restructuring Archives - CMDeltaConsulting

I asked people to suggest topics for the series, and this topic was suggested by top HR influencer, Perry Timms. Thanks Perry. In earlier posts in this series, I outlined the importance of engaging hearts as well as minds when it comes to organisational change. This is the D is for Development angle of OD. While difficult to do, some might call it the softer edge of OD. But OD has a harder edge too. Today, D is for Design; organisational design. And that means we need to take a hard look at the dreaded restructure.

Three things they don’t tell you about restructuring your team

There is a well-trodden path of advice about planning your organisational restructure. Specialist organisation design consultants will advise you to consider:

The purpose of your restructure: to realign to the organisational vision perhaps, to become more flexible or simply to save money (see also: change from the inside-out)
The context against which you are restructuring: mergers or acquisitions, changes to the product or service offered or simply to save money (see also: change from the outside-in)
Organisation design principles: to ensure efficiency and effectiveness of the structure.

This is all sensible stuff and only the principles might really need further specialist input.

These principles usually surround seemingly technical concepts including strategic alignment, accountability and empowerment, and the trade-off between coordination and specialisation. Don’t get me wrong, they can be very useful – I use them myself when consulting on restructuring – but they can over-complicate your approach, confuse you and run the risk of tying you up in knots.

What some specialists don’t tell you is that:

A successful restructure is an act of storytelling
It’s okay to sketch out your new structure on the back of a fag packet
Restructuring is only half the story.

LESSON 1: A successful restructure is an act of storytelling

Stories have a beginning, a middle and an end.

Beginnings

The purpose of the beginning is to see the possibilities you have in restructuring. These possibilities are varied and nuanced, so sketch a few out and see how they feel. You might just want to remove or add a couple of posts, or you may prefer to start with a blank sheet of paper and reimagine your purpose, or you might only have a vague notion about things being different, a matrix structure perhaps, or even a whole new operating model.

LESSON 2: It’s okay to sketch out your new structure on the back of a fag packet

Middles

The next step is to engage people in your thinking. This is about testing out the sketches you have made. Talk to your peers, boss, HR team, and (if you can) the teams that will be affected.

If you need any specialist advice, it is likely to be now, but remember a few key principles can be achieved by making a simple checklist against which to test your ideas. For example, ask yourself:

Does every strategic goal have an owner (this ensures alignment to the vision or strategy)?
Will the structure ease workflow between departments (to ensure coordination of key organisational activities)?
Does any post report to more than one manager (removing this helps to ensure accountability)?
Etc.

Even more important is to hone the story at this point: what is the compelling reason for the restructure? Can you articulate your assumptions, are you prepared to open them to scrutiny and can you explain your thinking?

Endings

This stage is about implementing your chosen structure. You may notice that thus far we have attempted to keep it simple: your story is compelling; your structure has been sketched out and tested. The final hurdle is implementation. This often fails because the structure will not sustain itself in isolation.

LESSON 3: Restructuring is only half the story

Organisation development must go together with organisation design. Development without design runs the risk of becoming soft: the structure does not support the development efforts, which is a waste of money. Design without development however is a hard, empty vessel waiting to be filled with meaning. Organisation development completes the act of restructuring by turning ideas into actions that will fulfil the vision the design set out to achieve. It does this by locking in the changes. It does this by shifting the culture. You simply must have both organisation design and organisation development to succeed.

OD thought leader: Robert Dilts (1955 – )

Dilts developed an understanding of neurological levels at play when change is underway. These levels form a hierarchy from bottom to top: Environment at the bottom; Behaviour; Capability; Belief; and Identity at the top. Sometimes, there is a sixth level – Spirituality– added to the top of the hierarchy. This indicates there is a higher purpose than Identity, although for many this is a moot point.

The basic idea is that each level affects those below it, and not the other way around. Also, people often operate from only one level, which blocks their ability to change. You can tell at which level people are operating by the language they use.

The phrase “I can’t do that here” neatly encapsulates the hierarchy from top to bottom: I = Identity; Can’t = (limiting) Belief; Do = Capability; That = Behaviour; Here = Environment. Think of a change where you are blocked, then say, “I can’t do that here” to yourself. Which word creates a tug internally? That is the level you are operating from; that is the level where something needs to change.

Dilts’ levels are often used by coaches to help people in this way, or to move up the hierarchy and consider deeper, more meaningful reasons for change. It is a core part of the principles and practice of Neuro-Linguistic Programming: reprogramming our language can help us change. The model is particularly useful in reframing individual mindsets and hence aligning individual change with a higher purpose.

As such it is a very useful technique for organisation development practitioners too.

First published on LinkedIn, December 2, 2016

Strategy informs structure, right?

Something needs to change. So, you convene a strategy session with your leadership team, commission some market research, and in a relatively short time frame, you’ve set your strategy. Logically, it is time to lift that off the page. You need to put the right team in place to deliver it. So, you sketch out a structure chart that will deliver it and then go about slotting names into places and recruiting for the gaps.

This is often the way of things. Organisations set their strategy and then create a structure that supports that strategy. On the face of it, this is eminently sensible. The goal of organisation design is to maximise the effectiveness of the organisation in serving its purpose. However, such formal structures are impacted by the informal structures, the power plays, the routines and the symbols of the existing culture. And culture itself tends to be either ignored or taken for granted when restructuring is underway.

Typically, leaders assume purpose informs strategy informs structure in a linear, predictable way. They draw a structure chart. Then they hire into that structure based on capability and expected cultural fit. And then names appear on the structure chart. Some new, some existing. And then the prevailing culture remains steadfastly in place, whether this was the intention or not. If the culture is out of alignment with the strategy and purpose, then the desired future will never be achieved.

Where should culture feature?

A better mindset going into restructuring acknowledges the causality between strategy, structure and culture is mutual. This means that the organisation design combines:

Appropriate formal and informal structures
The capabilities to deliver products/services
In a market where those products/services are valued
The internal machinations that serve the purpose.

In other words, structure, strategy and culture interdependently in alignment. It means aligning head, heart and hands.

This requires a different approach to restructuring, more of a configuration of the subsystems. Indeed, in his 1989 work Mintzberg on management, Henry Mintzberg suggests organisation design is more a LEGO construction than a jigsaw; a creation that goes beyond configuration.

Current theories and good practices in organisation design combine all the above. They advocate a forward-looking systems-based approach, coupled with an assumption of mutual causality between subsystems and hence a ‘beyond configuration’ approach to designing organisations.

So far, so good. However, I suggest this is only half the story.

Organisational change is culture change

I believe organisational change is culture change and so culture should be given special attention during change. I believe the first step in restructuring is to understand the past by considering culture and specifically how the organisation learns. What are the values, beliefs, behaviours and underlying mindset that collectively define the organisation? I then advocate using organisation development techniques to understand how the organisation got to where it is today by learning from its past. This will likely consider incrementalism, retrospective sense-making and the development of emergent strategies and structures. I tend to do this by facilitating workshops with leaders and then with managers and other members of staff to triangulate the findings.

Only then should leaders turn their attention to the future and sketch out some ideas for an appropriate organisation design. This inherently requires considering the mutual causality between strategy, structure and culture.

By reflecting on the backward-looking loop and engaging others in that reflective exercise, leaders will achieve a deeper understanding of where the organisation is today and what really needs to change to realise the desired future. And generally, it is not just names on a structure chart.

Jeremy J Lewis

@growthepig

Tag Archives: restructuring

The A to Z of OD: D is for Design