change An Action-Oriented Toolkit
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1 organizational change An Action-Oriented Toolkit Chapter 5: Navigating Change Through Formal Structures & Systems Chapter Overview This chapter discusses the basics of how organizations structure themselves It outlines how change leaders can diagnose the strengths and weaknesses of existing systems and structures It examines how the formal structure and systems can foster, impair and facilitate the acceptance of change initiatives It lays out ways to manage systems and structures to gain approval for change initiatives. Formal approval, coalitionbuilding and renegade approaches to change are discussed It reviews ways to develop more adaptive systems and structures to increase the likelihood of continuous improvement 2 How Do Structures & Systems Relate to Change Management? Existing formal structures and systems need to be understood when assessing the need for change. Need to understand how Structures and Systems facilitate or hinder change Need to understand how Structures and Systems can be used to gain approval for change Need to understand how Structures and Systems can be used to gain acceptance for change Need to understand how to create more adaptive Structures and Systems 3
2 Making Sense of Organization Structures & Systems 1. To what degree are tasks subdivided into separate jobs? 2. On what basis will jobs be grouped together? 3. To whom do individuals and groups report? Work differentiation Departmentalization or Integration Chain of command 4 Making Sense of Organization Structures & Systems (con t) 4. How many individuals report to an individual manager? 5. Where does decision-making authority lie? 6. To what degree will there be rules and regulations to direct employees and managers? Span of Control Degree of Centralization/ Decentralization Formalization 5 Mechanistic vs. Organic Organizational Forms More Mechanistic Tasks are broken down into separate parts & rigidly defined/assigned High degree of formalization, strict hierarchy or authority/control, with many rules Narrow span of control with reliance on hierarchies of people in specialized roles Knowledge & control reside with upper management, limited lower-level authority Communication is vertical (boss/worker relationship) Simple, straight-forward planning process More Organic Flexible tasks that are adjusted & redefined through teamwork & participation Less formalization, less reliance on hierarchical authority, more decentralization Wide span of control Highly decentralized decision-making authority located throughout organization Communication is free-flowing & horizontally integrated (team relationship) Sophisticated environmental scanning, planning & forecasting process 6
3 Uncertainty & Complexity & Internal Alignment Simple Environment Complex Environment Stable Environment Centralized, simple mechanistic structure Use of rules, policies, procedures & hierarchy Few departments Low need for integrating roles Efficiency & stability focused, little imitation Centralized structure, more sophisticated information & control systems Use of rules & policies, procedures & hierarchy, but adapted to the complexity Many departments, some boundary spanning Modest need for integrating roles & systems Some environmental scanning, imitation & planning activity Dynamic Environment Decentralized, organic structure, participative & team focused Fewer rules, policies, procedures Few departments, much boundary spanning Few integrating roles Much environmental scanning, imitation & a strong planning orientation Decentralized, organic structure, participative & team focused, sophisticated information & control systems Fewer rules, policies and procedures Many departments, boundary spanning Many integrating roles Extensive environmental scanning, imitation, sophisticated planning & forecasting systems Information Processing View of Structure a. Rules and Policies b. Hierarchies c. Goals and Visions Mechanistic Methods d. Slack Resources e. Self-Contained Tasks f. Vertical Information Systems g. Lateral Relations Methods to Lessen the Need to Process Information Methods to Increase the Capacity to Process Information Information Processing View of Structure (con t) Strategies to Decrease Information Processing Needs 1. Addition of Slack Resources 2. Creation of Self Contained Tasks Information Processing Capacity of Structural Design Choices Fit Organization s Information Processing Requirements Organizational Effectiveness Vertical Information Strategies to Increase Processing Capacity 1. Hierarchical Referral (Ask the Boss) 2. Rules, Policies and Plans, including Vision and Goals 3. Increase the Vertical Communication Capacity of Information Systems Horizontal Information Strategies to Increase Processing Capacity 1. Increase the Horizontal Communication Capacity of the Information System 2. Create Lateral Relations: a) Direct Contact b) Liaison Role c) Task Force d) Formal Teams e) Formal Integrating Roles f) Managerial Linking Roles g) Dual-Authority Relationships
4 Formal Structures & Systems There is no one best way to organize Structural decisions should follow strategic decisions All structures present leaders with dilemmas they must manage Once structural choices are made, formal systems and process need to be aligned Structures shape and impact people s behavior Toolkit Exercise 5.1 Impact of Existing Structures & Systems on the Change Think of a change situation you are familiar with. 1. How did the organization use structures and systems to deal with uncertainty and complexity? Was this effective? 2. How did existing structures and systems affect the ability of the change leader to bring about desired change? a) What systems/structures were involved? b) How did these systems/structures influence what happened? Was this due to how they were formally designed? Or was this related to how they actually came to be used in practice? c) Who influenced how the systems/structures were used and how did this affect the outcomes that ensued? 11 How do we Develop an Understanding of Structures & Systems? Follow the paper trail. Ask those who know. Develop process maps.
5 Three Approaches to Change 1. Using systems and structures to obtain formal approval for change - the traditional, hierarchical approval approach 2. Strategies based on creeping commitment and coalition building 3. Strategies involving simply forging ahead without formal approval the renegade approach Using Structures & Systems to Increase the Probability of Approval Ask if approval is necessary. Don t initiate activities that trigger unnecessary formal approval systems If approval is necessary, show how change is aligned with the organization s vision & strategy Use good processes to legitimize the change. Show how benefits of change exceed the costs and risks of doing nothing Using Structures & Systems to Increase the Probability of Approval (con t) Show how the change will improve system and structure alignment Frame the change in ways that increase organization comfort. For example, move in increments by positioning it as a trial If time is critical, demonstrate urgency and focus on external pressures for change
6 Using Structures & Systems to Increase the Probability of Approval (con t) In all cases: When there is a decision maker, identify their attitudes to the change and attempt to work with them. Demonstrate how the change project relates to the strategy or vision of the organization. Use good existing process to legitimize the change proposal. Using Structures & Systems to Increase the Probability of Approval Flow-Chart Do I need support? Yes Involve those who will be affected & influential parties to your change initiative No No Do I need approval? Just do it yourself Yes Small Is time a factor? No Big or small project? Whose approval do you need? Engage others & explain cost/ benefit to request approval Use existing process to legitimize legitimize Yes Big Whose approval do you need? Create awareness of looming crisis/threat/ opportunity Use existing process to legitimize Whose approval do you need? Approach others incrementally Demonstrate cost/benefit for approval Use existing process to Toolkit Exercise 5.2 Gaining Approval for the Change Project Consider a change project in an organization you are familiar with. 1. What is the approval process for minor change initiatives? For more major change initiatives? a. If the change requires capital approval, how is this obtained? b. If the project needs dedicated staff what are the processes for adding people and selecting and developing staff? c. Does the project alter the way work is organized and performed? What systems are used to define jobs, and assess performance? d. Who approves the change? What approval power do they have? 2. Can perceived risks be reduced by the way the change leader stages the project and manages the approval process? 18
7 A Checklist for Change Initiative Approval What does the paper trail say about formal structures and systems that have to be considered when leading the change? What are key points in the process that we need to be conscious of (e.g., timing of meetings, getting on the agenda, cycle time, types of decision made and where decisions are made)? How are the relevant systems and structures interconnected? How do they influence one another? A Checklist for Change Initiative Approval (con t) Develop a process map that tracks the change idea from start to finish. Where does formal authority and decision making lie? What decision parameters are normally applied and are there zones of discretion available to decision makers? What are the power and influence patterns around particular systems and structures? Who has direct and indirect influence on how they are applied? How should the systems and structures be managed to reduce resistance? Can they can be managed to create leverage that will advance the change? Mastering the Formal Approval Process The likelihood of gaining formal approval increases when: You have a well placed sponsor You know your audience and their preferences Power and influence patterns and the implications of the project for the firm and those involved in the approval process are understood
8 Mastering the Formal Approval Process (con t) The likelihood of gaining formal approval increases when: You do your homework with respect to your detailed knowledge of the change project, its scope, objectives, costs, benefits, & risk areas Needed approval and support is obtained in advance The change project is effectively presented by appropriate individuals You have a good sense of timing of when it s best to bring it forward Using Creeping Commitment & Coalition Building Use data, pilot programs and other incremental system-based approaches to acclimatize organizational members to change ideas Know the key stakeholders and their interests Coalition building is valuable because of the role such coalitions might play later, during the formal approval process Using Creeping Commitment & Coalition Building (con t) Create opportunities for direct involvement that will build interest and support within key groups Use the above initiatives to build momentum to move the organization towards adoption Coalition building contains risks that need to be managed Avoid tactics that seriously harm relationships, diminish your integrity and/or compromise your longer term objectives
9 Bypassing the Formal Approval Process Assess how systems and structures can be leveraged to advance change without prior approval Understand your power and authority Assess whether change is manageable, defensible and within your scope of authority Keep key people sufficiently informed to avoid accusations you acted underhandedly Don t create unnecessary enemies or use tactics that do long-term damage to your reputation The renegade approach can be used to generate supportive data, refine the change, and build momentum that is difficult to stop It is often easier to gain forgiveness than permission Toolkit Exercise 5.3 Using Structures & Systems to Promote Change 1. Look back at the questions raised in Toolkit Exercise 5.1. How could the existing structures and systems have been approached and used differently to advance the desired change? 2. What role could incremental strategies that were nested within existing systems and structures have played? Would they have really moved the process forward or simply avoided the real changes that needed to be addressed? 3. What role could more revolutionary strategies have played? Would they produce issues related to their alignment with existing systems and structures? How would you manage the challenges created by this? 26 Using Alignment to Aid Approval & Acceptance Gaining approval is less daunting when you can show how the change aligns with the organization s mission, vision and strategy Frame changes in ways that show value and reduce the sense of incongruence with existing structures and systems Demonstrate there is little to fear, that the level of disruption can be managed, and that the benefits that outweigh the costs. Reduce perceived risk by breaking a big change into smaller stages. Don t assume the approval = acceptance
10 Using Alignment to Aid Approval & Acceptance (con t) By minimizing initial incongruence, you can learn, adapt and modify systems and structures as you proceed. Linked incremental changes can produce significant long-term effects Use existing systems and processes, where appropriate, to advance the changes the way they are used will influence the way the change is perceived Listen carefully and communicate effectively and empathetically, using formal processes to help in this regard The involvement of others can facilitate acceptance and approval. Be patient it takes time to build acceptance and commitment Developing More Adaptive Structures & Systems 1. Systematically and deliberately scan their external environment 2. Have a shared perception of the gap between the current and desired level of performance 3. Have a concern for measurement of performance 4. Develop an experimental mindset where they try new things 5. Create an organizational climate of openness and accessibility Developing More Adaptive Structures & Systems (con t) 6. Engage in continuous education at all organizational levels 7. Use a variety of methods, appreciate diversity and take a pluralistic view of competencies 8. Have multiple individuals who act as advocates for new ideas and methods 9. Have an involved, engaged leadership 10. Recognize the interdependence of units and have a systems perspective
11 Summary We investigated formal systems and structures to see how they influence change and how they can be worked with to advance change We explored systems and structures related to the approval process & how to work with, through and around them We explored how formal systems and structures can be used to advance acceptance of the change We addressed the desirability of addictiveness in formal systems and structures. 31
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