Increase your organization readiness to change

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Consultant at PM Skills

Abstract

Each organization belongs to a certain structure. An organization structure depends on its management style, its leadership style, and its control system. There are three major organization structures:

  • the military structure, inspired by the army with a strong leader at the top
  • the political structure, which gives opportunity to new leaders to emerge, as long as they strengthen the power of the leading organizational stakeholder, whom I call the Prince
  • the healthy structure, which is an emerging organizational structure that gives people more freedom to do their job and where leaders are servant leaders

The approach to change in an organization depends on its structure. Changing a military structure organization requires strong leaders that know exactly what they want, when changing a healthy structure organization requires leaders to empower their team members. Most organizational change initiatives fail because we apply strategies that are not tailored for the structure of the concerned organization. If we'd apply the right strategy, all organizations would be ready to change:

  • Changing a military structure is at high risk if we expect the organization to get out of its original scope
  • Changing a political structure requires building an alliance to defeat resistance, which implies politics and lies
  • Changing a healthy structure requires trust, clarity, and integrity

Introduction

There are multiple strategies to organizational change, like for example the top down approach and the participative approach. Not all organizations will react the same to a given approach. Some organization might reject participative approaches because employees consider it a sign of weakness from the leaders, when others might consider the same approach as a best practice.

Many consultants consider resistance as a natural reaction to change: “only babies like being changed” they say. From my experience, it depends. It depends on the nature of the change. It depends on how people are engaged in the process of change. Consider your own case: having you do something depends on

  • What you have to do: there are things you like and things you dislike
  • Who wants you to do it: if you decide, will it be a problem?
  • How you are asked to do it: it could even be an opportunity if you are given freedom to use your talent to do it your way

Many change management experts consider that dealing with organizational change is dealing with people. People are an important part of organizations, but as the PMI's Managing Change in Organizations: A Practice Guide (2013) has shown, organization also includes infrastructure, processes, and relationships between people (including culture). Infrastructure and processes can be changed through projects. And relationships between people shape people's behavior in organizations. This paper will show that relationships between stakeholders depends on the structure, and to increase the organization readiness to change, you need to understand the structure of the organization first in order to design a change approach that corresponds to the structure.

The structure of an organization shapes the relationship between stakeholders that shapes people's behavior

Exhibit 1: The structure of an organization shapes the relationship between stakeholders that shapes people's behavior

As a project management consultant involved in organizational changes for the last 15 years, I had the opportunity to observe different organizations’ changes from the inside during periods of several months, sometimes several years. Sometimes I had to opportunity to propose and execute the change strategy, most often I was involved in changes decided by others which leave me with the opportunity to collect the reaction of stakeholders of the organization I was temporarily working with. My education in organizational science and over 20 years of reading change management books from a sociological, psychological, economical, epistemological, and consulting perspective has helped me assemble the following approach.

There are three structures of organizations: the military structure, the political structure, and the healthy structure. Each structure corresponds to a coherent mix of management style, leadership style, and control system. This article presents the differences among the three structures and explains what change management strategies (or approaches) can be applied to each structure.

The Three Structures of Organization

The military structure

Origin of the military structure

The military structure corresponds to ancient organizations that were based on a hierarchical model inspired by the army.

Main characteristics

Those organizations have many of the following characteristics.

Authority and discipline

The military structure is characterized by hierarchical relation between managers and their employees inside the organization with top down delegation of authority and discipline.

Centralized decisions

All decisions are taken at the head of the organization. The model is the body where the head commands and controls and arms and legs do what has been decided. In case of disagreement, the manager will decide. In military structure organizations, top leaders know how things must be done in detail.

Division and standardization of tasks

As suggested by Frederick Taylor and Henri Fayol at the turn of the 20th century, the work is broken down into its component parts, and employees are specialized on standardized tasks.

Born leaders

Families and social ranks, casts in certain culture, educations and titles, separate leaders from others. Some leaders rely on their title to lead. Leaders are different because of their style, their charisma. Conflict of class might arise in the organization when leaders are rejected.

Fair leaders

Employees are loyal to their leaders. Good managers understand the strengths and weaknesses of their personnel to allocate the right people and the right tasks to realize the organization's objectives.

Secure employment

There is a moral contract between employees and the organization. Employees remain docile; they do what they are told; they show respect to their leaders in exchange of protection, salary and secure employment.

Detailed instructions

Employees are being told what to do in all circumstances. Employees will not be blamed for following up with an instruction.

Reward and blame

People are blamed for their mistakes and for not abiding by rules. They can be honored for their service and sacrifice. They are promoted from their experience rather than for their results.

Salaries

Performance is measured by marginal productivity: the organization recruits additional employees until marginal productivity equals employee cost.

Advantages and dysfunctions of the military structure

The military structure is well adapted to mass production were employees’ skills are low; tasks are repetitive; when risk of demand is low; and when the future is predictable.

It is not adapted to most large firms in developed and developing countries. But it might correspond well to some government agencies or civil services. Small business offices where high expertise is required might also have this organizational structure.

The political structure

The origins of the political structure

The military organization works as long as customers agree to buy a standard product. As Henry Ford famously said about the Model T: “you can have any color as long as it's black.” When the organization needs to diversify in order to satisfy customer variety, a military structure is no longer tailored.

The military structure is not adapted when the organization must react in case of big change: no longer can everything be planned at no risk. In a market where competition is high and when products and services need to be customized, centralized decision making is no longer the solution.

As firms grow international then global, they need to adapt to local market: these organization need people who understand the context of the business and are able to take initiatives.

Employees on the production line need also to take initiatives to align the production to the demand. This doesn't match with Frederick Taylor's principles of scientific management (embedded in the military structure): according to Taylor, employees were supposed to be incapable of understanding what they were doing.

Main characteristics of the political structure

The political structure of an organization works differently when markets are expanding, or when the organization is expanding by winning market shares, and when the organization decline.

  1. When markets are expanding

    Initiatives are required

    In political structures, managers are given more autonomy than in military structures where everything is decided and controlled at the higher level. To enter a new market, product leaders develop new approaches with new products and new services.

    Leaders are raised from the bottom

    As their market grows, successful managers gain more influence in their organization. People take power in the organization depending on the resources they control. People at the head of a large market today have a higher chance of taking the lead of the whole organization tomorrow.

    Growing cake

    Organizations create enough value added for all stakeholders: employees, suppliers, customers, shareholders, and government. As the cake increases, every stakeholder's piece of cake grows at the same time. Depending on the growth, as long as everyone has a piece of cake, some waste might even be tolerated.

    Indicators

    Following the principle of 1922 Nobel Prize physicist Niels Bohr, “what can't be measured doesn't exist,“and by extension it can't be managed (Cushing, Fine, & Goldstein, 1996, p. 220). There are indicators for all activities, all inputs, all outputs, and all organizational stakeholders.

    The forgotten stakeholder

    Experts disagree on environmental and social key indicators. As environmental and social impact doesn't have commonly accepted standardized measures, it gets no piece of cake. As a consequence, a crisis may rise suddenly when the organization hadn't predicted it. You'll always find an expert to explain afterwards: “we should have listened to weak signals.”

    Standardization of management education

    Career development depends on education. Belonging to a family or having the right attitude is no longer enough to become a manager: you also need the right skills. Managers use standardized tools and techniques like strategy, marketing, finance, or project management.

    Hide any mistake

    This is appearance that counts. Because of wild competition inside the organization, any mistake and even a rumor could ruin a career. It's better to hide mistakes or deny them when possible. There is a risk that managers hide information from shareholders in corporations, as there is a risk that politicians hide information from the electorate.

    Extrinsic motivations

    What encourages people to lead are extrinsic motivations, which include the following:

    • Monetary compensation
    • Having power
    • Having a title
    • Public recognition
    • Social status
    • Winning over others

    Networking

    Career opportunities are found inside and outside the organization. People build alliances through personal networks: clubs, alumni associations, and communities are places to grow your network outside of the organization. People tend to regroup based on their power (i.e., the resources they control). The success criteria are the personal power.

  2. After the top: the vicious circle

    When markets have reached the top or are declining, the political structure becomes toxic for most stakeholders.

    Not all stakeholders are equal

    When the cake (i.e., the organizational resources) is no longer growing, not all stakeholder pieces decrease in the same proportion: the piece of cake of some stakeholders can grow, which makes the other stakeholders’ pieces of cake decrease faster.

    The Prince

    When markets are expanding, there are opportunities for the best managers to skyrocket their career. When markets are no longer expending, competition grows inside the organization. Managers are competing to get more power, i.e. to have bigger teams and bigger budgets. Stakeholders compete. In all organizations—small, large, civil services, government business enterprises, listed corporations, not-for-profíts—there is generally a leading stakeholder, whom I call “the Prince.” The Prince is a person or a group of people that could be:

    • Shareholders
    • A group of employees (for example labor unions members)
    • A group of managers of the organization
    • A specific customer
    • A specific supplier
    • The government

NB: In the following, I will illustrate the power dynamic of the Prince. In this paper, I take the shareholder as the Prince as an example. The Prince could be a client, a manager, a union, or any other organization's stakeholder or group of stakeholders. Whoever the Prince may be, the Prince will strengthen the resources (power or revenue) in a political structure organization.

Loss of trust

When competition rises on the market, prices decrease. If nothing is done, shareholder value decreases first. Shareholder trust in the organization management decreases. As trust is decreasing, the Board of Directors develops external audits and internal controls to reduce information asymmetry and make sure risks are well communicated to stakeholders. Lawyers play an important role: they write contracts in detail to reduce risks for their client. Cost and time of non-productive activities are higher.

Profit and loss when the organization is at the maximum size

Exhibit 2: Profit and loss when the organization is at the maximum size.

Profit and loss after a first decrease in sales

Exhibit 3: Profit and loss after a first decrease in sales.

Conquering the power

Should shareholder value decrease for an excessive period of time (see exhibit 3), the Board of Directors wonders if the CEO is the right person for the job. Directors will always find CEO candidates to put another strategy in place to increase shareholder revenue by pressuring other stakeholders. The board of directors fires the CEO for bad performance.

Top down organizational change

The new CEO develops a strategy which will impact the organization. The execution of the new strategy is declined into a portfolio that includes some of the following projects:

  • Find waste first, when possible
  • Implement lean management
  • Optimize processes
  • Standardize processes
  • Cut supplier costs
  • Optimize tax
  • Develop low cost products to get to the market with a low price and attract or keep customers
Profit and loss after transitioning the results of the strategy execution into the operations

Exhibit 4: Profit and loss after transitioning the results of the strategy execution into the operations.

The short term prevails over the long term

These are of course top down approaches decided by the executive. Most efforts are being put in place by the organization focus on cutting costs; less is being done to grow the cake. In the long term, reducing the costs is not enough: organizations need new products and services to have more customers.

Standardization of processes

To reduce risks and improve quality, the organization processes are becoming more standardized with massive use of software such as, Enterprise Resource Planning, Customer Relationship Management, Supply Chain Management, and Computerized Maintenance Management Systems Employees are supposed to apply the processes using the software but remain accountable for the results.

Personal power is more important than organization

When leaders of an organization are less honest with one another, when they put the need of their departments or their career ahead of the need of the greater organization, when they are misaligned, confused, and inconsistent about what is important, they create real anguish for real human beings. And they experience that anguish themselves too. (Lencioni, 2013, p. 13)

Competition between stakeholders

When pushed too far, the organization becomes less competitive, but the Prince gets more personal benefits (share value, revenue, parachute, paid vacation, pension, health insurance, etc).

Get a project funded

To get a project funded, it is better to underestimate the costs and overestimate the benefits. They talk about selling a project to the sponsor.

Paradoxical injunctions

Toxic management that characterizes political structure organizations leads to giving employees instructions that are impossible to perform:

  • Do the same tasks in the same period of time complying with more and more procedures and constraints (including barriers to innovation)
  • Follow the processes and be compliant with a contradictory injunction
  • “Take initiative!” (If you obey, you don't take initiative. If you take initiative, you disobey.)

Most employees can go through such turbulent situations when they are temporary. But more and more people suffer from such moral harassment as paradoxical injunctions and other toxic management practices.

No more ideas

In political structure organizations, those who launch new ideas are at high risk. It is wiser not to change as long as you don't have the support of your management. By asking reputable consultants such as, McKinsey, Bain & Co, BCG, lawyers, or financial advisors like J.P. Morgan, Lazard, Rothschild), managers reduce shouldering risks on their own. In political organizations, new ideas come from consultants that are paid a high price.

Outsourcing

The trend is to outsource non-strategic activities like IT, real estate, vehicle fleet, and other services for the same reasons as ideas are outsourced. (This enables risk transfer.)

Advantage and dysfunctions of the political structure

Political organizations appeared to be a positive alternative to the military structure which proved to be unable to adapt to the end of mass market, globalization, and a more complex world.

Political structure has introduced variety and competition inside large organizations. This was the premise of organizational agility.

In political structure organizations, when sales decrease, stakeholders work against each other and no longer in the interest of the team. Until the 19th century, innovation relied on a singular genius who invented great things. In the 20th century, innovation was based on team work—a department in the organization—it could have been engineering, R&D, marketing, etc. But in the 21st century, innovation comes from teams that work with other teams in projects. Every year Sanofi spends €5 billion in R&D and their laboratories have discovered no major molecule during the last 20 years. As Sanofi CEO Chris Viehbacher explains: “We cannot go on spending money like that. We need to change the way we innovate”. Isolated research teams used to be the solution to discover new pharmaceuticals. Today what works is cross-fertilization among separate laboratories in which you have researchers, universities, and information technology experts.

Political structure organizations also generate “wasted resources and time, decreased productivity, and increased employee turnover and customer attrition. The money an organization loses as a result of these problems, and the money it has to spend to recover from them, is staggering” (Lencioni, 2013, p. 13).

The main issue is that political structure organizations are permanently unbalanced to the advantage of a stakeholder: the Prince is progressively controlling more resources (i.e. power or revenue) to the disadvantage of others. This is even true at a national level (countries are complex forms of organization): we see that a growing portion of people who are going to the best universities in the world are students whose parents used to study in the same schools. Despite what is been done in favor of diversity, the parents of many who are ranked among most influential people used to be, and sometime still are, in the same rankings. This self-reinforcement of the Prince is quite closed to the “cultural reproduction” that consists in transferring advantages from generation to generation.

More and more people feel concerned by this worldwide leadership crisis that is often considered a root cause of the financial crisis of 2008: “When problem surfaced at Enron, WorldCom, Arthur Andersen, Tyco, and dozens of other companies, the severity of the leadership crisis became painfully apparent, creating a widespread erosion of trust in business leaders. An enormous vacuum in leadership exists today—in business, politics, government, education, religion, and non-profit organizations” (George, & Sims, 2007, p. xxv).

This is because, “[i]n business, trust is everything, because success depends on customers’ trust in products they buy, employees’ trust in their leaders, investors’ trust in those who invest for them, and public's trust in capitalism.”

The healthy structure

Origins of the healthy structure

Although they offer high salaries and good compensation packages, money is not everything: “If you're just chasing the rabbit around the course, you're not running toward anything meaningful” (George, & Sims, 2007, p. 110).

Employees in political structure organizations feel oppressed by heavy processes, rules, and bureaucracy. They want to run away from politics and might feel attracted by an organization that offers welfare, is concerned by employee wellbeing, and cares about personal realization. Those who have worked in a political organization structures know the misery of dealing with dysfunction, politics, and confusion.

Some argue that generation Y (i.e., people born between 1982 and 2004), also called millenials by William Strauss and Neil Howe in their Generational Theory, no longer accept the working conditions of their parent: making a big effort to reach success. People's experiences around millenials tend to prove that success is more and more uncertain. Millenials are supposed to search for a balanced life where work is not the main priority. A political structure is not compliant with this expectation.

Political structure organizations meet difficulties in retaining high quality employees: “When leaders of an organization are less honest with one another, when they put the need of their departments or their career ahead of the need of the greater organization, when they are misaligned, confused, and inconsistent about what is important, they create real anguish for real human beings. And they experience that anguish themselves too” (Lencioni, 2013, p. 13).

Main characteristics of the healthy structure

A healthy organization has several of the following characteristics:

Clarity

The reason why the organization exists corresponds to a common purpose. It is generally associated to values shared by employees and even other stakeholders of the organization. Employees have been selected for their attitude, and then trained for their skills. The mission, the strategy, and the priorities of the organization has been communicated repeatedly to employees. CEO, CFO, COO, CSO, etc. are all CROs (i.e. chief repeating officers): an important part of their job consists in communicating and over communicating the decisions made to the organization. All recruitment processes, training processes, and rewarding processes are aligned with the organization clarity.

Managers are good in management

In other structure organizations, people become managers because they were successful in their job. It doesn't guarantee that they are good in management. Healthy organizations put people at the management level because they are good at managing employees. In some organization, employees chose their managers, not the other way around.

Managers serving employees

Relations between employees are based on trust. One of the main roles of managers is to support their employees. Supporting means doing everything to make people's work easier, which includes making people feel good at work. Managers are not supposed to tell people what to do in detail: they give clear direction so that people know what is expected of them. People are given freedom to do their job their own way or to find the best way to achieve their goals.

A time for conflict

Before a decision is made, employees have the opportunity to ask questions, discuss, and even go into conflicts about ideas. Managers have to consider their employees’ contributions. It might take time; it might require patience from managers. This time is necessary to get everyone committed: people need to weigh in on the decision to commit. If they don't weigh in, they don't buy in. Once the decision has been made, all discussions must stop. Every employee should commit to the decision, even if they had a different idea.

Accountability

Employees are accountable for what they do. If they need skills, they can get trained or ask support to their managers. Anyone in the organization, not only managers, is likely to ask questions like: “When will you be ready?” or “Have you tested the quality of your realization?” Everyone is accountable to their colleagues.

Celebrate mistakes

An example was given by Mike Gallagher, keynote speaker at the PMI Congress EMEA 2014 in Dubai, and former executive of Jordan Grand Prix (the Formula One team). When a car stops during a race to change the wheels, they call it a “pit stop.” The world's fastest ever pit stop was made by the Red Bull Team in November 2013 for the pilot Mark Webber (in 1.993 seconds). The pit stop team is composed of 20 world class mechanics. When one of the mechanics makes a mistake, the whole team loses. And it happens that bad pit stops make a race loss. Mike Gallagher asks: “What do you think happens to a mechanic that makes a mistake?” He explains that those people know what they have to do. They know the consequence of a mistake. All of them are so committed to the team that none of them wants to be the one that causes a big delay. But it happens sometimes: to err is human. When it happens, everyone is confident because they know the mechanic will work so hard that the team is sure to have the best mechanic at this position at the next race.

Of course, if someone would make frequent mistakes, then it is a problem of competence or a question of attitude. This would be another issue.

Intrinsic motivations

What encourage people to lead are intrinsic motivations, which include the following:

  • Personal growth
  • Satisfaction of doing a good job
  • Helping others develop
  • Finding meaning from efforts
  • Being true to one's beliefs
  • Making a difference in the world
Advantage and dysfunctions of the healthy structure

“The power of organizational health is undeniable,” says Patrick Lencioni (2013, p. 189). “Even the most skeptical executives I meet don't dispute the advantage they could achieve if they could make their leadership teams more cohesive” (Lencioni, 2013). Healthy organizations are also organizations in which people take initiatives to solve problems even if it is not their duty, even if they don't follow the processes. They start to take initiatives when they are neither being sanctioned nor being rewarded. When people are facing problems and they have a solution, they just fix it. Solving problems is a priority over following processes (Carney, & Getz, 2009, p. 20).

So far only a few early adopters have embraced the healthy structure. Lencioni is optimistic: “whether it takes place over the next five, ten, or twenty years, I don't know. But it's coming” (Lencioni, 2013, p. 189).

Leading in complexity

The fact is that the world has become so complex that no CEO or organization leader is able to anticipate all the impacts of their decision, particularly in large organizations. Organizing a conflict around a decision has two advantages:

  1. You give employees the opportunity to ask questions, criticize, be heard, and finally to understand the change: it's part of the change transition
  2. You give yourself an opportunity to identify risks and difficulties and, the most important, they give solutions and opportunities that you, as a leader in a complex world, are not able to imagine
  3. In some case, you give your people an opportunity to tell you that they are not ready to follow you on that path
The risk of collective decision biases

Just because all employees are likely to discuss decisions doesn't mean that decisions are made collectively. It is important that people participate in the discussions as individuals rather than as a group to avoid the following group decision cognitive biases:

  • Groupthink: when members of a cohesive group fear creating conflict with the group. It also happens when leaders encourage conformity and discourage healthy dissent.
  • The polarizing effects of groups (also called the “risky-shift phenomenon”): groups tend to produce more extreme decisions than individuals, both in cautious and risky directions
  • Overconfidence: this is an individual bias that has also been demonstrated for groups, including in business decisions. The idea is that groups are overconfident about their skills, their impact, the value of their portfolio, their forecast, etc.
  • Confirmation bias: groups tend to pay more attention to information that confirms and ignores what conflicts with the group view

Organizational change strategies

Here are the guidelines to follow to identify the most appropriate change approach. I use the PMI Change Life Cycle Framework presented in (PMI, 2013, p. 19). It decomposes the movement from the current state to the future state in five steps:

  • Formulate change
  • Plan change
  • Implement change
  • Manage transition
  • Sustain change

Changing a military structure organizations

Strategy 1: to be applied when there is no impact on the organization mission

In that case, the future state (i.e. the organization after the change) still corresponds to the mission of the organization, no matter the impact of the change on stakeholders. Example of change:

  • Moving military troops to a perilous region
  • Merging two public services
  • Go to the moon, go to Mars

Step1: Formulate change

  • Define the purpose and the objective of the change
  • Clarify the success factors
  • Define the scope: who is concerned, for how long, when?
  • Assess readiness to change by consulting senior managers

Step 2: Plan change

  • Plan everything in detail. In military structure organizations, employees must be given clear and detailed instructions.
  • Work should be broken down in standard tasks. You need experts to have it done (or people with previous similar experience).
  • Identify what training is necessary, who should be trained to do what.
  • Plan communication, human resources management, and risks as it should be planned in a project or program.
  • Make sure communication is handled. This is a top down approach. All information should come from the head of the organization.

Step 3: Implement change

  • Communicate the vision, the mission, and the strategy as clearly as possible.
  • Communicate individual plans to every stakeholder so that each of them knows what they have to do.
  • Train: in a military structure organization, employees should know how to do their tasks; managers should be able to explain improving the way their team's work.

Step 4: Manage transition

  • Have management supporting stakeholders toward the future state
  • Measure adoption rate
  • Reinforce communication

Step 5: Sustain change

  • No specific action is required except measure benefits realization.
Strategy 2: to be applied when the future state is out of the mission of the organization

A military structure organization is not built to be transformed. Organizations are made of unwritten rules that make them difficult to change. Unwritten rules are rules that everyone obeys because they are considered “normal”; they are specific to each organization, but they are not written, which makes them difficult to identify and change. In military structure organizations, unwritten rules are running the organization, which makes changes costly and time consuming.

It is economically better to have people willing to join a new organization that is created to correspond to the desired future state. Moving people collectively to the new organization is not the best thing to do: they will transition the unwritten rules to the new organization.

Changing a political structure organization

Strategy 3: Increase the piece of cake

Political structure organizations tend to reinforce the Prince power over the time. Increasing the piece of cake of the Prince (and reduce other pieces of the cake) is the trend of the political structure. Those who are the most successful in taking over the resources of others generally follow Niccolo Machiavelli instructions like the following:

  • Politics have no relation to morals
  • Avoid the hatred of the most powerful
  • Everyone sees what you appear to be, few experience what you really are
  • Hatred is gained as much by good works as by evil
  • The first method for estimating the intelligence of a ruler is to look at the men he has around him
  • It is much safer to be feared than loved because …love is preserved by the link of obligation which, owing to the baseness of men, is broken at every opportunity for their advantage; but fear preserves you by a dread of punishment which never fails
  • If an injury has to be done to a man, it should be so severe that his vengeance need not be feared

Step 1: Formulate the change

In Politics, the change is never completely formulated, or, if it is, it's kept secret.

Step 2: Plan change

  • Plans are prepared with caution but they have to be updated quickly according to the interactions with allies and enemies.
  • Risks are managed.
  • The Prince is getting prepared for change: be armed and have good allies, as Machiavelli says (1505, p. 89). John P. Kotter prefers using the phrase “creating a powerful guiding coalition” (2011, p. 7).

Step 3: Implement change

  • “A wise prince ought to adopt such a course that his citizens will always in every sort and kind of circumstance have need of the state and of him, and then he will always find them faithful.” (Machiavelli, 1505, p. 48)

Step 4: Manage Transition

  • The Prince mobilizes the stakeholder with promises. Then he never lacks legitimate reasons to break his promise, as the promise given was a necessity of the past: the word broken is a necessity of the present.
  • But if an injury has to be done it should be so severe that the vengeance need not be feared (Machiavelli, 1505, p. 9)

Step 5: Sustain change

The Prince should stay away from the place where the change took place in order to avoid the revenge of those who suffered from the change.

Strategy 4: Increase the cake

Political structure organizations also have an option to increase the cake. But the following condition must imperatively be realized: the Prince must agree to give up privileges and no other successor shall take his place. There is an example in the recent history of Spain. In 1974, Franco, the Spanish dictator, give the full control to Juan Carlos. In 1975 Franco died and Juan Carlos became King of Spain. Juan Carlos decided to change the constitution and make Spain a democracy. This is what Lencioni calls “the leader's sacrifice” (2013, p. 190).

Once this condition is realized, the rest is about making an organization healthy (Lencioni, 2013, pp. 15–16).

Step 1: Formulate the change

  • The leading stakeholder (the Prince) should invite other stakeholders to the process of formulating change as the last decision, just as Juan Carlos did to transition Spain to a democracy.
  • It's no longer the Prince that handles the process: it has become a collective process. It starts with creating a team.

Step 2: Plan change

  • The organization must create clarity by answering the six following questions (Lencioni, 2013, p. 76):
  • Why do we exist? (the organization's mission statement)
  • How do we behave? (the organization's value)
  • What do we do? (products and services)
  • How will we succeed? (organization's strategy)
  • What is important, right now? (short term priorities)
  • Who must do what?

Step 3: Implement change

  • The process should begin with few activities
  • It could be implemented in a division of a bigger organization
  • It should start at the top and go on cascading

Step 4: Manage Transition

  • The transition corresponds to the team building process
  • There is a time for discussion (conflict of ideas)
  • Then all stakeholders should commit to the decision and all discussions should stop
  • Stakeholders should commit to the decision and be accountable for what they do to the rest of the organization
  • Results should be measured

Step 5: Sustain change

  • Clarity (the answers to the six questions above) should be reinforced
  • The answers should be applied in the recruiting process, in the hiring process, in the performance management process, and in the compensation and reward process

Changing a healthy structure organization

The strategy to changing a healthy organization corresponds exactly to the above strategy four. The process is exactly the same. It is easier, as there is no need for the leader's sacrifice.

Conclusion

I believe that most organizations have a political structure, though this needs to be measured. All political structure organizations are ready to change. But they are not ready for any change. What counts is the approach. Changes engage political structure organizations into a spiral or circle. There are two spirals. One is virtual and gives the organization a healthy structure that makes it grow. The other is vicious and puts the whole cake into the hands of a group of stakeholders and nothing will remain for the others, who lead the organization to strive. Only the first spiral makes any organization ready to change. It corresponds to the “strategy four: increase the cake” and requires the organization's leading stakeholder (whom I call the Prince) to let go, which may be counterintuitive.

Few organizations have a healthy structure, as Lencioni recognizes (2013, p. 189). We still know very little about healthy structure organizations. Can a large organization be healthy? How fragile are healthy organizations? Will managers accept the switch from a political structure, where they have been successful, to a healthy structure, which is totally new to them? These are management innovation questions.

References

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This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2014, Yves Cavarec
Originally published as a part of the 2014 PMI Global Congress Proceedings – Phoenix, Arizona, USA

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