Managing change in organizations

one size does not fit all

Yves Cavarec, MBA, PMP, Consultant at PM Skills

Not all organizations react the same way to change. Organizations that exist for the success of their leader (what I call military structure organizations) rely on a trustful relationship between the leader and the people. They are very difficult to transform without breaking trust and threatening the organization itself. Organizations could survive, in theory, by permanently adapting to changes in their environment. But such organizations do not exist since one leading stakeholder (the prince) takes and keeps the power, which prevents the organization to adapt for example by renewing leaders at its head. Rather than Darwinian, those organizations have a political structure. A political structure organization tends to become less and less efficient: The prince tends to keep more and more resources (i.e. mainly revenue and power) when other stakeholders have less and less. The last structure of organization (healthy organizations) can be reached when the prince is willing to sacrifice its power and share its resources with other stakeholders. The risk is high that another stakeholder takes over the organization and becomes the new prince.

Introduction

I have identified three main structures of organisations (Cavarec, 2014, p. 2). Each structure corresponds to a cohering mix of management style, leadership style, and control system. The way an organisation can be changed highly depends on its structure. Success of organisational change and success of projects that require stakeholder involvement from across the organisation require that the change approach match with the structure. Not all organisations will react the same to a given approach. Some organisations might reject participative approaches because employees consider it a sign of weakness from the leaders, when others might consider participative approaches as a best practice.

Collective resistance to change is a reaction to an approach that is not compliant with the structure of an organisation. Resistance is information.

As a project management consultant involved in organisational changes for the last 16 years, I had the opportunity to observe different organisational changes from the inside during periods of several months, sometimes several years. Sometimes I had to opportunity to propose and execute the change approach, but most often I was involved in changes decided by others, which left me with the opportunity to collect the reactions of stakeholders of the organisation I was temporarily working with. My education in organisational science and over 20 years of reading change management books with sociological, psychological, economical, epistemological and consulting perspectives helped me assemble the following approach.

This article presents the difference between the three structures and explains what change management strategies (or approaches) can be applied to each structure. Many consultants consider resistance as a natural reaction to change: “Only babies like being changed”, as they say. From my experience, it depends on the change approach. Think of yourself: having to do something new 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.

The Project Management Institute's (PMI) Managing Change in Organizations: A Practice Guide has shown that organisation also includes infrastructure, processes and relations between people (including culture). Infrastructure and processes can be changed through projects. And relations between people shape people's behaviour in organisations. Many change management experts consider that dealing with organisational change is dealing with people. I consider that helping people to change individually is not enough. People belong to a system. People's behaviour depends on their interactions with others. Interactions between people depend on the organisation management style, the organisation leadership style and the organisation control system. (See Exhibit 1.)

img

Exhibit 1: The structure of an organisation shapes the relation between stakeholders that shapes people's behaviour.

This paper shows that to increase organisational change success, you need to build a change approach that is compliant with the structure of the organisation. It introduces the difference between the three structures and explain what change management approaches can be applied to each structure. Whatever the structure, I use the PMI change life cycle framework presented in (PMI, 2013, p. 19) as a basis of change approach. The change life cycle framework breaks down the movement from the current state to the future state in five steps:

  • formulate change
  • plan change
  • implement change
  • manage transition
  • sustain change

The Military Structure

Origin of the Military Structure

The military structure corresponds to ancient organisations that were based on a hierarchical model inspired by the army. The military structure has evolved over time, but it still exists. It is different from what it used to be in the steel and the mining industry in the 19th century. Military structure organisations are not limited to manufacturers in developing countries. Intellectual, mental, or artistic work organisations in developed countries may have a military structure as well.

Main Characteristics

Those organisations have many of the following characteristics.

Centralised decisions

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

Division and standardisation 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 specialised in standardised tasks.

Born leaders

Families and social ranks, castes in certain culture, education and titles separate leaders from others. Some leaders rely on their title to lead. Leaders are different because of their style, their charisma. For example, you must be a doctor, a certified accountant, a lawyer, or a member of a family to lead some organisations. Conflict of class might rise in the organisation when leaders are rejected.

Fair leaders

Employees are loyal to their leaders. Good managers understand the strengths and weaknesses of their personnel to assign the right people to the right tasks to realise the organisation's objectives.

Secure employment

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

Detailed instructions

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

Salaries

Performance is measured by marginal productivity: The organisation recruits additional employees as long as marginal productivity is greater than employee cost.

Reward and blame

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

Authority and discipline

The military structure used to be characterised by hierarchical relation between managers and their employees inside the organisation with top down delegation of authority and discipline. However authority is less and less a characteristic, especially in developed countries.

Advantages and Dysfunctions of the Military Structure

The military structure used to be well adapted to mass production, where employees’ skills are low, tasks are repetitive, when risk of demand is low, when the future is predictable. Since the social and economic environment has changed, military structures tend to be replaced by other structures.

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 organisational structure.

How to Change Military Structure

Approach 1: To be applied when there is no impact on the organisation's mission

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

  • Moving military troops to a perilous region.
  • Merging two public services.
  • Going to the moon or 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 organisations, employees must be given clear and detailed instructions.
  • Work should be broken down into 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 organisation.

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 organisation, employees should know how to do their tasks; managers should be able to explain to their team how they can improve the way they 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 to measure benefits realisation.

Approach 2: To be applied when the future state is outside of the mission of the organisation A military structure organisation is built to be strong and bold in order to resist changes in the environment. It is not made to be transformed. Organisation are made of unwritten rules that makes them difficult to change. Unwritten rules are rules that everyone obeys because they are considered “normal”; they are specific to each organisation; but they are not written, which makes them difficult to identify and change. In military structure organisations, unwritten rules are running the organisation. In particular, trust between leaders and followers is a condition to make the organization exist.

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

The Political Structure

The Origins of the Political Structure

The military organisation works as long as customers agree to buy a standard product. Henry Ford's famous quote about the Model T was “you can have any colour as long as it's black”. When the organisation needs to diversify in order to satisfy customer variety, a military structure no longer fits.

The military structure is not adapted when the organisation 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 customised, centralised decision-making is no longer the solution.

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

Employees on the production line also need 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 organisation works differently when markets are expanding, or when the organisation is expanding by winning market shares, and when the organisation is declining.

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, new services.

Leaders are raised from the bottom

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

The cake gets bigger

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

Indicators

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

The forgotten stakeholder

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

Standardisation of management education

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

Hide any mistake

It's appearance that counts. Because of wild competition inside an organisation, any mistake and even a rumour could ruin a career. It's better to hide mistakes or deny it when possible. There is a risk that a manager hides information from shareholders in corporations, as there is a risk that a politician hides 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 organisation. People build alliances through personal networks: Clubs, alumni associations, communities are all places to grow your network outside the organisation. People tend to regroup based on their power (i.e. resources they control). The criterion for success is personal power.

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 (organisational resources) is no longer increasing in size, not all stakeholders’ pieces decrease in the same proportion: Some stakeholders’ pieces of cake of can even grow bigger, which makes other stakeholders’ pieces of cake decrease faster.

The Prince

When markets are expanding, there are opportunities for the best managers to skyrocket their careers. When markets are no longer expanding, competition is growing inside the organisation. Managers are competing to get more power, i.e. to have bigger teams, bigger budgets. Organisations’ stakeholders compete. In all organisations – small, large, civil services, government business enterprises, listed corporations, nonprofit – 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 labour unions members)
  • a group of managers of the organisation
  • a specific customer
  • a specific supplier
  • the government

In the following, I'll illustrate the power dynamic of the prince. In this paper, I take the shareholder as the prince: It's just an example. The prince could be a client, a manager, a union, or any other organisation's stakeholder or group of stakeholders. Whoever the prince, they strengthen their resources (power or revenue) in political structure organisation.

Loss of trust

When competition rises on the market, prices decrease; if nothing is done, shareholder value decreases first. This explains the difference in Sales and Profit between Exhibit 2 and Exhibit 3. Shareholder trust in the organisation management decreases. As trust is decreasing, the board of directors develops external audit and internal control 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.

img

Exhibit 2: P&L when the organisation is at the maximum size.

img

Exhibit 3: P&L after a first decrease in sales.

Conquering the power

Should shareholder value decrease for a too long period (see the decrease in profit between Exhibit 3 and to the former period in Exhibit 2), the board of directors wonders if the CEO is the right person for the job. Directors will always find CEO candidates to put in place another strategy to increase shareholders revenue by pressuring other stakeholders (see Exhibit 4). The board of directors fires the CEO for bad performance.

Top down organisational change

The new CEO develops a strategy that will impact the organisation. 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.
  • Optimise processes.
  • Standardise processes.
  • Cut suppliers costs.
  • Optimise tax.
  • Develop low cost products to get come to the market with low price and attract or keep customers.
img

Exhibit 4: P&L 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 by the organisation on cutting the costs, less is being made on increasing the size of the cake. In the long term, reducing the costs is not enough: Organisations need new products and services to have more customers.

Standardisation of processes

To reduce risks and improve quality, the organisation processes are standardised with massive use of IT software like enterprise resource planning, customer relationship management, supply chain management, computerised maintenance management systems, etc. Employees are supposed to apply the processes using the software but remain accountable for the results.

Personal power is more important than the organisation

“When leaders of an organisation are less honest with one another, when they put the need of their departments or their career ahead of the need of the greater organisation, 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 organisation 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 characterises political structure organisations 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 aren't taking initiative—if you take initiative, you are disobeying.)

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 organisations, 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 consultants with high reputation (McKinsey, Bain & Co, BCG, lawyers, financial advisories like J. P. Morgan, Lazard, Rothschild), managers reduce risks over their shoulders. In political organisations, 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 (risk transfer).

Advantage and Dysfunctions of the Political Structure

Political organisations appeared as a positive alternative to the military structure, which proved unable to adapt to the end of mass market, globalisation and a more complex world.

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

In political structure organisations, when sales decrease, stakeholders work against each other and no longer in team. Until the 19th century, innovation relied on genius that invented great things. In the 20th century, innovation was based on team work; a department in the organisation was in charge of innovation; it could have been the engineering department, R&D, marketing, etc. But in the 21st century, innovation comes from teams that work with other teams in projects. As Sanofi CEO's Chris Viehbacher explains, every year Sanofi spends €5 billion in R&D, and their laboratories have discovered no major molecule during the last 20 years. “We cannot go on spending money like that. We need to change the way we innovate” (Viehbacher, 2013). Isolated research teams used to be the solution to find new drugs. Today what works is cross-fertilisation between laboratories among which there are researchers, universities and information technology experts.

Political structure organisations also generate “wasted resources and time, decreased productivity, and increased employee turnover and customer attrition. The money an organisation 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 organisations 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 country level (countries are complex forms of organisation): 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 favour of diversity, the parents of many who are ranked among most influential people used to be, and sometimes 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 as a root cause of the financial crisis of 2008. “When problems 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 organisations” (George & Sims, 2007, p. XXV).

The result is that “in 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” (George & Sims, 2007, p. XXV).

How to Change a Political Structure

Approach 3: Increase the piece of cake

Political structure organisations tend to reinforce the prince's power over time. Increasing the prince's piece of cake (and reducing the other pieces of 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's instructions, such as 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 (1908/1515, p. 89). John P. Kotter prefers using the phrase “creating a powerful guiding coalition” (Kotter, 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, 1908/1515, p. 48).

Step 4: Manage transition

  • The prince mobilises 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, 1908/1515, 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.

Approach 4: Increase the cake

Political structure organisations also have an option to increase the cake. But the following condition must imperatively be realised: The prince must agree to give up his privileges, and no other successor shall take his place. There is an example in the recent history of Spain. In 1974, Franco, Spanish dictator, gave 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” (Lencioni, 2013, p. 190).

Once this condition is realised, the rest is about making an organisation 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 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 organisation must create clarity by answering the following six questions (Lencioni, 2013, p. 76).

  • Why do we exist? (the organisation's mission statement)
  • How do we behave? (the organisation's values)
  • What do we do? (products and services)
  • How will we succeed (organisation'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 organisation.
  • It should start at the top and continue cascading downwards.

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 organisation.
  • Results should be measured.

Step 5: Sustain change

  • Clarity (the answers to the 6 questions above) should be reinforced.
  • The answers should be applied in the recruiting, in the hiring process, in the performance management process, and in the compensation and reward process

The Healthy Structure

Origins of the Healthy Structure

Although they offer high salaries and good compensation package, 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 organisations feel oppressed by heavy processes, rules and bureaucracy. They want to run away from politics and might feel attracted by an organisation that offers welfare, is concerned by employee well-being, and cares about personal realisation. Those who have worked in a political organisation know the misery of dealing with dysfunction, politics and confusion.

According to Carney and Getz (2009, p. 246), healthy structures (that they call liberated workplaces) come from trusting people and let them organize their work freely and take initiatives in everything.

Some argue that the Y Generation (people born between 1982 and 2004), also called millennials by William Strauss and Neil Howe in their generational theory, no longer accept the working conditions of their parents: making a big effort to reach success. People's experiences around millennials tend to prove that success is more and more uncertain. Millennials, if they actually exist as described by Strauss and Howe, 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 organisations face difficulties in retaining high quality employees: “When leaders of an organisation are less honest with one another, when they put the need of their departments or their career ahead of the need of the greater organisation, 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 organisation has several of the following characteristics.

Clarity

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

Managers are good in management

In other structure organisations, people become managers because they were successful in their job. It doesn't guarantee that they are good in management. Healthy organisations put people in management positions because they are good at managing employees. In some organisations, employees choose their manager, not the contrary.

Managers at the service of 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 conflict of ideas. Managers have to consider their employees’ contribution. 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 for support from their managers. Anyone in the organisation, not only managers, is likely to ask questions like: “When will you be ready?”, or “Have you tested the quality of your output?” 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 Racing team in November 2013 for the driver Mark Webber (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 encourages 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 organisational health is undeniable,” Patrick Lencioni says (2013, p. 189). “Even the most sceptical executives I meet don't dispute the advantage they could achieve if they could make their leadership teams more cohesive”. Healthy organisations are also organisations where 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” (2013 p. 189).

Leading in complexity

The fact is that the world has become so complex that no CEO or organisation leader is able to anticipate all the impacts of their decisions, particularly in large organisations. Letting people go into “conflict” until they reach a decision or come to a “commitment” (Lencioni, 2007, p. 188) has three advantages:

  1. You give employees the opportunity to ask questions, criticise, be heard and finally understand the change: It's part of the change transition.
  2. You give yourself an opportunity to identify risks and difficulties, and, most importantly, employees may give solutions and opportunities that you, as a leader in a complex world, are not able to imagine.
  3. In some cases, 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

The fact that 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: This is when members of a cohesive group fear going into conflict with the group. It also happens when leaders encourage conformity and discourage healthy dissent.
  • The polarising 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 ignore what conflicts with the group view.

How to Change a Healthy Structure

Approach 5: Virtual circle

The approach to changing a healthy organisation by keeping it healthy corresponds exactly to the above approach 4. The process is exactly the same. It is easier as there is no need for leader's sacrifice.

Approach 6: Political way

There is always an option for a healthy organization that a stakeholder takes the lead over others in order to become the prince. Princes rise only when they are allowed to by other stakeholders who accept to reduce their resources (i.e. mainly their revenue and power). The change approach is the same as approach 3: Increase the piece of cake.

Conclusion

The way an organisation changes depends on its structure. Military (or hierarchical) structure organisations are built for the leader's success and nothing else. Military structure organisations will adapt as long as stakeholders trust the leader. And stakeholders will trust and follow the leaders as long as they feel protected. The two limits of military structure organisations are trust and protection; inside those limits, the organization will adapt to the environment.

Political structure organisations tend to naturally reinforce the resources (i.e. mainly the power and the wealth) of the prince. Most changes that do not threaten the prince (particularly when they reinforce the resources of the prince) are likely to succeed. Only a coalition of allies can force the prince to share their resource to the benefits of a new prince.

Healthy structure organisations require an equilibrium between stakeholders. They require that stakeholders subject themselves to rigorous discipline: work cohesively as a team, update clarity frequently and spread clarity over the organisation. The CEO is the keeper of the culture (Carney & Getz, 2009, p. 233). The risk is high that a stakeholder takes the lead over others and turns the organization structure into political.

 

References

Carney, B. M., Getz, I. (2009). Freedom, Inc. Crown Business.

Cavarec, Y. (2014). Increase your organization readiness to change. PMI Global Congress 2014 North America. Phoenix, Arizona, USA.

Cushing J.T., Fine, A., & Goldstein, S. (Eds.). (1996). Bohmian mechanics and quantum theory: An appraisal. Dordrecht, the Netherlands: Kluwer Academic Publishers.

Frederick W. T. (n.d.). In Wikipedia. Retrieved from http://en.wikipedia.org/wiki/Frederick_Winslow_Taylor

George, B. & Sims, P. (2007). True north: Discover your authentic leadership. San Francisco, CA: Jossey-Bass.

Fayol, H. (n.d.). In Wikipedia. Retrieved from http://en.wikipedia.org/wiki/Henri_Fayol

Howe, N., & Strauss, W. (1991). Generations: The history of America's future, 1584 to 2069. New York, NY: William Morrow & Company.

Kotter, J. P. (2011). On change management. Boston, MA: Harvard Business Review Press.

Lencioni, P. (2013). The advantage. San Francisco, CA: Jossey-Bass.

Lencioni, P. (2007). The five dysfunctions of a team. San Francisco, CA: Jossey-Bass.

Machiavelli, N. (1908). The prince. (W. K. Marriot, Trans.). Retrieved from http://www.constitution.org/mac/prince00.htm (Original work published 1515)

Project Management Institute. (2013). Managing Change in Organizations: A Practice Guide. Newtown Square, PA: Author.

Spanish transition to democracy. (n.d.). In Wikipedia. Retrieved from http://en.wikipedia.org/wiki/Spanish_transition_to_democracy

Viehbacher, C. (2013). Interviewed by Stephane Soumier on BFM Business on Feb 7 2013. Retrieved from http://www.youtube.com/watch?v=YW5Marh696k

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.

© 2015, Yves Cavarec
Originally published as a part of the 2015 PMI Global Congress Proceedings – London, UK

Advertisement

Advertisement

Related Content

Advertisement

Publishing or acceptance of an advertisement is neither a guarantee nor endorsement of the advertiser's product or service. View advertising policy.