Recent McKinsey research found that many global companies are constantly changing their organization structure. Almost 60 percent of the respondents told us they had experienced a redesign within the past two years.
McKinsey attribute this to the increasing pace of strategic change and I’m sure there is some truth in this.
However, it also reflects what I called in my book (Making the matrix work) “a damaging preoccupation with structure.”
When organizations change their strategy they often move quickly to aligning their structure with the new strategy. This makes sense and is a necessary part of a major transformation. However what they often fail to do is to follow on and embed the change into their systems (such as ERP, finance and people systems) and their skills (including capabilities, ways of working and culture).
Aligning skills and systems are critical parts of a successful change implementation. If you change the structure but you don’t change the way of working, the information flow, or the way you measure and reward success your change initiative is unlikely to be complete.
This process can take several years. Unfortunately in the mind of the CEO and their direct reports this feels like it’s taking far too long. When the expected results don’t transpire senior leaders often react by changing the structure again.
Not only does this not help, it actually gets in the way by disrupting the teams, organizations and processes that they are starting to develop to deliver the previous strategy and structure.
People buffeted by biannual changes in organization structure soon learn not to put effort into difficult change in behaviours and way of working because they know a new reorganization will be along shortly. It becomes a rational response to keep your head down.
Once you’ve developed a complex multidimensional structure such as a matrix you shouldn’t really need to reorganize ever again unless there is a major strategic change in your business. All you are talking about usually is a different balance or weight of the different “legs” of your matrix.
A formal structural change is a slow and cumbersome way of achieving this flexibility. You don’t get more flexibility by adding more structure!
We can achieve the flexibility we need through changes in way of working, by creating a more networked and aligned organization. The traditional reporting lines may define resource ownership or professional development but increasingly, the organization of work is cutting across these traditional silos.
It’s time we stopped focusing so much on structure and paid more attention to skills.
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