Organising for Effectiveness

A Consulting Service for Developing New Forms of Organising to Succeed in the Current Economic Environment

Some Common Underlying Needs

Traditional hierarchies by themselves are found to be inadequate in meeting the need for:-

Enterprise and adaptability to the market: to create the political and economic conditions inside a company in which people are free to transact and contract with each other, like internal entrepreneurs and suppliers of services, in creating wealth and value, combining the "strength of the large company with the agility of the small".
Integration: to collaborate and integrate more quickly and effectively across different teams, knowledge bases or disciplines and functions in different locations or organisations in creating, adapting and delivering products and services in an increasingly knowledge-based economy.
Flexible organising: to modify continuously the way of organising to meet the challenges of a competitive, complex, dynamic, interdependent environment. To establish the context in which teams can be formed and re-configured around particular projects or stages of a project according to need, just as externally organisations form more flexible joint ventures and alliances.
Connectivity in line with the times: to create the organisational forms that make best use of information and communications technology.
Meaning and purpose: through new forms of organising to release the talent and energy of people and enable them to use their skills and knowledge and to develop self-reliance and adaptability to the extent they are able.
Cost-effectiveness: to reduce unnecessary administrative overhead, and management or transaction costs.
So, in different ways and to varying degrees, there has been an evolution and development of:-
Lateral forms of organising alongside the hierarchy not only to carry out and integrate work but also to learn and change together. Business process engineering, project-based organising, network organising, team-based organising, parallel organisations are all examples of steps towards this.
Internal markets within organisations that combine the freedom to transact business, compete and collaborate, inside and outside the organisation with tighter accountability for results, a system so designed and guided that it regulates itself and adapts quickly to change. Profit centres and careers managed more like a business or portfolio of products and services are examples of early steps towards this. Networks of product teams and business units transacting with functions and distributors in different locations in an internal market are a more advanced form.

The Challenge

How far these different ways of organising are already emerging or need to be fostered and grown for a business or corporation to survive and grow needs to be carefully assessed.

Typical problems, issues or questions that drive the need to organise differently are:-

New Product Development is too slow.
Matrix or dual reporting is not working but we need to think and act like a matrix (across functions, product divisions, locations - customer service/delivery areas, resource centres).
Decisions take too long as they are referred up the hierarchy.
Teams can manage themselves quite well but are not integrating effectively with other teams and no single manager can do this for them.
Customers want a multi-functional or multi-product team - and the same service in different locations.
Support functions (IT, Human Resources, Finance etc) are not really meeting the needs of business units who pay for the overhead.
The allocation of resources in the business planning and budgeting process constrains initiative.
Change beyond one area of authority or across more than one boundary is very slow to initiate and make happen.

New structures and systems alone are not enough. If a change like this in organising is needed, then it requires a major shift in beliefs about the way organisations work, how a business or enterprise is controlled and the kinds of disorder that may need to be tolerated, the role of workers, leaders and managers, status differences, the sources, balance and use of power, the basis of stability and security, the implicit contract of employment, co-existence of constructive competition and collaboration - and so on. Skills and capabilities need to be acquired too to manage and thrive in such an organisation. Many are calling this a paradigm shift. Over the last 35 years the resistance to changes in this direction are seen to be strong, while there have also been examples of bold business leadership.

Process

These ideas and practices can be applied, or misapplied, in various ways. There are many ways of applying the principles and concepts of these new forms of organising, and so they need to be tailored to the business, culture and stage of evolution of the organisation. Where different parts of an organisation need to be on the continuum between traditional hierarchies and more or less dynamic market-based networks will vary.

Organisations that change themselves successfully usually do so through seeing it as a process of learning through cycles of analysis and design, action, dialogue and reflection. This has a formal, planned side and an informal, emergent aspect that both need to come together. Leaders in line and support functions are needed who understand from experience the process of change, re-learning and evolution in organisations. A capability both for change and for organisation design and re-design needs to be established within the culture.

Some of the activities that help this process and illustrate where we can be of help are:-
Conducting an inquiry into the current situation and providing tools and frameworks that help a design team to arrive at alternative options.
Advising and facilitating management or integration teams in the process of establishing the organisational context and systems to make the new form of organising work.
Mentoring and supporting leaders in different positions in the new structure in understanding their role and in learning how to conduct themselves effectively in it.
Guiding the design and leadership teams through implementation and learning cycles.
Coaching work teams and their leaders in developing self-management and in learning how to integrate their work with other teams.
Designing the IT systems and human resource policies and practices to support and encourage the new ways of organising.
Helping to establish an evaluation and monitoring process for learning and re-design.
Planning the steps in the evolution of the new form and in the development of shared understanding and ways of working needed for it.

Capability

We see our role in BCG as helping our clients to develop and improve their collective capability to change and learn. Part of helping organisations to develop this capability has been assisting them in creating the environment, skills, practices, structure and infrastructure that stimulates, supports and guides continuous self-organised change. Another part has been developing their awareness of more fundamental transitions, the steps in the journey through them over time and how behaviours and mindsets can change over time.

Learning how to organise differently is one application of this. It means to be able to design and re-design not only the way of organising but also the context, systems and infrastructure for this, and the culture and leadership behaviour that supports it. This can entail questioning some fundamental beliefs, assumptions and habits, as well as learning new skills and capabilities. Each part of the social system can then complement and reinforce the other.

In BCG we have over the last 15 years built up a practical knowledge of ways of organising based on a systemic understanding of social systems. We are at the same time continuing to learn with our clients, especially those who are at the frontiers in developing new forms of organising to fit the times. With many others we believe that there has been a new paradigm of organising emerging over the last four decades that is still evolving and can take different forms according to the context. As part of the process of learning with others we are building up a network of people in organisations who want to share their experiences in this with other organisations and with people in university research units focusing on developments in this area.

We draw on long standing networks of consultants from different disciplines and in different countries to meet the requirements of a particular project, and they too are involved in this learning network.

For further information contact:-
John Bristow: [email protected]
Nick Smith: [email protected]

BCG Ltd, 24 Gay Street, Bath BA1 2PD - Tel: +44 (0) 1225-333737 - Fax: +44 (0) 1225-333738
[email protected]

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