As the world faces a pandemic, organizations have had to question some of their most entrenched practices and organizational constructs. During these exceptional times, an organization’s ability to adapt to an evolving economy and competitive landscape is consequential; the outcome will either be a resounding success that promotes organizational longevity or a decisive failure from which recovery will be difficult. So how can organizations facilitate the development of a successful strategy and implement change?
The leader’s dilemma
Whether it is proactive or reactionary, strategic change encompasses the active attempt to control organizational transformation through a cognitive plan, where the leadership becomes a facilitator for its execution. The majority of successful strategies do not hinge on a single aspect but on a combination of several elements. Unfortunately, the challenge facing a senior manager or executive–or any individual forming or implementing strategy–stems from the fact that it is impossible to consider all potential variables or to predict with certainty which option will yield the best results.
However, in adopting the perception of an organization as a living, evolving entity, we can still build informed strategies and pivot more swiftly.
The living organization
As organizations grow, they develop an increasingly complex dynamic of interlinking systems. In this sense, an organization can be compared to a living organism akin to the human body, in which several systems and mechanisms interact in order to maintain homeostasis. Using the metaphor of the organization as the human body allows us to elaborate on the intangible constructions that underpin any organization–those that are so critical for strategic change to take root and drive action forward.
Structure–the musculoskeletal system
When discussing organizational design, the formal structure (e.g. organizational charts and workflows) encapsulates the more tangible aspects of an organization, while the informal structures (e.g. shared profits/losses and cross-functional teams) refer to the intangible aspects that link groups and align people’s motivations. Like the muscular system joining the skeletal framework to maintain posture and permit movement, both the physical constructions and linking mechanisms of an organization must act in unison to approach an objective. For instance, if motivational factors such as compensation incentives contradict the strategic narrative, it is unlikely that the change initiative will be implemented successfully. Top-performing firms often pay early, close attention to design decisions because they are critical for implementing strategies and can have lasting consequences.
Power–the cardiovascular system
The extensive network of blood vessels forming the cardiovascular system carries blood and nourishment to the body’s cells. Power within an organization functions in a similar manner: it is a pervasive system that controls the deployment of resources throughout the firm, transforming intention into reality.
Unfortunately, power is too often concentrated among select groups or individuals, causing feelings of powerlessness and disengagement among employees. If employees are not empowered, then implementation of even the soundest decision will be adversely impacted. If the cardiovascular system symbolizes power and only a small portion of the organs are allowed access to it, the entire body will suffer.
Communication–the nervous system
The nervous system coordinates the body’s actions and sensory information by transmitting signals to and from different parts of the body. Communication in an organization serves a similar role, driving alignment among its members to act on a cohesive vision.
Communicating compels the communicator to formulate thoughts in a coherent message. The receiver is then able to process the information articulated and reflect upon its meaning. Effective communication can only occur when both synthetization and reflection are properly conducted, as both are required to ensure clarity and comprehension. Similar to the nervous system, which provides directives to the human body and then processes feedback from the various senses, organizational communication should foster a reciprocal exchange of ideas across an organization.
Culture–the immune system
A strong organizational culture serves both as a mechanism of coordination and one of normalization. In this sense, the culture of an organization is representative of the immune system, which defends the host from the insurgence of potentially harmful pathogens. An organization must have the right culture to implement the desired change. While many concepts can influence how a change effort is perceived by individuals, if the people forming an organization do not hold a consistent belief system or are not motivated toward a common vision, successful implementation of the new strategy becomes increasingly difficult.
Working as one
The various systems of the human body must function in unison, with each complementing and supporting the other. Components of an organization exist together in various states of balance and consistency. The higher the degree of congruence among the components, the more effective the organization can become.
By exploring the ways in which the themes of structure, power, culture and communication co-exist, the following insights into developing and implementing strategic change can be applied to promote a living organization.
The holistic approach
When an organ within the human body begins to fail, the negative effects often impact other surrounding components. This internal dependence, in which a change in one area has repercussions in others, is present in organizations as well. In broadening the perspectives used to formulate a strategy, potential executives and senior managers will be more informed about developing a strategy to drive the future of business. Actually, one can go as far as to say that a strategy cannot be judged in an absolute manner but can only be determined to be successful or inefficient in regard to how it is aligned with other aspects of the organization and its industrial environment.
With the mindset of adopting a holistic vision, the formulation and implementation of strategies no longer occur in distinct phases from one another, nor should they be considered mutually exclusive. While intended strategies are usually the outcome of conscious thought, realized strategies often involve emergent characteristics that complement the traditional concept of deliberate action. When thinking and acting are differentiated and kept separate, organizations are unable to participate in active learning and are therefore limited in their capacity to identify and benefit from emerging opportunities. This is where the capacity to receive feedback within an organization allows for a potential change of course to avoid errors or altering circumstances.
Change is a negotiation process
If the change initiative allows for feedback to take place, the process of change management becomes one of negotiation requiring some degree of compromise and willingness to adjust to emerging insights. Generally, collective approaches where members have a high level of influence and are motivated toward a common vision generate more effective collaboration. However, balance is required to ensure sufficient flexibility in moving inclusive dialogue forward while maintaining consistency of core values and the organization’s strategic efforts to avoid member confusion. In essence, compromise where you can and where you can’t, don’t.
Finally, the unifying thread given the insights discussed thus far is that change initiatives must be adaptable. Like the human body, organizations are open systems that interact with their environment and must, therefore, be able to adjust to the demands dictated by their surroundings. Adaptability must be baked into any organizational undertaking. If enough time is allowed to elapse, even the best strategic decision can become outmoded or ineffective.
An organization that attempts to incorporate these guiding concepts will be better positioned to confront its changing landscape. In doing so, the leadership role moves away from an all-knowing, heroic catalyst of change to one responsible for empowering others. After all, a well-structured and unified organization can outperform even the most heroic individual.
McGill MBA candidate 2022
Article by: Fabio Gatti
Illustration by: Chris Madden