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Tuesday, Nov 28, 2023

Corporate Design and Change

Corporate Design and Change If you are thinking of organizational change, you are doing so for a purpose. Perhaps you have decided on a change in strategy and believe its success depends on significant organizational change. Perhaps the organization and its processes have not kept up with prior strategic evolution. Perhaps you are concerned that the organization has lost vigor, or its culture fails today’s needs, or its operations are slow and inefficient. Whatever your underlying concerns, you are looking for some real gain in corporate performance (or maintenance of high performance in changed circumstances). If any of the above are true for you and your organization, then corporate change can unleash a tremendous amount of value. Equally, if not done well, it can destroy enormous value, so you end up worse off than you now fear. Getting it right is not often easy. Having a well-researched and/or recommended corporate design firm work with you will increase your chance of success and reduce your chance of failure. A good corporate design firm can leverage your strategic intent and managerial effort. Typically, there are two strands to the contribution of a corporate design firm: corporate design and change counseling. Strategy cannot be divorced from its implementation. Without the right organization to propel it, strategy is like a car without an engine. Much strategy comes to grief for want of suitable organization design or flaws in the implementation. Achieving an appropriate corporate design depends on several things. This includes the “designers” actually understanding the strategy. That requirement is central to our approach. An organization is not just a set of responsibilities and reporting lines. More importantly it is a set of integrated processes, impelled (or retarded) by culture, values and reward systems, and drawing on a range of personal and corporate competencies. Many changes to organization design focus on reporting lines and head count. While they are an important part of any organization design, overlooking the others makes the likelihood of failure high. The best corporate design firms are not interested in working with clients to produce failures. Life is too short for that. Most corporate design companies want to work with people committed to succeed. It is always a team effort. The process of change is frequently a quagmire. Its success has typically depended on personal skill and luck, rather than the application of systematic management principles. The principles derived from the study of corporate evolution in general underlie the advice corporate design firms provide on executing corporate change. Those principles are both parsimonious and powerful. They do not make change a simple job. It almost never is. But the principles provide managers with real clarity about what they need to do in order to make effective corporate change. Equally important, the principles also provide an understandable framework which managers can use to continuously monitor whether they are actually applying the principles. Of course corporate design and change cannot be treated independently. The most appropriate corporate designs are usually developed through the change process. However, this does not mean simply hoping those involved in the change process will come up with a suitable corporate design. A corporate design firm’s contribution is to ensure that sound design principles are applied and to do so without being influenced by vested interests which so often color the judgement of internal parties. Organizational assessment tools are sometimes helpful in clarifying the current corporate reality, how it needs to change and in establishing a common perspective among key members of the organization to provide a basis for action in building the future. However, they are not always relevant and therefore are not central to the ultimate approach. Rather, the best approach to corporate change fundamentally relies on applying sound corporate design principles and the primary principles of effective corporate change.

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