A SOLID BUSINESS STRATEGY IS ONLY A GOOD IDEA WITHOUT AN ORCHESTRATED ORGANIZATIONAL CHANGE PLAN
Now that our business strategy is clear, success will follow!
… this is what many top-managers think, before realizing, a few months down the road, that nothing in the organization has moved.
The fact is, that a solid business strategy is only a good idea, if companies are not able to translate it into a clear organizational strategy and into an orchestrated organizational change plan, which takes into account cultural and people dimensions.
Culture and structure need to be adapted to strategy targets. You need to have the right people and the right capabilities in place to deliver on your objectives. You need to be clear on what management systems are needed … and, if there is a gap, there needs to be a plan for how to close it, so that objectives can be achieved.
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ORGANIZATIONAL DIMENSIONS TO BE CONSIDERED
KPIS & INCENTIVES
A PROVEN APPROACH TO DRIVE ORGANIZATIONAL CHANGE
In our projects to drive organizational change we normally go through five steps, as described in this flow:
1: SET DIRECTION FOR THE CHANGE REQUIRED
- Define the dimensions (size, structure, decision rights, skills, culture) and extent of change required
- Set-up specific objectives
- Identify performance measures for achievement of objectives
2: IDENTIFY CONSTRAINTS AND HOW TO OVERCOME THEM
- Identify organizational constraints on the achievement of the agreed objectives
- Reflect upon how to overcome constraints
3: CHOOSE AMONG ORGANIZATIONAL OPTIONS
- Develop organizational options for achievement of objectives
- For each option, describe what / who is involved and how it will work
- Choose the way forward
4: DESIGN THE IMPLEMENTATION PROGRAM
- Plan how to implement
- Measures of progress
5: CARRY OUT PLANNED CHANGES
- Involve all concerned
- Allocate responsibilities
- Monitor progress and adjust
Is it our size, our structure, the way we allocate decision rights, our skills or our culture?"
DETAILED DESCRIPTION OF THE APPROACH
STEP 1: SET DIRECTION FOR THE EXTENT OF CHANGE REQUIRED
First of all, we need to understand and agree upon the dimensions and the extent of the organizational change that is required to capture market opportunities.
Do we need to change the size, the structure, the distribution of decision rights, the skills, or the culture? ... and which of these changes have the highest priority?
Once we have clarified the direction and the relative priorities, we need to ask ourselves the question: “What is the end-state we should strive for?" At the end of the change process, where do we want to be on each dimension of change? ... This means setting specific objectives for our organizational readiness program.
And then a further question: “How will we know if we have reached our objectives?” … This means setting the performance measures to track in order to be sure that we have reached the objectives. We then need to share these organizational targets with the rest of the organization, in order to create alignment on where we want to go.
Normally we start this step with the whole team of stakeholders involved. After a series of individual interviews, we run a team workshop, to discuss, agree upon and prioritize how much the organization needs to change and what is most important to change first.
STEP 2: IDENTIFY ORGANIZATIONAL CONSTRAINTS AND HOW TO OVERCOME THEM
Once we know where we want to go, we need to ask ourself another question: “What will get in the way? What are the major obstacles that we are likely to face?"
We then need to collect and share ideas on how these obstacles can be overcome and on what is the most likely avenue to succeed.
STEP 3: CHOOSE AMONG ORGANIZATIONAL OPTIONS
In this step, we design and assess the different options that will allow us to move from where we are now to the end state that we have decided we want to pursue.
For example: let’s say that one of our objectives is to speed up the launch plan for a new product to be commercialized from the current 9 months to 6 months. There might be different ways to achieve this objective, by e.g., 1. redesigning the process for new product launch, or by 2. changing decision rights distribution, or even by 3. rethinking some of the KPIs and incentives linked to new product launch.
… this is an example of alternative organizational options that we have at our disposal. So in this step we list and evaluate the different options and decide on the best way forward.
Organizational change needs to be designed and implemented selectively, only on the dimensions and processes that are most likely to impact the success of the strategy. To limit organizational disruption, we adopt an evolutionary approach to change: in most cases we are not talking about a total redesign, but rather about specific and high-impact changes on those elements that are most linked to business success.
STEP 4: DESIGN THE IMPLEMENTATION PROGRAM
Once we have decided on both our end state and on how we are going to make it happen, meaning that we have agreed on our winning organizational option, we will have to design how we get there over time: what it takes to implement our chosen option, who is responsible, what are the different steps to be taken, what should be the timing.
STEP 5: CARRY OUT PLANNED CHANGES AND MONITOR PROGRESS
Finally, we plan a communication campaign that involves all individuals concerned and ensures their buy-in.
In parallel, we design how to monitor progress, how to make sure that the company is moving towards the objective, and if it doesn’t, how to act promptly to readjust and get back on the planned track.