Organizational development is a continuous process. It is constantly conducted in almost all organizations at different levels, in different measures and it is of course how it should be. However, the motives for which changes are initiated, or the ways in which management implements it, mostly damages rather than improves the organization and makes it viable. We are dedicating this article to the topic why and how the structural evolution takes place and how it is best done with us.
Why structural changes are necessary to be done
Recently, we met the manager of one of the most successful Georgian company. The team of young people soon managed to create a very large organization. They have successfully solved a very big and difficult task and the results were very good to begin with. But now, when the main barrier has been overcome, towards which was addressed their structure, they realized that processes, priorities are changing and something very important should be changed in the structure, the distribution of responsibilities among the members of the top management team, the main processes should be grouped in a new way. Otherwise, they clearly see that the solution of new priorities is very difficult or even impossible activity.
The most significant changes in the main priorities cause the need to change in the structure. In its turn, the change in the priorities may be due the changes in competitive environment, in the size and scale of the organization, or in the solution of many parts of the solution of the main mission, as is the case with the above-mentioned company.
The second reason, which would require structural changes in the organization, is the growth of managerial potential, which is happening constantly whether we want it or not. The managers, due to the growth of their leadership resources and improvement of management skills, are in need of a new role and increased liability. If the organization delays in giving them more difficult task, it will lead to demotivation and they will try to go elsewhere in search of a greater challenge. In its turn, the organization will not be able to use a lot of opportunity.
Third, no less important reason why it is also necessary structural changes is the changes that took place in technologies of work methods, approaches. An approach or technology which we are applying affects the structure as well, and when this approach or technology undergoes a significant change or changes, accordingly are changed the meaning, encumbrance, assignment of the whole services, increases or decreases it significantly. Therefore, this change will inevitably lead to some necessary structural changes.
Given the fact that the team development, changes in priorities, work methods, approaches and the evolution of used techniques are constant happening in almost all organizations, the need of less important and significant structural changes are permanently on the agenda. The second issue is when the management understands its necessity, when it starts the structural changes and which approach is applicable in this case.
How structural changes are conducted with us
Unfortunately, we are almost always delayed to start the structural changes. For some reason, all top-managers evade structural changes very much. Mainly because at least in Georgia, most likely and probably elsewhere, any structural changes are perceived very personally by the people to whom these changes are related. Therefore, as long as it is not so difficult, as long as it is not so difficult to conduct the decision-making process, while the initiatives from the side of staff is not reduced by minimum, while tensions and conflicts in the higher and mid-level management is not reached its peak, no significant changes are made in almost all organizations. For this reason, many things go wrong and a lot of opportunities are lost.
However, there are several reasons for which the relatively mild and relatively painless structural changes are initiated. However, these conditions often lead to the changes which make the organizational structure more difficult and uncertain in the future.
a) When a new person comes in the top-management team, an appropriate service or even a new trend will be created for him. This usually gives basis for immature structural solutions. A change, no matter how painless it seems, has positive as well as negative effects. And if we cannot properly analyze the negative effects of this particular change or ignore them as a whole, it may cause important problems for the future.
b) The same effect has when an important person leaves the team. Leaving of high-level managers very often causes the structural reorganization. On the grounds that there is no successor within the organization, it’s difficult to bring this caliber of staff from the outside, the management often makes the decision to split the trend and annex to any other manager. Given the fact that a person is only one factor that affects the design of the structure, due to the recent changes in the structure that were made for him, almost always affects the rest of the structure and finally has negative consequences for the organization.
c) Structural changes are often caused by significant structural changes made by individual competitor. Fearing that through these changes the competitor will acquire a competitive advantage, the management also began to create similar structures, which usually almost never succeeds. Since the full transfer of generated changes for one organism is impossible and almost never have good results.
d) Brave managers, who have coped with their task very well, often become the cause of structural changes. Management believes that it’s better to increase the liability and impose other tasks to these people who expose open or implicit initiatives. Thus, this is the way how the structural units are moved from one place to another, assembled or re-assembled, etc. However, these changes are often so out of context that ultimately makes it difficult to talk seriously about who is responsible, whose authority where begins and where it ends up.
e) We have the same effect in the case of discredited managers. When a person cannot solve his problem for a long time, it’s hard to watch his torture, the management doesn’t want to let him go but the task is very important, then surgical interferences are initiated in the structure, some offices are closed, some agencies are created, responsibilities are re-distributes as well. There is an attempt to seek a more suitable function for this person and assign this important task to somebody else who can better solve it in management’s opinion.
All these reasons, almost spontaneous, are reasons for poorly analyzed structural changes. These types of changes are almost continuous processes in the organizations, although the structure and responsibilities become more and more uncertain as a result of it, the processes are complicated, decision-making quality decreases and is stretched in time. The enforcement process slows down and becomes more complicated. People are more demotivated, strained, with fewer initiatives and more conflicts, while the organization becomes even more severe and inflexible.
How to male desirable the structural evolution
Any structural change has both positive and negative influences on the organization, changes the balance of power, and changes the processes. How clearly we’ll see the positive effects that we can see in the idea of change, we must remember that it entails with some other changes as well, some of which could be very harmful for the organization itself. Therefore, any changes should be treated with much more seriously.
The current reactions, which we conduct in the form of structural changes, are in need of much more complex and in-depth analysis in terms of expected adverse effects. However, for the reasons given in the first part of this article there is a constant need for these changes and the management should be able to promptly and adequately respond to these needs too.
When a very substantial change takes place in the priorities of the organization, management team, work methods, approaches, and technology, the management should immediately set up a working group and assign the preparation of appropriate structural project with relevant arguments and the expected impact analysis. Without this probably we either don’t change the structure which must be changed, or do it under spontaneous decisions in a much more negative result.
However, due to the fact that there are changes in priorities, in the team and methods, probably not very significant, but small and numerous ones, it is necessary to conduct one current revision of the structure annually. For this purpose, preferably once a year, for example in late autumn to set up a working group to survey all managers, collect their comments and ideas about the existing inconsistencies in the structure and improving needs. Then this information will be analyzed and the recommendations about the ongoing structural changes with relevant arguments will be submitted to the higher management.
However, due to the fact that the potential of such “prophylactic” changes is still limited, these simple changes will not solve most problems. After some time, even if the organizational scheme of arrangement is good enough, it is necessary to implement radical changes. The growth of team potential, the changes in environment, and accordingly in priorities, the innovations made in working approaches requires making the radical, general revision of the organizational structure at least once in three or maximum five years.
In this case it is advisable to develop a new concept on a completely clean sheet of paper, which fully takes into account the new realities, new priorities, the growth of team potential, significant changes made in recent years and the new organizational model will be developed, which will be able to serve the organization’s goals for the next 3-5 years under the conditions of annual “prophylactic” changes. The plan for the transition to this new structure will be prepared and the most important transformation process for any organization will be enabled.
Organizations that do not apply this approach towards the task of structural evolution, as a rule, are constantly late for necessary changes. They mostly follow the events, rather than outdistance them, mostly lose opportunities than create them, use a lot of staff and other resources in vain, and as a result they are not so profitable.
Read the “Synergy Group’s books and note-books” to be more successful and take more initiatives of the structural changes themselves.