Chicken Manufacturing Companies
Following a merger, the CEO of a large manufacturing company was concerned that the newly combined business had too many complex and unnecessary processes, all of which made it difficult to get things done and drove ...
Chicken Manufacturing Companies
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Timing is critical for successful organizational change. What you do first and the sequence of actions that follow can make or break your effort. But in many cases, it's not completely clear whether one step causes another or vice versa. Like the classic "chicken or the egg" dilemma, you're left asking yourself: Which should come first? Here are two examples of this problem:
Headcount reduction or simplification? Following a merger, the CEO of a large manufacturing company was concerned that the newly combined business had too many complex and unnecessary processes, all of which made it difficult to get things done and drove up costs. Since many jobs had already been eliminated during the initial integration period, the CEO was concerned that another round of layoffs would be disruptive, so he argued that the firm should focus first on simplifying processes, and that lower costs would be a natural byproduct. Several key line executives, however, felt that they should first eliminate more jobs, which would force the remaining people to streamline their work.
Delayering or expanding management roles? The CEO of a fast-growing technology services firm realized that the company was becoming increasingly siloed and unable to develop broad-based solutions for customers — a problem that would eventually constrain their growth. After considerable thought, she decided that the best way to force her managers to take a more holistic perspective was to increase their spans of control so that they were responsible for end-to-end processes and wouldn't have the time to micro-manage the technical details. She also was convinced that the increased spans would result in fewer organizational layers, lower costs, and faster response times. But many members of her team thought that they should start by training managers in the skills required to develop solutions with customers in mind before changing the structure.
The truth is that good arguments could be made for both sides in each of these cases. Yes, eliminating jobs forces people to streamline work; and streamlining work can eliminate jobs. And yes, delayering can force managers to take broader perspectives, which can in turn facilitate changes in structure. It's like the Miller Lite ads where drinkers argue over whether the beer is "less filling" or "tastes great." What's the right answer when the logic can go either way? But unlike beer, with changing an organization you can't do both simultaneously. You need to make a choice about where to start.
Prioritize the goals. In the cases described here, as with many change efforts, there are multiple goals. While all are important, one of the best ways to find a starting point is to determine which of the goals is most critical. In the first case, for example, the CEO felt strongly that most important goal was to stabilize the organization following the merger, which meant that headcount reduction should not be the starting point. However, in the second case, the senior team all agreed that developing broader solutions was the most critical goal, but there was still disagreement about whether that should be done through training or through structural change. So what should you do if clarifying the goals doesn't provide guidance about where to start?
Rely on structural shifts to change behaviors. The next principle to consider is that structural change usually drives behavioral change, and not vice versa. In other words, training people in new ways of working — without modifying job responsibilities, reporting relationships, and incentives — is often a prescription for failure. Because old patterns are often entrenched, structural change can be a forcing function to break them. In the second case, for example, the senior team tried to convince, guide, and teach senior people to collaborate more effectively to create solutions for customers — but the shifts didn't take hold until they reorganized into broader teams, with larger spans of control and fewer layers.
Deciding where to start with organizational change is often a complex argument about what should come first. Rather than get caught in the debate, it's important first to clarify what you want to achieve, and then find the most powerful way to get there.
Ron Ashkenas is a managing partner of Schaffer Consulting and a co-author of The GE Work-Out and The Boundaryless Organization. His latest book is Simply Effective.
Steve, I agree with you that the "either-or" position could result in fragmentation of the Oanizational Ecology in respect of an envisag new r "improved" type of situation; be it the question of head count reduction vs simplification or delayering vs training. I further tend to agree that identification of core values as a sincere attemp in determining "who we are and what we stand for" is probably the most important question to ask in this regard. In order not to fragment and destroy the Organizational Ecology, which is construed along the lines of a multitude of variables, ons copuld possibly ask the question or approach the dilemmas with a "and-and" view. The danger with such an approach is of course that you increase the complexity of reasoning and the complexity of possible interventions, which of course will depend on the methodology that you apply to analyse, assess and define the reasons for change or transformation. It is furthermore also dependent on the ovarll approach to monitor, measure the success or effectiveness of your transformation or change initiatives and eventually to implement corrective measures wher undesireable effects present themselves.
The fundamental issue is very often that CEO's follow the lead of individuals that ignore the Organization Context/Ecology and present solutions that are contextualised for the particular organization.
Thank you Ron for this excellent blog and the above response. I do believe that the notion of a choice between A or B is what we teach students and is borne out of deductive analysis and the belief that one side is always better than the other if we have sufficient data. Although this may be true for many management challenges and issues, I would argue that it isn't true for leadership in change and transformation. The process of Changing what we do and how we do it, needs to be weighted against Enduring in what we are good at and what is core to our organization. Organizational change therefore can be seen in terms of dilemmas (as you mention), not simply a choice between A or B. Dilemmas simply stated are challenges between two seemingly opposing value orientations that are both important, positively defined, and desirable. As in your examples, the need to have a lean workforce vrsus lean processes, and the technology specialist (silo-ed) focus versus the generalist client focus. Correctly framing the dilemma in positive terms is as important as ultimately reconciling such dilemmas as you indicate. This process is extremely hard and isn't simply a leaders' task. The skill of facilitating and committing to re-alignment is a leadership competence. This is particularly true across organizational as well as cultural boundaries as you indicate. I believe there is a well documented structural, systems thinking view of change and transformation and hope that more organizational leaders will...
Maarten, I think the point you make is that posing an "either-or" question results in an imperfect solution, since the positive outcomes of the "unchosen" path remain forever lost (or at least unexplored until the pendulum of opinion swings back). Framing change as a dilemma requires a deep sense of those values that are important to the intent of the business. I think that core values rather than goals are a better lodestone in times of complex decision making. Goals are reductionist and by their nature result in an over simplification. As one who has been party to precisely the sort of choices that Ron describes on many occasions, its my experience that goal prioritization is only useful once values are clear - and during mergers, clear value systems don't emerge like a butterfly from a chrysalis.
And as an aside, while structural shifts can work- by eliminating the possibility of continuing to do things as they have always been done - they need to be done in concert with the elements of behavioral change. Thats probably a given. Moreover, structural change, done in isolation from the company's value system and initiated as a "goal" in and of itself, is self defeating.The associated chaos, confusion and morale-sapping, energy-draining, firefighting that fall upon the shoulders of "the few" during the period that the new order is taking shape results in greater damage to productivity, quality and effectiveness than is readily observed at the time.
You make a great point about having a clear goal. It baffles me how often this point is made and how often it is never implemented. Many times goals are ambiguous and siloed divisions will understand the goal differently. Usually in a manner most beneficial to local needs. More interesting is your point of using structural change as a catalyst. I couldn't agree more. Training is quickly forgotten and little ever becomes of it unless it is applied immediately Structural change will force the organization to learn. Learning has to be actively managed and not just introduced in training sessions and post-project analysis.
Thanks for your comment. I wish there was an easy answer about how to influence decision-makers, but of course there isn't. Depending on the person you might be able to walk through the different scenarios, with the risks and benefits of each. The key however is to help them clarify the number one priority -- if they had a choice between A or B, and could only achieve one, which would they choose. Unfortunately many decision-makers avoid these kinds of choices and try to do both, which doesn't usually work.
Timing is critical for successful organizational change. What you do first and the sequence of actions that follow can make or break your effort. But in many cases, it's not completely clear whether one step causes another or vice versa. Like the classic "chicken or the egg" dilemma, you're left asking yourself: Which should come first? Here are two examples of this problem:
Headcount reduction or simplification? Following a merger, the CEO of a large manufacturing company was concerned that the newly combined business had too many complex and unnecessary processes, all of which made it difficult to get things done and drove up costs. Since many jobs had already been eliminated during the initial integration period, the CEO was concerned that another round of layoffs would be disruptive, so he argued that the firm should focus first on simplifying processes, and that lower costs would be a natural byproduct. Several key line executives, however, felt that they should first eliminate more jobs, which would force the remaining people to streamline their work.
Delayering or expanding management roles? The CEO of a fast-growing technology services firm realized that the company was becoming increasingly siloed and unable to develop broad-based solutions for customers — a problem that would eventually constrain their growth. After considerable thought, she decided that the best way to force her managers to take a more holistic perspective was to increase their spans of control so that they were responsible for end-to-end processes and wouldn't have the time to micro-manage the technical details. She also was convinced that the increased spans would result in fewer organizational layers, lower costs, and faster response times. But many members of her team thought that they should start by training managers in the skills required to develop solutions with customers in mind before changing the structure.
The truth is that good arguments could be made for both sides in each of these cases. Yes, eliminating jobs forces people to streamline work; and streamlining work can eliminate jobs. And yes, delayering can force managers to take broader perspectives, which can in turn facilitate changes in structure. It's like the Miller Lite ads where drinkers argue over whether the beer is "less filling" or "tastes great." What's the right answer when the logic can go either way? But unlike beer, with changing an organization you can't do both simultaneously. You need to make a choice about where to start.
Prioritize the goals. In the cases described here, as with many change efforts, there are multiple goals. While all are important, one of the best ways to find a starting point is to determine which of the goals is most critical. In the first case, for example, the CEO felt strongly that most important goal was to stabilize the organization following the merger, which meant that headcount reduction should not be the starting point. However, in the second case, the senior team all agreed that developing broader solutions was the most critical goal, but there was still disagreement about whether that should be done through training or through structural change. So what should you do if clarifying the goals doesn't provide guidance about where to start?
Rely on structural shifts to change behaviors. The next principle to consider is that structural change usually drives behavioral change, and not vice versa. In other words, training people in new ways of working — without modifying job responsibilities, reporting relationships, and incentives — is often a prescription for failure. Because old patterns are often entrenched, structural change can be a forcing function to break them. In the second case, for example, the senior team tried to convince, guide, and teach senior people to collaborate more effectively to create solutions for customers — but the shifts didn't take hold until they reorganized into broader teams, with larger spans of control and fewer layers.
Deciding where to start with organizational change is often a complex argument about what should come first. Rather than get caught in the debate, it's important first to clarify what you want to achieve, and then find the most powerful way to get there.
We hope the conversations that take place on HBR.org will be energetic, constructive, and thought-provoking. To ensure the quality of the discussion, our moderating team will review all comments and may edit them for clarity, length, and relevance. Comments that are overly promotional, mean-spirited, or off-topic may be deleted per the moderators' judgment.
Harvard Business Publishing About Us Privacy Policy Copyright Information Trademark Policy Harvard Business Publishing: Higher Education | Corporate Learning | Harvard Business Review Copyright © 2012 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.To continue reading, you must be a registered user or subscriber of HBR.org.
Timing is critical for successful organizational change. What you do first and the sequence of actions that follow can make or break your effort. But in many cases, it's not completely clear whether one step causes another or vice versa. Like the classic "chicken or the egg" dilemma, you're left asking yourself: Which should come first? Here are two examples of this problem:
Headcount reduction or simplification? Following a merger, the CEO of a large manufacturing company was concerned that the newly combined business had too many complex and unnecessary processes, all of which made it difficult to get things done and drove up costs. Since many jobs had already been eliminated during the initial integration period, the CEO was concerned that another round of layoffs would be disruptive, so he argued that the firm should focus first on simplifying processes, and that lower costs would be a natural byproduct. Several key line executives, however, felt that they should first eliminate more jobs, which would force the remaining people to streamline their work.
Delayering or expanding management roles? The CEO of a fast-growing technology services firm realized that the company was becoming increasingly siloed and unable to develop broad-based solutions for customers — a problem that would eventually constrain their growth. After considerable thought, she decided that the best way to force her managers to take a more holistic perspective was to increase their spans of control so that they were responsible for end-to-end processes and wouldn't have the time to micro-manage the technical details. She also was convinced that the increased spans would result in fewer organizational layers, lower costs, and faster response times. But many members of her team thought that they should start by training managers in the skills required to develop solutions with customers in mind before changing the structure.
The truth is that good arguments could be made for both sides in each of these cases. Yes, eliminating jobs forces people to streamline work; and streamlining work can eliminate jobs. And yes, delayering can force managers to take broader perspectives, which can in turn facilitate changes in structure. It's like the Miller Lite ads where drinkers argue over whether the beer is "less filling" or "tastes great." What's the right answer when the logic can go either way? But unlike beer, with changing an organization you can't do both simultaneously. You need to make a choice about where to start.
Prioritize the goals. In the cases described here, as with many change efforts, there are multiple goals. While all are important, one of the best ways to find a starting point is to determine which of the goals is most critical. In the first case, for example, the CEO felt strongly that most important goal was to stabilize the organization following the merger, which meant that headcount reduction should not be the starting point. However, in the second case, the senior team all agreed that developing broader solutions was the most critical goal, but there was still disagreement about whether that should be done through training or through structural change. So what should you do if clarifying the goals doesn't provide guidance about where to start?
Rely on structural shifts to change behaviors. The next principle to consider is that structural change usually drives behavioral change, and not vice versa. In other words, training people in new ways of working — without modifying job responsibilities, reporting relationships, and incentives — is often a prescription for failure. Because old patterns are often entrenched, structural change can be a forcing function to break them. In the second case, for example, the senior team tried to convince, guide, and teach senior people to collaborate more effectively to create solutions for customers — but the shifts didn't take hold until they reorganized into broader teams, with larger spans of control and fewer layers.
Deciding where to start with organizational change is often a complex argument about what should come first. Rather than get caught in the debate, it's important first to clarify what you want to achieve, and then find the most powerful way to get there.
Ron Ashkenas is a managing partner of Schaffer Consulting and a co-author of The GE Work-Out and The Boundaryless Organization. His latest book is Simply Effective.
Steve, I agree with you that the "either-or" position could result in fragmentation of the Oanizational Ecology in respect of an envisag new r "improved" type of situation; be it the question of head count reduction vs simplification or delayering vs training. I further tend to agree that identification of core values as a sincere attemp in determining "who we are and what we stand for" is probably the most important question to ask in this regard. In order not to fragment and destroy the Organizational Ecology, which is construed along the lines of a multitude of variables, ons copuld possibly ask the question or approach the dilemmas with a "and-and" view. The danger with such an approach is of course that you increase the complexity of reasoning and the complexity of possible interventions, which of course will depend on the methodology that you apply to analyse, assess and define the reasons for change or transformation. It is furthermore also dependent on the ovarll approach to monitor, measure the success or effectiveness of your transformation or change initiatives and eventually to implement corrective measures wher undesireable effects present themselves.
The fundamental issue is very often that CEO's follow the lead of individuals that ignore the Organization Context/Ecology and present solutions that are contextualised for the particular organization.
Thank you Ron for this excellent blog and the above response. I do believe that the notion of a choice between A or B is what we teach students and is borne out of deductive analysis and the belief that one side is always better than the other if we have sufficient data. Although this may be true for many management challenges and issues, I would argue that it isn't true for leadership in change and transformation. The process of Changing what we do and how we do it, needs to be weighted against Enduring in what we are good at and what is core to our organization. Organizational change therefore can be seen in terms of dilemmas (as you mention), not simply a choice between A or B. Dilemmas simply stated are challenges between two seemingly opposing value orientations that are both important, positively defined, and desirable. As in your examples, the need to have a lean workforce vrsus lean processes, and the technology specialist (silo-ed) focus versus the generalist client focus. Correctly framing the dilemma in positive terms is as important as ultimately reconciling such dilemmas as you indicate. This process is extremely hard and isn't simply a leaders' task. The skill of facilitating and committing to re-alignment is a leadership competence. This is particularly true across organizational as well as cultural boundaries as you indicate. I believe there is a well documented structural, systems thinking view of change and transformation and hope that more organizational leaders will...
Maarten, I think the point you make is that posing an "either-or" question results in an imperfect solution, since the positive outcomes of the "unchosen" path remain forever lost (or at least unexplored until the pendulum of opinion swings back). Framing change as a dilemma requires a deep sense of those values that are important to the intent of the business. I think that core values rather than goals are a better lodestone in times of complex decision making. Goals are reductionist and by their nature result in an over simplification. As one who has been party to precisely the sort of choices that Ron describes on many occasions, its my experience that goal prioritization is only useful once values are clear - and during mergers, clear value systems don't emerge like a butterfly from a chrysalis.
And as an aside, while structural shifts can work- by eliminating the possibility of continuing to do things as they have always been done - they need to be done in concert with the elements of behavioral change. Thats probably a given. Moreover, structural change, done in isolation from the company's value system and initiated as a "goal" in and of itself, is self defeating.The associated chaos, confusion and morale-sapping, energy-draining, firefighting that fall upon the shoulders of "the few" during the period that the new order is taking shape results in greater damage to productivity, quality and effectiveness than is readily observed at the time.
You make a great point about having a clear goal. It baffles me how often this point is made and how often it is never implemented. Many times goals are ambiguous and siloed divisions will understand the goal differently. Usually in a manner most beneficial to local needs. More interesting is your point of using structural change as a catalyst. I couldn't agree more. Training is quickly forgotten and little ever becomes of it unless it is applied immediately Structural change will force the organization to learn. Learning has to be actively managed and not just introduced in training sessions and post-project analysis.
Thanks for your comment. I wish there was an easy answer about how to influence decision-makers, but of course there isn't. Depending on the person you might be able to walk through the different scenarios, with the risks and benefits of each. The key however is to help them clarify the number one priority -- if they had a choice between A or B, and could only achieve one, which would they choose. Unfortunately many decision-makers avoid these kinds of choices and try to do both, which doesn't usually work.
Timing is critical for successful organizational change. What you do first and the sequence of actions that follow can make or break your effort. But in many cases, it's not completely clear whether one step causes another or vice versa. Like the classic "chicken or the egg" dilemma, you're left asking yourself: Which should come first? Here are two examples of this problem:
Headcount reduction or simplification? Following a merger, the CEO of a large manufacturing company was concerned that the newly combined business had too many complex and unnecessary processes, all of which made it difficult to get things done and drove up costs. Since many jobs had already been eliminated during the initial integration period, the CEO was concerned that another round of layoffs would be disruptive, so he argued that the firm should focus first on simplifying processes, and that lower costs would be a natural byproduct. Several key line executives, however, felt that they should first eliminate more jobs, which would force the remaining people to streamline their work.
Delayering or expanding management roles? The CEO of a fast-growing technology services firm realized that the company was becoming increasingly siloed and unable to develop broad-based solutions for customers — a problem that would eventually constrain their growth. After considerable thought, she decided that the best way to force her managers to take a more holistic perspective was to increase their spans of control so that they were responsible for end-to-end processes and wouldn't have the time to micro-manage the technical details. She also was convinced that the increased spans would result in fewer organizational layers, lower costs, and faster response times. But many members of her team thought that they should start by training managers in the skills required to develop solutions with customers in mind before changing the structure.
The truth is that good arguments could be made for both sides in each of these cases. Yes, eliminating jobs forces people to streamline work; and streamlining work can eliminate jobs. And yes, delayering can force managers to take broader perspectives, which can in turn facilitate changes in structure. It's like the Miller Lite ads where drinkers argue over whether the beer is "less filling" or "tastes great." What's the right answer when the logic can go either way? But unlike beer, with changing an organization you can't do both simultaneously. You need to make a choice about where to start.
Prioritize the goals. In the cases described here, as with many change efforts, there are multiple goals. While all are important, one of the best ways to find a starting point is to determine which of the goals is most critical. In the first case, for example, the CEO felt strongly that most important goal was to stabilize the organization following the merger, which meant that headcount reduction should not be the starting point. However, in the second case, the senior team all agreed that developing broader solutions was the most critical goal, but there was still disagreement about whether that should be done through training or through structural change. So what should you do if clarifying the goals doesn't provide guidance about where to start?
Rely on structural shifts to change behaviors. The next principle to consider is that structural change usually drives behavioral change, and not vice versa. In other words, training people in new ways of working — without modifying job responsibilities, reporting relationships, and incentives — is often a prescription for failure. Because old patterns are often entrenched, structural change can be a forcing function to break them. In the second case, for example, the senior team tried to convince, guide, and teach senior people to collaborate more effectively to create solutions for customers — but the shifts didn't take hold until they reorganized into broader teams, with larger spans of control and fewer layers.
Deciding where to start with organizational change is often a complex argument about what should come first. Rather than get caught in the debate, it's important first to clarify what you want to achieve, and then find the most powerful way to get there.
We hope the conversations that take place on HBR.org will be energetic, constructive, and thought-provoking. To ensure the quality of the discussion, our moderating team will review all comments and may edit them for clarity, length, and relevance. Comments that are overly promotional, mean-spirited, or off-topic may be deleted per the moderators' judgment.
Harvard Business Publishing About Us Privacy Policy Copyright Information Trademark Policy Harvard Business Publishing: Higher Education | Corporate Learning | Harvard Business Review Copyright © 2012 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.To continue reading, you must be a registered user or subscriber of HBR.org.
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