Built to Change, A New Idea
10 Sep 2009 Leave a Comment
in Uncategorized Tags: Change Management, Creating Value, Org Design, Strategizing
THE BUILT TO CHANGE MODEL OF ORGANIZATIONAL EFFECTIVENESS
By Richard Walton
September, 2009
I recently attended a conference at the Cape Cod Institute. The title of the presentation was ‘Built to Change, A New Model of Organizational Effectiveness’. The central thesis of the program was that in order to be effective today, we must abandon the old model of organizing for stability in favor of the new model of organizing for change. The key principles of the model are strategizing, designing, and creating value. I will explain each point below.
Strategizing is the process of deciding what products and markets the firm will serve. The model differs from past practice in that it suggests that the real need is for temporary competitive advantage, not permanent advantage. The reasons for this are obvious: In a environment of continuous change, no advantage can be permanent. Therefore it is much better to search for temporary advantage and be prepared to develop new products and services to meet new opportunities as they emerge, rather than spend organization resources defending a position that is constantly being undermined by the forces of change. In other words, embrace change rather than fight it.
Designing is the process of developing structures to compete effectively in the present as well as the future. Designing a structure for change is one in which change is considered the norm, rather than a temporary disruption to ‘the way we do things around here’. Among other things, this requires job descriptions to be flexible and broad, rather than narrow and rigid. Employees who interact with the external environment and gain new skills thereby should be considered a major organizational asset, and be rewarded accordingly.
Creating value is the third major principle of the new model. It is built upon the combined impact of organizational competencies and capabilities. Competencies are based in science, technology and engineering. Capabilities are based in processes, routines, behaviors and systems. It is the combination of the two that results in the creation of value through leveraging both to create customer perceived value. This can only be done by developing the capability to respond to changes in the outside environment, and leveraging organizational competencies to create and deliver value to customers when, where, and how it is needed.
The ‘Built to Change’ model of organizational effectiveness is ideally suited to the environments we are experiencing today: severe economic reversals, political instability, constant and rapid change, and newly emerging pressures to ‘go green’ and conduct business in an ethical and socially responsible manner. Adaptation to change is the key to survival now and success later, using the principles of strategic alignment, design for change, and value creation through the building and deployment of personal and organizational competencies and capabilities.
