Need to develop the ability to change

Inevitability of regular major structural reorganisation in UK organisations means all organisations need to focus on building adaptive capacity

One in three major reorganisations fail to achieve the efficiency or effectiveness objectives that lie behind them, 40% are not completed on budget, and 60% are not completed on time.

These findings, from a survey of over 800 CEOs, HR directors and other senior managers, lie behind a major new research report into organisational change, how it works, and where it fails - backed by detailed study of eleven large organisations as they went through changes themselves.

Organisational change is a constant feature of modern working life - to such an extent that we have become familiar with change and perhaps complacent in our belief that we understand it. Change and reorganisation in organisations across both the public and private sectors is now so inevitable that trying to identify the perfect organisational design is a fruitless task that should be replaced by a concerted and ongoing effort to build the skills and capabilities required to deliver more fluid forms of organisation. This is the conclusion of the three-year research study - 'Organising for Success' - commissioned by the Chartered Institute of Personnel and Development and led by Richard Whittington, Professor of Strategic Management at the Saïd Business School, University of Oxford.

The research was made possible by unparalleled access to eleven major reorganisations taking place in organisations across the private, public and voluntary sectors over the three-year duration of the project. Organisations in which reorganisations were studied included:

• Cadbury-Schweppes
• Lever Fabergé
• Ordnance Survey
• Lewisham Borough Council

The research also included two surveys of CEOs, HR professionals and senior finance, IT and operations staff.

Between the two surveys, nearly 1,500 individuals were surveyed.

Based on this in-depth research, the report identifies the practical skills and capabilities required to undertake reorganisations and other organisational changes effectively.

It presents a refreshingly practical and direct analysis of the requirements for genuine change and stresses the importance of the role Human Resource professionals can play in change.

The report presents a new model for successful change - 'The Seven Steps to Successful Organising'.

• Sustained top management support - the surveys showed that personal commitment and political support on the part of top management was a crucial differentiator between success and failure in reorganisations.
• Coherent change - taking care to ensure that any single reorganisation initiative moves in step with the broader strategic agenda, keeping top management on board and adapting to ensure wider business objectives continue to be delivered.
• Substantive involvement - successful reorganisations can all demonstrate that they have genuinely involved and consulted staff before and during the process - not just informed and explained. Involvement makes communications a two-way process, creating a valuable source of learning about the reorganisation's shape and progress.
• Communications - a multi channel approach to both internal, and crucially external communications is essential if customers, suppliers and other stakeholders are not to be adversely affected by the process of change.
• HR involvement - having good people skills in a reorganisation team strongly differentiates between successful and unsuccessful reorganisations. Chief executives surveyed as part of the research rated HR professionals as the most important source of advice and learning with regard to reorganisations. According to the research, more than half of HR Directors are closely involved in reorganisations at least every two years.
• Project management - reorganisations need organising too, and good project management can make the difference between success and failure. However, project management is not a cure-all, and without care can become overly rigid and cumbersome for the changing circumstances being managed.
• Skilled teams - assembling a team with the right skills and experience is essential. In a business environment where major change is to be expected, on average, every three years, managers should use end-of-project reviews and similar devices to ensure that reorganisation skills are built systematically into the organisation as a whole, rather than residing with a few powerful and potentially mobile individuals.

Vanessa Robinson, CIPD Organisation and Resourcing Adviser, said: "The pace of reorganisations is accelerating, in both private and public sectors. In this culture and atmosphere, organisations are unlikely to succeed by simply trying to pick the best organisational structure 'off the shelf'. Nor is it enough to hire in one or two change management experts who carry all the information and knowledge in their heads. The truly successful organisation is developing new capabilities to handle and absorb this kind of repeated change.

"Reliance on too few senior individuals and avoidance of the perspective that external experiences bring runs the risk that change leaders may end up fighting the last war on too many occasions. Good war stories are by definition about old wars.

The personal experience of key managers is hard to interrogate critically and is not easily shared with others. If organisations wish to improve their skills and capabilities in managing reorganisations, they need to invest properly in learning - and to ensure that this learning is accessible throughout the organisation. Learning must become the property of organisations, not individuals, if the capacity to manage change on an ongoing basis is to be delivered."

Richard Whittington, Professor of Strategic Management at Saïd Business School, said: "Organisational structures have shorter life cycles today than in the past. There needs to be a dynamic approach - leading to a shift from structure to structuring, and from organisation to organising. People issues are central to any such dynamic approach."
 

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