Achieving organizational effectiveness and implementing change in an organization has many dimensions. We can help you determine when to restructure your organization, when to change your corporate culture, and when to do both (and in which order).
As we were concluding a series of expert coaching sessions for an organizational restructuring project within a global NGO's headquarters, our client asked “but is this really fixing our issues? Don’t we have to change our culture instead?”
Questions of culture and organizational culture change often come up as people deploy the organizational effectiveness suite and the Organizational Structure Kit in particular. Having the right structure and a powerful organizational culture are both major drivers of organizational effectiveness. However, you should know when – and how – to tackle each topic. And you should be clear about the implications of any approach to boosting organizational effectiveness.
When to work on organizational restructuring (and not on changing corporate culture)
An adaptation of your unit structure is necessary if you need a new answer to at least one or more of the following questions:
How effective is your organizational structure?
Triggers could be, for example, shifts in the market environment; the pursuit of new entrepreneurial opportunities; a new strategy; or the launch of a new product or service. All of these triggers can lead a management team or a leader to reconsider the configuration of their resources by way of a reorganization. Changing managers is often part of this process.
Depending on the depth and scope of the reorganization, as well as the size of the organization, organizational restructuring can be a matter of several weeks to several months.
Obviously you would not consider a major culture overhaul in the context of such a reorganization if you weren’t convinced that the way your people work, and work together, requires drastic change in order to keep the organization viable.
In the case mentioned above, the international NGO reviewed the services provided to country operating units by a function on the global HQ and regional levels. The issues involved were about quality standards, duplication as a result of organic growth, and decentralized decision-making. The restructuring made good sense and was not met with major resistance from within the organization. Still, there was an emerging sense in the HQ that the organizational culture was developing unfavorably and that something had to be done about it.
When to drive organizational culture change (and keep your structure and processes)
You should consider a major culture shift if you sense that crucial behavioral patterns and routines are ineffective, impede your organization’s growth and progress, and impair the wellbeing of your people.
As a management and change project, the kind of analysis and the kind of work you need to do are very different from a reorganization focused on structures and processes.
Above all, if you want to be serious about culture change, you need to be prepared for the long haul. Sustainable impact will usually be reached in years rather than months. The baseline diagnosis will also require more profound measurements in order to direct your efforts.
If you see potential in changing your organizational culture, but no immediate need to adapt your structure, you can drive culture change as a stand-alone project (that is, without incurring the cost, effort, and friction of a reorganization).
When to do both (and potentially even more)
It’s time to do both a reorganization and an initiation of an organizational culture change if the following two conditions both exist: your organization is not set up in the right way in terms of structure and processes, and your organization has ingrained behaviors and routines that are not sustainable for its effectiveness. This scenario, however, requires a major turnaround. Such a broad approach, while involving a major and often risky effort, can also entail opportunities, and even synergies, as the structural and behavioral dimensions of organizing can be activated as part of a joint narrative.