Organising for success

Organising for success in 21C: a starting point for change
New capabilities for leading and managing organisational change

We know that successful organisations today need to be like chameleons, able to adapt rapidly to match the pace of change in the marketplace. With the potential not only for large-scale value creation but also value destruction, organisational design is more critical than ever for business success. Get the design wrong and strategy is compromised, morale is damaged and customers dissatisfied. Get it right and the organisation is energised: opportunities for cross-selling and collaboration become real, good practice spreads from one part of the business to another and central services really add value to the operating businesses.

Yet, despite the faster rate of reorganising - organisations are now undertaking large-scale reorganisations at least once every three years - evidence suggests corporate performance is often damaged by the exercise. In many cases this is because there is a focus on the technical issues of organisational structure, with less attention being paid to the underlying processes and relationships that are critical to supporting successful reorganisation, in particular how to successfully integrate the people management and development aspects with wider changes in organisation.

Human resources issues are tightly bound up with reorganising. Evidence suggests that changes in structure and systems must be aligned with necessary changes in culture and behaviour. Managing the complex whole is a high-stakes, high-frequency activity that managers must increasingly and repeatedly engage in. Yet we know very little about the capabilities required to manage repeated changes in organisational design.

This bulletin summarises the first report from the CIPD's major research programme Organising for Success in the Twenty-First Century. The report Organising for Success in the Twenty-First Century: a starting point for change provides a starting place for translating existing knowledge about the organisational design process into effective HR contribution and practice.

Reorganisation: the performance challenge

Yet evidence suggests organisations are failing to exploit the benefits of changes in their design.

Bringing together knowledge and tools for managing changes in organisational design, the report,Organising for Success in the Twenty-First Century: a starting point for change:

• distinguishes between organisation and organising and argues why embedding skills and capabilities for managing repeated changes in organisational design is now a critical performance issue
  
  
• provides an overview of the characteristics of traditional and new models of organisation - such as functional organisations, virtual corporations, network organisations, and project-based organisations - and discusses criteria for making choices about different models (Figure 1).
  

The report demonstrates that new models of organisation have not yet been widely adopted and are most often combined with traditional structures such as functional or divisional forms of organisation. It further argues that seeking off-the-shelf, 'once and for all' solutions is likely to be a dangerous distraction from the more complex task of adaptive organisation. The report:

• asserts that the skills in the how of organising are as important as the knowledge of what organisation and introduces some key tools to assist in decisions about the nature of organisational design
  
  
• introduces some practical tools for approaching the organising process. In today's world, managers no longer need prescriptive solutions but tools they can apply for themselves as and when required. The tools include how to integrate HR practices with changes in strategy and structure
  
  
• offers insights for approaching the organising process to deliver improvements in business performance. The insights provide a foundation for future knowledge development. In particular we need to know more about the internal capabilities and processes that can be managed and that discriminate between success and failure in organising.
  

The research programme

Organising for Success in the Twenty-First Century is a three -year programme of research, seminars and workshops by the CIPD. The aims of the programme are to:

• engage practitioners in the issues relating to effective practice in organising, that is, the activities required for developing and implementing organisational designs
  
  
• provide insights and tools to enhance the strategic contribution of those who are responsible for leading and facilitating changes in organisational design.
  

The research is being undertaken on behalf of the Institute by a team of researchers led by Richard Whittington, Professor of Strategy and Organisation at the Said Business School, University of Oxford.

Through the views and experiences of business leaders and HR professionals in household-name companies, as well as organisations in the public and voluntary sectors, we focus on how to manage repeated changes in organisation and the processes and practices that are required to successfully deliver value-added outcomes from changes in organisational design.

Summary

It is clear that delivering sustained performance in the twenty-first century requires new ways of thinking about and managing reorganisations. First, we need to shift the focus from thinking about organisation by seeing it as not as an end-state but as a repeated process organising. Second, managing organisational design must effectively integrate the 'hard' elements of structure and systems with issues relating to culture and behaviour.

The report reviews the state of knowledge on organising practice and draws out implications for HR professionals. But it offers much more than a review of what we already know about effective practice in organising. It provides a starting place for translating existing knowledge into effective HR contribution. Drawing on extensive case-study examples and tools, the publication offers practical insights into the organising process, interspersed with questions to stimulate thinking and prioritise action with colleagues. The report also offers an agenda for future knowledge and practice development, which forms the basis for the CIPD programme of work, Organising for Success in the Twenty-first Century. It is the first in a series of publications and activities that will help to address successfully the challenges in reorganising.