• Creating Management Processes Built For Change

    The authors concluded that organizational agility required routines in four areas: strategizing, perceiving, testing, and implementing. Routines and capabilities, the authors note, allow organizations to perform key activities reliably and repeatedly. Management processes -- the fundamentals of planning, organizing, controlling, and motivating -- operationalize the routines and capabilities. To support agility, management processes need to be designed well, and some processes must be designed for change. While the authors found that good management processes were a prerequisite for agility, good processes were no guarantee for success. Sustaining high performance was a function of whether certain processes were flexible and fast. They illustrate their argument using two companies from their research: the Brioche Pasquier Group, a multinational bakery headquartered in Les Cerqueux, France, and Netflix Inc., which is based in Los Gatos, California, and streams digital content to more than 80 million customers in more than 190 countries. Both companies demonstrated an ability to operate effectively without being tied to a rigid set of steps. At Brioche Pasquier Group, for example, twice a year individuals and teams identify objectives and actions related to their work that they think can improve short-term performance or develop future capability, and they also review the previous plans. Brioche Pasquier Group uses this as an opportunity to distribute monetary bonuses (funded by savings or new value realized) to the individuals and teams whose actions contributed to the results. At Netflix, executives are committed to putting information into the hands of the people who do the work and making sure that the information flows up and down to everyone who needs it.
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  • Designing Organizations That Are Built to Change

    This is an MIT Sloan Management Review article. Most large-scale change efforts fail to meet their expectations. A major problem is that even the most advanced change models will stumble when they face organizational designs and management practices that are inherently anti-change. The truth is that the effectiveness of change efforts is largely determined by organizational design, or how a company's structure, processes, reward systems, and other features are orchestrated over time to support one another as well as the company's strategic intent, identity, and capabilities. In a world that is perpetually changing, an organization's design must support the idea that the implementation and reimplementation of a strategy is a continuous process. However, a number of traditional organizational design features tend to discourage change. Thus, to transform themselves into organizations that are "built to change," companies need to rethink a number of these basic design assumptions with respect to managing talent (forget about job descriptions and redefine the relationship between company and worker), reward systems (implement a "person-based" pay system), structure (redesign the organization to maximize its "surface area"), information and decision processes (scrap the annual-budget process and move decision making closer to the front lines), and leaders (replace hierarchical command-and-control with shared leadership).
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