It is so easy to say: The organizational structure has to fit the strategy: Structure follows Strategy. That is true at its core, but also very demanding in times of ever faster changing conditions. How can the established stable forms of organization of many family-owned companies meet those new requirements?
There are plenty of reasons for changing organizational structures: strategic implications (building new business models, establishing a local presence in international markets, etc.), operational reasons (process optimization, etc.) and situational reasons (succession, etc.). (Re-)organization projects and a lot of effort for change management is supposed to help. However, this approach usually turns into an attempt to jump from one stable state to the next.
The linear organization with pyramidal, hierarchical structures is still the leading organizational structure. However, it will no longer suffice in the future, since the amount of a company’s tasks, that do not have to be done repetitiously, but rather erratically, dynamically, spontaneously and without much preparation, is strongly increasing today and will continue to do so. In this future, new but stable organizational conditions are not the right way to go.
There is no date of minimum durability for organizations. The idea that a long period of stability and calmness is a requirement for success after a completed organizational change (as is the case in many companies) is outdated. Organizations are, in the original sense of the word, tools to accomplish something. They are always means to an end, never the end itself. This in turn means that if the end changes, the means have to change as well.
It is not the big shot that counts, but gathering experience in quick incremental steps by applying a trial and error mentality. The 80:20 principle should therefore also be applied in organizational development. Not all situations and their outcomes are predictable, perfection down to the last detail is out of place today. On the contrary: This way of thinking usually leads to a considerable amount of wasted resources throughout the organization, as companies leave so many potentials for success untapped.
Development of a clear common goal
Minimum Viable Product as an implementation principle in organizational development and "cutting the elephant into small slices"
Emergence instead of perfection
Creating free space
Creative "Post it sticking" instead of complex project management
Short, effective stand-ups instead of long meetings
We repeatedly experience one statement as very true, even if it sounds strange at a first glance: The culture follows the structure.
When the framework for collaboration gets changed in a pro-active and visible way, a different working mentality, a distinct openness and a high level of confidence and trust in the employees' own problem-solving abilities emerges. An approach like this creates new and attractive perspectives for certain types of employees. They enter their learning and development zone. Other types of employees however might feel irritated and insecure, which makes them fall into their personal panic zone. In the future, family businesses will have to accept this ambivalence even more and leverage it to their advantage in order to meet the requirements of future customers and create competitive advantages.
With OKRs we have recently experienced a mindset and methodology that is designed as a continuous process to ensure that people work better and more effectively in teams to facilitate measurable progress inside the organization. The point of orientation is always the commonly agreed goal.
The following figure shows an example of a pragmatic way to use the elements of the OKR-concept in organizational development – in contrast to classical project management.
The project in this example relates to the revision of the entire organizational and leadership model of a company with a focus on the upper three management levels. The logic itself is equally suitable for many other organizational issues.
Agile approach to organizational development
A short look at the essential steps/components:
The retrospective is the most effective component in dealing with OKRs: here – ideally without a power imbalance between the participants – the question how well the collaboration between team members has worked during the last period is openly discussed. The aim is to identify what the social structure inside the teams can learn about the individual team members’ experiences and actively improve in the next period. This is what sets the further development of culture in motion. The retrospective is even more important when it comes to changes in organization, leadership and cooperation.
Organizations usually do not want to change on their own. Nor do they simply allow themselves to be changed to a desired state from the outside. We experience the opposite way too often: An organization unconsciously optimizes itself in such a way that changes that affect the status quo and the power structure of the management levels are avoided.
As a result, every change initiative is essentially reduced to redefining or reinterpreting new concepts in such a way that they actually reflect the status quo: "We're actually already doing that...". Craig Larman (a Canadian computer scientist, author and consultant for organizational development), who formulated these exact phenomena in Larman's Law, agrees.
If, however, the management team openly an clearly commits to continuously working on creating better versions of the organization in small steps, then it can be possible to gradually change the mindset of everyone involved. This creates a culture of organizational change in which changes are not experienced as exceptions and threats. Only then can quick adaptability and long-term objectives be reconciled with strategic foresight.
The right answers are usually already in the system anyway, i.e. inside the minds of the people who are part of the organization. In this sense, the team, not the individual, will be more and more responsible in the future.