Centralized, Decentralized, Geographic, Functional – STOP THE MERRY-GO-AROUND!!

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It’s the end of the year and I’m sure some of you are facing the dim prospects of yet another re-organization.  It may be at the corporate level, within your division, your function, etc. etc.  And you may have a group of people running around developing new organizational models and moving boxes around like lego toys.  Why?  Because this latest round of moving the boxes around is magically going to solve all the problems.  Most of you probably don’t remember this song but it’s worth reminiscing:

Little boxes on the hillside,
Little boxes all the same.
There’s a green one and a pink one
And a blue one and a yellow one,
And they’re all made out of ticky tacky
And they all look just the same.

As many of you can attest, the effort and “cost” of going through these hardly ever produces the results that were intended..  We have helped a number of major corporations through this exercise and there are a set of consistent themes that emerge and I will mention just two of them here.

The first is that any such exercise means a fundamental shift of power.  Being a zero sum game, there are going to be losers and winners and people’s reactions to the exercise, their involvement and level of energy, their support for the decisions and their execution is largely determined by how they feel they came out in the shift of power.  Further, what’s more important is not only what they feel but how it’s perceived by the rest of the organization.  Executives who do not address this concern up front and deal with it throughout the exercise will invariably face significant challenges in getting to the desired result.  The impact of this phenomena is not always explicit or obvious and there may be a time delay in observing the impact.

The second theme I would mention is that the focus is on the wrong element – the boxes.  It’s not the boxes that determine success or failure but rather the lines between the boxes – how will those boxes interact with each other, what are the processes that determine the various hand offs that occur between the boxes, etc.  Your core processes need to be able to handle any change in how those boxes are organized.  You clearly do not want to keep changing your process to accommodate the latest box exercise?  And in any case, you would be hard pressed to find any meaningful process in a corporation that follows a straight line down the middle of all those pretty boxes.   For example, almost all decision processes  make a meandering journey through all those boxes and at the end the path will look like a squiggly line.

So if you are about to go through another box exercise, please accept my sympathies and sing along with me……

Little boxes on the hillside,
Little boxes all the same.
There’s a green one and a pink one
And a blue one and a yellow one……………………

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Dalip Raheja
Dalip Raheja is President and CEO of The Mpower Group (TMG). Dalip has over 30 years of experience managing large organizations and change initiatives. He has worked across the spectrums of supply chain management, strategic sourcing, and management consulting.
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