Continuous Organisational Transformation

Cranfield School of Management

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Continuous Organisational Transformation
By Heather Stebbings

The recent announcement that the National Health Service is to undergo yet another massive organisational change has prompted some people to say that radical reorganisation is the last thing the NHS needs. However, experienced observers of organisations are saying that the NHS changes are symptomatic of the way all organisations are heading, and that we need to find new ways to continuously change, renew and adapt. I am very interested in this concept of continuous transformation in organisations. Indeed, if we take a look at a lot of organisations, change is something that is becoming the new norm. Yet all too frequently they struggle with their ability to change on a regular, continuous basis.

When we look at the ways in which organisations are best suited to perform, their business processes operate in a stable manner, set in their ways, with structures that produce sure, predictable outcomes. Take the banking industry, for example, where we have active discussion of plans for restructuring between investment arms and retail arms of banking. This is but one illustration where managers used to consistency have to face a pressing requirement to change, and this change will followed by another and another.

Handling ongoing transformation

If change has become the new norm, what are the things that need to change to bring this about? One of the findings from a recent pilot study shows that successful continuous change requires the ability to manage the relationships between critical components and between critical resources. If we look at this at the cross-functional business process level, interdependencies become more relevant. Take the legal industry for example: a number of legal firms have particular processes that are very set in their ways, they need to operate as professional services organisations that constantly deliver a good quality output. When we look at the way in which particular business processes change, what we see is specific information routing patterns - flows of information to a particular point, and perhaps the criticality of the information content.

How do you make change continuous?

How do you oil the wheels to make change continuous? The key is managing interdependencies that allow a required level of flex. In the legal industry study, one of the facilitating factors is understanding what it is that contributes to those flows of information; what is it that maintains that business process and the integrity of that business process? And if we look at the input to output to value relationships that exist there, oiling those resources and oiling those connections – managing those interdependencies really effectively is what enables reaction to ceaseless change events. Understanding interdependencies and adjusting them removes a lot of the constraints and allows change to happen unimpeded.

Key message for organisations

For managers faced with change on the ground, what is the key message on how to foster organisations which are adaptable, transformational and responsive? Taking a look into the nuts and bolts of the organisation, a starting point would be to carry out dependency mapping and constraint mapping in critical business processes – not just within departments. Take a look at the cross-functional processes and you’ll find a web of dense connections to certain resources, be they social capital or technology based.

The web of connections means that change within that process creates a ripple effect. What we find is that by mapping the connections, mapping the dependencies and constraints, we can find what we need to free up resources and relationships.

Dependency driven patterns of resources – no matter what those resources are – tend to experience more difficulty in flexing to adapt to new ways of operating. The implication is that it doesn't matter whether you "redesign" or "re-engineer" a process. All that you will do is reinforce dependencies no matter what order you put things in, or how quickly you can operate a process.

Three important factors

For continuous change, there are 3 important factors to bear in mind:

Firstly, like all organisations, there are the environmental uncertainties of business, be they in the outside world in which the organisations operates, the market conditions, the competitor activity, the economic pressures and so on. There are also the internal pressures such as investment in technology, operating cost challenges, and emerging business intelligence requirements.

Secondly, within each business process, there are the constraints and relationships between resource patterns. Those interdependencies are created by information flows – the content of the information flow as well as its timeliness. Whilst embedding a “flow” to operate in a particular way, the more restrictive the flows become. Worse, if you want to achieve lower costs of operation, or consistency of outcome, then imposing structures and minimum information requirements results in embedding rigidity.

Thirdly, there is a balancing act necessary to managing and mitigating the uncertainties of the environment with the business processes interdependencies you have in place in relation to the intentions and expectations of the stakeholders in the business. Changes in direction frequently result in major change programmes as the “left hand down a bit” instruction is translated into executable change activity. Sporadic projects, sometimes elaborate programmes, are created to implement step-change with end-states for achievement in order to cater for the new direction.

Continuous change isn’t about the end state. To enable evolution, look into the nuts and bolts of business processes - if there are in-built dependencies then it’s going to be tough. If you haven't got any flex at the lower levels, it’s going to be near impossible at the higher level.

In summary, as a fundamental starting point:

  • Understand the interdependencies, information flows, and relationships between core business processes –understand their input, output and value.
  • Oil those wheels, address the constraints, and understand the continuing value contribution in relation to stakeholder intent and outcome.
  • Embrace the paradox of balancing these elements – get it right at the micro level and the macro level will flex much easier.

Not to do so risks your organisation becoming yesterday’s success story, tomorrow’s disaster.

Heather Stebbings is a Doctoral Researcher.

Programmes and Executive

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