There’s a saying in business, “shiFt happens!”

Many people fear the word “change” for many reasons; the most common reason is that people get too comfortable. But what happens if a certain way of doing things doesn’t work any more? I’ve always learned that there are three types of people: people that watch things happen, people that make things happen and people that wonder what’s going on. People that watch things happen usually know they need to change but they are afraid or too comfortable so they watch other people go in the “mine field” first. When change management comes to mind, the first thing I thought about was a simple yet insightful business book I read “Who moved my cheese?” To give you a better insight on what I’m trying to say, here’s a video I found of the story described in the book:

When I think of change, I think of the word reinvent. Although change may be difficult for many people and organizations, it is an opportunity to be able to reinvent specific strategies and allow growth for the company. Change will help improve the company to be more efficient and productive. Can you imagine what it would be like if grocery or retail stores didn’t have any barcodes to scan or even a computer to do their inventory? It fascinates me to think of how it was done back in the day without technology! Here’s an article from the Financial Post that talks about allowing change in their strategies within the different channels in order to work better and optimize capabilities.

It is important for organizations to embrace change and allow for change to happen for the better. Change or Reinventing doesn’t only need to happen with company strategies, but with employees as well! Leaders in an organization will constantly need to elevate their skills and try their best to constantly become a better person and asset to the company. The New York Times had an article of how change benefits the company and even managers themselves when they allow for change and evaluate their flaws. Here is a link to that article.

Now we know all the why in the importance of change in an organization. Let’s talk about the how. John Kotter has a great example of the how to implement change in 8 steps. I’ve taken some explanations from the article to assist in illustrating each step:

  1. Create urgency – “Kotter suggests that for change to be successful, 75 percent of a company’s management needs to “buy into” the change” (Mind Tools)
  2. Form powerful coalition – “Convince people that change is necessary. This often takes strong leadership and visible support from key people within your organization. Managing change isn’t enough – you have to lead it” (Mind Tools)
  3. Create a vision for change – “Link concepts to an overall vision that people can grasp easily and remember” (Mind Tools)
  4. Communicate the vision – “What you do with your vision after you create it will determine your success” (Mind Tools)
  5. Remove obstacles – “Put in place the structure for change and continually check for barriers to it. Removing obstacles can empower the people you need to execute your vision, and it can help the change move forward” (Mind Tools)
  6. Create short-term wins – “Nothing motivates more than success. Give your company a taste of victory early in the change process. Within a short time frame (this could be a month or a year, depending on the type of change), you’ll want to have results that your staff can see” (Mind Tools)
  7. Build on the change – “Real change runs deep. Quick wins are only the beginning of what needs to be done to achieve long-term change” (Mind Tools)
  8. Anchor the changes in the corporate structure – “To make any change stick, it should become part of the core of your organization. Your corporate culture often determines what gets done, so the values behind your vision must show in day-to-day work” (Mind Tools)

Here’s an explanation of all 8 for all the readers wanting more insight about each step, what to do and how to go about it. Organizations will need a team of leaders with influence in the company to work together as a team in implementing change. Change or reinventing should not be something to be fearful of and should be accepted to become better. After all,

Change is the only thing constant. – Heraclitus, Greek philosopher (Mind Tools)

Are you afraid of change or being uncomfortable or do you love change and the surprises and new experiences brings? Let me know in the comments below and feel free to share your own experiences, I would love to read/hear about them!

References:

Dinaaqua. (n.d). Who moved my cheese. Retrieved July 23, 2012 from http://www.youtube.com/watch?v=fEH6fvU8i7o&feature=related

Mind Tools. (n.d.). Kotter’s 8-step change model – implementing change powerfully and successfully. Retrieved July 24, 2012 from http://www.mindtools.com/pages/article/newPPM_82.htm

Osak, Mitchell. (2012). Optimizing The Channel Experience. Retrieved July 23, 2012 from http://business.financialpost.com/2012/04/26/optimizing-the-channel-experience/

Singer, Natasha. (2012). Helping Managers Find, and Fix, Their Flaws. Retrieved July 23, 2012 from http://www.nytimes.com/2012/03/18/business/minds-at-work-helps-managers-find-and-fix-their-flaws.html?_r=1

“Move a little more to the right. Now you’re centered”

Organizational structure is important to understand because the structure helps the company identify who the major decision makers are and how tasks are organized and distributed among different departments. This is important to ensure unity, productivity and effectiveness throughout the organization and helps each individual take responsibility and stay accountable for their respective roles in the company. The organizational structure also outlines how to effectively communicate with different management levels.

There are many elements to consider and to look at when we think of the structure of the organization. One of the main elements that I enjoyed researching about was the difference between centralization and decentralization. Both structures are important to consider and both have their individual advantages and disadvantages. Below is a table I created for my fellow visual learners to illustrate the differences:

 

Centralized Structure

Decentralized Structure

Decision making
  • One individual will make decisions and provide direction
  • Small businesses usually use this structure since that one individual is typically the owner
  •  Several individuals responsible for making decisions
Advantages
  • Extremely efficient in making business decisions
    • Owners set objectives for different managers
  • Utilizes individuals with a variety of expertise and knowledge for running a variety of operations
  • Broad-based management team has knowledgeable directors or managers to handle various types of business operation
Disadvantages
  • Can suffer from negative effects of several layers of bureaucracy
  • Business owners responsible for making decisions in the company may require more time to accomplish tasks
  •  Can struggle with multiple individuals having different opinions on a particular business decision
  • Can face difficulties trying to get everyone on the same page when making decions

and here is the link to full details of where I got the information from to create this table.

In order to maintain sustainability, companies must choose to have either a centralized or decentralized structure; This however is not set in stone. A very short and brief article from the Harvard Business Review talks about CISCO, a company moving from  a centralized structure to decentralized in order to adapt to changes and cater to the company’s customers and culture. Companies need to strategically find ways to continue to participate in competition and adapt to changing trends and technologies.

In this economy, companies are definitely trying to keep up to growing trends while maintaining efficiency and attempting to cut costs. It is interesting to know that companies are really evaluating their structures in specific areas, not just in general. Along with advertising, employee wages are also one of the company’s biggest expense. An awesome article from the Financial Post talks about “the best ways to cut labor costs.” In the article, the author mentions many things to consider and strategies to help companies out with such a big expense. This came to my attention because it considered centralized and decentralized structures to assist in dealing with labor costs. It talks about considering moving from a “large, decentralized and complex organization” (Osak, 2011) to a “centralized set of policies and procedures to guide hiring practices and wage levels” (Osak, 2011).

It is really important that companies do find a structure that aligns with their mission, vision and goal as a foundation and something that they can stand one. Let’s think about buildings for a a moment…what if they didn’t have a proper structure that was strategically planned out to meet their needs? Would that building still look the same, or worse? Or would it even stand in the futre? What do you think about organizational structure? If you can build a company, what would your structure be like? Let me know in the comments below and I would love to hear about your creativity!

References:

Gulati, Ranjay. (2009). Cisco Systems (2001): Building and sustaining a customer-centric culture. Retrieved July 9, 2012 from http://hbr.org/product/cisco-systems-2001-building-and-sustaining-a-custo/an/409061-PDF-ENG?Ntt=decentralized%2520structure

Osak, Mitchell. (2011). The best way to cut labor costs. Retrieved July 9, 2012 from http://business.financialpost.com/2011/11/21/the-best-way-to-reduce-labour-costs/

Vitez, Osmond. (n.d.). Centralized vs. Decentralized Organizational Structure. Retrieved July 9, 2012 from http://smallbusiness.chron.com/centralized-vs-decentralized-organizational-structure-2785.html