Let’s acknowledge that change is hard. People naturally resist change, especially when it is imposed upon them. But organizations do things that make it even harder—and more exhausting for people—than it
3. Organizing for Sustained
Performance
needs to be. Often, leaders try to motivate people through carrots and sticks (mostly sticks). Far too often, leaders expect people to perform at higher levels while working in an environment that does not foster and enable higher performance on a sustainable basis. Given these obstacles, how can leaders transform organizations so that their people feel empowered and energized?
Success requires understanding the company’s organizational context—
the environment in which people work. For example, what meaning and direction have the company set with its mission and strategy, and how do its leaders and pivotal capabilities embody this? Is the organiza-tion’s design—its reporting structure, decision making, role definition, and processes—consistent with the direction the company has set forth? Has the company established the enablers to achieve this direc-tion, with the right talent, effective use of people and organizational data, motivational performance management systems, and ability to handle change?
A thoughtful diagnostic at the start of the transformation journey to identify areas of strength and weakness among these contextual ele- ments can help. With the insights thus generated, leaders can focus on the specific areas that require attention. It could be that the organiza-tion’s direction has not been effectively set, and the organization may lack purpose or clarity in its strategy or transformation agenda. Even if the direction is well established, there may be weaknesses in the leaders’ ability to convey and embody that direction. Alternatively, the organizational design may be inconsistent, with poorly defined roles or unclear decision rights. Or the organization may be weak on aligning its performance management systems to enable its strategy or not staffing the right talent in the right roles. Of course, many of the areas identified may also be strengths that can be further exploited. What matters is starting with a clear understanding of the organizational context and whether or not this context will enable the organizational outcomes that are critical to delivering and sustaining performance.
We have found that companies that truly put people first successfully achieve five core organizational outocmes (see Exhibit 1):
• Agility. The first outcome is agility, or the ability to act rapidly in an environment of change and uncertainty. Transformations, by
definition, require organizations to anticipate and adapt quickly to changes. This ability is usually required for funding the journey, and always for winning in the medium term, as companies launch new business models, move into new markets and products, and embrace new ways of working, including the introduction of new digital technologies.
• Simplicity. The second critical outcome is simplicity, or the use of ORGANIZATIONAL CONTEXT
LEADERSHIP STRATEGY AND TRANSFORMATION
AGENDA PURPOSE
PEOPLE PEOPLE AND ORGANIZATION
ANALYTICS
PERFORMANCE
MANAGEMENT ENTERPRISE CHANGE STRUCTURE ACTIVITIES
AND ROLES DECISION
MAKING PROCESS AND SYSTEMS/IT
PIVOTAL CAPABILITIES
ENGAGEMENT COOPERATION PEOPLE ORIENTATION AGILITY SIMPLICITY
ORGANIZATIONAL OUTCOMES
Ability to proactively act on signals of change and uncertainty in nimble ways
Utilization of integrated, minimally sufficient solutions that are easy to adopt
People as a competitive force for the company, enabled to contribute, learn, and grow
Ability to create additional value via collective problem solving Long-term employee commitment; employees go above and beyond
Source: BCG experience.
Exhibit 1 | The Organizational Context Shapes Critical Outcomes
minimally invasive solutions to enhance effectiveness and efficiency.
With many initiatives happening across a transformation, it is critical to ensure that the company doesn’t layer on new rules, processes, and other coordinating mechanisms that ultimately hinder its ability to execute.
• People Orientation. Third, companies that put people first enable them to learn, contribute, and grow. Transformations require people to adopt new behaviors and work with new tools and processes. It’s critical to invest in developing them to learn new ways of working and contributing and to facilitate their personal growth.
• Cooperation. Fourth is cooperation, or working together across functions, locations, and businesses to increase the company’s overall effectiveness. Transformation almost always requires across-the-board cooperation to deliver end-to-end solutions for customers, gain economies of scale, and enable companies to use resources efficiently.
• Engagement. Last, companies that put people first energize and inspire them to go above and beyond. Transformation requires a great deal of energy and commitment. More often than not, it is the very people who are already playing key roles with heavy commitments who are asked to contribute to key transformation initiatives. Leaders must focus on employee engagement if they want their people to have the energy and stamina needed to succeed over the long term.
These organizational traits may seem elusive, but they are, in fact, entirely achievable, provided that companies analyze and understand the context in which people work and then take deliberate steps to shape it accordingly.