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early days

During the early part of the 20th Century, Scientific Management was American managers dominant school of thought. Fredrick Taylor had firmly established his Scientific Management theories as oranizations' base philosophy by pioneering the use of time and motion studies as the best way of improving employee productivity and organizational profitability. Managers would carefully break down their departments' tasks into simple chunks, then work out the best way for their employees to execute these chunks. The employees then did their jobs exactly as they were told. In 1920, at the request of managers in charge of Western Electric's Hawthorne plant, Elton Mayo and Fritz Roethlisberger were invited to study the impact of Taylor's approach on the plant's employees and its productivity. The social and relational insights that they discovered through this study was one of the early catalysts for what today is Organization Transformation (OT).

single Element OT interventions

By the 1950s, Mayo and Roethlisberger's "Hawthorne" discoveries had found their way into what we at TLO see as a variety of discrete single element OT interventions. Through their Hawthorne Study, Mayo and Roethlisberger had discovered that good human relationship create positive impacts on employee satisfaction and small group productivity. By 1980 these insights were being embedded small-scale interventions designed to improve individual employees' job performance and small work groups' productivity results.

By the end of the 80's, these single-element experiments had evolved to the point where reasonably large-scale improvement initiatives were being designed and experimented with. These are the interventions that we see as single element OT interventions. We define them this way because each one of these interventions focused on transforming only one specific aspect of an organization, e.g., the design of a job, an organization's hierarchical structure, or the nature of a department's workflow.

Plus or minus two or three, we've identified eight single-element OT interventions that were, at the end of the 20th Century, standard organization development interventions;

  • Job Design Interventions
  • Workflow Design Interventions 
  • Employee Satisfaction, Employee Empowerment, & Employee Engagement Interventions
  • Employee Commitment Interventions
  • Kaizan, Quality Circles, First Time Quality, & Total Quality Control Interventions
  • Lean & Lean Six Sigma Interventions
  • High Performance Team Interventions
  • Service Profit Chain Interventions

 

TLO's 8 Elements of organizational Transformation

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Research done on these kinds of single-factor Interventions since the turn of the century is showing that, while interventions like the eight described do produce transformative results, for the most part, it's hard to sustain the processes that produced them over time. It's almost impossible to generalize them throughout the rest of a host organization.

The reason? Each of these single-factor transformation interventions tends to be focused on just one aspect of an organization, usually its operational value chains. Eight of the eight single-factor interventions listed above were, and still are, value chain interventions.

To either sustain their effectiveness over time or expand the productivity results these interventions create to other parts of their value chain, we've learned that the host organization has to transform other bedrock elements of its infrastructure, especially those that are supporting or hosting the single-factor intervention. For instance, the organization has to transform the value chain's supervisory processes from a unilateral command and control system to a collaborative positive expectations management approach. Or, it has to transform the value chain's employee competency profiles by adding complex problem solving skills or small group learning skills. In short, we're learning that single-factor transformation interventions, while usefully focused on radically altering a specific part of their organization's value chain, are self-sealing. To either effectively support them over time, or generalize their results throughout the system, the OT consulting process eventually has to expand its focus to other elements of the system that are inter-related and integrated. To transform one single-factor element eventually demands the transformation of several others. 

This is why TLO's has developed its 8 Elements Organization Transformation Theory.

The 8 Elements of a 21st Century Organization   

None of us can transform an organization unless we're aware of and work on transforming each pivotal element of the organization. This includes an organization's structural elements, it's process elements, and external network elements. While we're not ready to say we've identified and fully understand all the elements of a modern organization, we do believe we've made a good start defining the essential ones. 

For your consideration then, here's our best take on an organization's fundamental structure, process, and network elements. To transform an organization, we believe you must radically alter each of these eight elements. In a modern 21st Century organization, all these elements are closely integrated. Consequently, to transform the organization they all need to be radically and irreversibly altered in some coherent, comprehensive way. All of them together are necessary for an effective system-wide transformation. Any one element that remains unchanged or is not being transformed becomes an anchor to the overall organization transformation effort. To bring about a full scale organizational transformation, these eight elements are the ones we think must be revolutionized:                              

1. The Organization's "Organizing Principle" is the core assumption around which everything in the organization is structured. A company's organizing principle is the fundamental presupposition from which its senior leaders derive their strategic imperatives. In medicine, for example, "curing illness" or "healing sickness" has been the core presupposition or principle around which medical systems have always been structured--until recently, that is, when the idea of "promoting wellness" has emerged as a better premise.

2. The Organization's "Business Model" is the instrument senior leaders typically use to amplify their company's organizing principle into an appropriate business strategy, relevant operating principles, and essential performance obligations. It's also the rationale they use to explain to interested stakeholders how their organization creates economic, social, and/or political value, as well as meaning for themselves and their employees. A business model typically encompasses a broad range of issues, including a description of purpose, target customers, product offerings, and performance strategies.

3. The Organization's "Modes and Methods of Coordination" are the structures, systems, roles and policies used by the company's executives, managers, and supervisors to control and orchestrate everything their organization does to produce its products and services. Structurally, over the last couple of centuries, functional hierarchies have been the dominant way we've exercised control over an organization's systems, processes, and employees. In behavioral terms, "supervisory compliance" has been the dominant mode of control and coordination with employees.

4. The Organization's "Means of Production" are the various business processes the organization uses to create products and services that are consonant with its organizing principle. Since the mid 1700s, the "horizontal value chain" has been the basic way organizations have structured their modes and means of production. Historically, this has meant that an organization's value chain has included six sequential steps: product design and development, marketing and sales, inbound logistics, operations, outbound logistics, and customer service. For example, orchestrating this sequence has been the way car manufacturers, airlines, and hospitals have organized their horizontal processes in order to "get work done."

5. The Organization's "Competency Platforms" are made up of those knowledge bases, technologies, and essential skill sets that the organization uses in combination to realize and develop its core competencies. Using this platform, managers and supervisors create the company's key products and services. As one example, Kaiser Permanente depends on dozens of specialized knowledge bases, technologies, and skill sets, each organized into its own functional specialty, such as Cardiology, Orthopedics, or Gynecology, to deliver the medical care it provides its patients. Overall, Kaiser's core competency platform is what forms the way they "practice medicine."

6. The Organization's "Demographic Structure" includes those sets of professional employees a company needs to produce its goods and services. Airlines such as Virgin Australia, WestJet, and Emirates need groups of pilots, flight attendants, gate agents, and baggage handlers. Kaiser Permanente must have groups of doctors, nurses, lab technicians, and administrators.

7. The Organization's "Culture" is that set of unique-to-the-company identities, foundational stories, essential values, and unifying symbols and signs it uses, both consciously and unconsciously, to define its systemic ethos and fundamental purposes, engage, empower and align its employees, and maintain its cohesiveness through time.

8. The Organization's Partnership Networks" are those interconnections a company creates to link itself to its suppliers, customers, competitors, and regulators. American Airlines, for example, has a vast network of partnerships with Boeing, its passengers, Delta, United, and Southwest, as well as with the FAA and TSA.

 

21st Century ot Support Services

Researching the internet to learn what it has to say about how to implement an organization transformation effort reveals four conclusions:

  • To successfully implement an organization transformation effort, each of an organization's eight key elements needs to be addressed in ways that irreversibly transmute them.
  • No organization can ever successfully transform all eight of its key elements simultaneously. Successful transformation require all eight be reconfigured, but for now these kinds of transformational change efforts will probably need to be orchestrated in some kind of sequential fashion.
  • It's also likely that each organization's transformation effort will have to be unique, with the exact order in which their eight elements are addressed being a function of conditions on the ground for that specific organization.
  • Comprehensive organization transformation support is needed to effectuate any system-wide organization transformation. This support needs to be available and offered in three distinct ways: First as Thought Leadership, second as Thought Partnership, and finally as OT Consulting.

This Organization Transformation Services graphic provides a useful visual sense of these propositions: 

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Conceptual Implications

On the Conceptual Frameworks landing page, we wrote "TLO's 8 Element, 2 Loop, 3 Horizon model of organization transformation is the conceptual framework we've developed...to help us make sense of and learn from our twenty plus years' worth of occasionally satisfying, often frustrating, always tough OT consulting assignments."