How a pair of shoes can help you to transform your business
Is your organization wearing the right shoes for today’s challenges?
Shoes do not seem to have a lot of in common with a business.
But sometimes a strange comparison helps us to simplify things and get a deeper understanding of a complex issue.
Our comparison starts by looking at the shoes you decided to wear this morning. I imagine you chose the ones that match best with your clothes and plans for today.
If tomorrow you do different things, you will wear different shoes.
There is no such thing as a pair of shoes ideal for all situations, and the same goes for a firm or a business.
This is the first of three things shoes and a business have in common.
Different criteria of selection
Let’s dive a little deeper to understand what makes a pair of shoes, and similarly a type of business, the one to choose for a certain situation and environment:
- There are formal and casual shoes. Similarly businesses can be hierarchical with a rigid structure, or more loose.
- The shoes you wear for outdoor or sport activities are different than the ones you use in the office or for relaxation. The same difference occurs in the business world. Some companies are much more action-driven and externally oriented than others.
These factors, the level of formality and the orientation towards action, are the other 2 things shoes and a business have in common.
This is what it means for our shoes:
For our business we can bring it down to the following 4 types of organization as described by Juan Carlos Eicholz in his book Adaptive Capacity:
One crucial difference
However, organizational changes are much more complicated than wearing different shoes. It is a long and complicated process.
As a result of this, firms find themselves trapped into an old model which is no longer aligned to today’s necessities.
The following are the 2 most common issues companies are facing with respect to their organizational structure:
- Bureaucratic organizations have execution problems. They need to move faster and become more effective in bringing the decided actions to the market.
- Action driven organizations discover that their hierarchical structure is making it difficult to adapt to a more competitive environment. Because innovation and adaption require a participatory organizational structure.
Is your organization wearing the right shoes?
Many firms are still wearing shoes that were appropriate 10 or 20 years ago. Since then the organization has adapted itself to its people, but maybe not so much towards the competitive challenges it faces in the market.
We need to start by understanding the current state of our organization:
- To what degree is it internally or externally oriented?
- Is the decision making system hierarchical or participatory?
Then define how the organization should be:
- Is the environment and its business context stable or unstable? If it is unstable, the company should be externally oriented.
- What kind of work is required to improve performance? Is technical work sufficient? If you need internal collaboration to find out how to adapt, the decision making system should be participatory.
Conclusion
Chances are great your firm has been wearing the same shoes for too long. It might be time to hit the refresh button.
The starting point of every transformation is understanding how an organization should be. For most companies this means finding out to what degree they should be action driven and innovative.
Do you want to find out more?
Thinking about new ways to create competitive advantage and improve your organization? This PDF describes the 4 pillars that increase enterprise performance and helps you to apply them in your company.
