Principles of the Adizes Organizational Therapy

By Dr. Ichak Adizes

Below are excerpts of the book by Dr Adizes: Pursuit of Prime, which is being reprinted now and will be available by the mid of June.

In Managing Corporate Lifecycles book Dr. Adizes presented how to diagnose where an organization is on the lifecycle and why. In this book, Pursuit of Prime, he presents what to do about it, how to lead an organization to Prime, how to transform it from one stage on the life cycle to the next. It is a systemic systematic process of organizational therapy. Pursuit of Prime is a must to read for all those that read Managing Corporate Lifecycles and want to know more.

Editor

I have designed a process that comprises 11 modules of change to promote progress to - or back to - Prime. Just as doctors prescribe specific courses of treatment and medication for their individual patients, the Adizes Program follows a defined sequence of restorative procedures. Their application differs depending on the nature of each corporate patient's problems and its stage in the lifecycle. The wrong treatment or inappropriate application of the right treatment at the wrong location on the lifecycle can cause damage, more loss of hope, and further erosion of energy. A doctor will not prescribe the same medicine intensity to a baby as it would to an adult. And that is what is wrong with many textbooks or trade books on management. They prescribe how to manage well an organization without taking into account that what needs to be done, how to structure the company, the desired leadership style, the reward system, the communication systems and procedures, the strategies, goals etc all change depending where the organization is on the lifecycle. They all assume that the company is already in Prime. And as we all know from experience it is not true. Most companies are not in Prime. And they do not know how to get there. And that is what Pursuit of Prime is all about.

THE FRAMEWORK

Supported by the principle that complementary teams with organizational authority, power, and influence have considerably more firepower than individual contributors, the eleven module therapy is a comprehensive and practical way for companies to handle their own problems through teamwork.

Teamwork mitigates resistance to change: Those busy rowing have no time to rock the boat. An analogy from sailing may help make my point. If, for example, waves rock a sailboat, some people will be nauseated. To overcome their nausea, they should take a turn at the helm and watch the horizon. Likewise, organizational change, especially if it is continuous and unpredictable, can make people sick to their stomachs. To overcome the sickening sense of being a victim of circumstances, people need to get involved in controlling the situation as they fix their eyes on the mission.

Let me repeat some of the principles of organizational therapy:

• Why: The aim is to bring the company to Prime which means the organization is flexible and in control. It copes proactively and efficiently with its changing environment.
• How: The vehicle is participative change.
• What: What you work on depends on your organization's stage on the lifecycle.
• Who: The organizational therapist needs to form a team of people who together exercise authority, power, and influence on the subject worked on. Working as a team, those people have the authority to say both yes and no to the potential changes the team will be making.

The team members start by collecting the problems-the potential improvement points - they have to address. I use the modifier potential because it is impossible to solve all the problems at once, and we don't want to build unrealistic expectations that could foster a new sense of failure. From the complete list, we select those problems we will work on and those we will put on the back burner.

The therapist keeps vigilant watch over the work of the team: Are the team members discussing a certain change in terms of we or they? The moment it appears that a certain course of action requires the approval of people who are not in the room, we table that discussion until those people join the team. If we can't get them to join us, we change the definition of the problem, scaling it to fit the capabilities and authorities of the people in the room.

Why this limitation? The driving force of the process is to increase the organization's sense of potency. We increase faith by picking problems the members of the group can solve. What is crucial for therapy is not what they do but how they do it. As the team solves a problem, everyone gains in self-confidence and mutual trust. With faith in themselves and the organization growing, the group can tackle a broader range of problems.

Like any other therapy, the process is one of building trust. It starts with trust in the therapist, followed by trust in themselves, expanding to trust in other members of the team, and maturing into trust in the organization itself.

To achieve a sense of self-reliance, we compose autonomous teams of top managers who work together to decide what, where, how, why, and who. They do not just study the problems, they do not just make recommendations, they take action, and they take the credit. It is not enough to hire consultants to make a study and not see them until they present their findings for your approval. You cannot undergo therapy by sending someone else to the therapist. You cannot hire someone to exercise for you several times a week.

Along with those participants who have decision-making authority are those in a position to bring about implementation. They are people whose cooperation is crucial. Those are the people who, I claim, have power. Since many people are in positions of power, we invite those leaders others will follow. The third group we invite are those with know-how who can influence the success of what we are discussing.

Here are the 11 modules of organizational therapy. The sequence, intensity in terms of time allocation and intensity of involvement is custom made for each organization.

Module I: Conduct an organizational diagnosis.

Conduct an organizational diagnosis to pinpoint the problems facing the company and the root causes of those problems. A superficial analysis can lead to a misdiagnosis and subsequently to mistreatment.

The diagnosis involves an analysis of both the company's structure and the processes it uses to identify and accomplish its intended mission. The process, led by the organizational therapist, reveals the potential for organizational improvement. The diagnostic workshop helps the company identify where it is positioned in the corporate lifecycle, then describes specific steps the company will need to take to get back on the road to Prime. An implicit aspect of this phase of the program is engendering desire to make necessary changes, and the company must make it clear that it stands ready to make ironclad commitments to achieve those changes.

Module II: Team Problem Solving

Form teams to address and solve cross-functional problems and exploit opportunities. This step is important because of the often intractable nature of the company's problems. Those are not problems readily corrected by individuals, or they would have been solved by now. In most cases, the problems have been around for a long time. Those intricate problems usually require cooperation among different functions and different individuals, and that doesn't come easily to most organizations.

Problem-solving teams of people from opposing camps are not easily managed. Managers and other employees, who have functioned well individually, need to learn both effective teamwork skills and powerful problem-solving methodologies. During this intense phase, the teams perform and receive instruction on how to solve the problems assigned to them in a way that accomplishes four activities simultaneously: problem solving, team building, style enrichment, and cognitive management training.

Module III: Train and certify Integrators.

Train integrators who will get the company to meld its disparate organizational functions and produce change effectively. The goal is to coalesce authority, power, and influence to enhance organizational effectiveness.

In this phase, we build organizational structure that parallels the staff meetings and allows change and openness.

Those first three phases help employees feel they can climb mountains to get their jobs done. The teams learn to chase down problems, identify their root causes, and either eliminate those problems or reduce their impact on company operations. All this is accomplished without the witch-hunts that typify failing companies.

At this phase the organization also learns how to provide bottom up leadership for change. Most leadership books deal with top down leadership we add to it same bottom up leadership whereby employees provide leadership for change.

Module IV: Define you organization's mission.

Working together in the environment of trust and respect created in the first three phases, this fourth phase brings employees together to take a collective peek into the future. Their collective diversity helps shape a plan of action for the future. The definition of the mission will include the markets and customers the company should serve; analysis of the company's strengths and weaknesses in marketing, manufacturing, and distribution in comparison with its competition; and a projection of the future environment (internal and external) and its likely effect on the company.

Module V: Create structure that follows mission.

The teams design the organizational structure they think is best suited to carry out the company's mission.

This phase, among the most complicated of the entire program, should defeat corporate colonialism or dysfunctional corporate headquarters control that could destroy nascent efforts or hamper organizational ability to grow.

Module VI: Test the new structure; establish and verify accountabilities.

In this phase the teams define and clarify responsibilities among different functions of the company. To be sure the teams can implement their recommendations, it's crucial to associate appropriate levels of authority with newly defined responsibilities. Information systems that track performance, operational and financials, throughout the organization establish clear accountabilities.

The right information systems encourage trust and cooperation. Information that fails to pinpoint accountability encourages political infighting.

Module VII: Enlist organization-wide involvement.

At this point, it is time for information to extend beyond the upper echelons and permeate the company. Unless there is an honest attempt to integrate the total organization, a chasm will open between top management and the rest of the company.

Module VIII: Set goals and budgets.

Set goals and budgets in a way that encourages risk-taking, committing to goals that are not easily achieved and establishing goals and budgets . based on mutual trust and respect. During this phase, the company prepares its annual operating budgets. Setting goals is an art, whether for an individual or a group. With teams, the challenge is magnified. If you try to touch the ceiling, simply throwing up your hand will extend your reach only so far, but if you first stretch your arm, then your side, then the upper part of your leg, the calf, and finally your feet and toes, you will come closer to the ceiling. The same principle applies to organizations. The entire team must stretch as far as it can-together.

Module IX: Develop a long-term strategic Plan.

Develop a long-term strategic plan for increasing market share, identifying new market opportunities and increasing profitability. The organization's plan for regaining Prime will be a communal vision with the full support and commitment of the managers responsible for results. The managers are ready to prepare the company's capital budget.

Module X: Infuse every organizational function with the Adizes methodology.

During this stage, the organizational therapist prepares company managers to take over the reins. The company's top managers devise a plan to integrate all company units into the company's vision, mission, and strategy.

The original diagnosis guides the units' handling of organizational functions and their individual problems. The units establish timetables and assign each problem either to teams or to individuals.

Module XI: Design reward systems.

This last step demands that all other steps already be in place. Employees' rewards are tied directly to their performance, and their performance is tied directly to the company's performance. Top management joins with the teams to devise incentive systems that reflect how well teams have achieved their goals and how those goals have affected company performance.

If all the previous 10 stages have been implemented successfully, team performance should be high and consistent with the company's vision and mission. Information systems will reflect actual versus budgeted or planned performance, and there will be systematic accountability for all of the company's teams and individual performers.

With direction, resources, structure, and rewards to get the job done, the organization will reach the payoff point, and all stakeholders benefit. Clients get satisfaction at a price they are willing to pay, investors enjoy higher stock prices, and employees earn higher compensation and recognition.

But it is important to remember that as soon as the company successfully completes the 11 modules, it is time to start over. Why? In the course of the year-long program, the organization uncovers new problems and new opportunities, and all of those will require new teams, new missions, and new structures. The greater goal of the process is to institutionalize itself. Just as taking your car to the garage for regular tune-ups keeps it running smoothly, preventive maintenance keeps organizations running at peak performance.

The focus of the Adizes methodology is continual rejuvenation. It helps the company recognize problems before they grow into ugly, expensive crises. When the information system needs to be revised and updated to reflect changing conditions, the company's managers know what to do and when to do it. When market share in certain regions shows signs of decline, the company's attention is drawn to the trouble spots, and teams take corrective actions. When the established organizational structure shows signs of wear, the company revitalizes it before it becomes unresponsive.

The process is never ending. It is a journey, not a destination.

THE PROCESS

With the Adizes methodology we work more as a facilitator and coach rather than as a traditional consultant. Our job is neither to find answers to all the questions nor to preach to troubled companies: "Here is the solution. Work with it." We reverse the flow of energy. We ask the questions, and the company provides the answers. When a patient consults a psychotherapist, the doctor does not give answers. The doctor asks the questions, and the patient searches for answers. A good therapist knows the right questions to ask at the right time. I, too, ask questions to provoke answers that will help organizations discover for themselves how to resolve their problems. With the tools I give them, they can diagnose their position in the lifecycle to determine which of their problems are normal and which abnormal.

After we teach and put organizations in the position to solve some of the normal problems, we proceed to the mission phase: What business are we in? We work to understand what questions to ask - when and how - and, more important, which questions not to ask.

That task presents significant challenges. As a matter of interest, you should know that the Adizes Graduate School for Organizational Transformation awards masters and doctoral degrees in the discipline of organizational therapy. That is a field of study that involves a program of no less than three years and includes supervised internship and clinical work.