Why Structure First?

The professional  literature and the consulting industry, by and large, promote the following sequence in treating problems: structure follows strategy.

 On the surface, it makes sense. How do you know what structure you need in order to fulfill a function unless you first know what that function is? The same sequence is practiced in architecture and in new product development.

 My experience as an organizational therapists  for more than 50 years, as well as that of my associates at the Adizes Institute serving clients in more than 70 countries, this sequence makes sense if you’re starting totally from scratch. Then, in theory, without an already-established organizational  structure, you decide where you want to go and organize it to get there.

The reality, however, is that there usually is already an established structure with people who have individual interests that are embedded by the roles they have in that organization. You cannot ignore what already exists. Imagine you already have a building on the ground. Now you want the building to serve different needs. Should you flatten the old building and start from scratch, displacing those who inhabit it?

 Many consulting firms do that in their practice. They ignore the existing organizational structure, define a strategy, and design an organization to deliver the new strategy. The leadership of the company has the role now of abolishing the old structure, implementing the out-of-the-blue new structure, and displacing a lot of people. Implementing the new structure involves radical — and unnecessarily painful — surgery.  Or the company adapts the recommended structure to its reality. What often happens, is that the consultant has recommended a racehorse but the company delivers a camel.

 The protocols of the Adizes Methodology for Organizational Therapy are different.

 We do not do consulting FOR the client organization. We do it WITH the client organization.

 This poses a challenge.

 For people in the existing structure to design and to accept a new strategy, they need to free their hold on their existing power and responsibilities. Otherwise, they will design the strategy based on the interests they have, which are derived from the positions they occupy in the present structure. A new strategy is not going to emerge. It will only offer some minor improvement to the present strategy.

 What to do?

We first do a diagnosis of the situation with the leadership of the company. During this process, the executives come to their own realizations that changes need to be made. The diagnosis yields a conclusion that a new strategy — and subsequently a new structure — is necessary in order to survive or succeed in the ever-changing marketplace.

 Once the mindset of the organization is amenable to accept change, we focus on changing the existent structure first without reflecting the new strategy. It has not been designed yet anyway. We first work on making the power structure more willing to accept changes. For instance, we’ll separate marketing from sales, separate R&D and new product development from production and operations, separate finance, which should focus on the future, from accounting, which focuses on the past to the present. We create pockets of interested parties in the structure to look at the future rather than be prisoners of the past, and thus of the present.

 With a new power structure — where the organization has departments whose roles and interests are to deal with future threats and opportunities — we proceed to design the desired strategy participatively with the leadership of the company. We then follow with the design of the new structure to reflect the new strategy.  

The sequence then is: Change mindset > change the present power structure first to focus on the future and not only on the present > design the new strategy > design the new structure.

This participative protocol facilitates fast and effective implementation of a new strategy and structure. Granted, the preparation is longer than the usual sequence of designing strategy non participatively and following it with a new, imposed structure. But the implementation is very fast, and is almost always faithful to the design. It also avoids massive layoffs and the significant pain that organizational change causes.

 Adizes Methodology structural redesign is not a one-time change. Rather, it involves incremental, ongoing changes. It’s more akin to physiotherapy than surgery.