Lower Walls

New rules for competition
New breed of corporation
The old breed
Attempts to leap the walls
From engineering to architecture
Resize, reshape, rethink


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Lower Walls

Excerpt from Rethinking the Corporation

By Robert M. Tomasko



What will be the shape of the new corporation - the company that survives and thrives the difficult path to the twenty-first century? Will it be a flattened pyramid, a networked cluster, a hollowed-out donut, or possibly even a shamrock?

These and other non-hierarchical possibilities stimulate a great deal of interesting speculation. The art of organization design is at a significant crossroads. Many of its old truisms are coming under fire, and few new proven ones have emerged to replace them. But at least some sense of direction for the new corporation is apparent. It will be a business with few walls. Its structure will minimize barriers between staff thinkers and line doers, between different functions and divisions, and between the company and the outside world. And its emergence closely parallels similar changes in global politics and economics.

The broken wall may be the best symbol of the last decade of twentieth century.

The Iron Curtain and the Berlin Wall have fallen. Long-isolated Albania has opened it borders, rejoined the rest of the world, and discussions even have begun about softening the demilitarized zone between North and South Korea. Officials from the CIA and KGB openly meet in each other's offices to compare notes. It is getting easier to move across the world's political and military divisions. Flights to Tokyo are shorter; more are crossing Siberia or overflying the once deadly airspace above the Kamchatka Peninsula.

Traditional economic walls are also lowering. The bold plans to bring about an economically unified European Community are stimulating similar thinking in many other regions. Free trade pacts are expanding the size of many markets. Protectionism is diminishing as more countries follow the bold steps of Brazil and Mexico to open formerly imprisoned domestic markets to global competition. The hardened wall between centrally planned economies and free enterprise has become very brittle as capitalism emerges as the preferred philosophy of both the East and West..

Wall crumbling has not been a process without pain, though.

Countries ranging from Ethiopia and Iraq to the Soviet Union are finding that the diversity of their inhabitants is pulling apart what had been intact nation states. Political and ethnic rivalries fuel violence in Africa and the Balkans, and children in some Latin American countries face the painful choice of completing early schooling, or dropping-out to quickly get a share of the opportunities increasingly available in an internationalizing economy.

Traditional Indian politicians fear loss of their centuries old culture as the subcontinent opens to significant foreign investment. Southeast Asian countries carefully monitor signs of domination by powerful trading partners, China and Japan. The collapse of the Berlin Wall has led to the emergence in reunited Germany of the anti-foreigner sentiments expressed by the young, rebellious "skin heads." And concerns related to general social and political liberalization strengthen reactionary movements on several other continents.


Turmoil in the private sector

The experiences of many corporations are mirroring these dramatic changes in the world's political, economic and social boundaries.

Many former market leaders have stumbled. Others are threatened. Mergers, spinoffs, restructurings and reorganizations, - formerly infrequent occurrences - have become ongoing routines. The question within many companies is not will we need to downsize again, but when?.

It used to be simpler. Economic performance went with being big and powerful. Scope and scale were the keys to strategic success. But now, in industry after industry worldwide, the David are unseating the Goliaths. And then, sometimes joining forces with them.

IBM's set standards - barriers that once provided a strong competitive advantage - but soon find themselves challenged by innovative Compaq's. Who, in turn, must cope with competition from even newer, low price upstarts such as Dell and Gateway.

Companies like Apple Computer, who attempted to wall-in their market through hard-to-copy products, join forces with former arch rivals when they find themselves faced with difficulties maintaining high profit margins.

Combinations like that have been presaged by the automobile industry, one that has become global and mature even faster than the computer business. Chrysler manufactured cars in a competitor's plant. General Motors teamed up with Toyota to use a former GM plant to build a Japanese car with a GM nameplate, using American labor and Japanese work methods.

Pan American or TWA, more often than not, were the choices of transatlantic frequent flyers. Their business was once protected by almost impenetrable regulations and bilateral aviation treaties. Now, as deregulations becomes a global phenomena, their routes are being flow by the ex-domestic carriers who used to feed them traffic, and who - in turn - are fearing a decade of take-no-prisoners competition as JetBlue, Ryan Air and Southwest out-perform them economically


New rules for competition

Many companies have found this new business environment requires dramatic changes in the ways they compete. And that the alternative to change is extinction. Corporations, like biological species, have three major threats: overpowering predators, drastic turns for worse in the environment, and bad luck. All three seem to be in ample supply in today's business world, and managed adaptation the only reliable option to ensure survival.

Corporate competition once seemed simpler, almost reducible to a formula: "Build a strong brand image", "Find a safe niche", or the long popular "Cut price, gain market share." But time has shown many of these to be as simplistic as they are simple. One American executive, reflecting on his industry's Japanese competitors: "Just when we thought we had it all figured out - pow - they came at us from another direction."

And the directions change almost annually. Consider the problems American and European executives have had understanding Japan's global competitive success.

Initially the emergence of Japanese enterprise was attributed to their low wage work force. "Made in Japan" meant low quality, and low price. Toyota's, and Honda's, early exports to the U.S. were objects of ridicule.

But some industries were seriously threatened by this price competition. A number moved their manufacturing operations off shore to low wage havens. Others "hollowed" themselves out, contracting to low cost suppliers as much as possible of what they used to do in-house.

Soon Japanese competitive success was understood by their European and American rivals to involve more than just a tradeoff of quality for price. Low Japanese prices were increasingly seen as a result of high Japanese productivity - it took Toyota's work force significantly fewer hours to build a car than did General Motors'. So the competitive problem was defined as one of closing the "productivity gap."

But attempts by Japan's competitors to close the gap frequently stumbled as the goal post kept advancing ahead of the point that their downsizings and one-shot productivity improvement campaigns brought them to. The competitive issue was not productivity per se, but productivity improvement. In fact, the Japanese were found to have mastered the art of continuous productivity improvement.

Many companies rose to this new strategic challenge, and replicated Japan's productivity improvement tools (many of which, ironically, were originally borrowed from Western companies). But just as they started to catch-up, many found the battle had shifted to a different front. Quality, and ongoing quality improvement, were the new bases of competition.

Again time, money and talent were spent on quality programs. New books were written, old ones reread, training programs started, and yet another focus added to many companies. Some became so passionate about their quests for quality - and its close cousin, customer service - that annual reports began by declaring this was to be "The Year of the Customer."

Not long, however, after the quality wave reached the shores of Japan's competitors, some astute business observers warned that the "real' foundation for Japan's businesses' advantage was their speed and how they used time. Time-based competition were the watchwords of the moment - at least until other, equally astute Japan-watchers declared that the ability to focus on core competences was what was setting them apart.

Even before the world's corporate strategic planners could sort these issues out, a new definition of competitive success was uncovered: expeditionary marketing, the ability to use the corporation's imagination to create markets that do not currently exist, along the lines routinely practiced by Minnesota Mining and Manufacturing and Sony.

Gary Hamel and C.K. Prahalad, professors from, respectively, London Business School and the University of Michigan, neatly sum up this new thrust by maintaining: "The global battles of the 1980s were won by companies that could achieve cost and quality advantages in existing, well-defined markets. In the 1990s, these battles will be won by companies that can build and dominate fundamentally new markets."


Strategic whiplash

Low wages, high productivity, continuous improvement, quality, speed, competence, imagination sufficient to invent new markets - a quick review of recent Western perceptions of the basis for "real" competitive advantage. Which of these is really the most significant? Are all of them equally important? Perhaps, none of them. Maybe it all just depends on each companies' particular situation?

Or does the real difficulty lie in how competitive advantage is perceived?

Some companies have suffered from strategic whiplash as they attempted to duplicate whatever advantage is momentarily attributed to their most troublesome competitors. Perhaps in some arenas Japan's "real" strategy is to cause confusion among its economic adversaries by encouraging them to focus on one thing, then another, and soon thereafter on something entirely different. Keep your opponent continually off balance by encouraging reaction to your last move, instead of anticipation of your next one. Sounds like a judo lesson. Regardless, one overriding observation about corporate Japan's success is the remarkable ease by which many have continually changed the rules of the game.

This is accomplished through strong and single-minded focus in the near term - coupled with flexibility in shifting the focus faster than the competition. Or, in other words, through managed adaptation.

These characteristics, though, are not limited to the Japanese. Virginia Semiconductor, Inc., a 20-person silicon wafer fabricating business located near Richmond, has found a profitable global business niche by going after smaller quantity orders than their Asian competition prefer. This underserved and traditionally unpopular part of the market has, though, great potential as "just-in-time" becomes every manufacturer's way of life. By staying focused and agile Virginia Semiconductor turns orders around in weeks rather than months, outperforming both Japanese and Silicon Valley competitors.

The Limited, a Columbus, Ohio based retailer which operates one of America's once fastest growing collection of speciality stores also specializes in speed and focus. Each of their seven brands of stores is carefully targeted at a specific type of customer and customer need. But within the bounds of that focus, the merchandise offered rapidly changes to reflect in almost real time the fashions of the moment.


A new breed of corporation

Thriving in a business environment that prizes both focus, and the ability to quickly change the focus as new conditions demand, requires a new breed of corporation. This need has been recognized by many organization observers, theoreticians and practitioners.

Michel Crozier, a Paris-based organizational sociologist, feels that while many managers have noticed the world in which they operate has changed significantly, they have not updated the management theories and approaches that guide what they do. He says: "Managers' main challenge in the 1990s is to question their views and practices about hierarchy, control, distance, access to information - in short, their entire managerial system. They need to develop a new model to meet the impending challenges of the rest of this century."

Peter Drucker has some clear ideas about this new model. He says: "The typical large business twenty years hence will have fewer than half the levels of management of its counterpart today, and no more than a third of the managers. In its structure, and in its management problems and concerns, it will bear little resemblance to the typical manufacturing company, circa 1950, which our textbooks still consider the norm."

Ray Stata, Chairman of the high tech manufacturer Analog Devices, seems to have grasped the essence of the new basis of competition when he asserted at a M.I.T. top management forum: "The rate at which individuals and organizations learn may become the only sustainable competitive advantage."

The "new corporation" they are looking for is one that has adjusted its form to the shape of the new competitive threats it is now facing. It is not something that will emerge out of thin air. Too many start-up businesses repeat the mistakes of the corporate dinosaurs by modeling their organization after what they think they want to be, rather than what they need to be.

Nor will it arise phoenix-like from the ashes of the growing number of business failures and bankruptcies. Few seriously troubled companies have the luxury of time and money to thoroughly rethink their basics.

The "new corporation" is more likely one that will emerge from a deliberate effort to transform the organizational configurations that have worked in the past to those demanded by present reality. This necessitates a head-on confrontation with much of the conventional wisdom about how a company should be organized - and then movement beyond it. Let's start by considering what this conventional wisdom entails.


The old breed of corporation

Many assumptions that have served as basic building blocks for the corporation in the one-strategy-at-a-time, mass production era are either inadequate or misleading in an era of surprise-based competition. This conventional wisdom that has become too-dangerous-to-take-for-granted includes a variety of beliefs that have shaped the organization structures of the twentieth century. How many of these have currency in your company?

- Bigger is better: the size and scope of the firm is limited only by the imagination of its leaders, or the forbearance of its lenders.

- The best way to get something done is in-house, using an organization built around functionally discrete activities.

- The basic building block of organization is the individual job.

- Standards can be maintained only by keeping employees in narrowly defined and closely watched jobs.

- The key functions of the middle manager are control and coordination.

- The kind of information that you should have is determined by your place in the management hierarchy.

- Career advancement means moving upward in this management hierarchy."

- You get ahead by getting it right the first time. Mistakes are things to avoid,eliminate or hide.

These, and similar assumptions implicitly guide the ways most companies are organized today. They all encourage corporate wall building. Some of these assumptions build barriers between different classes of workers. Others separate the broad range of skills many employees bring to their work from the narrow demands of their jobs. Some lay out well demarcated internal turf boundaries, others keep the business apart from potential external resources and allies. And some operate more on a psychological level, keeping valid information and learning away from those who need it most. What kind of companies have we built by applying these assumptions?

Consultant Steven Hronec has observed that many companies "design a product by throwing it over the wall from one department to another." Each toss adds costs and delays as well as distance between the final product and the original requirements of the customer. The characteristics of this process are replicated in the way most businesses handle new orders, develop annual budgets, orient promising new hires, and put together finished products.

The structure of many jobs, departments and functions frequently offers only impediments to the flow of work, new ideas, and commitment to the overall mission of the business. But we still tend to use these as our basic units of organization. This is partially a result of mental inertia on the part of organization planners, but also because these structures offer some sense of comfort, security and control.


Corporate Maginot Lines

Andre Maginot was a French civil servant. He also served as a soldier during the horribly bloody battle at Verdun during World War I. He and thousands of others held back the repeated German attacks on Verdun's massive fortifications, but not without being seriously wounded. Maginot recovered, continued his government career, and in 1929 became France's Minister of War. Then for the next few years he directed the construction of a long line of thick concrete forts and underground bunkers that paralleled the border with Germany. Maginot attributed the walls of Verdun with saving his life, and expected what came to be known as the "Maginot Line" do do the same for France.

When the Germans attacked France again in 1940, Maginot's wall proved irrelevant. They simply went around it, attacked through Belgium, and overran French defenses in weeks.

Much of history is the story of walls being erected, a temporary sense of security and control provided, and the barricades then being overrun. The famous walled city of Jericho succumbed to a combination of trumpets and psychological warfare, China's Great Wall was penetrated by Genghis Kahn, and many medieval castles met their match when cannons were invented. Still, given these failings, the value of temporary security is high, for walls continue to be popular to propose and build. The debate around the latest "Star Wars" plan to put a wall of satellites in space illustrates this well.

Just as the business world has adopted the idea of hierarchy from the military, it has reflected in many of its organizations the fortress mentality of armies that are - ultimately - destined to be outflanked. These "corporate Maginot lines" may provide needed order in the short run, but can put at risk the business' long term health.

John Welch, General Electric's former chief executive, likes to characterize organizational walls as "toll-gates." He went to great lengths in his speeches to General Electric's managers to emphasize the high cost of their tariffs. He feels that whenever people or products are forced to cross a wall, they pay a toll in terms of economic, emotional and time costs. These costs eventually lead to higher prices and diminished competitiveness.

What would be the opposite of this situation? What would be a company with minimal walls? It is an enterprise that has oriented itself in a way to prize speed, flexibility and focus.

It has done this by eliminating the costly barriers that have isolated it from its customers, suppliers, and marketplace partners. It has done this by, also, eliminating the internal obstacles that have separated its employees, managers, and organization units from each other.

It is one that has rethought both processes and practices. Julio Rotemberg, an M.I.T. economist has extensively studied how businesses get real results from knowledge creation and innovation. His work shows that little will happen unless attention is also given to creating a corporate culture that allows information to flow freely, with little regard to hierarchy and idea-stifling procedures. The former leader of American Express, Harvey Golub, sees this as a situation where "there's something about the culture - not just the knowledge but the way it gets applied - that gives the organization skills beyond the talent of the people."

Making the whole more than the sum of its parts is a hope of many corporate executives. But getting there can prove difficult.


Attempts to leap the walls

The mindless following of barrier-building assumptions has been a source of trouble for many companies. Another is the simplistic seductiveness of many contemporary ideas about the company of the future. Many of these rightly take aim directly at the evils of bureaucratic walls. But then they became the management gurus' equivalent of the storming of the Bastille. Its walls were surmounted, but few prisoners actually found inside needing to be released.

Some business best sellers advocate equally romantic and symbolic ideas about the company of the future. Chaos, and how organizations must join forces with it to survive, is one such popular topic. Some books suggest the path to success is in some way related to the process by which large creatures learn how to dance. Some put conflict on a pedestal, and suggest the cultivation and harnessing of tension as the answer. Others point toward the symphony orchestra as the corporate model of the future. Many see teams - and clusters of teams - as the only sound way to organize work.

One pair of forward thinking management writers, Stan Davis and Bill Davidson - possibly perplexed by all these alternatives - feel the best thing to do now with many dysfunctional organizations is nothing. Let them collapse of their own excess weight. They lament the state of modern organization theory: "The old models don't work, and the new ones have yet to evolve."

It has become politically correct among many business thinkers to reject hierarchy and lionize the flat organization. But seldom is attention given to discerning when and how much hierarchy might be appropriate. Few guidelines exist for how work is to be done, performance be measured and careers to flow in these minimalist structures. And almost never are ideas fleshed-out about how to get from today's bureaucracy to tomorrow's hot-wired, information-based organization.

There are many stimulating, positive attributes associated with this kind of futuristic thinking. Practicality, however, is not always among them.

Many of these visions fail to appreciate the hard reality of dynamic conservatism. This phenomena was labeled in the 1960s by Donald Schon, an M.I.T. professor and ex-Arthur D. Little consultant, when he investigated why it is so hard for good ideas to gain acceptance in large organizations. His studies looked at corporations, the military and civilian bureaucracies. They indicated the problem was not what we usually attribute to inertia, the tendency of objects to keep moving in their present course, but a stronger and more pervasive force, a tendency to fight vigorously to remain stable.

A danger lies in too quickly writing this off as simple "resistance to change," which can be overcome either by ignoring it and plowing straight ahead, or by trying to pacify it with several well delivered motivational speeches. Or a quick series of team building meetings. Mastering change requires more than exhortations about initiative, entrepreneurship and empowerment.

All established social systems - a category that includes successful corporations - work very hard to survive. They, often at great cost, maintain their boundaries, work methods, and patterns of interactions. The more they are pressed from the outside, the more they tend to push back. The need for social equilibrium is very strong, regardless of some commentators attempts to deny it, and is frequently self-reinforcing. This parallels the common biological perspective on what keeps organisms cohesive: "Any tendency toward change is automatically met by increased effectiveness of the factors which resist change."

This dynamic is true of human beings as well as social systems. As many of the more psychologically astute observers of organizational behavior - the Manfred Kets De Vries, Harry Levinson and Abraham Zaleznik- have found: most peoples' personalities will work overtime if necessary to maintain some semblance of balance and equilibrium. This balance, and what is need to achieve it, may vary widely among individuals, but the overall objective is similar. This finding is common in their studies of hundreds of executives, managers and workers.

Why are these factors so often ignored when thinking about organization change? This is due in part to the limited understanding of social and psychological dynamics possessed by many would-be "change agents." Psychological intelligence is seldom given the attention in business schools that financial manipulation receives. Perhaps, also because businesspeople tend to be an optimistic lot. Those that have reached positions of power usually have had more successes than failures in their careers, and feel reasonable in extrapolating from their own experiences to those around them.

These experiences, and the often single-minded focus that helped achieve them, are less common than they might think. Most mere mortals are better jugglers of multiple priorities, than single objective sprinters. Career, family, personal life, professional calling - all tend to blur the agendas of most organization members. And the situation compounds itself when considering the competiting priorities of departments, divisions and other sub-groups within the company. Sometimes it takes most of the energy available to just stay on an even keel. Just ask any member of a two-career household.

But what if, instead of rejecting an organization's, and its employees', need for stability, we try to acknowledge, accept and take advantage of it. The best defense against a pervasive problem is an equally pervasive understanding of it. What approach can best build this understanding into the new corporation?


From engineering to architecture

Some of the new thinking about organization is, to give it its fair due, a reasonable reaction to the problems inherent in the old, mechanistic models of organization. These models, as London Business School professor Charles Handy maintains, perceive organizations as "gigantic pieces of engineering, with largely interchangeable human parts." This static view is pervasive among many executives and the management consultants they have used to advise them on matters of organization. "Let's redraw the chart and get back to business as usual" is the approach frequently taken to reorganization. The career paths of many individuals from both these camps have passed through engineering schools.

Many well intentioned critiques of today's companies come from individuals with behavioral science inclinations: psychologists, anthropologists and practitioners in the hybrid field of organizational behavior. They have added important missing pieces to our understanding of corporate organization, but their diagnoses tend to be stronger than their prescriptions.

Most recently individuals with a grounding in information systems and computer networking have given attention to the problems of malfunctioning corporations. Some are advocates of "reengineering," another very useful, but narrow and potentially static path to organization improvement. Their tools are powerful, but sometimes give too much attention to new technology at the expense of the human change that needs to accompany it.

This situation is a bit like the story of the group of blind men, each touching a different part of an elephant and each providing a different, though myopically accurate, description of the beast.

To generate new thinking about the new corporation, a mindset is required that blends these alternative perspectives. And uses them to shape, or reshape, the business. The issue is not one of simply moving from one narrow perspective, mechanistic engineering, to another, humanistic psychology. Rather a discipline oriented to melding the work of other fields to create something new is required. The problem of reshaping a corporation is essentially a problem of design.

For several reasons, the field of architecture provides a good source of perspective on the task of reorganization.

The architect provides a master plan and then coordination for the work of many skilled trades and disciplines. While there is room in the design process for art and creativity, few architects have the freedom to start with a clean slate and impose their design on the environment. The architect of a building is usually more driven by the wishes of the client, the purpose of the building, the needs of its inhabitants, the constraints of the site, and the concerns of the regulators. Doing good architecture is essentially a highly skilled balancing act. On a day-to-day basis they match a concern for beauty with a need for energy conservation, the multiplicity of owner-specified-requirements with the minimal budget available.

In their actual planning and design work, architects also balance competing structural forces. Buildings must bear a variety of loads and use structure to redistribute them. They must support themselves (their "dead weight"), deal with the comings and goings of their inhabitants ("live weight"), and be prepared to resist sudden pressures from windstorms and earthquakes ("dynamic weight"). They must also cope with more hidden, slow-acting challenges such as thermal expansion and settling ground. And what other profession has had more experience in safely removing walls?

This is not to suggest the job of corporate reorganization be contracted out to a nearby architect. They are, obviously, better trained at manipulating the physical, not the human, environment. But there is something to be gained by letting the design mentality of the architect guide, at least metaphorically, the work of the executive or consultant as they reshape the corporation.

Organizational architects may work with different materials than do planners of buildings and bridges, but they still are in the business of design. They also balance competing requirements, and must marry the company's mission with the principles of human behavior. They must plan structures that can distribute a variety of "loads": employee needs, executive's wishes, market demands, competitor attacks. They must minimize dead weight (bureaucracy and internally-directed activities) and maximize the corporation's ability to handle live loads: customer requests and resources needed to meet them. Organizational architects must create organizations that withstand dynamic factors such as fast and aggressive competitors, as well as be alert to slower-moving dangers such as technological advances and global economic shifts.

Architects also frequently deal with redesign or renovation, not just new construction. This is often true in times of a weak economy. Organization architects, especially during business downturns, often face the task of reorganization. Few have the luxury of creating a business from scratch. Architects are realists. They want to see things happen; they cannot afford to write-off an unimplemented good idea as the victim of "resistance to change." For them inertia and stability-seeking tendencies are tools to work with, not just barriers to overcome.

Analog Devices' Ray Stata sees the role of senior executives increasingly including the planning of their organization: "Historically leaders were referred to as 'captains of the ship' to denote their role in operating the vessel entrusted to their care. But future leaders must be both designers and operators. Their principal contribution will be to shape the design of the organization structure .... Expertise in organization design will be a critical skill - a skill that will require considerable technical knowledge about how to analyze, modify and stimulate the behavior of complex human systems."

This critical skill is not one that is applied once and then forgotten. Organization planning is an ongoing activity of top management. It requires the same attention given to other strategically significant processes in the corporation, such as new product development, long range planning, and quality management. It can benefit from attention to continuous improvement just as products and manufacturing process do.


A three-fold strategy; a three part book

We began by considering what is an appropriate shape for the new corporation. Perhaps this is the wrong question, especially since is seems so difficult to settle on a single, always appropriate answer. No one organization design is right for every business, there is too much variation in missions, strategies, and capabilities. The real issue is not so much the specifying a new, innovative configuration each company must adopt, but outlining a path each business can follow to invent its unique and best organizational form. The exact shape may be less important than the process used to discover it.

If an architect was faced with the problem of revitalizing an aging, dysfunctional corporate structure, and was told that the result had to minimize barriers and walls, what steps would be taken?

Applying design logic to reorganization first suggests careful consideration of what is already in place, how functional it is, and what turf it needs to cover? The key issue here is one of resizing, adjusting the company's equivalent of the architect's "site" to fit the demands of its future mission. This is the subject of the next three chapters.

Then comes the work of reshaping, designing the basic building blocks of the company, and arranging them to have the most favorable impact on competitive advantage. This is where traditional corporate reorganization usually begins and ends: rearranging the lines and boxes on the chart. This middle step is necessary, but not sufficient, to remake a corporation. Doing it successfully is still important, and requires taking a hard look at the way many companies have overlearned the lessons of the industrial revolution. That is the purpose of the second part of this book.

Finally comes rethinking the basics of how the work of the corporation needs to be managed. Just as the architect considers the infrastructure of the building being designed, the organization planner's job is not finished until thought is given to issues such as setting direction and maintaining control, information flows, the nature of jobs, usage of teams, career paths and peopleflow management, rewards, and mechanisms for decision making. These form the infrastructure of the modern corporation, and are as critical to its functioning as are the climate control, electrical, lighting, plumbing, and communications systems incorporated into a building's construction plan.

Part Three of this book deals with what needs to change in a corporation's infrastructure to guarantee the success of its resizing and reshaping.

These three steps also need to occur in an orderly sequence. Modifying the shape of the company's structure only makes sense after the resizing of the work is tackled. As Peter Drucker is fond of saying: "It is always amazing how many of the things we do will never be missed.... And nothing is less productive than to make more efficient what should not be done at all."

Just as it is important to lay the groundwork for reorganization, it is equally essential to follow up changes in organization structure with improvements in the basic processes used to manage. Unless these infrastructural aspects of the company are reexamined - and in some cases reinvented - it is very likely the results of restructuring will unravel.


© Robert M. Tomasko 2002

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