Built to Change: How to Achieve Sustained Organizational...

Features

• Cover Type: Hard Cover with 352 pages
• Published by: Jossey-Bass February 17, 2006
• Written in: English
• ISBN 10 Number: 0787980617
• ISBN 13 Number: 978-0787980610
• Book Dimensions: 9.1 x 6.3 x 1.4 inches
• Weighs: 1.1 pounds

Product Review
Back in the good old days, when news travelled at the speed of telex and the world seemed big, change was something that happened to companies once every few years.
Chief executives would initiate "change programmes" to rid their organisations of old habits and inculcate new ones. Strategy would be re-examined, priorities reset, jobs redesigned and reporting lines redrawn.
To be sure, these initiatives came with a variety of labels attached. In the 1970s, diversification and job enrichment were the watchwords. The 1980s belonged to strategic focus and quality. The 1990s gave us business process re-engineering and e-commerce. But the underlying assumption was always the same: change was periodic, planned and uncomfortable, given that the natural state of organisations was reckoned to be equilibrium.
The snag is that these days news travels so fast - and competitive advantage is so fleeting - that the planned approach has proved woefully inadequate. Change programmes come and go so quickly that managers and employees can barely keep up. The result is dysfunctional organisations with low morale and poor customer service. Yet chief executives who decide to slow the pace of change risk being overtaken by competitors.
If you think this is an exaggeration, take a look at Built to Change, a splendid new book by Ed Lawler and Chris Worley, both of the University of Southern California's Centre for Effective Organisations. As the authors note: "An analysis of Fortune 1000 corporations shows that between 1973 and 1983, 35 per cent of companies in the top twenty were new. The number of new companies rises to 45 per cent when the comparison is between 1983 and 1993. It increases even further, to sixty per cent, when the comparison is between 1993 and 2003. Any bets to where it will be between 2003 and 2013?"
Yes, a handful of companies do seem to be able to hang in there. The management practices of this select few were examined in Built to Last, by Jerry Porras and Jim Collins, published in 1994. But surviving is hardly the same as thriving. About half of the companies featured in Built to Last have fallen from grace since the book appeared. The same fate befell many of the companies featured in 1982's In Search of Excellence. The disquieting truth is that very, very few companies (including Procter & Gamble, Johnson & Johnson, Toyota and a handful of others) manage to sustain high performance over long periods.
The problem, argue Profs Lawler and Worley, is that we continue to design organisations with stability in mind. Executives need to think about building companies not only to last but also to change, in the sense of responding to the competitive environment without going through the trauma of planned change.
The message is not entirely new. Management writers such as Tom Peters and Rosabeth Moss Kanter first took issue with the planned change paradigm more than twenty years ago. They argued instead for corporate cultures that rewarded innovation and let change bubble up from below. More recently, managers have been urged to draw inspiration from complex adaptive systems found in nature by creating organisations that operate "on the edge of chaos". Alternatively, they have been told to make their bureaucracies more like markets by introducing internal competition for ideas, capital and labour. Enron, the energy trader, you may recall, was a standard-bearer for many of these trendy ideas before it became a byword for malfeasance.
What makes Built to Change worth reading is its careful attention to the unglamorous stuff of management - organisational design, decision-making processes, measurement and reward systems, recruitment criteria and so on. Yes, corporate culture is important. Yes, internal market mechanisms may work sometimes. But of more immediate concern are the policies and processes that underpin day-to-day work.
If we want our company to be more responsive to changing circumstances, how should we organise ourselves? (Answer: in self-managing teams and small close-to-the-customer business units.) What kind of people should we hire? (Normal folk will do just fine.) How should we appraise individual performance? (Do not exempt top management, measure outcomes as well as behaviour, avoid forced ranking.)
The ultimate Built to Change company? Profs Lawler and Worley offer nothing so gauche as a league table. My vote goes to Toyota, which has over the years shifted its source of competitive advantage from low price to high quality to sharp market segmentation and eco-friendly technology.
All in all, this is classic Ed Lawler. A serious student of organisations before many of today's chief executives were born, he has collected more detailed data about the management practices of more companies over a longer period than almost any other researcher. His writing is research-based, relevant, long on insight and short on extravagant claims. For the record, Built to Change is his 38th book.
My only quibble is with the notion that the average human being will always embrace change if the organisational context is correct. Personal experience tells me that change - even voluntary change - always involves fear, uncertainty and elements of loss. I will devote next week's column, my last after 15 years as an Financial Times journalist, to this piquant topic. (The Financial Times Limited, 22 February 2006)

"bold, fascinating" (getAbstract, August 2006)

Product Review
"Lawler and Worley have done it. Built to Change captures the change challenge faced by most executives and offers practical tools that not only dissect change but provide hope that the constancy of change need not be feared but relished. They explain how to anticipate leadership challenges and make them manageable. This gift is why Lawler continues to reign in this profession as the thought leader for ideas with impact."
--Dave Ulrich, professor, Ross School of Business, University of Michigan, and partner, The RBL Group

"Built to Change is a dramatic departure from the tired approach of looking back at successful companies and identifying elements of excellence.  Lawler and Worley have broken new ground in helping companies to look forward and understand the requirements for success in a constantly changing world."
--David A. Nadler, chairman and CEO, Mercer Delta Consulting, LLC

"The absence of change is just another description for death in business as in life. Ed Lawler and Chris Worley seize on this point to provide an insightful look into what makes a business not only survive but thrive in today's global marketplace. The book is concise, comprehensive and a must read for anyone responsible for ensuring the success of a company, large or small."
--Patrick L. Johnson, president and CEO, Pro-Dex, Inc.

"This is an important book for organizations positioning themselves for future success. It provides insight about the issues companies need to consider to ensure success"
--Ben R. Leedle Jr., CEO, American Healthways, Inc.

"This is classic Ed Lawler. A serious student of organisations before many of today's chief executives were born, he has collected more detailed data about the management practices of more companies over a longer period than almost any other researcher. His writing is research-based, relevant, long on insight and short on extravagant claims."- Financial Times (London)

"A survival guide for organizations of the future!"

-- Marshall Goldsmith, executive coach and author is the author of The Leader of the Future, Global Leadership: The Next Generation and Coaching for Leadership.

Reader Reviews
Obviously, if organizations are not "built to change," they cannot effectively respond to inevitable changes in their competitive marketplace. Moreover, they may be able to achieve some temporary success but cannot sustain it over a period of time. In the Foreword, Jerry Porras briefly but brilliantly explores two themes: "First, leaders must understand their organization's values, and work to shape them in such a way that those values guide and sustain needed changes rather than undermine them. Second, leaders must architect their organizations to embrace rather than resist change." Co-authors Lawler and Worley see this volume as a sequel to Jim Collins' Built to Last because, in it, they explain "what organizations need to do once they have developed the foundation for survival and want to increase their effectiveness over time." This seems to be the same objective which Collins set for himself in his own sequel, Good to Great. What they call the "B2Change Model" consists of Environmental Scenarios (which describe a range of possible future business conditions an identifies "preferred futures") and three primary organizational processes which contribute to organizational effectiveness. Strategizing (a process by which to establish priorities so that by having a "strategic intent"). Only after concluding this process can an organization then initiate the other two processes, Creating Value through competencies and capabilities, and, Designing the structures and other processes that enable an organization to achieve sustained effectiveness enterprise-wide. Step by step, with both rigor and eloquence, Lawler and Worley explain how any organization (regardless of size or nature) can do this, guided and informed by the B2Change Model. In the final chapter, they make several key points. First, that making the transition to a B2Change organization is much more difficult than operating one. Also, that each of the three processes is more changeable and more flexible than the prior one. However, the designing process is the key to developing the competencies and capabilities that are needed to implement a strategic intent. They identify five key initiatives on the road to becoming B2Change and then discuss them in the order in which they recommend implementation. (They are listed on page 287.) They also explain how certain key elements can support an organization's focus on its external environment so that everyone involved understands change as a natural process. "Creating a change-friendly identity is a fundamental step in becoming a b2change organization." Still another key point involves what Lawler and Worley see as the final initiative: bringing all of the prior processes together in a virtuous spiral. "Virtuous spirals - periods in the life of an organization - are characterized by critical configuration, proximity, and dynamic alignment. They are built and sustained by a series of temporary competitive advantages." I am reminded of what Peter Drucker observed in 1963: "There is surely nothing quite so useless as doing with great efficiency what should not be done at all." That is precisely why Lawler and Worley place such great emphasis on the first process of the B2Change Model, Strategizing. It is absolutely imperative that proper organizational priorities and an organization's strategic intend be established first. Otherwise, completion of the second and third processes may well be flawless but ultimately worthless.