The Nature of Organisational Change

Richard Seel

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This article offers a simple typology of different kinds of change. It was developed to help clients understand change in organisations and it helps to explain the specific nature of organisational change as the most fundamental of these. It also offers some thoughts on the nature of organisational change.

Introduction

I usually refer to myself as an organisational consultant; indeed, my masters degree is in organisational consultancy. But most people don’t know what that means (and nor did I until I started my MSc) so I often find myself trying to explain. Potential clients are not usually interested in abstract theory and the challenge is to find a reasonably accessible way of describing what I do. This article offers a typology of change in organisations, not as a theoretical abstraction, but as a way of helping people understand the nature of organisational change.

The initial premise is that there are four kinds of change in organisations:

l         Process change.

l         System change.

l         Structural change.

l         Organisational change.

In what follows I will say a little more about each—much more than I would expect to say to a potential client, but still being far from exhaustive.

Processes

Processes are the ordered set of activities which are used to generate the outputs of an organisations. Michael Hammer and James Champney define a business process as, “a collection of activities that take one or more kinds of input and creates an output that is of value to the customer.” (1995:35)

Hammer and Champney contrast the process way of thinking with a simple task focus, where each individual activity is viewed in isolation. Their work is thus a step towards a more holistic view of organisational life. Processes can cut right across structural boundaries such as departments, divisions or even firms; if the process can be managed and designed to operate as a seamless whole enormous efficiencies could follow.

Business Process Re-engineering (BPR) was sold as a radical form of organisational transformation. By re-ordering the processes to a more natural customer-focused way the hope was that organisations would undergo a step change and move to new ways of working and being. The reality was usually different.

This is not the place to discuss the strengths and weaknesses of BPR but the absence of any reference to people in the definition above is very significant. In fact, processes always involve interactions between people, usually on a one-to-one basis.

A better perspective on process comes, in my view, by considering the interactions between the people who actually interact with one another to deliver the process. Winograd & Flores’ notion of commitments (1986) is worth exploring further in this context.

Systems

When most people in organisations speak of systems they are referring to sets of procedures. Increasingly these will be facilitated by networked computers; so much so that IT systems are now the first kind most managers will call to mind. But there are also HR systems: reward and recognition; recruitment and retention; appraisal and development; and so on. There are Health and Safety systems such as ‘permit to work’, payroll and finance systems, and so on. Many of these are codified into standards such as ISO 9000.

Books on change in organisations often spend chapter after chapter advising on how to change systems but although useful and essential, changing systems is unlikely to bring about fundamental change.

System change in organisations is often not systemic—that is it rarely takes account of the wider implications for the organisation as a whole. For instance I recently worked with an organisation which re-arranged its shift system for production workers from a six-shift to five-shift system. Production is continuous throughout the day and year and the new system requires fewer workers but means that each shift only spends one week in five on days.

The same organisation also introduced a new ‘permit to work’ system (safety is crucial) which gave more responsibility to the production workers. Each change was made for good reasons but the effect of the two together is that maintenance workers are having to wait hours for their permits, they get frustrated and demotivated and the state of maintenance at the plant is poor.

The temptation is to ‘fix’ one or other of the systems so that they gel together better. The chances are that this temptation should be resisted—unless we ask why this situation was allowed to occur, real change is unlikely.

Structures

Structure is the outward form of organisation; an indication of the regularities which arise when groups of people get together in pursuit of a common purpose. Structures will inevitably emerge from the interactions between individuals—these people will usually work together; this one will usually adopt a leadership role; these will perform some functions, those will perform others; this group will have more status and power than that; and so on.

Yet although structure will always emerge, in modern organisations it is usually imposed from ‘outside’. A conscious decision is made: perhaps to move from a hierarchy to a matrix; or from functional divisions to process-focused work teams.

Traditional ‘expert’ consultants are often very skilled at suggesting appropriate structures for different kinds of organisation in particular environments. Vast sums were expended (and often still are) in creating new structures. How often these projects deliver value for money must be questioned—indeed, it can be argued that one of their primary functions is to provide a mechanism to help managers deal with anxiety in organisational life (Hirschhorn & Barnett 1993).

Organisation

Organisation is the most fundamental aspect of a business, charity, public service or any other goal-directed collection of people. My current working definition of an organisation is a co-creating pattern of relationships. The outward manifestation of organisation is what is often known as culture. I will just briefly look at the three key terms in the definition in a little more detail:

Relationships

The notion of relationship is core to this view of organisation, which owes much to the work of Maturana & Varela:

Organization denotes those relations which must exist among the components of a system for it to be a member of a specific class. (1987:47)

The relationships in human organisations are those which exist moment to moment between the people who are ‘members’ of the organisation and also between them and those who are in the ‘environment’ of the organisation. (I therefore do not see human organisations as autopoetic as I understand Maturana and Varela’s use of the term.)

Pattern

I use the word ‘pattern’ to indicate that although the way the networks of relationships occur is completely unpredictable at the micro level there are nevertheless some regularities and consistencies.

The metaphor of the whirlpool may help here. From the point of view of an individual water molecule all is change and progress—it enters the whirlpool at a specific place (the source), moves from outside to inside in a way which is sometimes orderly and sometimes turbulent and finally exits into another relatively calm environment (the sink). Technically, the whirlpool is a chaotic system and it is not possible to predict the trajectory of an individual molecule.

To the outside observer the whirlpool seems to present a relatively stable and recognisable pattern. Not only can we recognise a whirlpool if we see one but any particular whirlpool has features which persist over time (the Great Red Spot in Jupiter’s atmosphere is a good example).

Co-creating

It is crucial to recognise that the patterns of relationship which make up organisation are not designed or imposed from ‘above’ or ‘outside’; they are co-created by all the other conversations and interactions which are occurring. Patterns may have a degree of stability but they too are both influenced and influencing in this continuous dance of change.

Changing the Patterns

Change in the patterns of organisation - 'culture change', as it is often called - is not a simple or predictable process. I believe that cultural patterns are emergent, the result of thousands of individual local-level interactions and that although they can be influenced, these patterns are remarkably resistant to change (for more on this see Culture and Complexity and Emergence in Organisations).