Built to change

Organizations designed to adapt and evolve, known as built-to-change organizations, operate differently from traditional entities. They aim to create virtuous spirals, propelling the organization to new heights and further than ever before. To achieve this, they employ eight specific strategies that foster a change-friendly environment. These strategies are designed to keep the organization in close touch with market and environmental demands, allowing for continual definition and redefinition of their objectives. They also encourage agility, flexibility, and innovation, which are crucial in today's fast-paced, dynamic business environments. These organizations understand that change is the only constant and are designed to stimulate and facilitate change rather than resist it. They are closely connected to their environments, reward experimentation, learn about new practices and technologies, and commit to continuously improving performance. They seek temporary competitive advantages and are designed to facilitate the ability of an organization to change

Strategize for a sequence of temporary advantages

Change-friendly organizations are characterized by their robustness and ability to thrive in various business environments. This resilience stems from their mindset, which is not solely focused on a single groundbreaking idea. Instead, these organizations seek temporary advantages, exploit them to their fullest, and swiftly reconfigure to leverage another distinct temporary advantage when circumstances shift. These temporary advantages often emerge from the intersection of a firm's identity and its strategic intent. The corporate identity of a firm is shaped by a series of decisions, events, crises weathered, wins, losses, and past change events. It mirrors how the organization prioritizes and addresses the often conflicting demands of the overall business environment. On the other hand, a firm's strategic intent outlines how the business plans to achieve its objectives, encompassing five distinct elements: the scope of the organization's operations, its growth aggressiveness, its differentiation strategy, its underlying business model, and its ability to orchestrate its activities effectively.

To pinpoint the most suitable temporary advantage to harness, change-friendly firms regularly assess and modify their business strategies. This process involves three steps: strategic review, strategic choice, and strategic change. In the strategic review, the company evaluates if its current strategy is still apt for the changing business environment. If the current strategy is deemed unfit for the anticipated business environment, the company's identity or strategic intent, or both, need to evolve. These strategic reviews may be conducted periodically or in response to a market event. Ideally, everyone in the company should participate in a strategic review as front-line staff may possess market information unknown to senior management. In the strategic choice phase, the organization decides whether it needs to alter its identity, strategic intent, or both.

Change-friendly organizations typically make ongoing minor changes to avoid a major overhaul later. This allows the organization to add new capabilities and competencies while fine-tuning what is already working. The goal is to maintain market leadership by embracing change. Finally, in the strategic change phase, the chosen strategy is implemented. In practical terms, strategic changes can be a reorientation, where one or more elements of the strategic intent are varied, or a transformation, where both the corporate identity and the strategic intent are varied to some extent. Transformations are risky as changing a firm's identity is challenging and only occurs if your change coincides with the arrival of a new dramatic technology, a fundamental environmental change, or a major merger or acquisition. As Edward Lawler III and Christopher Worley put it, "Excellence is about change...the ultimate competitive advantage in today's business environment is the ability to change."

Establish work and project structures without specific job roles

To create a change-friendly environment in organizations, it's essential to adopt flexible and dynamic strategies. Eliminating rigid job descriptions and encouraging employees to take on tasks that add value enhances adaptability and customer focus. Assigning responsibilities temporarily can meet specific needs more effectively. Encouraging employees to report to multiple managers can dismantle the notion of working for a single individual, promoting a more collaborative environment. Forming temporary teams dedicated to specific goals such as product development or customer service allows for focused efforts and clear outcomes. After achieving their objectives, team members can transition to new projects, fostering a culture of continuous learning and adaptability.

Promoting virtual work relationships acknowledges the productivity and flexibility of working from various locations, supporting a modern and inclusive workplace. Establishing multiple customer-facing units creates a direct link between employees' efforts and customer satisfaction, encouraging accountability and innovation. Outsourcing non-core business processes can allow organizations to concentrate on their strengths, leveraging external expertise for efficiency. Creating independent business units with decision-making autonomy encourages innovation and challenges the status quo, fostering an environment where new ideas thrive.

Transitioning to a change-friendly organization is a challenging process for most firms, as they are typically built for endurance rather than adaptability. To successfully transition, organizations must be prepared to challenge their stability by making a sound business case, addressing resistance, and developing a viable action plan. This involves a shift in identity, reconfiguration of intent, development of new capabilities, and a complete redesign.

The transition is not marked by a definitive "end state", but rather by an observable appetite for and ability to make regular strategic adjustments instead of seeking stability. The transition generally involves five key internal initiatives: creating a change-friendly corporate identity, pursuing proximity through scenario planning, building a strong internal capacity for orchestration, establishing strategic adjustment as normal and desirable, and creating the organization's own virtuous spirals. Creating a change-friendly corporate identity involves encouraging more people within the organization to focus on the external environment and view ongoing change as natural and beneficial.