We spend much our time talking about the mechanics of organisational change but very little discussing the deeper and more lasting concept of organisational reform. 

Reform begins with idea that organisational inertia arises from individuals reacting to shifts in the recurrent patterns of individual and organisational behaviour that are at the foundation of organisational social order. 

This sounds like academic twaddle to the pragmatic managerial mind. However, if managers are to successfully undertake organisational reform (and the evidence would suggest that it is not going well so far), then there is a need to understand why people behave the way they do—individually and collectively. The problem of social order in organisations is also the problem of reform.

Social order in organisations arises from the need to overcome two problems.  

The first problem of social order is the need for everybody to be confident the behaviour of their co-workers is predictable. I need to know that there are limits on your actions and behaviour. I need to know that you in a given set of circumstances you will act within mutually understood set of boundaries. Predictability gives enables the coordination that is necessary for achieving a collective outcome—an organisational goal. To achieve this, people (and organisations) need systems to provide regularity and predictability to workplace interactions. The term ‘bureaucracy’ is much derided by those undertaking change but it is essential to preserving social order in all organisations. It describes standards, provides the mechanisms for resolving conflict and turns what would otherwise be chaos into predictable behaviours. Creating the boundaries for predictable behaviour in the workplace is the problem of systems integration.

The second problem of social order turns on the idea that if people are to work together they must be able not only to coordinate their activities, but also cooperate. This is the problem of social integration. Social integration is about the formation of a social identity where the individual relinquishes some freedoms in order to be part of a group. Employment contracts are an example. But there is also a subjective and emotional part of this relationship. The symbols and myths to which individuals attach emotional or sentimental significance often represent group identity. These might be consistent with the individual’s beliefs and motivations. Within all organisations, tradition, culture and structure provide the scaffolding for the symbols that make social integration possible. This scaffolding in essential to a sense of collective identity and ethic.

To reform an organisation, it needs to be moved from its current state of comfortable equilibrium. It will need to confront the organisational gravity that comes with social order. It must confront the current systems that provide predictability and stability as well as work with the platforms that people draw on for identity and belief. Not an insignificant task and not one to be taken lightly. 

For example, the comfortable stability of today includes leaders who work around problems and inconsistencies that they know reduce individual and organisational performance. These are irritations that we know should work more effectively but would require extra effort to address. In some way, these irritations can sometimes be seen as special to us and are integral to the culture of our organisations. They represent shared hardship. Collectively, the workforce absorbs these inefficiencies into the pattern of its daily interaction. Inefficiency and ineffectiveness are accommodated and managed with instinctive ease as part of the prevailing social order. 

There is a view that stimulus for reform (or change) arises from dissatisfaction and discontent in the organisations leadership or its workforce—this is incorrect. 

If organisations as in a state of the comfortable equilibrium that is grounded in what is necessary to maintain social order and collective outcomes, then it is not difficult to imagine that most people can, and do, put up with a lot in the name of maintaining consistency and certainty. Comfort and stability is king. This is often portrayed as a failing of the workforce, for instance, middle managers are seen as resistant to change. In terms of conditions required social order, why would any segment of the workforce be pro-change?

To reform, an organisation needs a shove (usually from outside) to move it to a new state and, most importantly, the momentum to maintain the direction of movement.

From the perspective of the workforce, the need for reform more likely emerges from a fraying of the existing social and organisational order in a number of areas that ultimately leads to a lack of consistency and/or a loss of identity or connection with the organisation.

However, an unsettled workforce in not enough, it is discontented stakeholders and customers that initiate organisational reform.

Reform can take the form of gradual decline over time that reaches a point where it is unsustainable and intolerable, or it can be a rapid collapse that arises from dramatically (or unexpectedly) crossing an organisational ‘tipping point’. The history of organisations is replete with examples steady erosion and dramatic collapse. Most often, this is caused by drivers beyond its organisational borders not discontent from within. 

Central to initiating reform, and sustaining its momentum, is the understanding that reform involves reshaping the social and organisational relationships that are central to organisational performance. For example, an often overlooked feature of reform is that, by its nature, reform will divide and fragment the top leadership of an organisation. Why? Ultimately, reform will shift the basis on which power and resources are allocated. It will change who makes decisions and who will be the architects of the organisations future. It changes the basis of predictable behaviour and identity at the top.

So, how does the need for reform arise and then become actioned:

• There needs to be fiscal impact or constraint that is inescapable, obvious and real.

• There needs to be a growing sense that current practice cannot continue without profound consequences. 

• The top leadership must be reformed before the organisation can be reformed.

• Workforce mobilisation is enabled by surfacing local frustration with the current state and releasing that frustration by providing the autonomy and tools to improve performance. This must be leader-led. It must also reinforce accountability and responsibility for moving the organisation forward consistent with the overarching direction.

• Linking and mobilising groups within the workforce throughout the organisation to improve performance that allows knowledge to be shared and success reinforces the genuineness and localness of immediate action with a long-term objective.

• There needs to be central but external support or the talk of good work from outside the organisation—there needs to be external recognition that validates the effort and direction.  

So, leading sustainable reform requires the following elements:

• An authorising environment that is genuinely committed to sustaining reform and tolerant of ambiguity.

• A mobilisation of the key leadership factions within the organisation that in turn can mobilise the workforce.

• The expression and pursuit of a vision of reform that seeks to create a better outcome that is fair and reasonable (explainable) in the minds of the workforce. 

• The creation of new structures and process to support the reform that are logically consistent with the espoused direction.

Why is any of this important to understand? For me, there are five broad themes that are driving profound reform in people, work and organisation and the way they interact to produce performance. 

• Demographic change is creating tensions within the workforce that are negatively impacting on organisational performance. This is not about shallow discussions of generational differences; rather, it is about accessing the workforce capacity necessary to do what is required and the workforce capability (skills, knowledge and attitudes) to deliver performance.

• New technologies are providing new ways of delivering products and services which will lead to profound shifts in the relationships between and within organisations. Importantly, for the stability of organisational performance new technology always represents a profound challenge to social order.

• There is considerable pressure toward increased internal organisational integration. This is driven by customer expectations of improved performance, competitiveness and greater efficiency (value-for money) but also the increasing complexity of producing and delivering products and services. Concurrently, there is also the desire for specialisation and customisation that fragments management approaches.  

• Internally, and partly to due to rapid changes in organisational and workplace technology, there has been uneven economic and financial investment in organisational systems and capabilities that leads to a lack of balance, and thereby a lack of responsiveness or adaptability that is evident in performance.

• There is strong perception of poor organisational leadership that is disabling workforce participation. While the claims that 70% of the US workforce is ‘disengaged’ seem over-stated, if correct, it raises important questions about the quality leadership. 

Overall, I think we spend much our time talking about the mechanics of organisational change but very little discussing the deeper and more lasting concept of organisational reform. We spend a lot of time describing processes for change or the organisational benefits of change. We spend less time on thinking about how to work with the human enablers and obstacles that are central to successful organisational reform. 

Reform or change—call it what you want—is a messy, tactical and very human activity that requires leadership and endurance. Wishing this reality away by abstracting its untidiness to a series of easily recalled mechanical processes does not, in my view, help. 

Thanks for taking the time to read this post.

Sources:
Dennis Wrong, The Problem of Order: What Unites and Divides Society, Free Press, New York, 1994.

Michael Hechter and Christine Horne (eds), Theories of Social Order: A Reader, Stanford University Press, Stanford, 2003.

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