Going through an organizational assessment is a daunting task. The Transformation Model provides a framework for viewing an organization as a living system. Using the model, leaders can see how the pieces of the organization fit together and then make conscious choices about how to improve, their effectiveness. The model reduces structure complexity to seven key elements:
- Core Process
The seven elements are viewed as a whole system of interrelated parts which must fit together and be Closely coordinated if the organization is to be successful. High Performance can be built into every aspect of the organization by using the model to guide a comprehensive and integrated approach to change.
The seven elements of the model form the “big picture” of the organization. The first step is to analyze and understand each of the elements to know what is working or not working in the organization and how the elements are affecting each other. The next step is to adjust or redesign the elements so they are better aligned with the strategy and each other. Using the Transformation Model to analyze and realign the organization will improve key results and lead to increased effectiveness.
THE SEVEN ELEMENTS OF THE MODEL
Results: Key results indicate the level of organization performance. Because they define the success and health of an organization, results are the starting point for understanding how well an organization is functioning. They indicate where the organization is strong and what it should continue doing, and also highlight weaknesses which need to be addressed. Everything is tied to results.
Environment: Organizations, like all living systems, can survive only to the extent they maintain harmony with their external environment. They must meet changing customer requirements, adopt new technologies, adjust to the competition, and consider the legal, social, and political climate. Most organizations eventually die because they fail to respond quickly enough to the changing environment around them.
Strategy: There are two parts to strategy: business strategy and organization strategy. The business strategy identifies the direction and purpose of the organization, specifying products and services, market position, how the company differentiates itself from competitors, core competencies, and objective areas. A well-developed business strategy provides direction and guides the organization like a ship’s rudder in a stormy sea. Organization strategy is the “being” or character of an organization, describing “who we are” and “how we want to operate.” It includes the mission, ideal vision, guiding principles, and management philosophy of the organization. A clear organization strategy helps transform a company or office from a normal workplace to one that inspires and commits people to do their best.
Core Process: A core process is the major flow of work through an organization. Sometimes called the value chain, it is the sequence of events or steps performed by the organization to achieve its strategy and provide products and services to customers. When it is aligned with the strategy, all other business activity should support its accomplishment. Understanding, streamlining, and properly supporting the core business process is the central job of any organization.
Structure: Structure determines how people are organized around the core business process. It moves far beyond box charts, defining the boundaries between units, responsibilities, and relationships between people. It further prescribes the coordination of tasks and allocation of resources to units within the organization. The proper question about structure is not whether it is the “right” one, but whether it supports the strategy and helps rather than hinders performance.
Systems: Systems are standardized support processes, which help the organization coordinate and organize itself. There are two kinds of systems: coordination and development systems. Coordination systems, such as information sharing and communication, measurement and feedback, and policies and procedures, reduce uncertainty and prescribe how things should be done. Development systems, such as recruitment and selection, training and development, and evaluation and feedback, help employees develop within the organization. Systems are often centralized, owned by management, and support the whole organization. The most effective systems are the simplest.
Culture: Culture is how the organization operates. It includes leadership style, worker attitudes and habits, and management practices and beliefs which make up the distinctive “personality” of the organization. It is like the air that permeates everything and is both the source and outcome of organizational behavior. Culture mirrors the true philosophy and values of the organization—the ones people practice. As such, it is a measure of how well the organization has translated its philosophy (organization strategy) into action.