Briefing on Organizational Systems

When addressing organizational performance problems, it's tempting to treat symptoms in the most direct, simple manner; but this isn't always the right thing to do. Treating symptoms typically has little effect. Worse, treating symptoms can create other problems. Furthermore, treating symptoms is not lasting. Until their root causes are addressed, problems will crop up again and again.

To fix problems once and for all, leaders must introduce systemic change at the most fundamental level.

Systemic change is not a matter of reengineering a few processes, adding a few new functions, or simply preaching the values of quality and customer focus. Executives must do more than fine-tune existing practices, or lead the way on a few high-profile projects. They must fundamentally change the way the organization works, addressing the core drivers of behavior.

There are five systems that comprise the inner workings of organizations. They are:

* Culture: the behavioral patterns (habits and conventions) generally adopted within the organization.

* Structure: the definition of jobs and the reporting hierarchy (organization chart), as well as the processes that combine people into teams as work flows across organizational boundaries.

* Internal economy: the budgeting, priority setting, pricing (chargebacks), project-approval, and tracking processes that determine how resources flow through an organization and to its clients.

* Methods and tools: the procedures, methodologies, skills, and tools that people in an organization use.

* Metrics and rewards: the feedback loops that inform people about how they are doing in time to adjust their behavior, and the incentives for improving performance.

More on the five organizational systems....