Redesigning the organization and making it work.

Here's why most organizational fixes don't work, and some advice on what is required to ensure they do.

Over the years, a number of promising "must-have" organizational solutions and new practices have failed to deliver on their potential. Now, it is beginning to look like re-engineering "didn't work." And, most likely, "teams" won't work either. What does it take to make organizational changes "work" - to get and maintain the desired organizational performance? The short answer, based on our research and experience, is: "It's a system, stupid!"

Here is a discussion of two "system views" on the matter.

View one: the three levels of performance

Nineteenth-century environmentalist John Muir found that each component of the ecosystem is in some way connected to all other components. Similarly, we have found that everything in an organization's internal and external "ecosystem" (customers, products and services, reward systems, technology, organization structure, and so on) is connected. To improve organization and individual performance, we need to understand these connections. We have summarized these connections in what we call the three levels of performance, in Figure one.

The basic premise is that every organization is an adaptive system - the super-system. We call the environment in which any organization exists (its customers and markets, competitors, suppliers, and the general environment of government, culture, and economy) the organization's super-system. Every organization must adapt to changes in its super-system, or it will perish.

1. The organization level - This level emphasizes the organization's relationship with its market and the basic "skeleton" of the major functions that comprise the organization. …