Category Archives: Tom Somodi

An Organizational Structure that Works for Change

By Tom SomodiTom Somodi

Many, if not most people, would argue that the ability for an organization to change over time is critical to that organization’s long-term survival. To this end, the literature is full of theories, methodologies, recommendations and analysis on how an organization should be structured in order to maximize the likelihood of obtaining successful change.

It is explained that organizations need to be structured to provide employee empowerment, lean operating techniques, and continuous improvement philosophies as just a small sampling of examples. Yet, we still hear about organizations failing to obtain desired change even though they possessed exemplary efforts to support such structural recommendations.

The reality is that if we want to see advancement in this arena, a major paradigm shift needs to occur regarding the dynamics of change and organizational structure and the best place to begin this shift is by leveraging off of concepts found in Change Science.

Step 1 – Develop and Communicate a Proper Perspective of Change in the Organization: One of the first things Change Science tells us is that change is constantly and continuously occurring around us on a universal basis. Therefore, it is important for everyone in the organization from the board of directors down to individuals in frontline administrative and production positions to recognize this fact.

Every time a new customer order is received, an engineering drawing is created, a product is produced, an invoice is generated, and the list goes on, a change has occurred within the organization. Therefore, an organization is continuously inundated with change and assuming that the organization has managed to survive, this change (both expected and unexpected) on a whole has been successful change.

So, step one is for everyone to stop thinking of change as strictly specific efforts and/or events and recognize that the organization is already successfully dealing with a continuous stream of change at every level in the organization.

Step 2 – Develop an Organization Wide Understanding of Responsibility: So how does an organization manage all this continuously occurring change? The answer is simple – delegation of responsibility. From the person who pushes the button to start the production machine, to the person who enters the customer order and to the manager that resolves a conflict, responsibility for the control of these various changes has been delegated.

It is important to recognize that the concept of employee empowerment automatically exists as soon as that individual is given responsibility for managing and controlling the change that has been assigned to them. What is most often lacking is a top to bottom organizational recognition of the fact that not only is there a significant amount of change continuously occurring in the organization, but through the assignment of responsibility, all the employees in the organization are already masters at managing and executing all of that change.

Step 3 – Recognize and Communicate Two Broad Categories of Change within the Organization: Given that organizations are already managing and executing a continuous flow of change, why all the discussion about how organizations struggle with change? The answer lies in the fact that organizations have allowed the lines of responsibility between day to day operational change and strategic change to get blurred. More importantly, the lines of responsibility have not only become blurred but it is common that the interrelationship between operational change and strategic change has become disconnected.

Strategic change is in response to both internal opportunities for improvement and reaction to external influences that can threaten the organization.

Operational change focuses on the short term expected and unexpected change that needs to be executed in support of the customer and is based upon strategic change that has occurred within the organization on a historical basis.

It is critical that everyone in an organization understands that both operational change and strategic change is equally important in order for the organization to survive. There needs to be an understanding and an acceptance on the part of all individuals within the organization that operational change needs to be continuously executed in order to support the customer in the here and now, while strategic change needs to be continuously executed in order for the organization to survive into the future.

Step 4 – Adjust Organizational Responsibility to Clearly Support Operational and Strategic Change: Assuming an organization is successful in Steps 1 through 3, it can still face challenges when addressing change within the organization if there is not a clear delineation of responsibility for operational and strategic change amongst the workforce. The following guidelines will help:

  • Drive responsibility for day to day operational change as far down the organizational pyramid as possible. Ideally, the more operational change that can be executed and controlled at the administrative and production levels of the organization, the better. These are the people closest to the operational change and generally have the greatest ability to address opportunities and issues that may arise.
  • Clearly indicate (i.e. including through appraisal and compensation arrangements) that the primary responsibility over strategic change is from the lowest management levels on up to the executive and board level. There will always be operational change that requires involvement at the higher levels of management. Even a major customer contract could easily require signoff by the CEO. However, it should be clear that the main responsibility for management should be related to the accomplishment of strategic change. For example, the allocation of focus related to strategic versus operational change by management level might look something like the following:
Allocation Of Focus Between Strategic And Operation Change

Strategic Change

Operational Change

Board of Directors

100%

0%

Chief Executives

90%

10%

VPs

85%

15%

Directors

75%

25%

Managers

60%

40%

Admin & Production

5%

95%

  •  There should be a clear understanding at the ground operational level that it is management’s responsibility to make sure there is continuous strategic change occurring in the organization with an objective of long-term improvement and survival of the organization. However, it is also important to make sure a communication loop exists that supports the delineation of responsibility. This includes communication of the whys and what behind strategic change to those with a primary responsibility over operational change along with feedback communication to those responsible for strategic change regarding the performance of strategic change initiatives and other opportunities for improvements that might exist.

By following these four steps, the formula associated with an organizational structure that will greatly enhance the ability to support the change required for growth and long-term survival is really quite simple. The real challenge lies in executing the paradigm shift that requires a clear understanding by everyone in the organization that change is already constantly successfully executing within the organization and a new delineation of responsibility between strategic and operational change is required.

Tom Somodi is a speaker and expert on change, applying his extensive domestic and international business experience, including reorganizations, acquisitions, strategic change initiatives, and taking a company public during the difficult 2011 financial markets. Tom has held CEO, COO, CFO and board level positions. Tom’s book, The Science of Change: Basics Behind Why Change Succeeds and Fails is now available. For more information, please visit www.changescienceinstitute.com or email info@changescienceinstitute.com.

Why Proven Change Methodologies Fail

By Tom SomodiTom Somodi

It’s astonishing how businesses and individuals are continually influenced by solution providers and consultants of change methodologies. These solution providers and consultants somehow have the ability to convince an organization and/or individual that if they want to obtain a desired change, then all they have to do is “execute this,” “do that” or “buy into this methodology.”

Of course, as described above, the potential to have issues associated with such a simplistic summary are obvious. Nevertheless, in the heat of the moment of trying to determine a solution to obtain a specific change, falling prey to such arguments can be easy and very understandable.

However, this is not an article focused on bashing solution providers and change consultants. There is in fact much knowledge and potential benefit to be derived from their products and services. Instead, this article is intended to help develop an initial understanding about why such claims may not be accurate for your given situation.

Change is Not Just Something You Obtain, It’s Something You Experience: The first thing we must recognize is that change is not just something to be obtained, but is in fact, something we are all continuously experiencing. From all the change at the subatomic level to the movement of the galaxies in the universe, change is constantly occurring around us.

Therefore, while all change does require the execution of some sort of process, in reality, change is not an art but instead should be considered a science. All change follows a set of rules and principles just like any other science. More importantly, by understanding what these rules and principles are and how they work, we can use them to our advantage when attempting to obtain a change.

Environmental Override: One of the most powerful of these change science principles is that of Environmental Override, which in summary states that: “If the conditions in a given environment do not support the processes associated with a desired change, that change will not take place in that environment.”

In other words, a proven process that has worked well and provided successful change in other environments does not guarantee that such a process will work in your environment. A successful change in your environment will not occur unless all the conditions in your environment support all the requirements of that process.

Environmental override is one of the main reasons that a specific methodology/process can produce a desired change for company X but is unable to produce the same change for company Y. It can also go a long way in explaining why a specific diet works for Sam but does not work for Bill.

Not All Environments Are Created Equal: Over the years countless service providers and consultants of change methodologies have said how the way businesses operate, in general, are not all that unique from one another. Therefore, the solutions they were proposing were made to work on a universal basis and will work in most situations where there is adequate commitment on the part of management or the individual.

In addition, these solution providers had an answer if there was some unique aspect that needed to be accounted for. They would argue that it was either in the best interest for that organization or individual to eliminate the uniqueness (for example, follow best business practices) or they would say, “Don’t worry; our solution is easily customizable/configurable.”

Once again, on a global level such arguments make sense (for example, every manager or individual wants to be known for following best practices) and in some cases might even be an accurate assessment. However, management and individuals need to recognize that this is not always the case. The environment in which a change must take place is generally very complex and has developed over time in some sort of integrated relationship.

Therefore, the conditions in that environment might never support a given change solution. Also, even if the environment is modified to support the requirements of a given change solution, it might represent a complete revision of the organization with both plus and minus ramifications.

For example, a particular business system used to obtain a specific change in an organization might require individuals that have a specific skill set. By using that same business system in an environment where individuals with that skill set are few or nonexistent can make such a system either inoperable or unacceptable from a cost perspective. Likewise, a diet that works for a healthy person might not work for an individual that has a particular health condition (note, that in this case the body is considered a unique environment).

Leveraging Environmental Override to Your Benefit: Many a management group has been frustrated when a proven process fails to work in their organization and many individuals have been equally frustrated when a proven process that has worked for others, fails to work for them.

The key take away is that by understanding the change science principle of environmental override, you are now in a position to address it head-on at the beginning of your change solution selection process. Here’s how you can do this:

  • Make sure you clearly understand all of the requirements associated with that solution.
  • Look at the conditions that exist in the environment in which this solution will be executed and compare them to the above requirements.
  • REALISTICALLY assess whether the conditions in the environment can be adjusted to support the requirements of the proposed solution.
  • Make sure EVERYONE in the organization (including upper management) agrees with the operational, financial and cultural ramifications associated with adjusting the conditions in the environment to support the proposed solution. If this solution is for you individually, make sure all the ramifications associated with adjusting the conditions in your environment are realistically acceptable.

The effort involved in the above exercise will vary depending upon the significance and complexity of the change you are attempting to obtain. However, just having an awareness of the change science principle of environmental override can go a long way in helping you avoid the pitfalls associated with making the assumption that if a process/methodology works for someone else, it should also work for you.

Tom Somodi is a speaker and expert on change, applying his extensive domestic and international business experience, including reorganizations, acquisitions, strategic change initiatives, and taking a company public during the difficult 2011 financial markets. Tom has held CEO, COO, CFO and board level positions. Tom’s book, The Science of Change: Basics Behind Why Change Succeeds and Fails, will be released in the Fall of 2013. For more information, please visit www.changescienceinstitute.com or email info@changescienceinstitute.com.

Lower the Anxiety Associated With Change: Recognizing the Positives and Eliminating the Negatives

By Tom SomodiTom Somodi

It is likely there have been situations when you have asked yourself, “Why are there times when I experience anxiety relative to a change I am facing in my life?”

To answer this question, let’s start by thinking of your replies to the following few simple questions:

  • What do you think has the potential of creating more anxiety: the change associated with taking a bus to work in the morning or the change associated with having an operation to repair your knee?
  • What do you think has the potential of creating more anxiety: the change associated with rearranging a room of furniture at work or the change associated with moving an entire business to a new location?
  • What do you think has the potential of creating more anxiety: the change associated with driving your car across town or the change associated with flying on an airplane across the country?

While the answers seem absurdly obvious and probably the associations between the questions may have some similarity in characteristics, there are definitely differences between the examples that are relevant to our quest to understand the relationship between anxiety and change.

In the first question, the major reason the anxiety associated with the operation on your knee is more likely to occur is due to how much more significant having an operation is relative to taking a bus to work. So the level of significance associated with a specific change will tend to influence the potential anxiety you experience.

In the second question, it is the level of difficulty that is a driver in determining the potential for anxiety. It is far more difficult to move an entire business operation to another location than it is to simply rearrange a few pieces of office furniture. We need to recognize that no matter how you want to personally define difficulty, the more difficulty you have associated with a change the more likely you are to experience the potential of anxiety.

Finally, the third question raises the issue of control. When you are driving the car you are completely in control. So generally speaking, you are more likely to experience less anxiety, when you are in control than when you are not in control—as in the case of relying on an airline and its pilot to fly you where you want to go. It is an interesting dynamic that having control of a situation can often greatly reduce the level of anxiety associated with a change, even when that change fails to occur.

A lack of control can also be associated with the unknown. Even though a change might be fairly simple, if an individual, organization, or society faces a change that contains a lot of unknowns, the unknowns create a feeling of a lack of control. This then increases the potential for anxiety.

For example, taking a train from one city to another city can be a relatively straightforward way of obtaining the change of traveling between locations. However, if you have never taken a train before and/or you are in a new city, there can be the potential for a great deal of anxiety associated with this change because the unknown creates a perception of a lack of control. So it a lack of control that in turn increases the potential for anxiety. If you continue to take this same train in the future between the cities, chances are your anxiety will probably decrease, given that you become more familiar (that is, more experienced) with the change, resulting in a feeling of being more in control.

It is also important to realize that significance, difficulty, and control are not just individual characteristics but are, in fact, dynamics that can be interacting with each other relative to the same change. For example, a change can be very significant, but if you believe that you have a great deal of control over the change, then the anxiety that might otherwise exist can be tempered or even completely negated.

So the level of significance, difficulty, and control play a considerable role in the amount of anxiety that can be associated with any given change we are facing and the following rules can be applied:

  • The greater the significance associated with a change, the greater the potential for anxiety.
  • The greater the difficulty associated with a change, the greater the potential for anxiety.
  • The greater the control you have associated with a change, the lower the potential for anxiety.
  • Significance, difficulty, and control can be interacting simultaneously relative to a given change, thereby, creating a set of mixed dynamics relative to the anxiety that exists with any given change that we face.

It is important to note that these rules apply to us not only as individuals but also as organizations and societies. In fact, much of history has been influenced by the anxiety associated with the change an organization or a society was facing. For example, there is a good chance that you have been employed by, or maybe even managed, a business organization that completely reorganized itself because of its anxiety about its ability to remain competitive in the changing marketplace. Or how about a society that went to war because of its anxiety over an actual or perceived loss of control in its access to food, water, or other resources.

Now that we have established the main drivers behind anxiety and change, is there a why behind these relationships?

The answer to “why” exists in the fact that you realize that you are not always successful in obtaining the change you desire. If you know that the change you desire will always take place, then there would be no reason to have any anxiety. However, through experience, you have come to recognize that a desired change cannot be guaranteed.

You also have learned to realize the ramifications and affects associated with significance, difficulty, and control and this inability to obtain guaranteed change. From the time you were a baby on you have accumulated a vast conscious and unconscious knowledge base relative to change. This knowledge base has inherently provided you with the ability to realize that change is not guaranteed and has created recognition that significance, difficulty, and control can play a major role when attempting to obtain a desired change.

It has also inherently created a defense mechanism in the form of anxiety that helps bring certain change from the unconscious to the conscious where you are more likely to focus on it relative to everything else going on in your daily life. Even though in the end there might not be anything you can do about increasing the potential for success, this anxiety response provides you with an opportunity to focus on the desired change with the hope of increasing the chances for a successful change.

Is this set of dynamics good or bad? I believe that the answer is generally positive. While anxiety caused by the underlying drivers of significance, difficulty, and control can sometime paralyze us or create negative consequences, these emotions are in fact the natural response associated with bringing issues/change into the forefront of our conscious attention. This in turn helps us focus on changes that require immediate and/or our full mental awareness.

In the end, this new found understanding of the relationship between anxiety and change should help you recognize the positives of the anxiety response while eliminating some of the negative aspects of anxiety by providing a basis for you to focus on and leverage off of the underlying drivers of significance, difficulty and control.

Tom Somodi is a speaker and expert on change, applying his extensive domestic and international business experience, including reorganizations, acquisitions, strategic change initiatives, and taking a company public during the difficult 2011 financial markets. Tom has held CEO, COO, CFO and board level positions. Tom’s book, The Science of Change: Basics Behind Why Change Succeeds and Fails, will be released in the Fall of 2013. For more information, please visit www.changescienceinstitute.com or email info@changescienceinstitute.com.