CEOs can make or break a redesign

Question 1

Describe Organizational Redesign

Answer 1

Modifying organizational structure; reconfiguring how work is accomplished.

1. Rearranging workflows, job responsibilities, and/or reporting relationships.
2. Can involve creating, closing, or modifying departments and business units.
3. Often necessary but disruptive.

Question 2

List Aspects of the Redesign Process

Answer 2

1. Good metaphor: “If strategy formulation is like planting trees, organization design is like
   sowing grass: Its effect is immediate, all over the place, and in need of attention” (p. 3).
2. Redesigns transition from old to new designs.
3. Structures bridge firms’ goals, visions, missions, and values with day-to-day activities.
4. Optimal designs are abstractions that cannot be known with certainty; in turn, redesign is
   challenging, requires sustained effort, and may require experimentation.
5. First design the broad concepts (e.g., which decisions to centralize); then design the details (Leverage the knowledge of lower-level employees when designing details, but limit it for broad concepts).
6. Structures are the product of both deliberate choices (top managers) and emergent processes (will have minor adjustments and need to be monitored by top managers).
7. Design choices require careful analysis and consideration, not snap judgments and choices (be as comprehensive as possible, evaluate outcomes with data).

Question 3

List Importances of CEO Involvement

Answer 3

1. Redesigns have long-term, cumulative consequences on multiple stakeholders.
2. They impact strategy, culture, resource allocation, employee outcomes, and performance.
3. Poor or unstable structures undermine CEOs’ credibility.
4. CEOs (should) have organization-wide, not siloed, perspectives.
5. CEOs provide important signals of what is important.
6. CEOs’ involvement in redesigns provides opportunities to interact with employees.

Question 4

List CEO Behaviors that make redesigns more likely to fail

Answer 4

1. Are not committed to them: listening to wise counsel is important, but CEOs should be
   weary of trying to enact changes that they do not value or believe to be pressing.
2. Solicit too much input from others: there are limits to participative leadership.
3. Are unable to make, stick to, and follow through on decisions: analysis and flexibility are
   critical, but indecision and incessant wavering are counterproductive.
4. Lack authority: board members, founders, investors, and other stakeholders can undermine
   CEOs or meddle in their decisions; CEOs should have authority over operations.

Question 5

List Importances of CEO’s self awareness

Answer 5

1. CEOs should assess their own commitment, openness to others’ views, discernment,
   decisiveness, and control; these factors can also change throughout the redesign process.
2. They could organize redesign processes with their own strengths and limitations in mind.
3. More generally, self-awareness is an important aspect of emotional intelligence, which can
   increase leadership effectiveness and is receiving more attention in modern organizations.