Organizational Renewal, Re-energizing

Organizational renewal can occur as an ongoing, continuous process or as episodic change. Organizations need continuous renewal because it adds a level of stability in the midst of internal and external triggers of change.

(1) To emphasize the need for continuous organizational renewal

(2) To elucidate the respective roles of organizational culture, the external environment, and internal organizational processes as well as strategic decisions and actions in both continuous and episodic organizational renewal.

Organizations should be involved in implementing planned organizational renewal initiatives based on standards of excellence, market awareness, people development and the right balance between internal and external environments of the organization. Organizational renewal is a deliberate strategy for organizational performance and long term survival.

Organizational renewal may be sporadic or continuous. If sporadic renewal is a dramatic, rapid response to either an external or internal change, it will require an immediate quantum shift in the organizational leaders’ strategic and tactical thinking in order to achieve short-term as well as long-term, sustainable performance. The need for sporadic, i.e., episodic, as well as continuous organizational renewal may be the result of drastic, rapidly occurring events caused by external or internal triggers. External triggers of organizational renewal may be weather, global events, economic conditions, technological changes (including the internet as well as technology products), political and legal environment (including deregulation and regulation), socio-cultural changes, terrorism, and/or competition. These external triggers can also affect an organization’s capability to change and renew itself continuously. Examples of internal negative triggers of organizational renewal are: the loss of a large contract, failure to do adequate succession planning, theft, violence in the workplace, product safety problems, the loss of key employees, and failure to follow procedures. However, there are many positive internal triggers of organizational renewal. For example, the continuous development of capabilities (product, service, and manpower) can also lead to breakthrough innovations resulting in competitive advantage for the organization.

Strategic Renewal

Peter Drucker’s student, Cohen said that he learned from Drucker “You can’t predict the future, but you can invent it.” Such invention of the future is an integral part of strategic management, i.e., the result of strategic decisions and actions. “Strategic management is the formulation and implementation of strategies to achieve the mission, vision, goals, and objectives of an organization. It includes the analysis of the organization’s internal and external environments, the establishment of the overall direction of the organization, and coordination with all the firms’ functional areas. Strategic and tactical planning is an organization’s process to determine where the organization stands, what it needs to do, where it needs to go, and how it will get there”.

Portfolio theory, Scenario planning, Resource allocation models, Corporate culture, Leadership craft, Metrics that matter, and Strategic alliances). We concur with Pryor, et al. (2010) who stated that they “find it interesting, but not surprising, that strategy implementation or strategy execution did not make the top 10 list. For many years, various authors (e.g., Chandler, 1962/1998, 1977; Mintzberg, 1994; Mintzberg, Ahlstrand, and Lampel, 1998, 2005; Porter, 2008, 1990, 1986, 1985, 1980; and Pryor, et al., 2007) provided in the literature robust examinations of strategic management (particularly strategy formulation). However, Beer and Eisenstat (2000) emphasized that efforts to extend strategic implementation paradigms failed to provide an integrated representation that would be helpful in the effective realignment of “structure, systems, leadership behavior, human resource policies, culture, values, and management processes.”.

Re-energizing

Re-Align Talent: Be sure that your personnel are better aligned to reflect the renewed focus areas. Redeploy the “best and brightest” to the places in your business where they can make the greatest impact. In this way, you stack the deck for success and reduce the risk of investing in growth areas.

Renew Focus: Usually there’s been some “sprawl” in the business during its growth spurts. Examine all of the products and services that your business now offers and determine which ones are most profitable and the ones that hold the greatest potential to grow and prospers. Double-down on those business areas by shifting investments away from lower performing business interests.

Optimize and “Right-Size” Support Functions: During periods of transition, support areas like IT, Marketing, HR, and Finance, often don’t get the attention that they deserve in order to be positioned to continue to deliver the “right” services to their internal customers. Take a look at those support areas, retool their processes so that they’ll align with the firm’s new direction (e.g., what worked when your business was smaller may not work when you’re larger) and retool those areas with people who have the skills and competencies needed to support future growth.

Lose the Dead Weight: Once compensation models are properly aligned, it is essential to recognize that not all boats should rise equally. So, be sure to determine exit strategies for the bottom 10% of your contributors. This exercise can help to move the rest of business out of its comfort zone, too. If a business goes through this “thinning” exercise consistently over time, sluggishness never sets in. New talent is regularly brought in to renew the energy level and raise the business past its perceived limits whatever they may happen to be.

Redefine Compensation Models: Make sure that everyone is working on achieving the same goals. If I’m only compensated on my book of business, then chances are very high that I’m not helping my colleague build hers. If you want to be successful over time, change the mindset of the business to one where staff feel like they are “in it together.” This is done by aligning compensation and rewarding everyone on the growth and profitability of the “whole” business (and, not just on the part of the business that they work within).

Institute “Stickiness”: We all want our businesses to become indispensable. This “stickiness” can be accomplished with a focus on customer intimacy. Define what your customers want from your business by putting yourself in their shoes. Learn what keeps them up at night. Identify their greatest challenges once that’s done, determine how you can help them in some way.

Align Measurements with Desired Behavior People work by what is measured. So, measure outcomes, not effort. Determine which measurements generate the desired change in behavior, while generating growth and profitability. Put those in place, manage to them and monitor results.