The Evolution of Organizational Architectures
Leaders help their organizations clarify strategy—to make
choices about the breadth of product and service offerings,
target customers, technology strategy, competitive
timing, and the strategic intent, vision, or aspirations for a
business unit. In our book, Charles O'Reilly and I call
these the "axioms" of an organization. But strategy
and vision statements, by themselves, are just
words; almost all firms these days have well-articulated
visions and strategies—relatively few execute.
Execution depends upon how managers use the
organization's processes, structures, rewards, systems,
roles, competencies, and culture. Success
comes in the short-term, because organizations are
managed for internal congruence and consistency.
Then, these organizations start to grow so they
can handle higher volume. But, the only way
they can handle high volume throughput
is by installing structure, bureaucracy,
controls, systems, rewards, and procedures
for resource allocation.
Whether a business is making
dinners, training students, or
assembling computer chips or
automobiles, the only way its
managers can develop internal
congruence for handling high
volume is by building these
technical systems in the service
of a strategy. That's good news for
today, but bad news for tomorrow,
because with structure, bureaucracy,
and systems also comes "structural
inertia."
Firms also get older. The older an
organization becomes, the more it
develops myths, stories, and histories.
People begin saying things like "experience teaches
us. . . ." When the world is shifting, experience does not
teach us well. The older an organization becomes, the ...