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An Organizational Structure That Works for Change

June 16, 2014

Headshot_thomas_somodiMany, if not most, people would argue that the capacity of a nonprofit organization to change is critical to its survival over the long term. To that end, the nonprofit literature is full of theories, methodologies, recommendations, and analyses with respect to how nonprofits should be structured and operated in order to maximize their ability to thrive and drive change.

Yet, even with all the guidance at their disposal, too many nonprofits fail to make an impact or achieve the desired change.

The reality is that if we want to see progress in this area, nonprofit organizations need to rethink their relationship to the dynamics of organizational change, and the best place to start is with the concepts found in Change Science.

Step One – Develop and Communicate a Proper Perspective of Change in the Organization

One of the first things Change Science tells us is that change is continuously occurring all around us. Every time an event is held, a donor is contacted, a donation is processed, a program is launched or altered, something in the organization's calculus has changed. It is critical that everyone in an organization, from the board of directors on down to individuals in frontline staff positions, understands that basic fact.

Step one, then, is for everyone to stop thinking of change as something that happens "out there" and to recognize that the organization already is dealing with a continuous stream of change at every level.

Step Two – Develop an Organization-Wide Understanding of Change-Related Responsibility

So how does an organization manage continuously occurring change? The answer is simple: delegation of responsibility. From the person responsible for reserving event space and inviting potential donors, to individual program managers, to the executive or executives tasked with setting and implementing the organization's strategic direction, responsibility for managing change has to be delegated.

Delegating responsibility for change carries an added benefit: employees who are given responsibility for managing some aspect of change are automatically empowered, and an empowered employee is an engaged and more effective employee. Indeed, what is often lacking in nonprofit organizations is a top-to-bottom recognition of the fact that not only is there a significant amount of change continuously occurring in and around the organization, but that through the delegation of responsibility, individuals within the organization already are managing that change.

Step 3 – Recognize and Communicate Two Broad Categories of Change Within the Organization

Given that most nonprofit organizations already are managing continuous change, why all the discussion about how nonprofits struggle with change? The answer, I believe, lies in the fact that nonprofits have allowed the lines of responsibility between day-to-day operational change and strategic change to become blurred, even as the interrelationship between operational change and strategic change has become increasingly disconnected.

This disconnect can be an even greater challenge for a nonprofit than it is for for-profit organizations, given that nonprofits typically try to minimize their administrative costs and are constantly on the lookout for new funding opportunities. All the more reason, then, for them to think of change in both strategic and operational terms.

Strategic change most often is a response to either an internal event – the receipt of a major grant, an executive transition, a board shakeup – or a reaction to an external factor – a new competitor, the loss of a major funder, a disruptive technology – that poses a threat to the organization's prospects. Operational change is focused on short term changes in the organization's operating environment.

It is critical that everyone in an organization understands that both strategic and operational change are equally important in terms of organizational success. There also needs to be an understanding on the part of every staff member and volunteer that operational change needs to be managed with constituents' needs in mind, while strategic change needs to be managed with the needs of donors and board members in mind.

Step 4 – Adjust Organizational Responsibility to Clearly Support Operational and Strategic Change

Assuming that your nonprofit is able to successfully navigate Steps 1 through 3, it may still face challenges if it fails to clearly delineate responsibility for managing operational and strategic change. The following guidelines will help:

  • Drive responsibility for managing day-to-day operational change as far down the organizational pyramid as possible. Ideally, the more those tasks are executed at the staff and volunteer levels of the organization, the better. After all, those are the people closest to the continuous change affecting the organization and those with the greatest ability to address any issues and opportunities that may arise.
  • Clearly indicate that the primary responsibility for strategic change resides at the upper management, executive, and board levels. There will always be operational change that requires the involvement of upper management, or even the executive director and/or a board member. It should be clear, however, that strategy is the purview of the most experienced leaders in the organization. That said, a possible allocation of focus with respect to strategic versus operational change might look like this:

Allocation of Focus Between Strategic and Operational Change

     
 

Strategic Change

Operational Change

Board of Directors

95%

5%

Board Committees

90%

10%

Executive Director

85%

15%

Directors

75%

25%

Managers

60%

40%

Staff & Volunteers

5%

95%

  • Again, the key is to push responsibility for operational change as far down the organizational structure as possible, thereby maximizing the time available for the organization’s leadership to focus on strategic change.
  • There should be a clear understanding at the operational level that it is the responsibility of leadership to develop a strategy that secures the organization's long-term survival. It is also important to make sure a communication loop is established between the organization’s respective strategic and operational change teams. This should include communication of the whys and wherefores behind the strategic changes to those with a primary responsibility for operational change, along with feedback from those responsible for the latter to the strategic change team regarding the performance of the organization’s change initiatives and other opportunities for improvements.

By following these four steps, nonprofit organizations will greatly enhance their capacity to support the change required for growth and long-term survivability. The real challenge lies in executing the paradigm shift needed to ensure that everyone in the organization understands that change is already continuously happening and must be managed by an evolving delineation of responsibilities for its strategic and operational aspects. Good luck!

Tom Somodi is an expert in the area of corporate restructurings, acquisitions, and strategic change initiatives. His book “The Science of Change: Basics Behind Why Change Succeeds & Fails” is available on Amazon. For more information, visit http://www.changescienceinstitute.com, or e-mail info@changescienceinstitute.com.

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