Note: this is a research excerpt from Roxanne Nicolussi’s “Bigger Thinking for Smaller Enterprises”, published in 2017 and licensed under Creative Commons Attribution 4.0 International License.
Visioning provides a process for an organisation to design their ideal future collaboratively. Foresight approaches allow strategy development to be an inclusive process: allowing its users to be authentically involved in the process of creating a shared view of their organisation’s future. Beyond just a comprehensive list of long-range goals, visions should describe the end result of how those goals interact and play out into the future (Iwaniec, Childers, Vanlehn, & Wiek, 2014). This can help groups agree on concrete principles of success — saving time and resources from being used for short-term ad hoc decisions.
Vidal (2004) notes that both divergent and convergent thinking is needed for organisational decision-making processes as the quality of the decisions made is vital to organisational performance excellence. In diverse decision-making groups, members bring divergent perspectives to the group’s problem because of different experiences, values, attitudes, and cognitive approaches (Elsass & Graves, 1997, p. 946). Unilateral decision-making process was ranked the least effective for these kinds of processes. This finding can be attributed to the political nature of unilateral decision-making processes in which the opinions of all members of the organisation are not necessarily integrated in the final decision (Vidal, 2004).
Those who tend to internalize the mental models of the owners of their organisation are missing the opportunity to think interconnectedly. Thinking as a community sets the groundwork for transforming into a more sustainable organisation while creating a competitive advantage. McCammon (2012) offered the suggestion of creating a shared culture in the SME so that the mental model of the owner can be made visible and positively affect the organisation or even the network after their departure.
Unilateral decision-making process was ranked the least effective. Instead, SMEs are encouraged to think interconnectedly. Collaboration in an organisation’s long-term strategic planning helps groups agree on concrete principles of success — saving time and resources from being used for short-term ad hoc decisions. Most effective practices for this collaborative planning are divergent 12 and convergent thinking and diverse decision-making groups. Creating a shared culture at the organisation ensures the mental model of the owner is the same mental model as the members.
Though aligning with one anothers’ mental models of a desirable future for one’s organisation collaboratively with passionate members is ideal, there are several organisational barriers that influence the adoption of such activities. First, a management team must be able to understand and acknowledge its own imperfections. It is impossible to fix something when its owner will not admit it is broken. Internal organisational barriers come in many forms and play a large role in the adaptation of new ways of thinking. Management style, gender bias, power dynamics, seniority, and leadership style are just a handful of the systemic ways these may manifest. Additionally, personality styles act as self-systems reflecting important characteristics of the individual participants in the group and how that influences the functioning of the group. The current relationships, interactions and interdependencies within an organisation at any given time have an impact on the organisational decision-making as this can lead to biases and self-interested decisions. External changes in the environment and technology have also been shown to affect organisational structure and decision-making processes.
Reid & Alazem (2016) determined there was a direct connection between human behaviours and barriers to organisational change in the organisations they studied. Organisational change is the process in which an organisation changes and the effects of changes on the organisation. Organisational behaviour influences the way an organisation functions. It informs the strategy and potential success of strategy implementation. It is thus pivotal to understand how to most effectively manage organisational behaviour in order to promote sustainable organisational change. The most commonly cited facets of organisational change include vision, strategy, culture, structure, system, production technology, and leadership style (Yang, Zhuo, & Yu, 2009). The current research project focuses specifically on the vision component, while recognizing the influence of each of the aforementioned on one another. The organisation is a system and, as such, should be looked at systematically. The actualization of vision is dependent on the strategy and organisational culture that will allow for said strategy. A systemic viewpoint is taken so that different facets of organisational change are considered as parts of a whole. Organisational change often fails when organisations make an attempt to change through one facet without considering its impacts on the others. Moreover, some organisations apply identical change plans to all departments and individuals without considering their unique qualities and challenges. A big-picture perspective is crucial to successful organisational change (Chen, Suen, Lin, and Shieh, 2011).
Internal Influences on Organisational Change
Relationships, interactions and interdependencies within an organisation at any given time have an impact on the organisational decision-making. According to Nada, Louchert, & Kakabadse (2006) personality styles act as self-systems: 13 active forces with interest in preservation of social security and avoidance of anxiety. Self-systems are learned defensive activities against anxiety caused by factors of self-esteem and security. This is important to uncover as part of a discovery phase because personal interaction anxieties can be heightened during the levels of stress encountered during transformational change (Nada et al., 2006). Personality style outcomes can also reflect the social characteristics of the groups involved (Nada et al., 2006).
Additionally, personal values of the individuals participating in a decisionmaking process is also a factor that may impact the overall process. Ethical dimensions of decision-making should also be considered for systemic thinking as they are directly linked and contribute to individuals’ as well as groups’ decision-making processes (Fritzsche & Oz, 2007). The interactions between individuals generate a set of connecting fabrics that both exist, and are perpetuated beyond, the control sphere of any single organisation.
Organisational structure comprises horizontal and vertical differentiation, division of labour, span of control and spatial dispersion. A high-level discussion of some potential conflicts embedded within organisational structure follows.
Power dynamics have a great influence on the culture and functioning of an organisation. Oftentimes in private companies, the majority stakeholder is also the chair of the board. This results in a lack of board independence and diversity which means strategies may not be in the best interest of the other stakeholders. According to agency theory, inside directors are unlikely to monitor a CEO’s actions effectively because their employment with the firm makes them beholden to the CEO (Patton & Baker, 1987).
An organisation’s financial situation may also be a factor in the way some enterprises think. An organisation on its way to bankruptcy may accept unsustainable practices, lower ethical standards and cultural outliers because the company is in trouble. Companies under financial pressure must plan in the short term as a result. Companies not under that kind of pressure may feel more confident and take the longer view.
Distrust, a result of many different consequences, could influence a leader to choose to make decisions alone in order to avoid putting a decision in another member’s hands and consequently risk failure. Likewise, distrust in the capabilities of their own team of managers and employees may entice a leader to make decisions alone. Though this text emphasises the value of collaborative thinking, it recognises that collaborative thinking can be very effective, but it is not necessarily the best solution for all situations.
Lastly, the organisation’s culture is indicative of their way of thinking about the organisation and its future. A culture that focuses its time on what went wrong may be, in a sense, living in the past causing members to feel that the organisation has little or no future planning. Likewise, if the organisation’s communication between the leader and the rest of the company is insufficient, the same effect can occur.
External Influences on Organisational Change
There have also been a variety of studies that suggest structure is related to and affected by external variables. External factors that affect organisational structures and decision-making activity are changes in the external environment (Taylor, 1975; Mintzberg, 1979; Miller and Friesen, 1984; Ford et al., 1988), such as environmental uncertainty (Lawrence and Lorsch, 1967), and technological changes (Marsh and Mannari, 1981).
Reid and Alazem (2016) found that small businesses with a longer planning time horizon of three years or more share a commonality: they all have been in business for more than 20 years. In addition, it was found that the increased number of resources (e.g. human or financial resources) and internal distinction leads to increased planning (Fredrickson & Mitchell, 1984). Similarly, Debarliev et al. (2011) have identified the business’ number of employees as one of the main factors that has a substantial correlation with the strategic planning incidence. Alexander (in Reid & Alazem, 2016) has identified the lack of human resources that possess the strategic skills and the know-how, as one of the major barriers to strategic planning in small businesses.
One way to identify, mitigate and address barriers is conducting a discovery in the organisation. A discovery process allows an outside party to build trust with an organisation while obtaining an unequivocal understanding of the client, its past, and its future. A discovery is a crucial step in any client-consultant relationship as it aids in uncovering areas of weakness, progress by the client thus far, and changes the client is currently facing. Additionally, it surfaces personality styles that are present in the organisation (Chelliah, 2010).
As opposed to coming to an organisation claiming to be an expert on their problems, an organisation is more accepting of an outside party that is willing to get to know the organisation before trying to fix it. The more collaborative the consultant is in working with the organisation, the more successful the change. When the client and the consultant work together, the discovery phase allows for an understanding of the priority of change and how it can be efficiently and successfully addressed (Chelliah, 2010). Together, information can be sorted into categorized discoveries and assumptions (Chelliah, 2010).
Two common approaches to the discovery phases include the expert approach and the process-consultation approach. Whereas the expert approach is characterized by a consultant being employed to identify the problem, analyze, diagnose, and recommend a resolution (Schein, 1999), the process-consultation approach is characterized by the client and consultant collaboratively assessing the situation. The consultant trains the client on diagnostic and situational problem-solving methods. Both approaches allow for the consultant to facilitate the client’s decision-making process and apply the client’s valuable input throughout the process (Beitler, 2003). In the expert approach, the clients need to come up with their own sense of the problem. Process-consultation involves 15 the client to collectively diagnose the situation and implement appropriate processes collaboratively (Beitler, 2003).
Therefore, collaboration and co-creation are important not just as in organisational group settings, but also in the relationship between the client and consultant. Foresight processes encourage authentic involvement in the process of creating a shared future, helping groups agree on concrete principles of success — saving time and resources from being used for short-term ad hoc decisions. This can facilitate decision-making, and improve organisational culture overall through inclusion. A discovery process includes the assessment of the organisation’s many levels. Its success is also dependant on the collaboration between consultant and client organisation.