the ceo magazine, change management,
Mostafa Sayyadi, Author, Leading Between the Lines

Today‘s globalized nature of business is placing more pressure on companies to employ change management leaders who are capable to build learning companies. There are many studies that focus on the organizational factors that drive organizational innovation. Structure is one such area that plays a critical role and is a strategic prerequisite for business success in today’s knowledge-based economy.

Change management leaders can provide a better environment for employees to explore new ideas and create more knowledge. They concentrate on developing knowledge sharing and inspiring employees to generate new solutions and a better environment. Less emphasis on formalization could in turn contribute to create new knowledge, and in terms of typically written procedures and rules, restrict the generation of new ideas. Change management leaders inspire employees to reach informal agreements aiming at effectively handling the situations to some extent. They, in fact, develop more informal structures to stimulate new solutions in order to solve organizational problems in a more innovative manner. Moreover, change management leaders manifest themselves as inspirers who implement the required changes in the current status and create a better situation. Formalised structures are more bureaucratic, and this negatively contributes to the effectiveness of change management leaders in transforming existing situations and creating a better environment.

Change management leaders have been also described as the facilitators of interactions and relationships within organizations. A change management leader builds decentralized structures to enhance knowledge sharing and create a more innovative climate. This idea can be also supported by accounting for the crucial role of decentralised structures in facilitating the exchange of ideas and the implementation of more innovative solutions based on stipulating the power of decision-making around the organization. Less emphasis on centralization and formalization can, in fact, improve interactions, and subsequently generate more knowledge. A decentralised and informal structure facilitates knowledge flow within companies. The delegation of decision-making power could, in fact, create a climate that in turn develops interdepartmental communication within organizations. Decentralization encourages organizational communications, and consequently develops a climate of openness for employees to exchange their new ideas. Employees can even implement ideas through being delegated the authority of decision-making to their departments. Informal structures can also improve communication by developing the interactions among members to achieve an informal agreement to handle the daily issues and activities. An informal structure can, in fact, provide the required freedom for employees to generate new ideas and better solutions in order to handle the current problems and activities. Less emphasis on formal language could, therefore, facilitate innovation and generate more knowledge, and formal procedures and rules can restrict the generation of new ideas.

In conclusion, I place a new emphasis on restructuring business to build the best-performing companies that can create and implement innovations timely as they operate and compete in global markets. In the absence of flexible structures, organizations lose their required direction to achieve a high degree of competitiveness, and cannot implement successful change in order to adapt with today’s global business environment. Organizations have succeeded and failed based upon the restructuring of business that impact performance at the organizational level.

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