Unlocking Creativity by Michael A. Roberto

Author:Michael A. Roberto
Language: eng
Format: epub
ISBN: 9781119545835
Publisher: Wiley
Published: 2019-01-07T00:00:00+00:00

The Obsession with Reorganizations

Tony Hsieh may not have recognized the benefits of hierarchy, or acknowledged the disruptive effects that implementing Holacracy would unleash. Perhaps he failed to comprehend that taking any organizing system to the extreme often proves unproductive. Most importantly, though, he presumed that organizational structure drives performance, as many business leaders do. Unfortunately, that causal link is much more complex than many executives realize, as the studies of mountain climbers and sports teams illustrate. Leaders can adopt a variety of organizational structures, and each comes with its own costs and benefits. We cannot simply crank up an algorithm and select an optimal structure that promotes creativity, innovation, and growth. No such perfect structure exists, no matter the strategy, industry, or circumstance.

Business leaders do not seem to recognize this eternal truth. They desperately seek to find the perfect organization chart for their business. Executives love reorganizations. A substantial percentage of chief executives restructure their organizations early on in their tenure.25 Like mad scientists in the laboratory, they invent new ways of dividing responsibilities. Leaders redraw the boxes and arrows on the organization chart, sometimes with a series of dreaded dotted lines to boot. Perhaps they decide to organize by line of business rather than by functional area, in hopes of breaking down discipline-based silos. One executive might choose to impose more centralization, perhaps in hopes of securing cost synergies. Another may decide to decentralize, in hopes of generating growth by providing more autonomy to local managers. Some add management layers; others eliminate them.

Sony provides a classic example of a reorganization aimed at unleashing employee creativity and recharging growth. The firm attempted a major restructuring in 2009. Apple had surpassed the Japanese consumer electronics giant in the portable music player business, and Samsung had overtaken the company in the flat-screen television industry. Once heralded as an innovative leader, Sony had become a stodgy laggard. At the time of the restructuring, the company's press release stated explicitly that the goal was to improve the pace and quality of new product development. CEO Howard Stringer proclaimed:

This reorganization is designed to transform Sony into a more innovative, integrated and agile global company with its next generation of leadership firmly in place. The changes we're announcing today will accelerate the transformation of the Company that began four years ago.26

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