Put together one very centralized company, a deserving workforce,

several opinionated executives, a little bit of time and what do you get?

No, it's not Extreme Makeover: Home Edition, but Extreme Makeover:

Organization Edition.

Although this sounds like the hit reality TV show on ABC where a family

whose home is in ruins has the opportunity to have their entire house

redesigned, this article argues that the same idea holds true for

organizations today where design, in many ways, is also in ruins and

needs an organizational makeover.

In a fast-paced business environment, many organizations recognize

the need for a strategy that allows their firms to prosper. However, failure

will eventually result when late nineteenth and early twentieth century

structures prevail in these organizations. In his book, Organization

Theory and Design, Richard Daft says, "This structure was quite

effective and became entrenched in the business world for most of the

twentieth century. However, this type of vertical structure is not always

effective, particularly in rapidly changing environments, (87). The

solution for an organization stuck in the past, in terms

of strategy, structure, and leadership, which desires to succeed in the

future, is to adopt the approach of the learning organization.

What sets learning organizations apart from traditional organizations is

that the former's essential value is problem solving, where the latter's is

designed for efficient performance. In his book, The Age of Unreason,

Charles Handy writes, "The learning organization can mean two things,

it can mean an organization which learns and/or an organization which

encourages learning in its people, (225). These firms thrive on asking

questions, testing theories, and changing paradigms. Likewise, Richard

Daft says, "The learning organization promotes communication and

collaboration so that everyone is engaged in identifying and solving

problems. The learning organization is based on equality, open

information, little hierarchy, and a culture that encourages adaptability

and participation, (28).

The environment for companies today is anything but stable. Managers

can no longer forecast with certainty the outcome of their organizations.

This has drawn attention to chaos theory, which suggests relationships

between complex systems, including organizations, are nonlinear and

are composed of many choices that create varying effects and render

the environment unpredictable.

In the new environment managers are seeking solutions for today and

the future of their organizations. The learning organization offers hope

for the future as they seek to change key dimensions of their firms in a

chaotic environment.

A comparison of both approaches followed by an example will further

illustrate the purpose of this article.

Traditionally, the most common organizational structure is controlled

through the vertical hierarchy. Decision making comes from top

management and works its way down through the organization.

According to Daft, "This structure can be quite effective. It promotes

efficient production and in-depth skill development, and the hierarchy of

authority provides a sensible mechanism for supervision and control in

large organizations, (29-30). Although this structure may promote

efficiency, in a rapidly changing environment, this type of structure may

become overloaded. Because decisions rest solely with management,

they are not able to respond to changes in the market quickly enough to

succeed.

In the learning organization, structure is more horizontal, and tasks are

created around processes rather than departmental functions.

Furthermore, the hierarchy is considerably flattened, with only a few top

managers in finance and HR functions. Daft says, "Self-directed teams

are the fundamental work unit in the learning organization. Boundaries

between functions are practically eliminated because teams include

members from several functional areas, (30). In a rapidly changing

environment, the structure of a learning organization allows firms to

quickly change and adapt to new market demands.

In traditional organizations, strategy is formulated by top managers of

the firm, which every worker is expected to abide by. Executives use

strategy to guide their organizations through efficiency and

performance. Workers have little or no say in the direction and strategy

of the firm.

In learning organizations, however, both management and informed

workers who are in contact with suppliers, customers, and new

technology, contribute ideas and help develop the strategy. The strategy

of a learning organization is positioned for success because strategies

are more informal and allow for quick changes. According to Mintzberg

et al, "Their strategies are sufficiently open-ended to allow for the

unexpected, so that their capabilities of organizational learning can deal

with rapidly changing situations, (215).

The leadership in traditional organizations will directly influence the

strategy, structure, and environment, or indirectly through the culture of

the organization. In his article, The Genesis of Configuration, Danny

Miller adds, "The personalities of the very top cadre of managers are

expected to have dominated influence on the goals, strategies,

structures…there will be strong associations of …needs for achievement

and power, and neurotic style, with the strategies and structures of the

firm, (694).

Conversely, the leadership in learning organizations does not have

binding control. Instead, Mintzberg et al, say, "Managers have to learn

the art of asking questions, best done at close proximity to operations. In

a learning organization, managers become accustomed to walking

around and interacting with their subordinates in their work settings,

(214-215). Whereas information, knowledge and control of tasks were

directed by top management, with learning organizations, information is

shared and control of tasks is with employees.

As an example, we will consider Founders Bookstore Services and then

give it an organizational makeover to transform it into a learning

organization.

Founders Bookstore Services was started in 1991 by Dick Reiter after

many years of experience in the college store industry, where he

concentrated on Christian colleges and universities. Due to financial

problems in 1997, the company was sold to College Bookstores of

America and has since operated as a division of CBA.

According to Randall Wiersma, senior vice president, the strategy of

Founders Bookstores has been to compete successfully in their

Christian college store niche and operate in a decentralized manner.

Operating in a decentralized approach is sound advice, but the

organization's strategy should describe goals and objectives. According

to Jay Gailbraith, "The company's strategy specifies goals and

objectives to be achieved…It sets out the basic direction of the

company, (10).

As a learning organization, the strategy for Founders should be

approached with the following: Because each retail store operates on a

college or university campus, and uses a certain number book

wholesalers and suppliers, the strategy should incorporate the

overall goals of CBA, the university, ideas from employees, and input

from suppliers and vendors.

Further, the strategy should be to create what I call, "Jack-in-the-box

teams, where each team is encouraged to think "outside-the-box.

Similar to the toy, turning the handle are the teams thinking creatively for

ideas to challenges.

The structure for Founders follows the idea of the learning organization.

With only a few top executives at corporate, each retail store employee

works on the task-at-hand and customer relationships, not department

functions. Further, each store operates as self-directed teams with a

manager to facilitate daily operations.

Technology at Founders serves the purpose of supplying information to

keep operations running at a high level. Each retail store operates as an

entrepreneurial firm, where employees are empowered and have

complete information to act quickly to needs.

The learning organization thrives on strategy-structure alignment. For

the employees at Founders, there should be a clear understanding of

organizational strategy with a structure that allows the employees to

serve the needs of customers. Alignment also keeps the communication

of the organization simple, clear, and without confusion.

Finally, the leaders at Founders Bookstores need to act as facilitators.

Because the strategy will involve more input from employees and use

jack-in-the-box teams, leadership will involve more walking around and

interacting with subordinates, and keeping the lines of communication

open.

In conclusion, while there are many organizations that use the

traditional model approach, the market demands of the present are

quickly changing. The future will prove more turbulent for organizations

that are not prepared to meet these demands. A makeover to the

learning organization offers a solution to organizations that desire to

stay competitive as they retain a lean structure, a strategy that involves

input from key people, and leadership that facilitates involvement and

change.

Works Cited

1. Daft, Richard. Organization Theory and Design. Mason:

Thompson.

2004.

2. Handy, Charles. The Age of Unreason. Boston: Harvard University

Press. 1990.

3. Miller, Danny. "The Genesis of Configuration. Academy of

Management. Oct 1987; 12,4. 694.

4. Mintzberg, H., Ahland, B., and Joseph Lampel. Strategy Safari. New

York: Free Press.

Carmelo Di Salvo was born and raised in Buffalo, New York and

received his B.A in economics from the State University of New York in

Buffalo. He graduated from Regent University in 1995 with his M.B.A. In

the years following, he spent time working for businesses like Liberty

Tax Service and RBC Centura, as well as several years in the hospitality

industry. He returned to Regent in 2003 to pursue a Doctorate in

Strategic Leadership. His current focus is on teaching and consulting in

the areas of strategic leadership, foresight analysis and creativity in the

workplace.

Check out more of his insights regarding leadership in the 21st century

at http://www.leadershipcentury.blogspot.com