The Value of Transformation Models in Organizational Development

As part of a series, we present various organizational models for businesses and examine their advantages and disadvantages. In the first part, we already delved into what are known as diagnostic models. However, with the evolution of organizational design practices and methods, the focus has shifted more towards managing successful changes rather than just diagnosing conditions. In this context, the change or transformation models presented in this article can also serve as excellent diagnostic tools, but they focus more on the path towards greater effectiveness and concentrate on the human factors of organizational performance.

The Center for Organizational Design developed the Transformation Model in 1995. It is a framework for designing organizations that essentially has two goals: to help leaders understand their organizations and, based on that understanding, guide successful redesign. The model comprises eight variables that form the context of an organization. The aim is to understand and control these variables to achieve balance within the organization.

The Environment
The organization is to be understood as a living system that can only survive when in harmony with its environment. This environment includes competitors as well as the legal, social, and political climate.

The Strategy
How the organization aims to compete by creating value for customers is derived from the strategy. It includes performance goals and a system for generating growth. This addresses the direction in which the company is evolving.

The Core Process
The organization’s workflow and all related resources and technologies are referred to as the core process. It coordinates all other business activities related to this process.

The Structure
Structure describes how the company organizes people around business processes. It helps users understand boundaries, roles, responsibilities, and reporting relationships.

The Systems
Activities and tasks that organize and coordinate work are referred to as systems. Sometimes, the term functions is more common here.

The Culture
Culture describes how the organization truly functions at its core and how well it can implement the strategy into practice.

The Results
The organization’s performance is derived from predefined metrics. Well-thought-out parameters form the basis for understanding performance.

The Leadership
Leadership sets goals and monitors results. It also defines the vision and strategy and shapes the organization.

The Nadler-Tushman Model, also known as the Congruence Model, introduces a six-stage plan to close gaps in the collaboration of individual elements within an organization. It examines communication and information flow to understand the congruence of four central components.

1. Work refers to the tasks employees perform and whether they align with the company’s goals.
2. People relate to the skills, knowledge, experience, and training concerning compensation and the development of their potential.
3. Structure ensures coherence between what the organization wants and what it actually does.
4. Culture refers to values, norms, behavioral patterns, and written and unwritten rules within the organization.

The framework for organizational change can be used as a diagnostic tool. However, its main purpose is to guide organizational changes. In this context, Burke-Litwin is a causal change model that aims to show where changes occur and flow through the organization. The framework is much more complex and comprehensive than most organizational design models. It groups twelve factors into five categories. Each group is influenced by the group above and below it.

• External factors are at the top of the groups as they cause the need for changes.
• Strategic factors include strategy/mission, leadership, and organizational culture.
• Operational factors include structure, management practices, and systems (including policies and procedures).
• Individual factors include the climate in the work unit, skills and tasks, motivation, and individual needs and values.
• Results include both individual and organizational performance metrics.

In conclusion, meaningful diagnoses of the status quo are just as important as models that drive the transformation of an organization. The science of organizational design is advancing as rapidly as change itself. In the third and final part of our series, we will introduce two experimental models for organizational design that, in our opinion, deserve your attention.