The organizational structure we use today is over 100 years old. It was not built to be fast and agile.  

To succeed both in today’s world and into the future, we need to think – and act – differently.


Darryl McCall, COTY Inc. EVP of Operations

"Kotter International inspired leaders throughout our entire organization to help identify new and innovative ways to streamline our supply chain, save costs, and bring new products to market faster."
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Here's a familiar scene: a new competitive threat or a big opportunity emerges. You quickly create a strategic initiative in response and appoint your best people to make change happen. And it does — but not fast enough. Or effectively enough. Real value gets lost and, ultimately, things drift back to the way they were.

The traditional organizational hierarchy evolved to meet the daily demands of running an enterprise, which it does very well. The reality is, this system simply is not built for an environment where change has become the norm. Today, organizations need a powerful new framework for competing and winning in a world of constant turbulence and disruption. 

A select few organizations utilize a new system - a second, network-like structure that operates in concert with the hierarchy to create what Dr. Kotter calls a "dual operating system". This new system enables an organization to get today's business out the door, while simultaneously taking advantage of market opportunities and avoiding business threats. 

The Evolution of an Organization

All organizations begin like this ...

Virtually all successful organizations on earth go through a very similar life cycle. They begin with a network-like structure, like a solar system with a sun, planets, moons, and even satellites. Founders are at the center. Others are at various nodes working on different initiatives. All are seeking opportunities and taking risks, all guided by a vision that people buy into. Energized individuals move quickly and with agility.

... and evolve into this ...

Over time, a successful organization evolves as Dr. Kotter explains in the video above, into an enterprise that is structured as a hierarchy and is driven by well-known managerial processes: planning, budgeting, job defining, staffing, measuring, and problem solving. With a well-structured hierarchy and with managerial processes that are driven with skill, this more mature organization can produce incredibly reliable results.

… and ultimately become constrained by the hierarchy.

Limited by a focus on management rules and procedures, silo parochialism, pressures to make quarterly numbers, complacency or insufficient buy-in, and a limited number of go-to change leaders - the management-driven hierarchy alone is no longer up to the task of winning in this faster-moving world.

Communication across silos slows project progress. Short-term crises distract from long-term strategies. Risky new ideas are discouraged for fear of the career impact of potential failure. Even a pervading sense of smugness can result from continued success. All these issues stall acceleration.

The Dual Operating System

All organizations could look like this.

The 8 Accelerators

1. Create a sense of urgency around a Big Opportunity. Building a dual operating system starts here. This is, in many ways, the secret sauce that allows action to take place that many who have grown up in mature organizations would think impossible. Urgency gets people thinking about how they might be able to help you pursue a Big Opportunity.

2. Build and evolve a guiding coalition. This group of people from all silos and levels feels the urgency deeply, and they are ready to take on strategic challenges, deal with hyper-competitiveness, and achieve the Big Opportunity. They have the drive, the intellectual and emotional commitment, the connections, the skills, and the information to be an effective sun in your dynamic new solar system.

3. Form a change vision and strategic initiatives. The initiatives the nascent network side attacks first will be those that these individuals are very passionate about, that the organization's executive committee agrees make sense to work on, and that the hierarchical side lacks the ability to address well or fast enough.

4. Enlist a volunteer army. The guiding coalition, and others who wish to help, communicate information about the change vision and the strategic initiatives to the organization in ways that lead large numbers of people to buy in. Done well, this process results in many people wanting to help. This Accelerator starts to pull, as if by gravity, the planets and moons into the new network system.

5. Enable action by removing barriers. People act in the spirit of an agile and swift entrepreneurial start-up to identify and remove barriers that slow or stop strategically important activity.

6. Generate (and celebrate) short-term wins. All wins, both big and very small are celebrated. That celebration gives credibility to the new structure, which in turn promotes more and more cooperation.

7. Sustain acceleration. With relentless energy focused forward on new opportunities and challenges, we find a motor which helps all the Accelerators keep going.

8. Institute change. Wins are institutionalized, infusing the changes into the culture of the organization. After a few years, this action drives the whole dual operating system into an organization's DNA.

What we need today is a powerful element to address the challenges posed by mounting complexity and rapid change. The solution we have seen implemented that works astonishingly well, is a network-like system built for agility and speed existing along-side a mature organization's hierarchy that focuses on getting today's business out the door. It makes an enterprise easier to run while accelerating strategic change. This is not a question of "either/or". It's "both/and" - two systems that operate in concert. A dual operating system.

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