STRUCTURE IS NOT ORGANIZATION

STRUCTURE IS NOT ORGANIZATION

Diagnosing and solving organizational problems means looking

not merely to structural reorganization for answers but to a

framework that includes structure and several related factors.

14

ROBERT H. WATERMAN, J R . , THOMAS J . PETERS, AND JULIEN R. PHILLIPS

The Belgian surrealist Ren~ Magritte painted a

series of pipes and titled the series Ceci n'est

pas une pipe: this is not a pipe. The picture of

the thing is not the thing. In the same way, a

s t ruc tur e is not an organization. We all know

that, b u t like as not, when we reorganize what

we do is to restructure. Intellectually all

managers and consultants know that much

more goes on in the process of organizing

than the charts, boxes, dotted lines, position

descriptions, and matrices can possibly depict.

But all too often we behave as though we

didn't know it; if we want change we change

the structure.

Early in 1977, a general concern with the

problems of organization effectiveness, and a

ROBERT H. WATERMAN, JR. is a Director,

THOMAS J. PETERS a Principal, and JULIEN R.

PHILLIPS an Associate in the San Francisco office of

McKinsey & Company. Mssrs. Waterman and Peters

are co-leaders of McKinsey's Organizational Effectiveness

practice.

particular concern about the nature o f the

relationship between structure and organization,

led us to assemble an internal task force

to review our client work. The natural first

step was to talk extensively to consultants

and client executives around the world who

were known for their skill and experience in

organization design. We found that they too

were dissatisfied with conventional approaches.

All were disillusioned about the

usual structural solutions, b u t they were also

skeptical about anyone's ability to do be t t e r .

In their expe r i enc e , the techniques of the

behavioral sciences were not providing useful

alternatives to structural design. True, the

notion that structure follows strategy (get the

strategy right and the structure follows)

The authors want to offer special acknowledgement

and thanks to Anthony G. Athos of Harvard University,

who was instrumental in the development of the

7-S framework and who, in his capacity as our

consultant, helped generally to advance our thinking

on organization effectiveness.

BUSINESS HORIZONS

Structure Is Not Organization

looked like an important addition to the

organizational tool kit; yet strategy rarely

seemed to dictate unique structural solutions.

Moreover, the main problem in strategy had

turned out to be execution: getting it done.

And that, to a very large extent, meant

organization. So the problem of organization

effectiveness threatened to prove circular. The

dearth of practical additions to old ways of

thought was painfully apparent.

OUTSIDE EXPLORATIONS

Our next step was to look ouside for help. We

visited a dozen business schools in the United

States and Europe and about as many superbly

performing companies. Both academic

theorists and business leaders, we found, were

wrestling with the same concerns.

Our timing in looking at the academic

environment was good. The state of theory is

in great turmoil but moving toward a new

consensus. Some researchers continue to write

about structure, particularly its latest and

most modish variant, the matrix organization.

But primarily the ferment is around another

stream of ideas that follow from some startling

premises about the limited capacity of

decision makers to process information and

reach what we usually think of as "rational"

decisions.

The stream that today's researchers are

tapping is an old one, started in the late 1930s

by Fritz Roethlisberger and Chester Barnard,

then both at Harvard (Barnard had been

president of New Jersey Bell). They challenged

...