Tuesday, May 29, 2018

Structured Restructuring: How Organizations Define a New Managerial Role

Here is something that everyone – academics, managers, employees, owners—would like to know more about: How do organizations shape a new managerial role? What are the consequences of different approaches? This matters because organizations keep changing their roles. At the top, there is an amazing proliferation of CXO titles: Chief (fill in the blank) Officer. Do you know how many meanings the abbreviation CCO can have? I know of five. Below that level, the movement toward more partial organizations and greater coordination across organizations has led to many important roles that involve managing people and processes outside the organization, and doing so in different ways depending on the relation.

A recent paper in Administrative Science Quarterly by Sukhbir Sandhu and Carol Kulik looks at this issue using data on how 21 organizations developed the new role of sustainability manager. Sustainability management means making the organization friendly toward its natural and social environment, and it is described very differently by different people. Skeptics call it “building an emotional bank account with the community,” while idealists say, “We realized that to be sustainable, we had to be part of a sustainable society.” Organizations have a mixture of skeptics, idealists, and care-nots, and in this environment the sustainability manager position has been created and shaped in ways that work with the rest of the organization.

You might imagine that this would be an improvised process. It was, but somehow the improvisation followed three distinct patterns, each with its own set of consequences: prospecting, orchestrating, and championing. Prospecting organizations asked a manager to scout for sustainability initiatives done elsewhere and introduce them to other managers, who made decisions on initiatives based on potential reputational and legitimacy benefits. Orchestrating organizations had formalized corporate sustainability plans and used the managers to internally market and implement those plans, based largely on a business case of cost / benefit. Championing organizations had a mixture of planned and opportunistic sustainability efforts, the manager was integrated with the top management team, and sustainability initiatives were embedded in functions.

So what were the consequences of these patterns? Often that problems accumulated to the point that the organization transitioned to another pattern. Such transitions followed a sequence. Prospecting was a natural starting point for organizations with no prior sustainability manager, but in this pattern the manager had little discretion and had difficulty convincing top management to act. In some organizations, this missing communication and continued pressure to do more led to orchestrating. Orchestrating involved ambitious planning and many initiatives, but there was often poor follow-up by the organization because the sustainability manager did not have sufficient authority over other organizational units. This lack of implementation sometimes led to championing: the stage at which sustainability tasks became integrated with other organizational tasks and the sustainability manager had both the authority and opportunity to promote new initiatives. What Sandhu and Kulik found was that sustainability managers had the greatest success when top management bought into the necessity of the role and set parameters for it but the managers could determine how to do their work within those parameters.

The results of shaping a new role from both the top and bottom are good for sustainability, but the implications are a problem if organizations incorporate many new roles in the same way. Combining bottom-up and top-down initiatives for each new role means top management teams may need to grow, as they need to make more-complex and more-frequent decisions. No one said that management was easy, but the complexity of a modern organization has made it harder than ever.