Originally Published - 2 March 1999

A new report published today concludes that companies embarking on organisational changes will not succeed unless changes are made simultaneously on several fronts. The report's advice follows an international survey looking at key issues for the organisation of tomorrow, with responses from 450 large and medium sized European companies. The author of the report, Professor Andrew Pettigrew, from the Centre for Creativity Strategy and Change at Warwick Business School, particularly points out the dangers of simply implementing the latest management fad or fashion. He says:-

"Beware of attempts to improve performance through simple and singular changes. Leading innovation and performance is about delivering a complementary set of innovations and not the latest management fad. The quick fix is for the magician and there are few successful magicians in politics, business and the public sector."

Professor Pettigrew found much evidence of widespread changes in European companies. However he also found that improvements in companies' performance occurred most often if they implemented change across a range of activities. Piecemeal changes - with the exception of IT, were found to deliver little performance benefit. Indeed, implementing singular innovations frequently produced a loss of performance. The research compared new forms of organising in Europe between 1992 and 1996. The main changes made by companies in that period included:

• Delayering:- The average number of levels between the chief executive and the lowest manager with profit responsibility fell from 3.5 to 3.2 - however - although 30% of firms reduced the number of management levels, 20% of firms actually increased them (especially the fastest growing companies).
• Decentralisation - 61% of firms had a high degree of decentralisation of operational decisions, compared with 36% in 1992. 18% had a high degree of decentralisation of strategic decisions, compared with 12% in 1992.
• Project-based organisation increased by 175% between 1992 and 1996.
• Firms invested strongly in improving vertical and horizontal communications.
• 82% of firms were increasing their investments in IT infrastructures.
• The hard infrastructure of IT development is being underpinned by soft investments in new human resource practices such as team-building, cross-company training events and mission-building activities.
• Outsourcing increased from 1992 to 1996 - 65% of firms claimed increases.
• More alliances - 65% of firms claimed more long term alliances in the period.

Vic Luck, Managing Partner of the EMEA (Europe, Middle East, Africa) region of PricewaterhouseCoopers, one of the sponsors of the research and whose predecessor company Coopers and Lybrand were one of the companies examined in the report said:-

"In managing change it is a myth that "less is more" and that the more pin-pointed the change, the greater the impact. More is much, much more and in some cases companies have achieved significant advantages from implementing far-reaching multifaceted change programmes. The trends identified in this research are reinforced strongly by our experience of working with global companies. Clients are increasingly aware of the need for constant change throughout the organisation if they are to compete effectively."

The report also noted national differences. Highly internationalised firms display the greatest increases in decentralising and alliance formation. British firms are more likely to emphasise operational decentralising and downscoping. German companies emphasise strategic decentralising and human resource innovations.

Notes for Editors:

1. One of the companies in the survey which the researchers saw as an example of an organisation which had implemented a set of holistic complementary innovations was Coopers & Lybrand in the UK. It conducted a "wall-to-wall" change programme between 1994 and 97 which transformed the business. Vic Luck, previously Managing Partner of Coopers & Lybrand in the UK, is available for interview - see the PricewaterhouseCoopers contact details below
2. The survey findings form part of the INNFORM project on innovative forms of organising for the 21st Century. This international project is led from Warwick Business School by Professor Andrew Pettigrew and involves collaborating scholars from the Said Business School, University of Oxford, five European universities and universities in the USA and Japan. The research has been funded by the Economic and Social Research Council, PricewaterhouseCoopers, the consortium members of the CCSC, Warwick Business School and the institutions of the participating researchers.

For further information please contact:

Professor Andrew Pettigrew,
Centre for Creativity Strategy and Change
Warwick Business School, Tel: +44 (0)24 76 524800
email: a.m.pettigrew@warwick.ac.uk

Sue Beeby, Assistant Communications Manager,
Warwick Business School
Tel: +44 (0)24 76 524286 Email: schsbe@razor.wbs.warwick.ac.uk

Nicola Adamson, European PR manager, PricewaterhouseCoopers
Tel: +44 (0)171 939 2161 email: nicola.adamson@uk.pwcglobal.com