other corporations,” said one person who has worked with the company at a high level for many years. “It's not a company, it's just a bunch of disparate pieces. It's simply dysfunctional.” (Eichenwald, 2002, p. C‐6)
Miller and Friesen (1984) found that even in troubled organizations, structural change is episodic: long periods of little change are followed by brief episodes of major restructuring. Organizations are reluctant to make major changes because a stable structure reduces confusion and uncertainty, maintains internal consistency, and protects the existing equilibrium. The price of stability is a structure that grows increasingly misaligned with the environment. Eventually, the gap gets so big that a major overhaul is inevitable. Restructuring, in this view, is like spring cleaning: we accumulate debris over months or years until we are finally forced to face up to the mess.
MAKING RESTRUCTURING WORK: TWO CASE EXAMPLES
In this section, we look at two case examples of restructuring. Some represent examples of reengineering, which rose to prominence in the 1990s as an umbrella concept for emerging trends in structural thinking. Hammer and Champy promised a revolution in how organizations were structured:
When a process is reengineered, jobs evolve from narrow and task oriented to multidimensional. People who once did as they were instructed now make choices and decisions on their own instead. Assembly‐line work disappears. Functional departments lose their reason for being. Managers stop acting like supervisors and behave more like coaches. Workers focus more on customers' needs and less on their bosses' whims. Attitudes and values change in response to new incentives. Practically every aspect of the organization is transformed, often beyond recognition. (1993, p. 65)
More than half of all Fortune 500 companies jumped on the reengineering bandwagon in the mid‐1990s, but only about a third of those efforts were successful. Champy admitted in a follow‐up book, Reengineering Management (1995), that reengineering was in trouble, and attributed the shortfall to flaws in senior management thinking.
Some reengineering initiatives have indeed been catastrophic, a notorious example being the long‐haul bus company Greyhound Lines. As the company came out of bankruptcy in the early 1990s, a new management team announced a major reorganization, with sizable cuts in staffing and routes and development of a new, computerized reservation system. The initiative played well on Wall Street, where the company's stock soared, but poorly on Main Street as customer service and the new reservations system collapsed. Rushed, underfunded, and insensitive to both employees and customers, it was a textbook example of how not to restructure. Eventually, Greyhound's stock crashed, and management was forced out. One observer noted wryly, “They reengineered that business to hell” (Tomsho, 1994, p. A1). Across many organizations, reengineering was camouflage for downsizing the workforce, often with disappointing results.
Nevertheless, despite the many disasters, there have also been examples of notable restructuring success. Here we discuss two of them, drawn from different industries.
Beth Israel Hospital
Boston's Beth Israel Hospital illustrates a health care restructuring effort that sought to move toward greater autonomy and teamwork. When Joyce Clifford became Beth Israel's director of nursing, she found a top‐down pyramid common in many hospitals:
The nursing aides, who had the least preparation, had the most contact with the patients. But they had no authority of any kind. They had to go to their supervisor to ask if a patient could have an aspirin. The supervisor would then ask the head nurse, who would then ask a doctor. The doctor would ask how long the patient had been in pain. Of course, the head nurse had absolutely no idea, so she'd have to track down the aide to ask her, and then relay that information back to the doctor. It was ridiculous, a ludicrous and dissatisfying situation, and one in which it was impossible for the nurse to feel any satisfaction at all. The system was hierarchical, fragmented, impersonal, and [overmanaged]. A machine bureaucracy out of control. (Helgesen, 1995, p. 134)
Within units, responsibilities of nurses were highly specialized: some were assigned to handling medications, others to monitoring vital signs, still others to taking blood pressure readings. Add to the list specialized housekeeping roles—bedpan, bed making, and food services. A patient received repeated interruptions from virtual strangers. No one really knew what was going on with any individual patient.
Clifford instituted a major structural revamp, changing a pyramid with nurses at the bottom to an inclusive web with nurses at the center. The concept, called primary nursing, places each patient in the charge of a primary nurse. The nurse takes information upon admission, develops a comprehensive care plan, assembles a team to provide round‐the‐clock care, and lets the family know what to expect. A nurse manager sets goals for the unit, deals with budget and administrative matters, and makes sure that primary nurses have ample resources to provide quality care.
As the primary nurses assumed more responsibility, connections with physicians and other hospital workers needed reworking. Instead of simply carrying out physicians' orders, primary nurses became professional partners, attending rounds and participating as equals in treatment decisions. Housekeepers reported to primary nurses rather than to housekeeping supervisors. Housekeepers assigned to specific patients made the patient's bed, attended to the patient's hygiene, and delivered food trays. Laundry workers brought in clean items on demand rather than making a once‐a‐day delivery. Sophisticated technology gave all personnel easy access to patient information and administrative data.
Primary nurses learned from performing a variety of heretofore menial tasks. Bed making, for example, became an opportunity to evaluate a patient's condition and assess how well a treatment plan was working. Joyce Clifford's role also transformed, from top‐down supervisor to web‐centered coordinator:
A big part of my job is to keep nurses informed on a regular basis of what's going on out there—what the board is doing, what decisions are confronting the hospital as a whole, what the issues are in health care in this country. I also let them know that I'm trying to represent what the nurses here are doing—to our vice‐presidents, to our board, and people in the outside world … to the nursing profession and the health care field as a whole. (Helgesen, 1995, p. 158)
Beth Israel's primary nursing concept, initiated in the mid‐1970s, produced significant improvement in both patient care and nursing morale. Nursing turnover declined dramatically (Springarn, 1982), and the model's success made it highly influential and widely copied both in the United States and abroad. But even successful change won't work forever. Over the years, changes in the health care system put Beth Israel's model under increasing pressure. More patients with more problems but shorter hospital stays made nurses' jobs much harder at the same time that cost pressures forced reductions in nursing staff. Beth Israel chose to update its approach by creating interdisciplinary “care teams.” Instead of assembling an ad hoc collection of care providers for each new patient, ongoing teams of nurses, physicians, and support staff provided interdisciplinary support to primary nurses (Rundall, Starkweather, and Norrish, 1998).
Ford Motor Company
In 2006, after Ford Motor Company chalked up a $13 billion loss, Chairman William Ford III concluded that the way to save the company his great‐grandfather had founded was to hire a strong and experienced outsider who could take on the entrenched mind‐sets and in‐fighting among executives and divisions at Ford. He took a gamble on a non‐car‐guy, Alan Mulally, an engineer with a long career at Boeing and a reputation for turning around struggling businesses.
Arriving at Ford, Mulally encountered many surprises. Bureaucracy was so entrenched and top‐down that it was considered bad form for a subordinate to invite a superior to lunch. Ford was struggling, but no one wanted to admit it, so executives
