Understanding the interconnected nature of organisations

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Why leaders must understand how different organisational activities are interconnected to implement change successfully. Associate professor Eli Sopow outlines recent research from University Canada West

As businesses emerge slowly from the global Covid-19 pandemic, many are finding a very different idea of what a ‘workplace’ looks like. Employees have embraced the idea of working at least part of the week from home, the function of teamwork is being redefined and leadership approaches that were considered best practice pre-pandemic are now being re-evaluated.

One thing is certain. Many of yesterday’s answers to the dynamics of business have changed since the pandemic cocooned many of us into personal isolation chambers. As we now emerge, we are finding ourselves looking for answers to questions that didn’t exist before Covid-19. Questions like: “Has our organisational culture adapted to what is likely to be a future of endemic attacks by shapeshifting Covid-19 variants?” or “How do we stay innovative and adaptive through waves of uncertainty?” and “How do we deal with the increasingly important need for employees to feel valued in a psychologically healthy workplace?”

To find answers to the above questions, MBA students at University Canada West (UCW) in 2022 helped design, with the guidance of their professor of change management and leadership, a diagnostic survey tool called the ‘LEADicator’ that discovered new connections between a workplace culture (including its focus on innovation and willingness to change) the structure of reporting lines, the different systems of management and how employees felt about their workplace climate, including both job satisfaction and morale.

The research also included diagnosing the organisational health of three different workplaces across Canada and a deep analytic dive into a mountain of Canadian federal public service employee survey data from 2020, covering 86,668 workers in 16 key departments serving the public in areas of health, gender equality, Indigenous services, immigration and public safety.

‘Organic’ organisations

For businesses that are searching for today’s ‘holy grail’ of innovation best practices, the UCW LEADicator analysis disclosed many solid results.

Taking ‘corporate culture’ to mean the values, beliefs, ways of doing things and traditions of an organisation, the research found, as anticipated, a very strong connection between the culture measures of ‘being open to change’ and ‘being innovative’. This means that for a business to be innovative, it must also be open to change and this includes being open to challenging past ways of doing things.

Of specific importance here is the connection found between being open to change and a structure that facilitates collaboration and systems of communication that are both useful and timely, as well as a workplace climate where employees gave high ratings to feeling respected.

Another important finding was confirmation of a basic principle of organisational life – that organisations of all forms do not exist in separate silos of existence and operations that move forwards in a straight line and machine-like fashion. Organisations are ‘organic’ in that different activities are interconnected to varying and often changing patterns.

For example, the research showed that any business plan calling for greater employee teamwork must incorporate the fact that ‘teamwork’ is tightly intertwined with measures of timely communication, conflict management and being open to constructive criticism. This may seem obvious, but the data confirmed that weakness in any one of those connections will decrease levels of teamwork.

Businesses today are rightly focused on what a psychologically healthy workplace looks like and the need to ensure both emotional and physical health. The benefits here include greater employee job satisfaction and morale, less workplace conflict, fewer employee absences due to illness and a greater ability to both retain and attract employees. But what our research confirmed is that there is a very strong correlation between a psychologically healthy workplace (a reflection of organizational culture) and key measures of a workplace structure, including the coordination of activity and timely decision making, as well as key factors relating to human resource systems including timely and clear communication. Doing one thing alone to improve workplace wellness will not succeed.

The holistic nature of organisational life

What the research also demonstrated strongly is that any business that makes it a priority to focus time and resources on just one apparently weak element of its existence, for example the workplace climate measure of employee morale, will likely fail unless there is an understanding of the interconnectivity of organisational culture, structure, systems and workplace climate.

In one example from our research, a company found that its employees’ low morale was being caused by complaints about poor communication. Employees felt they were not being heard and that any communication that did occur was often top-down and neither useful, timely nor clear. These communication factors are indeed strongly correlated to morale, in that they relate to a description of how employees feel about the conditions of their workplace in contrast to ‘job satisfaction’ which is a measure of how much employees like what they do.

The company’s response to boost morale was to focus solely on improving employee communications. The use of time and expense in this area failed to move the needle. Our research showed the answer was obvious when looking at the holistic nature of organisational life.

Our data showed that morale is correlated to workplace system measures of internal communication, but it is also very strongly correlated to many measures of the workplace culture – including being open to constructive criticism and placing a priority on employee wellness – in addition to measures of the structure, including timely decision making. On all the above measures of culture and systems, the company in the aforementioned example was rated as ‘low’ by employees. Unless changes to communication were aligned with changes to organisational culture, tinkering with the workplace climate would never take root.

Covid-19 and its succession of shapeshifting variables has firmly established that we live in a highly integrated world of business, science, and ecology. What our recent research shows is that business leaders and managers must play the role of ‘boundary spanners’ and integrate the interconnected, yet constantly changing, nature of organisations.

Eli Sopow is an associate professor of management at University Canada West in Vancouver, Canada, where he specialises in leadership and change management. He has served as director of continuous improvement with the Royal Canadian Mounted Police as well as holding executive positions with consulting firms and government.