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As once stated by Tom Gayner, CIO of Markel Corporation, "Understanding the cause-and-effect relationships in business is the holy grail for decision-makers." Executives from Fortune 500 companies to start-ups are constantly seeking unique insight into this gravitas concept, and it is with this framework that "The Burke-Litwin Model" for Organizational Change and Performance looms large.




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Flevy Management Insights: Burke-Litwin


As once stated by Tom Gayner, CIO of Markel Corporation, "Understanding the cause-and-effect relationships in business is the holy grail for decision-makers." Executives from Fortune 500 companies to start-ups are constantly seeking unique insight into this gravitas concept, and it is with this framework that "The Burke-Litwin Model" for Organizational Change and Performance looms large.

The Burke-Litwin model seeks to bring clarity to the complexity of organizations. It defines 12 organizational variables, divided into transformational and transactional factors. The transformational factors include Leadership, Organizational Culture, and Mission and Strategy, all of which have more long-term and profound effects on the company's performance. Comparatively, transactional factors such as Structure, Management Practices, and Systems have a more immediate, yet less profound, impact.

A key principle of this model is the interplay between these factors. As McKinsey consultants have frequently noted, understanding this dynamic is vital for achieving effective Strategy Development and managing Change Management processes.

Applying the Burke-Litwin Model

Implementing the Burke-Litwin model involves a methodical diagnostic process to understand the numerous variables at work within an organization. A vital step in this process is assessing the current state of each factor:

After gathering this data, executives can then identify improvement areas and enact change. Important insights should be gleaned from adjacent disciplines as well, such as the Risk Management field where the Burke-Litwin insights could be applied.

Case in Point

A 2012 PwC report confirmed the value of the Burke-Litwin model in a case study involving a Fortune 500 bank undergoing a significant transformation initiative. Their research showed that the bank's transformations yielded a 10% improvement in customer satisfaction and an 8% revenue increase. They attributed this achievement primarily to the robust framework provided by the Burke-Litwin model.

Sustaining Change in an Era of Rapid Business Evolution

Implementing change is a critical challenge for Leadership at any level. However, the Burke-Litwin model isn't just another strategy – it provides leaders with the cognitive tools to analyze and act upon the interconnected variables in their organizations.

Speed and adaptability are critical in an era dominated by Digital Transformation and constant market flux. Yet, executives must master these qualities without sacrificing sound strategy and thoughtful analysis of their corporate ecosystem. As the 2021 Deloitte Global Human Capital Trends report underscores, organizational structures are in constant flux. As such, an agile model like Burke-Litwin's, fundamentally grounded in understanding complex organizational interrelationships, becomes even more valuable.

The Burke-Litwin model is not simply a tool for executives. It is an essential guide for all leaders navigating the turbulent waters of Change Management and aiming for Operational Excellence. Whether an organization faces Leadership changes, strategic shifts, or altered market conditions, Burke-Litwin equips decision-makers with the insights to effectively manage these changes.

A wise executive seeks to understand not only the individual components of their business but also how these components interact. By adopting the Burke-Litwin framework, leaders gain an effective lens through which they can observe, analyze, and act upon their organizations' intricate landscapes. In the end, driving meaningful, well-managed change is not a distant aspiration – it's a well-understood science.

For effective implementation, take a look at these Burke-Litwin best practices:


Explore related management topics: Digital Transformation Operational Excellence Change Management Organizational Change Strategy Development Risk Management Employee Engagement Agile Organizational Culture Market Research Customer Satisfaction Organizational Structure Performance Management




Additional Flevy Management Insights

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Download our free compilation of 50+ slides and templates on Organizational Design, Change Management, and Corporate Culture. Methodologies include ADKAR, Burke-Litwin Change Model, McKinsey 7-S, Competing Values Framework, etc.