Written by: Zsolt Czimbalmos, PMP, PBA, ACP, DASSM
Hungarian organisations in a state of change: why restructuring is not enough?
Recent developments in Hungary have created a new operating context for many organisations – both in the public and private sectors. As organisational consultants, we believe that changes in the external environment do not only raise strategic questions, but may also require a fundamental reconsideration of operating models and core values.
In situations like the current one, change often takes the form of organisational restructuring – but it rarely stops there. In this article, we aim to support leaders and decision-makers responsible for large-scale organisational change by outlining the key dimensions of change, common pitfalls, and practical approaches to addressing them.
We frequently observe in our client organisations that a new structure is introduced, leadership roles are reassigned, and communication is completed. Yet, after a few months:
- decisions continue to stall in the same places,
- tensions between organisational units persist,
- and priorities are constantly renegotiated at an operational level.
In such cases, the organisation has only changed formally, while its actual way of operating continues to struggle with the same underlying challenges.
Most organisations treat change as a structural issue. A new organisational chart is created, reporting lines are redefined, leadership roles are adjusted – and the task is considered complete. This approach, however, is based on a fundamental misconception: that organisational performance is primarily determined by formal structures.
In reality, organisational systems do not live in charts, but in everyday operating patterns:
- how decisions are made,
- how information flows,
- how teams and individuals coordinate,
- and which behaviours are reinforced
These patterns ultimately determine how priorities are set and how direction is defined in practice.
If these deeper layers of operation remain unchanged, the organisation is highly likely to revert to its previous equilibrium. This is often described as “resistance”, while in reality it is a systemic self-correcting mechanism.
When is large-scale organisational change truly necessary?
Not every operational issue justifies a comprehensive transformation. However, there are situations where change is no longer a matter of optimisation, but of fundamentally rethinking how the organisation operates.
Such situations typically arise when:
- the external environment changes to the extent that the current operating model is no longer competitive or sustainable,
- the organisation defines a new strategic direction or business model that cannot be supported by existing operations,
- growth or complexity reaches a level where previously informal ways of working no longer suffice,
- or when the organisation deliberately seeks to operate based on new values and principles.
The real dimensions of organisational change
Complex change does not occur along a single axis, but involves the simultaneous reconfiguration of multiple, interdependent dimensions. Four of these are particularly critical:
1. Structure as a framework
Structure defines formal responsibilities and authority. However, it does not determine how the organisation operates; it merely creates a space of possibilities. Two organisations with identical structures can function in radically different ways depending on how people actually work within them.
This is clearly visible in organisational silos. While often treated as structural issues, silos rarely originate from the structure itself. Instead, they are typically the result of:
- decision-making tied to specific units rather than cross-functional collaboration,
- incentive systems that reinforce local optimisation,
- and a lack of effective coordination mechanisms between units.
As a result, organisational units operate according to their own objectives, which may be efficient locally but lead to fragmentation and significant friction at a system level.
2. Processes as Value Creation Logic
Processes describe how inputs are transformed into value. However, this only makes sense if it is clear what the organisation considers “value” – something that is far less aligned in practice than many assume.
Different parts of the organisation often interpret value differently: what is efficiency in one area may mean loss of flexibility in another; what is speed for one team may represent a quality risk for another.
Without alignment, process optimisation remains local and fails to produce system-wide improvement.
Key questions include:
- where decisions are actually made,
- where information is delayed or distorted,
- and what cycle times the organisation operates with.
In many transformations, processes are not fundamentally redesigned, meaning the new structure continues to carry the logic of the old system.
3. Decision-making architecture
Clarifying decision-making goes beyond formal authority; it also concerns how decisions are prepared and who is involved.
While strategic direction remains a leadership responsibility, decisions that do not draw on the organisation’s relevant knowledge and experience tend to be of lower quality and harder to implement.
- access to the necessary information,
- appropriate involvement of relevant stakeholders,
- and clear accountability for decisions.
Unclear decision-making is one of the most common reasons why transformations stall.
4. Behavioural norms and incentives
This is the most difficult dimension to capture, yet often the most influential. It includes everything that defines what is considered acceptable and desirable behaviour – regardless of what is formally declared.
In this sense, organisational culture is not a set of stated values, but an operating system of norms that determines:
- how real priorities are formed,
- how accountability is assumed or avoided,
- how transparent operations are,
- and how collaboration takes place across units.
These norms are rarely established explicitly. They are shaped through incentive systems, processes, and leadership behaviour. Organisations define “correct behaviour” through what they consistently reward – and what they allow to go unchallenged.
This is where many change initiatives encounter their limits: if new ways of working are not aligned with existing norms and incentives, the organisation will revert to its previous state.
Sustainable change does not occur through declarations alone. It requires the deliberate alignment of incentives, processes, and leadership behaviour with the intended way of operating. Without this, the tension between declared intent and actual practice remains unresolved.
Change as system transformation
Successful transformations share a common characteristic: they do not address individual dimensions in isolation, but treat the organisation as a system. This means, for example, that:
- introducing a new structure cannot be meaningfully separated from redesigning decision-making,
- a new objective system will not function without aligning incentives,
- and process optimisation cannot be sustained without changes in behavioural norms.
A significant proportion of failures stems from underestimating these interdependencies, and attempting to transform non-linear systems through linear interventions.
The critical phases of change implementation
In practice, transformations are not projects with clear start and end points, but a sequence of transitional operating states. Each phase requires a different leadership focus.
1. Direction setting: making strategic decisions concrete
Many organisations make their first mistake here by remaining too abstract. Effective direction setting:
- defines concrete operating principles (e.g. centralisation vs decentralisation),
- makes priorities explicit,
- and clearly identifies areas where no change will take place.
This last point is particularly important, as transformation always involves reallocating limited resources.
2. Activation: establishing a shared interpretation among key roles
The success of any transformation largely depends on how middle management and key experts interpret the new direction. At this stage, a shared frame of reference is formed, determining how strategic intent is translated into everyday operations across the organisation.
This is where it will be decided whether the organisation continues to operate under a unified logic, or whether parallel, difficult-to-coordinate „local realities” will be created.
The focus here is on building shared understanding: key stakeholders need to understand the logic behind the change, the implications of decisions, and their own role in the new way of operating.
Without this, transformation may formally begin, but will be implemented inconsistently across the organisation.
3. Embedding: establishing the new way of operating
This is the longest and most resource-intensive phase, where change becomes visible in day-to-day operations. This stage is not about designing the new model, but about consistently establishing and sustaining it.
Core elements of organisational functioning are reshaped, including:
- how decisions are made and how quickly,
- how units collaborate,
- how responsibilities are exercised in practice,
- and what becomes a priority on a daily basis.
The change becomes „real” in this phase: the discrepancies between declared principles and actual operation become visible and manageable here.
This is where transformation becomes “real”: the gap between declared principles and actual behaviour becomes visible and can be addressed. The transition requires significant energy at all levels of the organisation. The new way of operating can only become sustainable if employees understand its purpose and can interpret how it improves their own work. Without this, the organisation will – unless actively managed – revert to familiar patterns.
4. Adjustment: measurement, feedback and intervention
Transformation does not end with a “go-live” date. Successful organisations continuously refine their operations through iterative feedback and targeted interventions.
Measurement focuses not only on outcomes, but on how the organisation operates:
- how decision speed and quality evolve,
- how collaboration between units develops,
- to what extent stated priorities are reflected in daily work,
- and whether new operating principles are actually applied.
This phase requires continuous leadership attention and deliberate communication. Organisations need to regularly reinforce what is working and where adjustments are required.
Without this, there is a risk not only of regression, but also of stabilising in an unintended, suboptimal operating state.
Common pitfalls in large-scale organisational transformations
Large-scale transformations rarely fail due to a single mistake. Instead, multiple issues tend to emerge simultaneously and reinforce one another. The following patterns are commonly observed:
1. Treating the change as a structural issue
Organisations often begin by redesigning their structure. While this is visible and quick, it does not in itself change how the organisation operates.
If decision-making, processes and incentives remain unchanged, the new structure will quickly reproduce old behaviours.
2. Loss of momentum
One of the most common – and hardest to detect – risks is gradual loss of momentum. Initial focus and leadership attention fade, while day-to-day operations regain priority.
Rather than a visible failure, what occurs is a slow decline:
- previously prioritised topics lose visibility,
- decisions revert to established patterns,
- and new principles become less evident in daily work.
This is typically driven not by resistance, but by limited capacity, loss of focus, and inconsistent leadership attention.
3. Underestimating the role of middle management
Transformations often do not break down at the level of executive decisions, but at the level of interpretation by middle management.
If this group does not fully understand the new operating logic, or cannot translate it into their own domain, inconsistent practices will emerge across the organisation.
4. Leaving incentive systems unchanged
A frequent mistake is defining new goals and principles while performance management and reward systems continue to reinforce old behaviours.
In such cases, the organisation formally moves in one direction, but operationally continues in another.
5. Ignoring operating norms
Organisational culture and behavioural norms are often treated as intangible, yet they strongly determine whether change becomes embedded.
If new principles are not aligned with what is actually accepted and reinforced in practice, the organisation will revert to its previous state.
6. Treating transformation as a project
Many organisations approach change as a project with a defined start and end.
This is misleading. Changing how an organisation operates cannot be “completed” – it requires continuous attention, measurement and adjustment.
7. Underestimating execution
Designing change is typically far less demanding than implementing it.
Organisations tend to underestimate:
- the time required for transition,
- the level of leadership involvement needed,
- and the temporary performance dip during the shift.
As a result, momentum is lost before the new operating model stabilises.
8. Lack of feedback
During transformation, organisations often lack regular measurement of whether their way of operating is actually evolving in the intended direction.
Without this, there is not only a risk of reverting to previous ways of working, but also of the organisation stabilising in an unintended operating state.
What works in practice?
Successful transformations are supported by deliberate mechanisms that enable the new way of operating to emerge and persist.
1. Experimentation and pilot approaches
Complex changes are rarely implemented in one step. Effective organisations test new models in controlled environments.
Pilots allow organisations to:
- test in real conditions,
- adapt based on rapid feedback,
- reduce implementation risk.
They also serve as credible proof points for the rest of the organisation.
2. Building visible early results
One of the biggest challenges is that the benefits of new ways of working often take time to materialise. At the same time, organisations experience uncertainty, increased workload, and sometimes temporary performance decline.
It is therefore critical that change becomes visible through tangible results.
Well-functioning organisations therefore consciously create situations where new ways of working quickly yield visible results. This is not about „beautifying” reality, but about demonstrating that the new operational logic is capable of working.
This involves:
- selecting areas where new ways of working can deliver quick, measurable outcomes,
- clearly articulating what has changed,
- and making results visible across the organisation.
These early results:
- build confidence,
- create momentum,
- and reduce uncertainty.
Without this, change easily remains “distant” for the organisation: people do not see how the new way of operating is better, and therefore revert to familiar solutions in their day-to-day work.
Visible early results are therefore a key lever of transformation: they make the new way of operating tangible and understandable for the organisation.
3. Continuous, two-way communication
Communication supports ongoing interpretation.
Effective organisations
- create regular forums for discussion and feedback,
- make progress visible,
- and allow uncertainty to be openly addressed.
Here, communication acts as a mechanism for continuously adjusting how the organisation operates.
4. Reinforcing the purpose of change
Transformation becomes sustainable only if people understand why it is necessary and how it relates to their work.
This goes beyond initial communication:
- continuous linking of daily activities to the broader purpose,
- concrete examples of what is changing and why,
- and visible evidence of progress.
Without this, change remains a “project” rather than an operational necessity.
5. Consistent enforcement of operating principles
New ways of working emerge not from statements, but from consistent application in daily operations. This means:
- applying the new logic in decision-making,
- addressing undesired behaviours,
- reinforcing expected behaviours visibly.
Inconsistency is one of the fastest paths to regression.
6. Dedicated focus and capacity
Organisations that dedicate time and attention are able to progress.
This could mean:
- clear leadership focus,
- dedicated roles,
- structured tracking mechanisms.
Without this, day-to-day operations will override transformation efforts.
7. Continuous measurement and adjustment
Effective organisations do not assume that change works immediately.
They continuously assess:
- how operations are evolving,
- where distortions appear,
- and where intervention is needed.
This ensures that transformation not only starts, but stabilises in the intended direction.
What is truly at stake?
The key question before any large-scale transformation is whether the organisation is capable of understanding and shaping its own operation as a system.
Redrawing structures is fast and visible. Changing how the organisation actually operates is complex, demanding work that requires:
- understanding interdependencies,
- consistent leadership presence,
- and continuous adjustment.
Organisations that can manage this complexity do not merely adapt to change – they actively shape it. For others, change becomes a recurring necessity: new structures, but unchanged ways of working.
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