Institutionalization is defined as building the company structure in a self-sustaining system to enable its survival and developmental continuity independently from the individuals in its body. Institutionalization also requires the company to adopt a certain trait, dynamism, and sustainability in order to adopt: a vision for its strategic decisions and activities; a mission to define its main goals and roles; values and principles to guideline its milestones, policies, and methods of execution to reach its goals.
The goal of institutionalization is to give the company the independence to keep functioning in a healthy manner without depending on a particular management figure or any other employee in its body at a given time. Sustainability of a company lies in its independence from individuals and methods provided by those individuals. This does not mean the company won't have individuals in its key positions. In short, it means to be able to keep the company functioning and free of major problems when an individual leaves the company body.
What needs to be done for Institutionalization?
Certain important and imperative steps need to be taken in order to achieve institutionalization. These are: clarification of mission and job definitions, definition of company rules, identification of workflows of the departments, definition of unique business principles, identification and assignation of rights and responsibilities of each position, icommission of these rights and responsibilities in a correct manner to correct people, and settling a culture of communication for final decisions to come through.
Institutionalization is an Investment to Future, Rather Than Today
An institutionalized company has the capability to function independently from its individuals. Such a company has clear definition of jobs and positions, and has alternative, pre-planned solution scenarios for possible problems. An institutionalized company keeps the focus on the job, on the mission. Applicants get to be chosen accordingly for the job at hand; jobs do not need to be created for the employee. Likewise, in an institutionalized company, any possible mistakes' roots are expected to be in the system, not the person. Also, not every fault is reflected upon the employee, because mistake tolerations are pre-defined. In order to become an institutionalized company, it is required to systematize the organization. Thus, it would be possible to perceive a possible mistake as ‘expected’ and take necessary precautions, instead of seeing it as a threat. This would alleviate the stress. In effect, institutionalization means to think big. It means to pay attention to small details, to invest on great future gains, even though it would yield no gain for today. Institutionalization is an imperative for a company to progress, to perpetuate itself, and to make it possible to be passed on to new generations.
