Management practice has its fair share of cynics,
and one story that many cynics will tell is that there are three sources of
inefficiency in organizations. The first is that they can’t change into better
practices, the second is that they pay for consultants who can’t help them
change into better practices, and the third is that they pay for business
schools to teach their managers, who end up not being able to change them into
better practices. As a faculty member of a school that benefits a lot from the
third source, I can at least say I agree with the cynics on the first two. But
then, what can be done?
New research by Melissa Valentine in Administrative Science Quarterly has looked closely at consultants and organizational change,
and offers some very helpful insights. She studied efforts to improve a cancer
treatment center, so the changes were not just simple matters of reducing cost
but had significant health outcomes. What did she find? First, it is completely
true that significant consultant effort can be invested with no real change as
a result. Money wasted, in other words, but perhaps worth trying because it is
likely that nothing would have happened without the consultants either.
But consulting changing nothing was just one result
– there were also some consultant efforts that did produce better practices.
Importantly, the difference in how the consultants and the cancer center
interacted in the unsuccessful and
successful cases was so systematic that this research gives clear guidance on
what needs to be done to improve organizations. The difference can be summed up
in one word: commitment. And I will
write the rest of the blog without any reference to interpersonal
relationships, although I admit to being tempted.
Consultants hear from organizational members what
works well and what does not, and they collect ideas on how improvements can be
done and who would be in favor of them and under what conditions. This is done
every time and has nothing to do with success or failure. The success came from taking one more step.
Whenever possible improvements were suggested and had some level of support
across the organization, the managers who would be responsible for making
changes were asked to renegotiate their obligations to each other and to
implement the necessary changes. The renegotiation is needed because changes in
complex organizations typically cross boundaries of managers and are most
effectively handled by direct negotiation, not by referring up to the shared
manager. Immediate implementation is needed because it is easy to give nice-sounding
promises without accepting the cost of actually following through. In other words, the success came from making
managers decide what to commit to and then making them commit.
This was not just done as a final set of activities
after delivering a report. It was a continuous effort, step by step, in which
managers made adjustments and re-adjustments, set time tables and expected
commitments, set new goals and measures, and followed up. The process also went
far beyond managers, because hospitals also have another very powerful group:
the doctors. Efforts to integrate their concerns were made in both the
successful and unsuccessful project, but again, the successful project pushed
all the way to commitment. In the successful case, the key decision makers
ended up feeling obliged to fulfill promises they had made to others in the
organizations – not to the consultants – and as a result, the organization
changed.
The implication is clear. Consulting is often seen
as an effective way of making changes because changes require a time
investment, and organizations typically don’t have the resources to do their
regular work and make time investments all at once. But increasing the capacity
to propose change does not relieve the organization of the responsibility to
negotiate, decide, and commit. Without those added activities, it is paying for
nothing.
