Systemic Blunders

Structural failures leading to change failures

Government BlundersIn the previous blog I described the book, The Blunders of our Governments by Prof. Anthony King and Sir Ivor Crewe which describes a series of major blunders by our governments. The third part of their book covers the systemic failures (as opposed to the human failures) which have contributed to significant waste and failure to change. In this blog I will discuss these systemic failures.

In particular I will re-cast the failures into the frame of organisational change.

Systemic or what?

The systemic failures apply to most organisations which struggle to change. They are a function of the design of the organisation, the management style and the culture. All of these can be changed so the systemic failures are avoidable. Here they are:

Stovepipes and central control

In order to manage an organisation it is split up into functional units: finance, HR, operations, marketing, etc. These units have their own cultures and ways of doing the things they deem necessary for their function. They turn into tribes, and before you know it you have tribal warfare between units over resources and primacy of the head of the unit at the top table. This leads to stovepipes which just don’t communicate, let alone cooperate.

A brilliant example of this is when a ‘change team’ or ‘change centre’ is set up within the organisation to do the strategic change to the rest of the organisation. It is usually staffed by contractors from outside the organisation who know the least about how to change the organisation. This team then design and do the change; which should be done by the people who need to change — leading to poor engagement and even less commitment from the front-line staff whose good will for change is essential for success.

A second effect of splitting the organisation into units is that the Chief Exec, or other top honcho, finds it difficult to keep up with and control all of the units in a way that is necessary to deliver operational effectiveness and strategic change. Most Chief Execs fail to run their executive board as a team, working together for the common purpose of the organisation. Instead they see the board (and the board see themselves) as the collection of heads of units who are there to fight for their tribe.

Musical Chairs

This is the effect of senior managers who change their jobs frequently. In a number of our institutions: the Civil Service, the Armed Forces; this change is part of the structure where senior staff move on every 18-24 months to a new job to broaden their experience. The consequence is that no one stays around to see a change through! These are supposed to be the sponsors and drivers of change; but who wants to complete the last incumbent’s change when you can start your own!

A number of senior manager seem to move on too quickly for other reasons. The average time in post for the head of a Local Authority is now around 2 years. Far too short a time to see through a major change. Senior commercial managers also move on too soon. There should be a rule: if you start a change you should expect to stay to see it through! But to do that senior managers must value a successful change on their CV; but since so few have them they don’t have much currency.

Leaders as activists

Many senior managers are put into post to ‘sort things out’. Their predecessors having ‘failed’ in some way; so a new broom is required. Few senior managers see themselves as maintaining the current status — they want to lead change. Consequently there is a lot of change going on; mostly uncoordinated (see stovepipes above). Many of these managers (leaders) do not want to hear that their pet change is not working (see the previous blog); nor do they want to see their change a lower priority to another managers change. It doesn’t matter that the organisation only has the capacity to do one of the changes.

The necessity for portfolio management to address the proliferation of change and bring all change within the capacity for change of an organisation is becoming urgent. Whilst at the same time putting in place structures to develop and increase the capacity of the organisation to do change. Such structures start with the appointment of an executive accountable for the measured capability for change and the success of change in the organisation.

Lack of accountability

This is one of our favourite topics. Time and again we hear in the news of another failure to deliver change and find that the senior managers have been punished with promotion and career enhancement. The point about accountability is that it involves consequences. A success should have positive consequences and failure should have negative consequences. If there are no consequences then there is no accountability and without accountability those making the key decisions have no skin in the game. Alignment of individual motivation and organisation goals is essential. It is used to justify bonus payments and share options. Yet senior managers continue to game the system and collect their bonus regardless of their performance. Recent announcements from banks on bonus pool increases whilst announcing big losses is just the tip of the iceberg across business and government.

Without accountability there will be no improvement in change success. End of!

Asymmetry of expertise

Delivering a change often requires considerable technical knowledge about the processes to be changed and the drivers for change (technology, legislation, finances, existing processes, etc). Knowledge about these topics is often not available to senior managers designing change, and sometimes only exists outside the organisation with contractors. This puts the decision makers at a disadvantage when making assumptions and believing the promises of contractors about their ability to deliver the desired solutions. Inexperience in successful change is common amongst managers — whilst experience of success change is not. Sometimes the complexities of a change, especially the people aspects, are hidden from senior managers.

It only takes a little hubris and some simple assumptions and the change as designed by senior managers is unimplementable. All managers have a role to play in exploring the complexity of change and ensuring that risks (especially assumptions) are exposed and managed.

Lack of governance oversight

In organisational terms this means bodies whose job it is to provide oversight of change in an organisation. There are very strong governance arrangements to ensure most organisations spend their money in a controlled and open way; to avoid corruption, nepotism and fraud. There are often few arrangements to stop the waste of money on unsuccessful change. Oversight bodies include: boards of directors (especially non-exec directors), local councilors, and parliament. King and Crewe note that in researching for their book the mention of Parliament in interviews was noticeable by its absence.

 Action?

Just like the common causes of project failure, these systemic causes of change failure in organisations can be fixed by senior managers who want to succeed at change. If you find your organisation is not taking these fixes seriously that might say everything you need to know about senior managers commitment to successful change.

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