Last week, we began a discussion of organizational management because of its relevance to both the public and private sectors but more especially in the light of the myriad of problems facing a number of state institutions. We looked at the concept of an organization and noted that it is a system of inter-related behaviour of a certain group of people whose collective action in pursuit of common objectives or goals is the distinguishing feature.
In addition, we discussed the historical development of organizations and considered that there were three waves of development. The first is the classical school of thought with its emphasis on the tasks to be performed and how productivity could be improved.
The major contributors were: (a) Frederic Taylor who, in his famous experiments at the Bethlehem Steel Works, was able to reduce the workforce from 500 to 140 through the redesign of the work; and (b) Max Weber from whom the concept of bureaucracy evolved whereby an organisation was viewed as a rational entity with formal rules, a hierarchical structure and a chain of command.
The human relations school of thought augmented the classical approach by factoring in consideration of the human element into the work environment. The major contributors were: (a) Elton Mayo whose Hawthorne experiments showed clearly how social considerations could improve productivity; (b) Abraham Maslow whose assertion that human needs are hierarchical from the basic need for food, clothing and housing, to those of self-esteem and self-realisation; and (c) Douglas McGregor whose identification of two main models of leadership – the work-centred Theory X and the employee-centred Theory Y – resulted in a major paradigm shift on how leadership is viewed.
The third wave relates to the systems approach which gradually emerged into the contingency theory. This approach acknowledges that organizations exist in uncertain and turbulent times and therefore management styles will have to vary from organization to organization in response to both internal and external factors.
We also discussed some aspects of current thinking on the subject, including the views of leading authorities, most notably Peter Drucker who asserted that the typical large business of the 21st century will have half the levels of management and one-third the managers of its counterpart at the time, and its management structure would resemble that of a symphony orchestra, a university or a hospital that are run by specialists.
Today, we continue our discussion of current management thinking.
Institutionalising learning from experience
There is no doubt that experience is the best teacher. As an accountant, I have learnt this throughout my career, and I am sure this is true for almost all disciplines. According to Kleiner and Roth , the situation is, however, not so in corporate life, the reason being that managers have few tools at their disposal to capture institutional experience, disseminate its lessons, and translate them into effective action. They advocate the use of a tool called “learning history” that has been developed and tested by a group of social scientists, business managers, and journalists at MIT.
The learning history is a written narrative of a recent critical event such as a product failure, a downsizing crisis or a merger. This narrative is prepared by “learning historians” who are trained outsiders and knowledgeable insiders. It is based on interviews carried out with staff of all levels from the CEO to the office assistant, i.e. people who have witnessed and experienced the event.
Each participant in the interview gives his/her own recollection and perspective of what happened in a free and frank manner. The narrative does not mention names, only designations thus allowing participants to express their views as freely as they can without fear of any action taken against them. The notes taken are summarized and relevant quotations are inserted after clearing them with the concerned participants.
The learning history is written in two columns. The right hand side contains the narratives and the quotations of staff members while in the left hand side the learning historians identify recurrent themes in the narrative, pose questions and raise issues of a sensitive nature that are normally not discussed. The whole exercise is seen as a genuine attempt to piece together what happened from the perspective of those whose are integrally involved, in the hope that it will serve as a learning experience for all, especially those who are about to embark on a similar project.
The authors likened this approach to the ancient practice of community storytelling where people sat around a fire and related past incidents, with a shaman – the learning historian – interpreting and guiding the discussion so as to facilitate shared knowledge as well as lessons for the future.
Kleiner and Roth illustrated how the learning history is carried out using the example of the successful launch of a car which hit the market one week ahead of schedule and with cost savings of $60 million relating to last minute changes in design. The launch succeeded mainly because the team responsible continuously broke and reinvented the company’s rules and procedures.
The learning history is therefore likely to provide a more meaningful mechanism for keeping track of an organisation’s experience for the following main reasons:
● It builds trust since employees, who believe that their views were ignored in the past, can now see them in documented form;
● It facilitates group discussions which provide new opportunities for collective reflection;
● It provides clarification about employees’ concerns, fears and assumptions thus allowing them to develop a higher level of confidence in one another. As trust increases, learning is facilitated;
● It assists in the transference of knowledge from one part of an organization to another; and
● It helps build a body of generalized knowledge, especially in relation to what works and what does not.
Learning histories once documented can form the basis for detailed discussions and debates by team members embarking on similar projects. The main objective is to transfer knowledge so that they are not required to re-invent the wheel all over. In addition, by going through learning histories, any mistakes made will be noted with a view to avoiding a recurrence. Perhaps, more importantly is the possibility of new insights being developed thereby facilitating further innovation.
Hiring the best brains and training them to stay current
Microsoft’s success and its competitive advantage over its industry rivals in the late 1990s were mainly due to the quality of its staff whose knowledge base must be current at all times.
It is for this reason that special efforts were made to recruit employees with strong intellect and capabilities. This approach was especially important for the IT group that consisted of over 1,000 employees. Microsoft did not encourage ‘legacy people’ whose skills had become obsolete.
Microsoft introduced the Skills Planning “und” Development Project (SPUD) in its IT group not only for entry level competencies but also those needed to maintain the leading edge in the workplace. The goal was to use the competency model to transfer and build knowledge and to better match employees to jobs and work teams. The project was to be extended throughout Microsoft. SPUD had the following five components:
● Developing a structure of competency types and levels;
● Defining competencies required for particular jobs;
● Rating performance of individual employees in particular jobs based on the competencies;
● Implementing the knowledge competencies in an online system; and
● Linking competency model to learning offerings.
Microsoft’s approach was aimed at ensuring that staff of the highest quality are recruited and continuously trained for the effective performance of duties. Its outstanding success over the years should be a source of emulation for organisations that are in dire need of injecting new ideas to their operations as well as upgrading the skills of their employees.
8-step approach to transforming an organisation
In the article, “Leading Change: Why Transformation Efforts Fail”, John Kotter observed over 100 companies trying to make changes to cope with a new and more challenging market environment. The process involved going through a series of phases that, in total, require a considerable length of time. He noted, however, that the results for most companies were mixed and that skipping stages creates the illusion of speed. Kotter concluded that critical mistakes could have devastating effects and advocated the following eight steps to transforming an organisation:
● Establish a sense of urgency by examining market and competitive realities, and identifying and discussing crises and potential crises, or major opportunities;
● Form a powerful guiding coalition by assembling a group with enough power to lead the change effort and encouraging the group to work together as a team;
● Create a vision to help direct the change effort, and develop strategies for achieving that vision;
● Communicate the vision and strategies using every vehicle possible, and teach new behaviours by the example of the guiding coalition;
● Empower others to act on the vision while at the same time get rid of obstacles to change as well as change systems and structures that seriously undermine the vision. Also, encourage risk-taking and non-traditional ideas, activities and actions;
● Plan for and create short-term wins, including recognizing and rewarding employees involved in the improvements;
● Consolidate improvements and produce still more change; and
● Institutionalise new approaches.
These are important steps if one is to succeed in any change effort. However, managers in the public sector are very much constrained in that they do not have the degree of autonomy and flexibility similar to those prevailing in the private sector.
They also do not have the flexibility to reward employees who are involved in improvements. The time has come for these outmoded and outdated practices to be cast aside and for bold and innovative approaches to the management of organisations to be enthusiastically embraced.
To be continued
