BUS603: Managing People

When considering the first phase of the design process, we found that nearly six out of 10 respondents indicated that it is often or always a challenge to create realistic estimates regarding the time and cost required to complete the project. Our interpretation is that this result partly reflects the unpredictability and complexity of organizational redesigns, but that it also seems to be related to a lack of skills and experience with these kinds of projects. Whatever the cause, one should consider how one can manage the early "contracting phase" more effectively. Consulting firms may offer training in how one best can create common ground with the client about the effort required. With projects of high uncertainty, a "reference class" approach is sometimes recommended, whereby one consults statistics on several projects completed in the past, instead of deriving time and cost estimates from the activities defined in the project plan for the unique project. However, the difficulty at the present is that such data are lacking, and five out of 10 respondents indicated that it was often or always a challenge to find relevant cases from other comparable organizations.

Secondly, five out of 10 respondents indicated that it is often or always a challenge to understand how people collaborate and/or exchange information across units in the organization. In most cases, the clients have only documented the formal organizational structure, and consultants therefore have to collect information about work processes and informal relations between units in the data gathering phase of the redesign project. The traditional method is to use interviews or workshops. It will probably always be necessary and desirable to conduct interviews and workshops with key stakeholders (both for information gathering, but also for other purposes such as aiding the consultant in interpreting the data and in building support for the project mandate). At the same time, it is also clear from the comments made that many clients have a limited budget and that there are time constraints that may limit the number of interviews and workshops that can be conducted. Hence there may be a need for tools that can help consultants collect and analyze information about how people work, and in particular, the relationships and interdependencies that exist across formal units.

As for the design phase, the key finding was that more than six out of 10 respondents indicated that it is often or always a challenge to help participants in the process see the larger picture, as opposed to "protecting their own turf". The question is whether this is simply an affirmation of the psychological and political nature of organizational redesign processes, or whether consultants can influence the situation. It is probably dependent on the client or decision maker, and how he/she proceeds in the organization design process. As an extensive literature in management has discussed, there are different ways of leading change processes, and they are not equally effective. If one has the will, it is possible for leaders to establish psychological safety and build trust among the participants in an organization redesign process. This should in turn reduce the tendency to focus on one's existing role or unit and increase the ability to look at the system as a whole from a strategic point of view. To this end, one may make use of principles and interventions described in the literature on stakeholder management, procedural justice or "fair process", action science, high commitment organizations, idealized design, and "whole systems" approaches.

With regard to implementation, it was found that six out of 10 respondents indicated that it is often or always a challenge to evaluate whether the organization redesign has achieved the intended effect. It is somewhat paradoxical that firms invest significant amounts of time and money in redesign efforts, without investigating whether the intended benefits are realized. As we mentioned above, there are psychological and political reasons for why decision makers may prefer to avoid an evaluation of outcomes. Yet a lack of evaluation is an obstacle to further learning. It means that one does not receive feedback - at least not based on systematic data - that could have been the basis for improvement in the tools and interventions that are used.