Magazine article Management Review

Why Don't Things Change?

Magazine article Management Review

Why Don't Things Change?

Article excerpt

If you have concerns about your organization's future viability in the emerging marketplace, and if you really want to get to some raw truth right away, here's a simple piece of advice: Start asking the question, "Why don't things change around here the way we'd like them to?", and hope dearly that you get some straight answers.

I say this in light of four stark realities that I've noticed in my research. One, managers are feeling increasingly overwhelmed by events that seem to be random and uncontrollable. Two, managers--or, shall I say, enlightened managers--are concluding that regardless of past successes, they've now got to do something significantly different in order to survive, much less thrive. Three, in an attempt to learn and adopt new habits, managers voraciously consume business books, training seminars and consultants' commentaries. Fourth, nothing happens.

Okay, that's not entirely fair. Things do happen, sort of. Short bursts of activity do occur, and they're labeled restructuring or reengineering or re-something. However, there is often little strategic coherence to these efforts and even less organizationwide commitment to them. Or, just as bad, a great sound and fury about change is accompanied by minor massages and tweaking of the status quo, which remains fundamentally intact. Sometimes, believe it or not, both the above roads to nowhere are pursued simultaneously. In my research with colleague Nick Imparato, we found numerous trends such as the following:

One firm we studied had reorganized itself five times in three years, with little to show for its efforts. That's because the major hurdle to change was always left intact: mainly, the requirement for an endless series of approvals for almost any kind of line decision. Unsurprisingly, within this context budgetary and discretionary spending authority were also negligible; trust was minimal and signoffs were sacred. Despite massive convulsions in processes and reporting relationships, and despite a steady chorus of buzzwords like "empowerment" and "marketization," the debilitating command-and-control mentality remained a basic management premise.

In another organization, executives responded to a decline in market share and profitability by demanding unreasonable price sacrifices from suppliers and other partners in the distribution channel while at the same time withdrawing critical support services. Feedback from their partners and customers reported that the root problems lay in the product itself. Yet the executives convinced themselves that making unilateral draconian demands on suppliers was more prudent than overhauling design and delivery processes, even though those improvements were dearly behind competitor innovations.

In a third firm, the CEO's response to declining earnings was to change the quarterly financial reviews to a new process he felt afforded a more appropriate fiscal discipline and control. He directed that the company close the books every month and he held his vice presidents accountable for knowing the status of each of literally thousands of line items. Unsurprisingly, earnings continued to decline as, for two weeks of every month, managers were obsessed in absorbing and justifying "the numbers" rather than taking on the mantle of growing the business.

These examples appear extreme, but they represent an all-too-familiar phenomenon. Despite managers' sense of consciousness and urgency (occasionally even panic) that "the things we do" have to change radically, things don't. In other words, even when managers are painfully aware that their products and services are becoming obsolete, that their organizations are being mercilessly attacked by an increasing number of competitors, that new methods of customer and employee loyalty must be pursued, and that kickstarts to revenues and margins must be achieved--things don't really change the way those managers want them to. Why not?

I submit that there are two fundamental impediments to genuine, value-adding organizationwide change. …

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