5/09/2006

Meet the Nick Carr of Organizational Change Management

In 2003, a gentleman named Nicholas G. Carr melvined the IT community with a Harvard Business Review article entitled "IT Doesn't Matter".

At least that's the impression you'd get seeing CIOs' reactions to the article, in which Carr had the temerity to suggest that most companies had no business trying to use I.T. for strategic competitive advantage. In the wake of the dot bomb era, CEOs were happy to use the article as a pretext for those "Do More With Less" conversations that CIOs all grew to dread. The amount of vitriol heaped on Carr is normally reserved only for senior members of the Bush Administration, but, as I wrote in Spook Action Predicts, for the great majority of companies, he was absolutely right in his assertions.

And I list the 3 primary barriers to success: employees, management, and the fundamental structure of the organization itself.

Rejected Cover Art for June 2003 CIO Magazine


Johnnie Moore recently noted an article that ups the "don't waste your time and money" ante considerably: Chris Grey's "The Fetish of Change". Grey is no lightweight crackpot. He is a Professor of Organisational Theory at Cambridge University! And a damn fine writer, in both style and substance.

He doesn't pull any punches, beginning:
"In this polemical paper I aim to interrogate prevailing assumptions and practices in the field of organisational change and the management of such change. I argue that change has become such a key part of our taken-for-granted understanding of organisations that we have made it into a 'fetish.' Just about every organisation scholar, manager, and management student seems persuaded that we live in times of unprecedented change, that organisational survival depends upon change, and that the work of managers is centrally concerned with change. Against this orthodoxy, I want to subject the notion of change to critical scrutiny."
Carr only assailed the downtrodden IT department; Grey is going after management in totality!
"Change is a notion which is drawn upon in a largely unthinking, but very significant, way so that it takes on an almost magical character. Change is like a totem before which we must prostrate ourselves and in the face of which we are powerless.

Perhaps the most interesting feature of the change fetish is the way in which it figures as the contextual, introductory, and taken-for-granted. So obvious are they taken to be that they typically take the form of rushed assertions at the outset of any particular treatment of management."

"...the belief that we live in times of unprecedented change is one which is found in many ages, and perhaps every age. In retrospect, the past seems more stable than the present because it is familiar to us, and because we experience the past in a sanitised and rationalised form. Yet, it is possible to point to any number of periods in the past when, for those alive, it must have seemed as if the world was changing in unprecedented and dramatic ways: the collapse of the Roman Empire; the colonisation of the Americas; the Renaissance; the Reformation; the Enlightenment; the Industrial Revolution; the World Wars. The shift from religious to secular conceptions of the world over the last four centuries has, and continues to have, massive ramifications throughout the world, beside which any issues of globalization and technical change experienced in recent years, even accepting these at face value, seem fairly limited."
Ouch! He relates many other supporting arguments, but then lands a haymaker with the following facts:
"Even the jewel in the crown of the change fetish - increased globalization - is by no means as clear-cut an issue as is commonly supposed. Hirst & Thompson (1996) expose claims about economic globalization to rigorous and sceptical scrutiny. Comparing the ratio of trade to Gross Domestic Product (GDP), for example, they find that this has dropped in most industrialised countries over the course of the twentieth century (Hirst & Thompson, 1996: 26-27), and, using a range of measures they claim that "unequivocally... openness was more in the Gold Standard period then even in the 1980s" (Hirst & Thompson, 1996: 28). With slightly less confidence, they argue that migration (of people) has been substantially less in the twentieth century than the nineteenth, certainly as a proportion of the world's population (Hirst & Thompson, 1996: 23). Overall, they conclude that "the international economy was hardly less integrated before 1914 than it is today" (Hirst & Thompson, 1996: 196-197)."

Having now disabused us of the notion that our times are by any means extraordinary, he goes on to describe the 'fetish' aspect of organizational change:
"In less abstract terms, this means that as an organisation changes, it contributes to the rationale for change in other organisations, which in turn provides a rationale for change in the original organisation. Ultimately, this is likely to be futile: suppose an organisation implements, for example, Total Quality Management (TQM) for 'the first time in the world' (or for the first time in a particular industry), and further suppose that this yields competitive advantage. Other organisations then seek to adopt TQM and, assuming that all organisations are equally successful in their implementations, the end result will be that no organisation has competitive advantage. In short, I am suggesting that organisations collectively generate a 'treadmill' of change, which is then seen as a problematic environment to which an organisational response must be made.

It is indeed very obvious that TQM illustrates this point. The 'quality revolution' of the 1980s came to be seen in the 1990s as being inadequate by virtue of its attachment to 'incremental change'. A new 'revolution' was needed (Hammer and Champy, 1993) and instigated in the form of Business Process Reengineering (BPR). But BPR then became seen as 'limited' (Koch and Godden, 1996), and a new vision of 'post-management' if offered as the solution. We can ascribe this to faddism (Abrahamson, 1996), but it is a faddism which is the outcome of particular social processes of competitive emulation, rather than being absurd or whimsical froth."

This is beginning to look like an unfair fight. And Grey's picking up steam:
"The most striking thing about change management is that it almost always fails. Despite (or, who knows, because of) the reams of worthy academic treatises, the unending stream of self-congratulatory 'I did it my way' blather from pensioned-off executives and the veritable textual diarrhoea of self-serving guru handbooks, change remains a mystery. And I do not think that the answer is just around the corner: rather, change management rests upon the conceit that it is possible systematically to control social and organisational relations, a conceit shared by the social sciences in general (Maclntyre, 1981). I will return shortly to this point.

Change management a failure? Is this just wild generalisation from an 'armchair critic'? Crosby (1989) - a leading advocate of TQM - claims that 90% of such projects fail to meet their targets, whilst Stewart (1993) gives a failure figure of 50-70% for BPR. New techniques are announced with a great fanfare and presented as the unproblematic solution to previous problems, but disillusion soon sets in. Some of this is bound up with the marketing activities of consultants and gurus. But there is more to it than that. Managers responsible for particular change programmes are likely, for career and identity reasons, to describe them as successful. Yet, the everyday experience of people in organisations is that one change programme gives way to another in a perennially failing operation: nirvana is always just on its way."

That's going to leave a mark! Then, bless his soul, the good Professor takes aim at benchmarking and "rest practices":
"Benchmarking aims to measure and match an organisation's existing products and procedures with those of competitors and, in particular, those of organisations perceived to be field leaders. It is part of a process which institutional theorists have described as 'mimetic isomorphism' (DiMaggio & Powell, 1991) or, as we might more straightforwardly say, copying. Benchmarking, as a general preparation for the deployment of particular change management techniques in the name of 'best practice', is expressive of the underlying search for generalizability which characterises change management discourses.

But...generalizability and hence benchmarking are predicated upon the assumption that organisational settings are homogenous with respect to the relevant features. In other words, it is assumed that doing what another organization did with a different set of people in a different place at a different time will yield the same results as those claimed for the original implementation. And what do such claims amount to anyway? Let's assume an organization is successful in terms of (say) increased profitability following the introduction of (say) a new organisational structure. There is no way of knowing whether this success was because, despite, or coincidental with the new structure. It is not known, by definition, whether had another structure been adopted the organization would not have been even more profitable."
(emphasis mine)

This should be starting to sound familiar to anyone who has read "When Bad Things Happen to Good Concepts".Much more articulate, and without the goofy pictures, but familiar. I guess that's the difference between a polemic and a rant.

But I did one of those Charlie-Brown-Spies-the-Decorated-Christmas-Tree double takes when I read this:
"The implication of the issues I have outlined, ultimately, is that the whole business of change management should be given up on."
What?! 'Polemic' means you're just kidding, right?


With some trepidation, I read on:
"Since the early days of management theory, imperfect implementation has been the stock defence of failures. Thus, Taylor ascribed the difficulties encountered by the introduction of scientific management in 19th century North America to a failure to fully implement his approach. Exactly the same case is made in relation to TQM, BPR, and so on.

It is worth pondering why, when so much effort and energy is put into change management - both doing it and writing about it - imperfect implementations continue to abound? Could it be that, even if it were to be granted that successful change management can in principle occur, there are necessarily problems in translating between settings?"

Bingo! You can only successfully apply a concept within a properly defined context. The daunting task for would-be change managers is that the context for change in this case comprises the entire contents of effected employee's brains!

Which brings us back to Mr. Nicholas G. Carr. While the title said that IT didn't matter, what he said in the article was slightly different. Carr argued that technology's ubiquity had turned it from a strategic opportunity to a strategic liability; that the IT department was much more likely to be the source of a disastrous mistake than a brilliant new breakthrough. He argues that if everyone has the same set of applications (incorporating industry best practices!), how can anyone gain a sustainable competitive advantage from them? Grey made the same argument about TQM and BPR programs in a previous quote. And they each have the statistics to back up their claims.

Does that mean we should abandon the notion of using IT or change management to achieve competitive advantage?

Was it over when the Germans bombed Pearl Harbor?

Hell No!

But don't kid yourself. As I said before, the context for change comprises the entire contents of effected employee's brains. Chances are very slim that any manager, any management team, or any consultant is going to be able to design a program to manage a significant change in that context.

Sometimes a management team is smart enough to admit it before they fail. A few years back I was working with a large company and got to discussing the Theory of Constraints with a brilliant program manager who had spent his entire 37 year career at the company. He told me that he and several other managers had been sent to Jonah training to see if it would benefit the company. The group returned convinced that using TOC would revolutionize their operation, but management decided not to go through with the project.

"Mike," he said. "This program would have run afoul of almost one million person-years of our corporate culture. I didn't like the decision, but I could respect it." Me, too.

But most management fools rush in where my friend's management angels feared to tread! And they deserve every bit of scorn that Carr and Grey can heap on them!!

I swear, some enterprising online university should name ME their William C. Dukenfield Professor of Imperial Couteur! If someone would get his act together, we would proceed with telling you how to overcome the obstacles outlined by the good professor.

Stay tuned. The ride gets wilder from here. I promise! You didn't think I was kidding about that "transformative experience" quest, did you?



posted by Mike at 9:05 AM


8 Comments:

Blogger fouro said...

Someone? SOMEONE? Damn, you Khan!

7:37 AM  
Anonymous Anonymous said...

Very good. more lost than ever, but very good.

10:23 AM  
Blogger Mike said...

Anon,

Thanks, and I'll look forward to you returning when I get warmer!

1:49 PM  
Blogger Rita Earle said...

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2:05 AM  
Blogger Mary Rita Earle said...

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11:58 PM  
Blogger Rita Earle said...

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