There is a change in the air!
It’s happening slowly, but the signs are there. Just as psychology and science are having to re-invent themselves to take into account human consciousness, so consultants specialising
in organisational transformation are having to move away from processes that focus on performance and start paying more attention to the human dimension.
To take just one example, think about the organisations that championed business process re-engineering (BPR). In the words of Michael Hammer, who was one of the leaders in the
field, BPR was “the radical redesign of business processes to achieve dramatic improvements in critical measures of performance such as cost, quality, service and speed.” 1
Illusion
In other words, it focused on reducing costs and on organisations becoming lean, efficient machines. Many organisations that embraced the BPR philosophy found themselves in real
problems and for a very simple reason. In the corporate world, they took the equation, Profit = Turnover – Costs and focused on cutting costs while improving efficiency. The theory is a seductive one; it’s implementation, however, was seriously flawed. In focusing on cutting costs, many organisations cut jobs, claiming they were trimming away the fat. Unfortunately, in reality, they didn’t merely trim away fat, they cut through organisational muscle and into the bone!
Short term, this gave the illusion of increased profits; medium to long term all it did was create a culture of fear, mistrust and guilt. A much more humane, and economically viable approach would have been to have focused at the other part of the equation and to have asked themselves – how do we increase turnover whilst holding the ratio of cost to turnover constant?
Equally unfortunately, the support for BPR coincided with the focus of boardroom power moving away from the operations and sales directors and onto the financial director. Most FDs, by their very background, relate far more easily to the concept of cutting costs than in enhancing the value given to customers or on staff self-fulfilment.
Communities of Humans
Inevitably, in such a culture, personal fulfilment, creativity and output decline. The irony is that it creates a vicious cycle; the most able people refused to accept the stress associated with working in such a culture and left to work in a more pleasant environment, leaving their original organisation even more denuded of motivated, capable people. As Arie de Geus writes, “Organizations die….. because their managers…….forget that their organization’s true nature is that of a community of humans.”
We have deliberately chosen the term ‘Organisational Transformation’ (OT) rather than the more commonly used ‘Organisational Development’ (OD). For many people in recent years, OD has placed its emphasis on processes and ignored people, as described above. So when a consultant talks about OD, it is often viewed as being ‘more of the same stuff that got us into this mess in the first place!’Arie de Geus
Similar Posts:
- A couple of reasons why change projects fail
- To Grow your Business Don’t Cut Costs – Increase Turnover
- 3 Deadly Mistakes Stopping You From Increasing Turnover
- 3 Deadly Mistakes Stopping You From Increasing Turnover – Part 2
- Are You Ready to Outsource?
