When launching an organisational development program, it is important to make sure that everyone involved has the same “organisation” in mind.
A dinner party hosted by a mutual friend brought David Adams and Ian Fairweather together after a lapse of 15 years since their university days. Fairweather was the newly appointed human resources manager for the Princess Margaret Hospital in the city; Adams was senior partner in Adams Petropolis Management Consultants.
The pair arranged to meet again to mull over old times at a pub they had frequented in their student days.
Fairweather found that Adams was a mine of information about organisational problems and behavioral approaches to tackling them. Adams and Petropolis could scarcely cope with the volume of business that came their way. Adams did not tell Fairweather that none of their jobs to date had been “big ones”.
Fairweather, just graduated in Hospital Administration, was eager to succeed in his job at the hospital and move on to bigger things. Besides, his job at the Princess Margaret was not secure unless he could get results. Also on his mind was that, like two other large city hospitals, his was “on notice” from the Government that, in line with rationalising in the public sector, at least one of the three hospitals must close within the next three years.
Fairweather planned a management development program through the upper echelons of the hospital. He wanted to instigate such a course, less for management development than as a vehicle for pulling together the disparate domains of the hospital medical and related services under the director of medical services, Dr Yuan Shih-Kai; nursing under the director of nursing services, Sister Doris Lang; and the hospital’s general administration, engineering and other non-medical, non-nursing areas, under the chief executive of the hospital, Arthur Holmes.
Adams sold Fairweather on an organisational development (OD) intervention to be implemented through his proposed management development course.
“Ian, with a well-oriented OD program we will be able to do much more than just management development with your people,” Adams explained.
“What will your OD cost us, David?”
“Well, it’s your OD program. It’s for the benefit of your hospital and your people. We have worked out that there are about 90 people at the Princess Margaret who are in management roles. We can’t change them overnight. And it will be hard to get consistent groups working together. That means a lot of extra work for Peter [Petropolis] and me. Let’s stick with the first figure we discussed $55,000 all in.
“And we will train you or anyone you nominate to take over as an internal change agent after we have finished.”
Fairweather gave in: “I’ll have to convince old Holmes, you know.”
Adams countered: “How about dinner on us at the Chelsea Restaurant next Wednesday? We’ll lay out your whole marketing strategy for you. Our formula has always worked. And I guarantee you are getting your dollar’s worth with us.”
Next day, Fairweather explained the deal to Brian Hensen, his principal training officer. Hensen knew Adams Petropolis Management Consultants and showed interest in working on the project.
“The old man will see this as a golden opportunity to lift the place and show our political masters that they can’t close us down. I would be happy to be the internal change agent.”
Fairweather started to map out with Hensen the plan that they would sell to the hospital’s executive.
Next, Fairweather dropped into Dr Patrick Farnum’s office. Farnum was head of haematology and well respected in his field. He was also a fervent promoter of the hospital and had made efforts to liaise with the hospital’s various sections.
Fairweather explained the program and its hidden agenda. “Doctor, it will do so much to pull us all together and improve everyone’s understanding of other parts of the hospital’s activities. I’m going to see Mr Holmes about this proposal now. Have I your support?”
Fairweather left Farnum feeling that the hospital had a sure future ahead of it.
Holmes listened apparently attentively to Fairweather’s case while in reality he was seeing beyond Fairweather’s plan to a way he could use it as leverage on the government when it came to showing that the Princess Margaret was vital to the city and that it also worked to develop its own staff.
Fairweather next met with Dr Yuan Shih-Kai. Again, Fairweather received a good hearing. Dr Yuan, however, was quietly calculating how much of the funding for Fairweather’s program could be diverted into medical research.
Finally, Fairweather entered Sister Lang’s office. When Lang entered, 15 minutes later, Fairweather felt little encouragement in Lang’s tight-lipped expression. However, she soon smiled and explained that she had just given Dr Jones, a young resident, an addition to his education; that her charge sisters did not exist as flunkies or secretaries to brash young upstarts in their first year of residence.
Lang stated that she would support the proposal only so long as senior nursing staff were fully represented on the program. “The nursing staff at Princess Margaret are as important as the medical staff.”
Seven weeks later, the first managerial group across all facets of hospital activity gathered to meet the trainers, David Adams and Peter Petropolis. Holmes spoke briefly about the advantages of management education. Dr Yuan spoke similarly and said he was delighted that his colleague, Dr Farnum from haematology, had made an effort to attend. Sister Lang asserted the importance of allocating a third of the places to senior sisters. Then the three speakers left the room their first and last participation in the program.
A fortnight later, Adams Petropolis began a series of sessions with two sets of participants from the staff. The first were the administrators and managers just below the three executives of the hospital. The second were also a cross-section, one step below the first set in the hierarchy.
Adams and Petropolis had a number of long meetings with Fairweather and Hensen. Fairweather had nominated Hensen as the internal change agent to take over when Adams Petropolis withdrew.
After these talks, Adams and Petropolis felt that they had a good idea of the problems at the hospital. They worked with the two sets of participants for two hours a week for 12 weeks, concentrating on team-building sessions and getting the participants to work on problem solving and communication skills activities. In the latter, the participants were mixed as much as possible to represent various hospital areas.
After three weeks, attendance began to decline. In the fifth week Fairweather got a terse memo from Holmes asking to see him promptly. Holmes asked Fairweather to account for a “progress” invoice for $20,000 from Adams Petropolis, and told him to cancel the sessions immediately.
Why did the OD program fail?
Noela L Estrange is managing director of The Quality Curve, a management consultancy in strategy and development, specialising in services.
- No organisational aims and objectives for the program were established. All the main stakeholders have personal reasons for giving their support. There was no agreement on the purpose of the program. Any major change program must be part of the organisation’s strategic plan and must set clear goals. Then, all participants understand why they are there and have a stake in making the process work.
- Senior management lacked commitment. Their swift departure from the initial session leaves all other participants to draw the conclusion that the program is not really important. Hence the later falling attendances. Senior management has to visibly support any development process. People trust what they see, not what they are told.
- No communication of the program’s purpose. Participants have been given no clear idea why they should attend even the executive group has cited different reasons; nor why the process is important for the hospital. The senior executive team should participate in an executive overview of the process so that they know how the process will work and what benefits it will produce.
How should Fairweather have managed the “reunion”?
- Managing the consultants. Fairweather should have asked himself: “Are these the right consultants for the job?” He should have asked for references and checked them. No worthwhile consultant will refuse to nominate referees for past work.
- Managing the project design. What are the identified deliverables from the project? Has Fairweather clarified what the key performance indicators are? Is it merely a matter of running the workshops, or are follow-up reports required to assess success or failure? It is easy to blame the consultants, but the human resources manager has responsibility for the design and management of the project.
Has the hospital got value for money from the program?
- Clearly, the chief executive does not think so. It is critical to the planning and management of any external consultancy that the agreement should spell out the expectations and performance measures. This ensures that neither party is making assumptions about outcomes.Getting internal stakeholder support.
- Fairweather has fallen into the trap of only talking to the executives whom he believes will support the process. He needs to talk to those who are likely to oppose it, and deal with their objections, or at least recognise them as possible barriers to success and incorporate them into the process. This should limit sniping at those who participate. The program should also link attendance with some commitment to the hospital’s business strategy.
Is it appropriate for the strategic direction of the hospital?
- The Princess Margaret is in survival mode. Any organisational program has to deal with matters that impinge directly on short and long-term goals. The purpose and objectives have to be clear, agreed and supported by the executive management. It is not clear whether Fairweather has assessed what is required to prove to external stakeholders that the Princess Margaret should survive rationalisation.
- The main problem is that the chief executive, Holmes, is not committed to the process. This is a costly error, as the memo indicates. If the chief executive is not persuaded that the process is important to the organisation, and does not lead the process, or at least openly support it, then failure is almost inevitable.
Richard Hancock is chief executive officer of Laubman and Pank Holdings, a national retailing and manufacturing group in eye and hearing care. He is a past president of AIM in South Australia.
In an environment of daily emergencies, crises and threats of withdrawal of government funding, a newly appointed human resources manager is trying to execute a hidden agenda of teamwork based on cultural change under the guise of a management development program without the direct interest of the chief executive and top management. A bad start.
Change must start at the senior management level in any organisation. Yet the chief executive was not involved in any part of the exercise. How could the human resources manager reasonably expect to develop the desired teamwork in the hospital when he himself was not demonstrating openness and honesty?
Cultural change in any organisation requires a vision shared by the staff and senior management. Identifying problems, needs and priorities become part of a continuous process, yet we see the human resources manager trying to solve the cultural issue through a single program.
Teamwork is the key issue for the hospital, yet from the outset the human resources manager, chief executive and consultants are not demonstrating it. Staff will have noticed this, reducing any chance of teamwork down the ranks. The senior management and the director of nursing services were briefed individually by the human resources manager and the consultants did not meet them at all.
Where was the input from a cross-section of staff at all levels? In particular, why did not Dr Farnum, who was known for his efforts to break down the barriers between the hospital’s various groups brief the consultants in their fact-finding stage?
When the human resources manager approached the senior managers they all had their own agendas. The medical director saw the gleam of money, the nursing director began jockeying for position to improve the status of her nurses. The chief executive focused on proving the worth of the hospital to the government. At the most senior level teamwork was lacking.
The teams formed for the program were ill-conceived. Management levels are segregated and the senior management make it clear that they are above this training. Wrong signals to the troops. Is it any wonder that interest in the training wanes?
How to do it could replace the assumptions, personal agendas and narrow perspectives presented
Case In Point presents common problems in management and offers solutions from experts. The cases are hypothetical, and the names are fictitious. We invite you to write to David James, Management Today, PO Box 55A, Melbourne 3001, and describe any issue you would like dealt with. Thanks to Stanley Petzall of the school of management at Deakin University for permission to use this material, which comes from his publication on management case studies.