A dinner party hosted by a mutual friend brought David Adams and Ian Fairweather together after a lapse of fifteen years since their university days. Fairweather was the newly appointed personnel manager for the Princess Margaret Hospital in the city; Adams was senior partner in Adams Petropolis Management Consultants.
Over dinner, Fairweather and Adams arranged to meet during the week at a pub that had been a favorite haunt in their student days.
Fairweather could hardly believe his good luck in meeting up again with Adams, for the latter was a mine of information about organisational problems and how to tackle them. It seemed that Adams and Petropolis could scarcely cope with the volume of business that came their way; however, none of their jobs to date had been “big ones”. Adams certainly did not tell Fairweather that fact.
Fairweather, fresh from a Master of Hospital Administration degree, was eager to make a success of his job at the hospital and, in time, move onto bigger things. Also, his job at the Princess Margaret depended on his achieving results. His plan was to initiate a sweeping in-service management development program among the upper echelons of the hospital.
His purpose in instigating such a course was less for management development than as a vehicle for pulling together the disparate domains of the hospital: the 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 general administration and engineering under the chief executive of the hospital, Arthur Holmes.
Quickly, Adams sold Fairweather on an organisational development (OD) intervention via the proposed management development course.
“Ian, with a dedicated OD program, we will be able to do much more than just management development with your people,” Adams explained. He described the OD process and its value in helping the hospital face up to impending changes.
Fairweather had explained that, as with two other large city hospitals, Princess Margaret was “on notice” from the Health and Planning Departments that, in line with current rationalising in the government sector, at least one of the hospitals would have to close within the next three years.
“What will your OD cost us, David?” asked Fairweather.
“Hang on,” said Adams, “It will be your OD program, Ian. It’s for the benefit of your hospital and your people. We worked out that there are about 90 people at Princess Margaret who are in management or sub-managerial roles. We can’t change them overnight! Anyhow, with the emergencies and crises of an organisation like your hospital, it will be hard to get consistent groups working together. That means a lot of extra work for Peter and me. Let’s stick with that first figure of $55,000 all in.”
As Fairweather moved to interrupt him, Adams continued quickly: “We will supply all material notes and so on and we’ll train you or someone you nominate to take over as an internal change agent after we disappear from the scene.”
Fairweather gave in, but stipulated that he would have to get the chief executive’s approval for a project of such size and scope. “I’ll have to convince old Holmes, the boss, you know.”
Adams countered this. “What about dinner on us at the Chelsea Restaurant next week? We’ll lay out your whole marketing strategy for you. Our formula has always worked. And listen, Ian, no one will be able to fault our work. I can guarantee you you’re getting far more than $55,000-worth with us as your consultants.”
Back at his office the next day, Fairweather explained the deal to Brian Hensen, his principal training officer. Hensen knew Adams Petropolis Management Consultants and showed enthusiasm in working on such a project. “The old man will see this as a golden opportunity to lift the place and show our political masters that we’re not the hospital that has to close down. And I’d be happy to take on the internal change agent role. I did a bit of that sort of thing with the bank before I came here.”
Pleased with this support, Fairweather started to map out with Hensen a management development plan that he believed they could sell to the hospital’s executive.
On his way to the executive offices, Fairweather dropped into Dr Patrick Farnum’s office. In addition to being head of haematology, Farnum was also known for his efforts to break down the barriers among the hospital’s various groups.
Fairweather explained the planned management development program and its hidden agenda to pull all the departments together and improve people’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 hardly needed to ask Farnum such a question. He left haematology feeling that the hospital had a sure future ahead of it.
Holmes, the chief executive, listened with apparent attentiveness to Fairweather’s case. But he saw beyond Fairweather’s development program to where he could demonstrate to the government that, not only was the Princess Margaret a hospital vital to the city, but one that also worked to develop its own staff.
Fairweather had made two more appointments for that morning. First, he called on Dr Yuan Shih-Kai, the director of medical services. Again, Fairweather was given a good hearing for the management program. However, Dr Yuan was silently calculating how much of the funding for Fairweather’s program could be diverted into the medical research moneybox. Surely, Fairweather would see, when the time came, that not all the $55,000 should be expended on mere management training.
Finally, Fairweather entered Sister Doris Lang’s office to lobby her about the program. The director of nursing stated that she would agree to the program only on condition that the senior nursing staff were fully represented on the program. “The nursing staff at Princess Margaret are equally as important as the medical staff and I want this reflected in your course, Ian.”
Some seven weeks later, the first managerial group gathered in the boardroom to meet the two trainers, David Adams and Peter Petropolis. Holmes spoke briefly about the advantages of management education. Dr Yuan spoke in a similar vein and mentioned that he was delighted that his colleague, Dr Farnum, had made a special effort to attend as much of the program as possible. Finally, Sister Lang asserted how important it was that one third of the places in the program be allocated to senior sisters in the hospital. With that, the three speakers, Holmes, Yuan and Lang left the room. That was the last the participants in the program saw of the trio: they did not join the participants again after that.
A fortnight later, Adams Petropolis Management Consultants began a series of sessions with two sets of participants. The first of the participants were the administrators and managers next below the three chief executives of the hospital. The second set were a similar cross-sectional group one step below the first set in the hospital’s hierarchy.
Adams and Petropolis had also prepared themselves for a number of lengthy meetings with Fairweather, the personnel manager, and Hensen, the training manager. Fairweather had nominated the latter to be trained as the internal change agent to take over when Adams and Petropolis withdrew.
After these talks, Adams and Petropolis felt that they understood the hospital’s problems. They started working with the participants for two hours a week for twelve weeks. They concentrated on team building, problem-solving and communication skills. However, from the third week, attendance at the sessions began to decline. Some sent messages to Fairweather apologising their absence because of work commitments.
During the fifth week Fairweather received a terse memo from Holmes asking him to attend his office promptly. Further, in the memo, Fairweather was asked to account for a “progress” invoice for $20,000 that Holmes had received from the consultants for an organisational development program at the hospital. Finally, the memo asked Fairweather to discontinue the sessions with Adams and Petropolis immediately.
Why did the organisational development program fail? How should Fairweather have managed after the reunion with Adams? How could Fairweather have better managed the OD?
Thanks to Stanley Petzall, of the School of Management at Deakin University, for permission to use this case study.
Proposed solution #1
Cherrie Lowe is director of clinical services at Greenslopes Private Hospital in Brisbane. She has had 17 years of experience in executive roles in the private health-care sector and has been recognised for her transformation of Greenslopes from a government organisation to a highly successful private teaching hospital.
The OD program failed for three main reasons. The hospital executives were not involved in the planning, promotion or delivery of the program and demonstrated no commitment to it. The several agendas of the personnel manager, consultant, training officer, chief executive and directors of medical and nursing services rather than organisational strategic objectives drove the implementation of the program. Inadequate planning by the personnel manager, Ian Fairweather, and lack of leadership from the hospital CEO resulted in participants who had little commitment to the program.
It is clear that the personal agendas of Fairweather and Adams for career advancement were the main motives for implementing the program. And it is doubtful that a reunion get together with an old friend is an appropriate forum at which to plan such a business project. Fairweather allowed his friend to persuade him that Adams Petropolis Management Consultants had the total solution for the hospital OD program.
Fairweather’s lack of objectivity in the matter limited his ability to research organisational needs and investigate other avenues for developing an OD program.
The threat of the hospital’s closure should have been a major element of consideration for Fairweather when developing his plan. That threat presented significant challenges to the hospital executive team, and resulted in the implementation of several change processes.
At times of organisational transformation, managers need to have knowledge of change management and transitional leadership. Knowledge of how staff may react to change in times of uncertainty and skills in being able to manage staff reactions are also critical during such times.
The uncertainty of the hospital’s future must have had a demoralising effect on all its employees. During such a time of turbulence, the active involvement of the CEO and the other managers in the development of an appropriate OD program was essential if staff morale was to be maintained.
Fairweather should have obtained a commitment from each member of the executive team to the OD program before entering further discussion with external consultants. He should have obtained clear directions from the executives regarding their expectations and the scope of the program.
Given that the development and implementation of the program required the engagement of external consultants, a list of suitable consultants from which to choose should have been compiled. The selection of an external consultant should have involved a review of the services available, evidence of previous experience, reference checks and cost ranges. The executive team should have ratified the final selection.
Fairweather’s main role in the OD program should have been as facilitator rather than as negotiator. By facilitating discussions between the consultancy, the hospital CEO and the hospital managers during the development phase of the program, he would have enhanced the potential for the success of the program. Through this process, all the interested parties would have grown more committed to the program, as they would have had opportunities to contribute their own ideas.
A comprehensive written overview of the proposed program, including objectives, goals, content, length, costs and cost benefits should have been submitted to the CEO for approval. Fairweather should have had approval in writing with any conditions or variations to the proposal before the final timetabling of the program.
To maximise attendance at the sessions, participants should have been included in the development of the timetables for the sessions. This strategy would have ensured that sessions were not conducted in peak activity times if adequate staff replacements could not be organised.
Also, executive attendance at educational sessions demonstrates executive commitment to the program.
Regular evaluations of the training sessions should have been conducted and the results immediately fed back to the executive team and the consultant. This process would have given Fairweather, the CEO and Adams opportunities to prevent poor attendance.
An OD program, well structured and supported by the CEO and departmental managers, can provide management staff with critical knowledge, skill and courage to survive and excel during major organisational transformations.
Proposed solution #2
Boris Kabanoff has been professor and head of the school of management at Queensland University of Technology since 1996. His main research and consulting interests are in the areas of organisational values and downsizing.
A wise person once observed: “The road to hell is paved with good intentions.” Not only has Ian Fairweather blown his first project in his new job, but he has probably lost credibility with the senior medical and nursing staff. He has been set up by his chief executive, who is anxious to distance himself from what senior staff see as just another “touchy-feely” exercise that has wasted precious funds.
How did Fairweather manage to get himself quite so far up this unpleasant creek? First, the role of consultants is neither the issue nor the source of his problems; the only advice Fairweather needs in this respect is caveat emptor buyer beware.
Part of the problem may lie in what Fairweather had learned and also had not learned in his recent studies. HR is not a “soft job”. HR managers have to be able to talk and think comfortably in the multiple languages of business (i.e. finance, strategy, operations and so on) and to demonstrate to senior management how HR works with these departments and can assist the organisation to advance its overall business objectives.
Fairweather’s mindset, on the other hand, seems to be that of the HR manager as a dispenser of comforting pills that are meant to pull together the troops who will then all march forward together. Fairweather’s thinking is all about HR as a process and nothing about HR as an element in overall business strategy. In other words, the OD intervention that Fairweather has implemented has little to do with what the other senior managers hold to be their main priorities.
Fairweather is not the only one with a multi-faceted agenda. Although everyone probably agrees that “pulling together the disparate domains” would be a good thing, everyone is at least equally as keen to ensure that their own domain is not disadvantaged. Dr Yuan is busily calculating how much of the training funds could be redirected to research, Sister Lang is protecting the status of nursing staff, and the CEO, Arthur Holmes, is dreaming about how the program will score points with his political masters.
These typical attitudes explain why the now frequently heard calls for HR to become more strategic and pro-active are more difficult to do than to prescribe.
Nevertheless, it seems that one thing Fairweather could have done differently would have been to build a meaningful relationship with his CEO, Arthur Holmes, so as to develop a capacity to influence Holmes thinking. This would not be easy either, because Holmes does not see HR as anything more than a useful image-building device.
Hence Fairweather’s first challenge would be to help Holmes appreciate the need for such a strategy and his role in putting it in place. One way of initiating this might be to focus Holmes mind on the need for the hospital to show the Health Department how it was serving the needs of its several stakeholders.
The nature of the strategy would depend in part upon the style and preferences of the CEO, and on time constraints. Given a preference for consultation and a relatively long time frame, Holmes and Fairweather might have set up a fairly broad representative strategic planning group, and allocate plenty of time to communicating a “new vision” for “unfreezing” current attitudes.
A CEO with more directive preferences or less time might prefer a small committee of trusted lieutenants to shape the strategy and then drive it down through the organisation with their help.
Whichever process the organisation adopted, it would be messier, more acrimonious, and outcomes would be less certain than a nice, friendly management development program with neatly packaged notes.
The more consultative approach would fail if it glossed over real differences in people’s preferences and priorities, or identified them but then failed to find a satisfactory alignment for them. The non-directive approach would have less trouble with this aspect since the “coalition” of senior decision-makers would have correctly identified what had to be done; but this group would then have to ensure that morale was rebuilt once the storm of change had passed.
Whichever approach he adopted, Fairweather would have done the job that many organisations today expect of their HR function. Rather than being seen as a senior coordinator of HR processes, he would have been seen as a significant member of the senior management team.