Archive for the ‘General Management’ Category
The paradoxes of organisational change
Introduction
It is a truism that organisations are in a constant state of change. It seems that those who run organisations are rarely satisfied with the status quo, and their unending quest to improve products, performance, sales or whatever makes change an inescapable fact of organizational life.
Many decision makers and managers who implement change take a somewhat naïve view of the process: they focus on what they want rather than all the things that could happen. This is understandable because change projects are initiated and plans made when all the nitty-gritty details that may cause problems are not yet in view. Given that it is impossible to surface all significant details at the start. is there anything that decision-makers and managers can do to address the inevitable ambiguity of change?
One of the underappreciated facets of organizational change is that it is inherently paradoxical. For example, although it is well known that such changes inevitably have unintended consequences that are harmful, most organisations continue to implement change initiatives in a manner that assumes complete controllability with the certainty of achieving solely beneficial outcomes.
It is my contention that an understanding of the paradoxes that operate in the day-to-day work of change might help managers in developing a more realistic picture of how a change initiative might unfold and some of the problems that they might encounter. In this post, I look at the paradoxes of organizational change drawing on a paper entitled, The social construction of organizational change paradoxes.
Paradoxes are social constructs
More often than not, the success of an organizational change hinges on the willingness of people to change their attitudes, behaviour and work practices. In view of this it is no surprise that many of the difficulties of organizational change have social origins.
Change makes conflicting demands on people: for example, managerial rhetoric about the need to improve efficiency is often accompanied by actions that actually decrease it. As a result, many of the obstacles to change arise from elements that seem sensible when considered individually, but are conflicting and contradictory when taken together. This results in paradox. As the authors of the paper state:
We propose that paradox is constructed when elements of our thoughts, actions and emotions that seemed logical when considered in isolation, are juxtaposed, appearing mutually exclusive. The result is often an experience of absurdity or paralysis.
Again it is important to note that change-related paradoxes have social origins – they are caused by the actions of certain individual or groups and their effects or perceived effects on others.
Paradoxes of organizational change
The authors describe three paradoxes of organizational change: paradoxes of performing, belonging and organizing. I describe each of these below, but before I do so, it is worth noting that paradoxes are often exacerbated by people’s reactions to them. In particular, those affected by a change tend to interpret it using frames of reference that accentuate negative effects. For example, employees may view a change initiative as a threat rather than an opportunity to improve performance. Paradoxically, their perceptions may become a self-fulfilling reality because their (negative) reactions to the change may reinforce its undesirable effects.
That said let’s look at the three paradoxes of organizational change as described in the paper.
Paradoxes of performing
A change initiative is invariably accompanied by restructuring that results in wholesale changes in roles and responsibilities across the organisation. Moreover, since large-scale changes take a long time to implement, there is a longish transition period in which employees are required to perform tasks and activities associated with their old and new roles. During this period, employees may have to deal with competing, even conflicting demands. This, quite naturally, causes stress and anxiety.
Paradoxes of performing relate to contradictions in employees’ self understanding of their identities and roles within the organisation. As such, these paradoxes are characterized by mixed messages from management. As the authors state, people faced with such paradoxes often express feelings of rising frustration with/distrust of management, doubt (inability to choose) or nihilism (futility of choice). This paradox isparticularly common when organisations transition from a traditional (functional) management hierarchy to a matrix structure.
Paradoxes of belonging
Another consequence of organizational restructuring is that old hierarchies and workgroups are replaced by new ones. Adjusting to this requires employees to shift allegiances and develop new work relationships. Leaving the safety of a known group can be extremely stressful. Moreover, since the new structures are rarely defined in detail, at least at the start, there is a great deal of ambiguity as to what it really stands for. It is no surprise, therefore, that some employees attempt to maintain the status quo or even leave while others benefit from the change.
At the heart of this paradox is a double bind where a desire to maintain existing relationships competes with the realization that it is necessary to develop new ones. People react to this differently, depending on their values, motivations and (above all) their ability to deal with ambiguity. Inevitably, such situations are characterized by antagonistic attitudes that accentuate differences and/or peoples’ defensive attitudes that provoke defensiveness in others.
Paradoxes of organizing
The fact that organisations consist of people who have diverse backgrounds, motivations and interests suggests that the process of organizing – which, among things, involves drawing distinctions between groups of people based on their skills – is inherently paradoxical. The authors quote a couple of studies that support this contention. One study described how, “friendly banter in meetings and formal documentation [promoted] front-stage harmony, while more intimate conversations and unit meetings [intensified] backstage conflict.” Another spoke of a situation in which, “…change efforts aimed at increasing employee participation [can highlight] conflicting practices of empowerment and control. In particular, the rhetoric of participation may contradict engrained organizational practices such as limited access to information and hierarchical authority for decision making…”
As illustrated by the two examples quoted in the prior paragraph, a manifestation of a paradox of organizing is that the (new) groups created through the process of organizing can accentuate differences that would not otherwise have mattered. These differences can undermine the new structures and hence, the process of organizing itself.
As the authors suggest, paradoxes of organizing are an inevitable side effects of the process of organizing. The best (and perhaps the only) solution lies in learning to live with ambiguity.
Conclusion
In the end, the paradoxes discussed above arise because change evokes feelings of fear, uncertainty and doubt within individuals and groups. When such emotions dominate, it is natural that people will not be entirely open with each other and may do things that undermine the aims of the change, often even unconsciously.
An awareness of the paradoxes of organizing may tempt one to look for solutions. For example, one might think that they might be resolved by “better communication” or “more clarity regarding expectations and roles.” This is exactly what professional “Change Managers” have (supposedly) been doing for years. Yet these paradoxes remain, which suggests that they are natural consequences of change that cannot be “managed away”; those who must undergo the process of change must also suffer the angst and anxiety that comes with it. If this is so, the advice offered by the authors in the final lines of the paper is perhaps apposite. Quoting from Mihalyi Czikszentmihalyi’s book Finding Flow, they state:
Act always as if the future of the universe depended on what you did, while laughing at yourself for thinking that whatever you do makes any difference . . . It is this serious playfulness, this combination of concern and humility, that makes it possible to be both engaged and carefree at the same time.
…and that is perhaps the best advice I have heard in a long time.
On the nonlinearity of organisational phenomena
Introduction
Some time ago I wrote a post entitled, Models and Messes – from best practices to appropriate practices, in which I described the deep connection between the natural sciences and 20th century management. In particular, I discussed how early management theorists took inspiration from physics. Quoting from that post:
Given the spectacular success of mathematical modeling in the physical and natural sciences, it is perhaps unsurprising that early management theorists attempted to follow the same approach. Fredrick Taylor stated this point of view quite clearly in the introduction to his classic monograph, The Principles of Scientific Management…Taylor’s intent was to prove that management could be reduced to a set of principles that govern all aspects of work in organizations.
In Taylor’s own words, his goal was to “prove that the best management is a true science, resting upon clearly defined laws, rules and principles, as a foundation. And further to show that the fundamental principles of scientific management are applicable to all human activities…”
In the earlier post I discussed how organisational problems elude so-called scientific solutions because they are ambiguous and have a human dimension. Now I continue the thread, introducing a concept from physics that has permeated much of management thinking, much to the detriment of managerial research and practice. The concept is that of linearity. Simply put, linearity is a mathematical expression of the idea that complex systems can be analysed in terms of their (simpler) components. I explain this notion in more detail in the following sections.
The post is organised as follows: I begin with a brief introduction to linearity in physics and then describe its social science equivalent. Following this, I discuss a paper that points out some pitfalls of linear thinking in organisational research and (by extrapolation) to management practice.
Linearity in physics and mathematics
A simplifying assumption underlying much of classical physics is that of equilibrium or stability. A characteristic of a system in equilibrium is that it tends to resist change. Specifically, if such a system is disturbed, it tends to return to its original state. Of course, physics also deals with systems that are not in equilibrium – the weather, or a spacecraft on its way to Mars are examples of such systems. In general, non-equilibrium systems are described by more complex mathematical models than equilibrium systems.
Now, complex mathematical models – such as those describing the dynamics of weather or even the turbulent flow of water- can only be solved numerically using computers. The key complicating factor in such models is that they consist of many interdependent variables that are combined in complex ways. 19th and early 20th century physicists who had no access to computers had to resort to some tricks in order to make the mathematics of such systems tractable. One of the most common simplifying tricks was to treat the system as being linear. Linear systems have mathematical properties that roughly translate to the following in physical terms:
- Cause is proportional effect (or output is proportional to input). This property is called homogeneity.
- Any complex effect can be expressed as a sum of a well defined number of simpler effects. This property is often referred to as additivity, but I prefer the term decomposability. This notion of decomposability is also called the principle of superposition.
In contrast, real-life systems (such as the weather) tend to be described by mathematical equations that do not satisfy the above conditions. Such systems are called nonlinear.
Linear systems are well-understood, predictable and frankly, a bit boring – they hold no surprises and cannot display novel behaviour. The evolution of linear systems is constrained by the equations and initial conditions (where they start from). Once these are known, their future state is completely determined. Linear systems cannot display the range of behaviours that are typical of complex systems. Consequently, when a complex system is converted into a linear one by simplifying the mathematical model, much of the interesting behaviour of the system is lost.
Linearity in organisational theories
It turns out that many organizational theories are based on assumptions of equilibrium (i.e. that organisations are stable) and linearity (i.e. that the socio-economic forces on the organisation are small) . Much like the case of physical systems, such models will predict only small changes about the stable state – i.e. that “business as usual” will continue indefinitely. In a paper published in 1988, Andrew Abbott coined the term General Linear Reality (GLR) to describe this view of reality. GLR is based on the following assumptions:
- The world consists of unchanging entities which have variable attributes (eg: a fixed organisation with a varying number of employees)
- Small changes to attributes can have only small effects, and effects are manifested as changes to existing attributes.
- A given attribute can have only one causal effect – i.e. a single cause has a single effect.
- The sequence of events has no effect on the outcome.
- Entities and attributes are independent of each other (i.e. no correlation)
The connection between GLR and linearity in physics is quite evident in these assumptions.
The world isn’t linear
But reality isn’t linear – it is very non-linear as many managers learn the hard way. The problem is that the tools they are taught in management schools do not equip them to deal with situations that have changing entities due to feedback effects and disproportionately large effects from small causes (to mention just a couple of common non-linear effects).
Nevertheless, management research is catching up with reality. For example, in a paper entitled Organizing Far From Equilibriium: Nonlinear changes in organizational fields, Allan Meyer, Vibha Gaba and Kenneth Collwell highlight limitations of the GLR paradigm. The paper describes three research projects that were aimed at studying how large organisations adapt to change. Typically when researchers plan such studies, they tacitly make GLR assumptions regarding cause-effect, independence etc. In the words of Meyer, Gaba and Collwell:
In accord with the canons of general linear reality, as graduate students each of us learned to partition the research process into sequential stages: conceptualizing, designing, observing, analyzing, and reporting. During the conceptual and design stages, researchers are enjoined to make choices that will remain in effect throughout the inquiry. They are directed, for instance, to identify theoretical models, select units and levels of analysis, specify dependent and independent variables, choose sampling frames, and so forth. During the subsequent stages of observation, analysis, and reporting, these parameters are immutable. To change them on the fly could contaminate data or be interpreted as scientific fraud. Stigma attached to “post hoc theorizing,” “data mining” and “dust-bowl empiricism” are handed down from one generation of GLR researchers to the next.
Whilst the studies were in progress, however, each of the organisations that they were studying underwent large, unanticipated changes: in one case employees went on mass strike; in another, the government changed regulations regarding competition; and in the third boom-bust cycles caused massive changes in the business environment. The important point is that these changes invalidated GLR assumptions completely. When such “game-changing” forces are in play, it is all but impossible to define a sensible equilibrium state to which organisations can adapt.
In the last two decades, there is a growing body of research which shows that organizations are complex systems that display emergent behaviour. Mainstream management practice is yet to catch up with these new developments, but the signs are good: in the last few years there have been articles dealing with some of these issues in management journals which often grace the bookshelves of CEOs and senior executives.
To conclude
Mainstream management principles are based on a linear view of reality, a view that is inspired by scientific management and 19th century physics. In reality, however, organisations evolve in ways that are substantially different from those implied by simplistic cause-effect relationships embodied in linear models. The sciences have moved on, recognizing that most real-world phenomena are nonlinear, but much of organisational research and management practice remains mired in a linear world. In view of this it isn’t surprising that many management “best” practices taught in business schools don’t work in the real world.
Related posts:
Models and messes – from best practices to appropriate practices
The unspoken life of information in organisations
Introduction
Many activities in organisations are driven by information. Chief among these is decision-making : when faced with a decision, those involved will seek information on the available choices and their (expected) consequences. Or so the theory goes.
In reality, information plays a role that does not quite square up with this view. For instance, decision makers may expend considerable time and effort in gathering information, only to ignore it when making their choices. In this case information plays a symbolic role, signifying competence of the decision-maker (the volume of information being a measure of competence) rather than being a means of facilitating a decision. In this post I discuss such common but unspoken uses of information in organisations, drawing on a paper by James March and Martha Feldman entitled Information in Organizations as Symbol and Signal.
Information perversity
As I have discussed in an earlier post, the standard view of decision-making is that choices are based on an analysis of their consequences and (the decision-maker’s) preferences for those consequences. These consequences and preferences generally refer to events in the future and are therefore uncertain. The main role of information is to reduce this uncertainty. In such a rational paradigm, one would expect that information gathering and utilization are consistent with the process of decision making. Among other things this implies that:
- The required information is gathered prior to the decision being made.
- All relevant information is used in the decision-making process.
- All available information is evaluated prior to requesting further information.
- Information that is not relevant to a decision is not collected.
In reality, the above expectations are often violated. For example:
- Information is gathered selectively after a decision has been made (only information that supports the decision is chosen).
- Relevant information is ignored.
- Requests for further information are made before all the information at hand is used.
- Information that has no bearing on the decision is sought.
On the face of it, such behaviour is perverse – why on earth would someone take the trouble to gather information if they are not going to use it? As we’ll see next, there are good reasons for such “information perversity”, some of which are obvious but others that are less so.
Reasons for information perversity
There are a couple of straightforward reasons why a significant portion of the information gathered by organisations is never used. These are:
- Humans have bounded cognitive capacities, so there is a limit to the amount of information they can process. Anything beyond this leads to information overload.
- Information gathered is often unusable in that it is irrelevant to the decision that is to be made.
Although these reasons are valid in many situations, March and Feldman assert that there are other less obvious but possibly more important reasons why information gathered is not used. I describe these in some detail below.
Misaligned incentives
One of the reasons for the mountains of unused information in organisations is that certain groups of people (who may not even be users of information) have incentives to gather information regardless of its utility. March and Feldman describe a couple of scenarios in which this can happen:
- Mismatched interests: In most organisations the people who use information are not the same as those who gather and distribute it. Typically, information users tend to be from business functions (finance, sales, marketing etc.) whereas gatherers/distributors are from IT. Users are after relevant information whereas IT is generally interested in volume rather than relevance. This can result in the collection of data that nobody is going to use.
- “After the fact” assessment of decisions: Decision makers know that many (most?) of their decisions will later turn out to be suboptimal. In other words, after-the-fact assessments of their decision may lead to the realisation that those decisions ought to have been made differently. In view of this, decision makers have good reason to try to anticipate as many different outcomes as they can, which leads to them gathering more information than can be used.
Information as measurement
Often organisations collect information to measure performance or monitor their environments. For example, sales information is collected to check progress against targets and employees are required to log their working times to ensure that they are putting in the hours they are supposed to. Information collected in such a surveillance mode is not relevant to any decision except when corrective action is required. Most of the information collected for this purpose is never used even though it could well contain interesting insights
Information as a means to support hidden agendas
People often use information to build arguments that support their favoured positions. In such cases it is inevitable that information will be misrepresented. Such strategic misrepresentation (aka lying!) can cause more information to be gathered than necessary. As March and Feldman state in the paper:
Strategic misrepresentation also stimulates the oversupply of information. Competition among contending liars turns persuasion into a contest in (mostly unreliable) information. If most received information is confounded by unknown misrepresentations reflecting a complicated game played under conditions of conflicting interests, a decision maker would be curiously unwise to consider information as though it were innocent. The modest analyses of simplified versions of this problem suggest the difficulty of devising incentive schemes that yield unambiguously usable information…
As a consequence, decision makers end up not believing information, especially if it is used or generated by parties that (in the decision-makers’ view) may have hidden agendas.
The above points are true enough. However, March and Feldman suggest that there is a more subtle reason for information perversity in organisations.
The symbolic significance of information
In my earlier post on decision making in organisations I stated that:
…the official line about decision making being a rational process that is concerned with optimizing choices on the basis of consequences and preferences is not the whole story. Our decisions are influenced by a host of other factors, ranging from the rules that govern our work lives to our desires and fears, or even what happened at home yesterday. In short: the choices we make often depend on things we are only dimly aware of.
One of the central myths of modern organisations is that decision making is essentially a rational process. In reality, decision making is often a ritualised activity consisting of going through the motions of identifying choices, their consequences and our preferences for them. In such cases, information has a symbolic significance; it adds to the credibility of the decision. Moreover, the greater the volume of information, the greater the credibility (providing, of course, that the information is presented in an attractive format!). Such a process reaffirms the competence of those involved and reassures those in positions of authority that the right decision has been made, regardless of the validity or relevance of the information used.
Information is thus a symbol of rational decision making; it signals (or denotes) competence in decision making and that the decision made is valid.
Conclusion
In this article I have discussed the unspoken life of information in organisations – how it is used in ways that do not square up to a rational process of decision making. As March and Feldman put it:
Individuals and organizations invest in information and information systems, but their investments do not seem to make decision-theory sense. Organizational participants seem to find value in information that has no great decision relevance. They gather information and do not use it. They ask for reports and do not read them. They act first and receive requested information later.
Some of the reasons for such “information perversity” are straightforward: they include, limited human cognitive ability, irrelevant information, misaligned incentives and even lying! But above all, organisations gather information because it symbolises proper decision making behaviour and provides assurance of the validity of decisions, regardless of whether or not decisions are actually made on a rational basis. To conclude: the official line about information spins a tale about its role in rational decision-making but the unspoken life of information in organisations tells another story.
Eight to Late 