TOP MANAGEMENT FAILURE: FIRST ORGANIZATIONAL EXAMPLE

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Submitted by Terri Griffith on Mon, 08/31/2009 - 08:43
TOP Management highlights that Technology, Organizations, People need to be considered in concert for success. Miss any one of the three dimensions, and you risk failure. This next series of posts will highlight mistakes. I suspect that you have a few of your own. I'd appreciate your examples in the comments below. The more we can illustrate the risks, the more likely are people to make the effort required for success. I'm going to start with an organizational failure. An example of a TOP Management organizational failure is a situation where some critical aspect of the organization -- policies, procedures, structure -- is not considered in the introduction of an organizational change. My favorite organizational failure example comes from a 1994 article by Profs. M. Lynne Markus and Mark Keil: If we build it, they will come: Designing Information Systems that People Want to Use.

Markus and Keil open with the question, "Why are some information systems that companies have invested millions of dollars in developing never used or avoided by the very people who are intended to use them?" They acknowledge that some systems aren't built well or have project management problems. It makes sense that these systems don't get the expected use. More concerning are those systems that do work well technically, but still are failures in terms of the goals that put the project in place. They say (in 1994) that they believe that such failures cost U.S. businesses millions of dollars. I think it is fair to assume that this number is in the billions today (links to data supporting this point would be appreciated).

Their example focused on a system designed to help the sales representatives of CompuSys produce error-free product configurations before providing a price quote. (While CompuSys is a pseudonym, I've always found it helpful to think of the task a Dell sales rep would do, though it's probably not Dell given the time of the example). While this system worked, the sales reps wouldn't use it -- even after a multimillion-dollar program to improve user interface, training, and the like. Markus & Keil note:

..we found two reasons for the failure to use [the configuration system]. First, sales reps were not motivated to do what the system enabled them to do. Second, using the system made it harder for them to do what they were motivated to do. Either of these problems alone would have reduced [the system's] use. Together, they were fatal. And the expensive redeployment effort did nothing to address either one.

Sales reps were incented on sales volume, not error free configurations. "It's not that anyone wants to be inaccurate and make a lot of errors, it's just not something we are measured on." ...and the configuration system made it take more time to get to the quote than instigated the sale. End of story for this change.

Markus and Keil go on to provide a variety of possible improvements, all of which fit into the TOP Management model. They suggest that CompuSys could have:

  • Changed its strategy to "design for error-free configuration"
  • Changed the incentive system for the sales reps
  • Changed the implementation process to highlight the overall firm value of using the system
  • Integrated the configuration and quote systems -- made it a passive task to use the configuration system (see background on active/passive)

They also note that while these changes make sense, part of the trouble is that technical and organizational changes are often not under the control of the same people. This gives me the takeaway point for this post: TOP Management needs to be practiced all the way from the top -- as a change at any level is in progress -- it has to be part of the organization's DNA to put Technology, Organizations, and People all on the table for consideration at the same time. Excellent management of any one aspect isn't enough. For success, we must intertwine these dimensions of organization and work design.