Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 1, Issue 29;   July 18, 2001: Look Before You Leap

Look Before You Leap

by

When we execute complex organizational change, we sometimes create disasters. It's ironic that even in companies that test their products thoroughly, we rarely test organizational changes before we "roll them out." We need systematic methods for discovering problems before we execute change efforts. One approach that works well is the simulation.

Once upon a time, an engineering consulting company hit a speed bump. Revenue was falling so fast that staff attrition couldn't keep up with the contraction. So management leapt into action, declaring a salary freeze.

But there was a carrot — if the company met its revenue target, everyone would get a bonus. In consulting, revenue equates roughly to billable hours, so the engineers did their best to help Marketing find business. Trouble was, there wasn't enough business.

With less than a month to go before the CEO's annual state-of-the-company address, Management announced a buy-out for people close to retirement. After his address, in Q&A, a bright engineer asked him, "Since so many are taking the buy-out, we won't have enough billable hours left to meet the bonus target. Does this mean there's no bonus?"

Penguins look before they leapJacques, the CEO, was blind-sided, but he was no dummy. He knew that if he said yes, he could expect an exodus of his best engineers. So he replied, "I'll have to get back to you on that." Back in the calm of his office, Jacques and his team worked out the right answer: "We'll lower the bonus target proportionately."

So they issued a memo, and everyone relaxed some. But Jacques had been embarrassed at a time when he needed to show strong leadership. He probably wasn't ready for that question because it involved an intersection of two unrelated policies. Since there are so many policies in any company of even moderate size, the number of such intersections is large, and it's difficult to anticipate which intersections cause problems.

The executive team goofed, as most do now and then. Yet, even though we test our products thoroughly, we rarely test organizational changes before we "roll them out." It's a high-risk practice, because we end up testing our change plans using the company itself. To limit that risk, we must discover defects in change efforts before we execute them, and one approach that works well is the simulation.

Even though we test
our products thoroughly,
we rarely test organizational
changes before we
"roll them out"
Simulations — sometimes called "games" — parallel reality. They're especially valuable when the event being simulated is high-risk. That's why the military runs war games, and why US presidential candidates run mock debates.

Simulations do require planning to ensure that they're faithful to reality, and you do need a skilled facilitator. But you can use simulations to test almost any organizational effort — process designs, project plans, test plans, reorganizations, mergers and acquisitions, marriage proposals — anything. Simulations can be off-site and small-scale, and you can use stand-ins for the actual players if security is an issue.

Next time you have that queasy feeling about your plans, look before you leap — simulate. Go to top Top  Next issue: You Have to Promise Not to Tell a Soul  Next Issue

101 Tips for Managing ChangeIs your organization embroiled in Change? Are you managing a change effort that faces rampant cynicism, passive non-cooperation, or maybe even outright revolt? Read 101 Tips for Managing Change to learn how to survive, how to plan and how to execute change efforts to inspire real, passionate support. Order Now!

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Related articles

More articles on Organizational Change:

ChangeIs It Really Resistance?
The term resistance, as used in the context of organizational change, describes our reluctance to abandon the status quo. But it's a loaded term, because it devalues that reluctance. When we approach change with this model of reluctance in mind, we sabotage our own efforts.
A Blame CirclePlenty of Blame to Go Around
You may have heard the phrase "plenty of blame to go around," or maybe you've even used it yourself. Although it sometimes does bring an end to immediate finger pointing, it also validates blame as a general approach. Here's how to end the blaming by looking ahead.
Masks of Tragedy and ComedyThe Ties that Bind
Changing anything in an organization reveals how it's connected to its people, to its processes, to its facilities, and to the overall context. Usually, these connections reach out much further into the organization than we imagine.
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When enterprises restructure, reorganize, downsize, outsource, spin off, relocate, lay off, or make other adjustments, they usually focus on financial health. Often ignored is the fear these changes create in the minds of employees. Sadly, that fear can lead to the need for further restructuring.
Lifeboats on board the FS Scandinavia, May 2006Contrary Indicators of Psychological Safety: I
To take the risks that learning and practicing new ways require, we all need a sense that trial-and-error approaches are safe. Organizations seeking to improve processes would do well to begin by assessing their level of psychological safety.

See also Organizational Change and Organizational Change for more related articles.

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A game of Jenga underwayComing September 4: Beating the Layoffs: I
If you work in an organization likely to conduct layoffs soon, keep in mind that exiting voluntarily before the layoffs can carry significant advantages. Here are some that relate to self-esteem, financial anxiety, and future employment. Available here and by RSS on September 4.
A child at a fork in a pathAnd on September 11: Beating the Layoffs: II
If you work in an organization likely to conduct layoffs soon, keep in mind that exiting voluntarily can carry advantages. Here are some advantages that relate to collegial relationships, future interviews, health, and severance packages. Available here and by RSS on September 11.

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