On the unintended consequences of organisational change

Introduction

Change, as the cliché goes, is the only constant.  At any given time, most organisations are either planning or implementing changes of some kind.  Perhaps because of its ubiquity, the rationale and results of change are not questioned as deeply as they ought to be.  In this post I describe some unintended effects of organisational change, drawing on Barbara Czarniawska’s book, A Theory of Organizing and other sources. I also briefly discuss some ways in which these side effects can be avoided.

I’ll begin with a few words about terminology.  In this article planned changes (also referred to as reforms) are changes instituted in order to achieve specific goals. The goals of reforms are referred to as planned effects – that is, planned effects are intended results of change. As I discuss below, although planned effects may eventually be achieved, change initiatives have a host of unforeseen but significant consequences. These are referred to as unplanned, unintended or side effects.

This article is organised as follows: I’ll begin by describing some of the positive and negative side effects of change, following which I’ll discuss why side effects come about and how they can be managed.

Advantageous side effects of change

Although, the term side effect has a negative connotation, some side effects of change can actually be advantageous.  These include:

1. Questioning of the status quo: In most organisations, processes and structures are taken for granted, rarely is the status quo questioned. Organisational change presents an opportunity to pose those “How can we do this better?” type questions that challenge the way things are done. Such questioning is unplanned in that it generally occurs spontaneously.
2. Opportunities for reflection: This is a consequence of the previous point: questioning the status quo can cause people to reflect on how things can be done better. Again, this is an unintended consequence of a reform, not part of its planned goals. Also, it should be noted that although opportunities for reflection arise often, they are generally ignored because of time pressures.
3. Spontaneous inventions: Finally, questioning of and reflecting on the status quo can trigger ideas for improvement.

Most people would agree that the above points are indeed Good Things that ought to be encouraged.  However, the important point is that people who are in the throes of a planned change seldom have the time or motivation to pursue these opportunities.

Harmful side effects of change

The negative side effects of planned changes are insidious because they tend to occur as a result of inaction – i.e. by not taking corrective actions to counter the detrimental effects of change. The following side effects serve to illustrate this point:

1. The aims of reform become cast in stone: The objectives of a change initiative are formulated based on an understanding of a situation as it exists at a particular point in time. Problem is, as time evolves the original objectives maybecome irrelevant or obsolete. Yet, in many (most?) change initiatives, objectives are rarely reviewed and adjusted.
2. The means get confused with the ends: Following from the previous point, a change initiative becomes pointless when its objectives are no longer relevant.  However, a common reaction in such situations is to continue the initiative, justifying it as a worthwhile end in itself. For example, if the benefits of, say, a restructuring initiative become moot,  the  restructuring itself  becomes the objective rather than the benefits that were supposed to flow from it.  This helps save face as the project can be declared a success once the restructuring is completed, regardless of whether or not the promised benefits are realised.
3. Improvisations and spontaneous inventions are suppressed: As I have discussed at length in this post, planning and improvisation are complementary but contradictory aspects of organizational work. A negative aspect of planned change initiatives is that they are inimical to improvisations: those responsible for overseeing the change tend to ignore, even suppress any improvisations that arise because they are seen as getting in the way of achieving the objectives of the primary change.

Planned change initiatives are generally implemented through programs or projects.  In fact, most major projects in organisations – restructurings, enterprise system implementations etc – are aimed at implementing reforms of some kind. However, although the raison d’etre of such projects is to achieve the planned objectives, many suffer from the negative side effects mentioned above.   In her book Czarniawska states, “Planned change rarely, if ever, leads to planned effects.”  Although this claim may be a tad exaggerated, the significant proportion of large projects that fail suggests there is at least a whiff of truth about it.

In the next two sections I take a brief look at why planned changes fail and what can be done about it.

The origin of the side effects of change

Most structures and processes within organisations have a complex, path-dependent history. Among other things, they develop in ways that are unique to an organisation and are often deeply intertwined with each other.  As a result, it is impossible to be certain about the consequences of changing processes or structures – there are just too many variables and dependencies involved.

There are two related points that flow from this:

Firstly, those who plan changes need to have a good understanding of legacy: the history of the issues that the change aims to fix and those that it may create in the future. The problem is most of the people involved in planning, initiating and executing reforms have little appreciation of such issues.

Secondly, most major changes are conceived by a small number of people who hold positions of authority within organisations. These folks have a tendency to gloss over complexities, and often fail to involve those who have a detailed knowledge of the affected processes and structures. Consequently, their plans overlook dependencies and possible knock-on effects that can arise from them. This results in the negative side effects discussed in the previous section.

..and what can be done about them

Czarniawska recommends the following informal rules for successful change:

1. Be willing to modify the objectives of the change and your path to get there as your understanding of it evolves.
2. Implement lightweight processes, avoid bureaucratic procedures.
3. Be open to improvisations.

This is good advice as it goes, but how exactly does one use it?

In our recently published book, The Heretic’s Guide to Best Practices, Paul Culmsee and I discuss how issues of legacy and lack of inclusiveness can be addressed.

Firstly, we suggest that apart from time, cost and scope (the classic iron triangle), project decision-makers would be well served by considering legacy as a separate variable in projects (also see this post on Paul’s blog for more on this point). More importantly, we describe techniques that can be used to surface hidden assumptions and aspects of history that could have a bearing on the project and those that might cause problems in the future.

Secondly, we discuss how one can work towards creating an environment in which a diverse group of stakeholders can air and reconcile their viewpoints. Such a discussion is a prerequisite to creating a plan that: a) considers as many viewpoints (variables) as possible and b) has the support of all stakeholders.  Without this, any implementation is bound to have side-effects because of overlooked variables and/or the actions (or non-actions) of stakeholders who do not support the plan.

Of course, inclusiveness sounds great but it can be difficult in practice, especially in large organisations. What can decision-makers do in such cases?  The answer comes from a slightly different, if rather obvious direction.

In his very illuminating book on decision-making, James March notes that organisations face messy and inconsistent environments. Given this, decisions made and implemented at lower levels have a better chance of success than those made in rarefied air of board-rooms.  Paraphrasing a statement from his book:

Since knowledge of local conditions and specialized competencies are both essential and more readily found in decentralized units, control over the details of policy implementation and adaptation of general policies to local conditions are [best] delegated to local units. From the standpoint of general management, the strategy is usually seen as one of gaining the informational and motivational advantages of using people with local involvement, [but] at the cost of accentuating problems of central coordination and control.

Indeed, most of the nasty side effects of planned change arise from over-centralisation of coordination and control.  The solution is to devolve control and decision-making authority down to the level at which the changes are to be implemented.

Conclusion

Planned change fails to achieve its goals because planners cannot foresee all the consequences of change or even know which factors may be important in determining these. Moreover, individuals will view changes through the lens of their background, biases and interests.  Since organisations consist of many individuals with different views, managing change is essentially a wicked problem.

To sum up, those who initiate large-scale changes should keep in mind the law of unintended consequences:  any planned action will have consequences that are not intended, or even foreseen.  These consequences can be managed by getting a better appreciation of the factors that affect the processes and the structures to be changed.   One can gain an understanding of these factors through a consideration of legacy and/or via dialogue involving all those who work with the processes and structures that are to be changed. The simplest way to achieve both is by delegating decision making and implementation authority down to where it belongs – with the people who work at the coalface of the organisation.