An article in 17 July, 2012 national Post (page FP6) titled “Putting macro challenge under the micro-scope” by Munir Sheikh (Distinguished Fellow at the School of Policy Studies, Queens University) makes a forceful argument that economists (and others) need to better understand how productivity is impacted by the so-called “micro factors” of productivity. This post is directed to OD (Organizational Development) practitioners who pride themselves on making a difference to their clients’ financial/economic wellbeing. How are you sure you are making a difference? And, just as importantly, if you can be sure then you are doing welcomed service to all stakeholders in Canada’s (and other countries too) future wellbeing.
According to Sheikh, macro-economists relegate a whole slew of purported productivity improving activities under the label of peripheral “micro factors” include:
- good management hiring (the best and brightest),
- staff incentives (to encourage employees to contribute up to and beyond their capabilities),
- being aware of what is going on beyond the four walls of your company,
- having an organizational structure that is flexible and nimble enough to act quickly to make efficient decisions in the face of change.
These factors are generally referred (by economists?) as “organizational innovation”. What strikes me is how OD relevant this list is. Is there anything on this list that we do not work with clients on?
Sheikh indicates that while Canada over the past number of years has made progress on the macro-productivity improvement inducing factors (corporate tax rates, R&D funding, import/export policies) which are within the realm of governmental activities. Statistics Canada shows an alarming deterioration of productivity gains in the so called “intangibles” (driven by the organizational factors) over the same period:
- 1960s through 1980s – 0.6% average growth (per annum?)
- 1980s through 2000 – fell to 0.3%
- 2000 to 2010 – dropped to -0.6% (yes negative growth!)
This should scare anyone who really cares about the wellbeing of ourselves, our families, our future our careers, our fellow citizens, our way of life and standards of living.
Sheikh call upon his economist colleagues to get with the program. I call upon my OD colleagues to do the same.
It is extremely rare to see OD practitioners demonstrate how their proposal will change the value of an organization’s “organizational innovation” into material benefits that stakeholders really care about (healthy [in the broad sense that we love], financially sound and economically contributing entities).
I am fully aware of the difficulties in measurement in our work. This is compounded by the fact that many of us are in a consulting role hence what we do can be very short lived (even ignored after been paid for) in duration. I use leadership development (targets the first two items in the first list above) efforts as an example. How many of these initiatives make any material difference that is apparent 2 to 5 years later? There is a whole wide range practice in OD around personal effectiveness, again do you know what material difference you have really made too? The only area of OD that I see at least a semblance of practice around determining subsequent benefits is in the “strategy planning and implementation” field. Typically there are some forms of metrics installed to measure progress. My challenge to these practitioners is even when you use the balanced score card approach I am taken by how inward this appears. Just how sophisticated and diverse do you set up your scorecard to reflect a broader range of external stakeholders interests in strategy implementation success?
Just because something is hard is a weak argument. Those of us in consulting often charge “generous” fees for nebulous (realized benefits) services. What contributes to our underwhelming “obvious” contribution to our Canadian clients positive growth in Stats Canada “intangibles”? For me, I look to the four levels of measurement:
- Inputs – That which we bring to the table including what we know (knowledge, robust theories of how things work in our practice areas), our skills at engagement of those we work with, etc. Are our theories really valid, useful, and gainful?
- Throughputs – How we put our clients to work with our knowledge, theories and their situational wisdom. These are of course our consulting processes. Do these processes really bring out the best in ourselves and most importantly our clients while we are their guests?
- Results – Did we achieve the deliverables expected and for which we can suitably be paid for? We are all clever at managing our contracts so we get paid for what we professionally and ethically believe we should be. But what about the client? Can anyone show that we have effectively helped them learn, develop, become wiser, have a well articulated plan, etc.?
- Outcomes – Really this all that matters (what Sheikh speaks to), what difference did it make anyway. Our dilemma is we can determine this until “later”.
There are some obvious contributors to whether the benefits ever materialize:
- The plan was still relevant in the future we end up in. This is really the future we want(ed). Remember the so called asian proverb/curse : “Be careful what you ask for in case you receive it!” This is why clarity around outcomes is so critical. Outcomes are about a “state of being/experiencing”. Results are about getting something we planned accomplished. A focus only on results creates the increased uncertainty and risk of living the aforementioned proverb/curse.
- The plan was robust enough to deal with the exigencies of implementation. This meant the plan was built upon sound principles of navigation and application of sound personal and organizational project management skills, habits and discipline.
- Those involved where up to the task in terms of competence, motivation and clarity around their expected contributions.
- Those involved were committed to making sure the outcomes were still pursued even if the plan had to be radically altered. Our clients know how to anticipate respond and meet resulting uncertainties and risks. In OD we sometimes call this “resilience”.
My question and urging is: If we can’t show that we are making a positive contribution to our society’s wellbeing, why are we even in the business and more importantly, why should we be listened too?