From Fragmentation Towards Cohesion: A Case Study in Facilitating Organizational Change

Michael Walton
Director of People in Organisations Ltd, UK; and a Visiting Senior Lecturer, Thammasat Business School, Bangkok. E-mail: michael.walton@btinternet.com

Facilitating organizational change is fraught with problems, and these are intensified if the organization occupies a prominent global profile and is staffed with status-conscious top executives. The paper outlines a change intervention in such organization and describes work with a senior management team that had lost direction and was falling apart. The reputation of the reclusive main Board Director involved was at risk, and in an attempt to retrieve matters, a Management Retreat was initiated to recover the situation. An approach to the work is outlined, together with the key outcomes from the intervention itself.

The case study offers insights on an intervention which addressed leadership issues within a top team. Inadequate top-team performance is a common feature of business life, but what adds to the interest of this case is that it involved a dysfunctional senior team within a major global organization. The material should be of interest to executives and managers-as well as to internal organizational change consultants-who find themselves confronted with problematic leadership issues within a privileged group of senior colleagues. The approach and methodology adopted had been developed from earlier research studies-across a range of industries and settings-in addressing top-team dynamics, and tensions between competitive senior executives. Conceptually, a client-focused psychological orientation-drawing on insights from social psychology and psychotherapy-characterized the approach adopted in this intervention.

The case describes an intervention within International Trading Securities (ITS), an international organization which occupied a prestigious role within the global economy. It had a high opinion of itself as a corporate body and was very proud of the role it played in business life across the globe. Recruited globally, ITS' top and senior executives were very experienced and highly rated in their various specialist fields of expertise. They were well-qualified, very well paid and treated with considerable respect wherever they traveled.

The organization as a whole could be said to have viewed itself as somewhat superior to the 'lesser' organizations with which it traded and-not surprisingly perhaps-a sense of corporate arrogance and superiority had come to pervade the organization and the behavior of its cader of very experienced specialists who occupied all the top executive positions. Most were Ph.Ds and there was a belief that they were indeed 'special', invariably 'knew best', and were the 'hot shots on the street'. ITS occupied a high and prominent global profile.

ITS undertook a monitoring and supervisory oversight of global trading markets. In doing so, it shaped the course of global trade, influenced the financial relationships between trading country states and was a broker in facilitating trade deals and accompanying fiscal arrangements. It was a place where those in its specialist fields of expertise wanted to work and there was fierce competition when short-term secondments were advertised globally. An ITS placement was greatly valued because of the enhanced status it bestowed on the lucky recipients of having such a noteworthy appointment listed on their CV.

Senior executives were treated in a very deferential, respectful and attentive manner. In some ways, it functioned 'as if' it was a military organization but without formal uniforms and the gold braid and insignia which overtly signified a person's rank! Displays of arrogance, entitlement and pomposity were not uncommon.

The organization could be described as somewhat addicted to administrative procedures and protocols. At one level, this resulted in a very ordered and logical approach to business life; however, at another level, it resulted in slow decision making, delays, frustration and complacency. Such protracted and time-consuming processes also had the effect of diluting and sanitizing potentially difficult issues. Thus, a climate of denial, self-satisfied superiority and laxity were often maintained when a climate of prudent introspection, humility and urgency would have served the organization far better. The rarefied atmosphere of ITS resulted in a somewhat out-of-touch organization and one that had become too wrapped-up in its own self-importance.

Perhaps I should point out that this was a very status-conscious organization, job title, job grade, pay scale, country of origin-each of these mattered a great deal and were factors in determining a person's impact and influence within ITS.

The key staff had large offices, self-importance was high, staff benefits and facilities were excellent, the staff restaurants provided high quality food and there was a separate waitress-only restaurant for senior staff and prestigious visitors. You booked in advance, signed your chit and paid monthly in arrears. No money passed hands. It was like a Professional Member's Private Club-by invitation only. It was a smart place to be. This organization-wide culture of privilege, complacency and superiority had also seeped into and pervaded the Administration Division which is the focus of this paper.

ITS was organized into a number of divisions, each of which monitored and supervised trading activity within their designated global territories. The organization as a whole, however, was driven by a central Administrative Division which was responsible for legal affairs, policy development, procurement, financial services, staff development, information and research, publicity and PR, information processes, support services, audit, human resources and associated central organizational services including cyber security.

This case describes an intervention within this large and somewhat unwieldy Administration Division. The Division did not have a good reputation internally and was viewed as slow moving, bureaucratic, cumbersome and disorganized. It had come-unfortunately-to be characterized by divisive internal politics and increasing interdepartmental tension. It was held in poor regard by the rest of the organization.

Whilst ITS overall was convinced of its own intellectual superiority and special place in the world, this contrasted sharply with the sinking reputation which this Division had within the wider organization.

The Intervention
This case describes the planning, execution and immediate follow-through of a top team 'Management Retreat'. The director, his 10 department heads and the author were involved. The effectiveness and efficiency of this Division were fundamental to the successful functioning of the wider organization because it provided the administrative and backup services on a worldwide basis. The Division was responsible for introducing, monitoring and policing all key internal policies and so pervasively affected all aspects of organizational life.

Unfortunately, the division's top management group was not working together effectively and this was showing through to the rest of the organization. The division was held in poor esteem, it was regarded as slow and ineffective. The relatively new Director-heavily protected by his PA who was described 'as a Dragon'-had chosen not to adopt a high-profile and was becoming somewhat of a recluse ... even to his own top team. Dissatisfaction was increasingly being expressed within his group of senior managers about the lack of leadership from the top; the opportunity for a division-wide management review seemed slim-although very necessary.

Something had to be done, but there appeared little appetite for such direct action, and it took a minor crisis to jolt the Director into action. The breakthrough came when the rivalry and tension between two of his top team spilled out-of-control and things began to fall apart. Open hostility, increasingly overt antipathy, rivalry, lack of cooperation and 'blame-game' dynamics began to take hold, and this threatened the Director's hold on his Division. He had to take action or else risk losing 'command'. His reputation and standing across the wider organization was at risk.

His dilemma was not knowing how best to address the failing situation confronting him and how to repair the damage to his personal reputation and that of his Division. He was facing a damaging, and potentially fatal, indictment of his leadership in an organization where image, prestige, status and ego were of considerable importance. A breakthrough occurred, however, when he invited the author to design and run a 'Management Retreat' which would review the performance of his Division. This invitation came because he had been made aware of my research in facilitating Board level top-team development and of successful Organization Development (OD) work I had completed in other divisions of ITS.

Given the publicity it would generate across ITS, the Director's decision to hold a Management Retreat was a brave and bold one. A more discrete approach would have been to sanction a series of coaching and counseling sessions which would have attracted very little public attention. Another possibility would have been to organize off-site mediation with a third-part specialist between two warring executives et al. within his executive team. Each of these low-key options would have had the advantage of no publicity and that any unresolved matters could have been diluted and then possibly glossed over or even conveniently forgotten!

So fronting-up with his team on such a Retreat was a 'big issue' because it signaled a public acknowledgment of problems of leadership and organizational dysfunctionality which had been previously glossed over or denied. It brought the need for change out into the open, and in that sense the 'elephant in the room' had been released for all to see!

Reviewing the Division's Performance
The off-site residential Management Retreat involved a group of 10 overall. The purpose was:
To work together to review the effectiveness of the current organizational and management arrangements within the division.
Both before, and after the Retreat, I was accorded regular and ready access to this reclusive Director with whom the 'brief' and general shape of the work to be accomplished was agreed. The intervention was to be built around my analysis of the issues raised with me during confidential interviews with the 10 participants. The sensitivity of the work meant that my immediate line manager was excluded from any part of the process and all notes, analysis of the collected data, etc., and production of a 'Discussion Document', to be presented at the Retreat, were handled confidentiality.

Each participant was interviewed, more than once, to collect their views and perspectives about how things were going and 'the State of the Division' and what, if any, changes needed to be made for the future. Respondents' data was then codified to further protect confidentiality. A number of common themes emerged from the analysis and these were used to shape a 'Discussion Document' which formed the central spine around which the group work was then organized.

The discussion document was introduced at the beginning of the 'Retreat'-and collected at the end of the event-because of sensitivities and the sensitive nature of the work itself. A number of 'Rules of Engagement' were discussed and agreed at the start as were the expectations for each participant following conclusion of the Management Retreat itself. The Director was very clear about the importance of this work and that the issues raised and the agreements reached would be followed through.

The discussion document highlighted three key themes each of which required immediate attention. The validity of the presented analysis was checked and challenged by the respondents: (i) to ensure that my overall summation of the key issues was fair and that I had not been misrepresented or misunderstood the data they had given me; and (ii) to check that I was being fair and respectful in how I had reflected the issues presented to me. This thus enabled each person to fully engage with my analysis, check their understandings of what I had presented and to add any additional points they felt needed to be emphasized or made. Taking the trouble for such 'validation' helped both to settle the group and to generate a constructive climate for further collaborative and constructive debate. They confirmed my findings and analysis and, following some tense debates, resulted in a shared agreement that much really needed to be different in the future. Psychologically, a shift had been achieved from a preoccupation with/on personal gripes and issues to a collective perspective on what 'we' now needed to do differently to make our division more effective, etc. This was a significant shift of focus and responsibility from 'individual' concerns to a 'group/team' responsibility for making things better.

One interesting feature is the introduction of 'contracted agreements' between colleagues whereby-following a series of 1:1 discussions-each person formally agreed to specific changes in how they were going to work together with that person in the future. This 'duo-contracting' process made it difficult for anyone to later try to backtrack on the agreements they had made and renege on the promises and commitments they had entered into. The Retreat was at times tense and frosty but by the end significant advances in the working relationships had been achieved. Whilst some felt a little bruised and embarrassed at times, no blood was actually spilt and the group emerged stronger and more mutually appreciative than before. One of the most startling changes was the swapping of departments between the two executives who had previously been 'at war' with each other. It was a remarkable-and somewhat unexpected transformation of relationships-change!

Priorities for Attention
In collating and analyzing the interview data, the general message was of a division that was rudderless; not necessarily totally out-of-control but without a clear focus or sense of direction. The Director-and his Division-was experienced by his top team as reactive to emergent issues rather than managing them. Quick decisions appeared to be made 'on the hoof', perhaps in response to political pressures, even if they cut across existing priorities! The Division behaved rather like an expensive and well-appointed Ocean Liner which had not been equipped with a compass and so had to rely on very fuzzy maps to guide its behavior and so had placed itself at the mercy of ocean currents (and political pressures!). This unsatisfactory state of affairs was further complicated because reporting to the Director there was an inner Cabinet of three very senior executives each of whom held ambiguous overlapping roles each one seemingly 'without portfolio'. Reporting relationships were unclear and ambiguous, clear decision making was absent.

It was a convoluted and confused organizational structure and difficult to manage. Some executives used this to their advantage either to do very little or to push for their own personal work agendas. Superficially, it looked an impressive structure, in actuality it was ineffective and dysfunctional.

An analysis of the interview data highlighted three main themes, each of which required immediate attention. First was the business of setting direction, second a need to clarify roles and responsibilities and finally there were a number of issues concerned with internal communications and mutual trust within the division. These three main themes, as shown in Figure 1, were used as the primary building blocks for the design of the retreat itself. Each theme highlighted a major flaw in the integrity of the division-and in combination demonstrated the urgent need for action.

So, the root of the problems-derived from the interview data-which beset the Division are listed as:
Theme 1: No Clear Direction
Setting direction and managing achievement-was the major concern
No clear forward plan
No shared vision of the future
No integrated work strategy
No shared sense of purpose
No performance standards
Separation of responsibility between policy and operations
Confused goals: internal conflict, absence of integrated action
A fussy and 'blunted' image of the division's purpose and intent

Theme 2: Confused Roles
Roles and responsibilities were confused and fuzzy
Confusion/ambiguity within the top 'Inner Cabinet' regarding who does what?
Disjointed and fragmentation between departmental managers
Unclear mutual expectations between managers
Unclear mutual expectations between managers and the 'Inner Cabinet'

Theme 3: Bad Dynamics
Internal communications were fractured and lacked discipline
Problems in securing adequate access to the director (he was overprotected)
'Cabinet' squabbles and ego-competition
Overloaded workload, but a 'lets do it all' mentality held sway at the top
Bottlenecks; no easy flow of data to manage priorities and loading
Information, and access to it, perceived as 'power'
Lines of communication frequently violated causing confusion
No regular meetings between executive managers
Poorly run meetings when held

The program of work during the retreat was focused around these three clusters of issues. Each participant was encouraged to question, challenge and disagree with the analysis and a collaborative, rather than a combative, climate was established in order to do so. There was 100% acknowledgment that there several important issues that were torpedoing the work of the division and that this top group-together-had to address and solve them. Differences of opinion were acknowledged and respected and there was no 'letting of blood'. It was tense at times and a couple of 'Time-Outs' were called to reduce tension and to cool things down.

A major fear-and quite reasonable given the competitive nature of the organization-for some had been a concern that frank exchanges of views could have resulted in fractured future working relationships. This did not happen. Towards the end of the Retreat, one of the most senior participants commented that 'the family was still intact' and having worked on its issues, felt that the group was more able to work together in the future. Initial anxiety, fear, apprehension and doubt were replaced by a shared sense of collegiality, enhanced mutual regard and more openness.

Outcomes and Follow-Through
The major outcomes were:
Agreed priorities for attention and a series of follow-up meetings to agree on the Division's 'Agenda for Change'.
A review of roles and responsibilities within the 'Inner Cabinet'.
More formal and also more informal meetings between this group of senior executives.
The development of a division-wide integrated work plan.
An enhanced and more positive climate of mutual trust, regard and understanding.
Positive changes have occurred since the work was initiated, but the slow pace of change still left something to be desired. In spite of the good intentions expressed, there were lingering doubts as to whether or not the full potential for positive change and review created by the 'Management Retreat' would be realized in full. All departments, however, completed their Work Reviews on time and much then rested on (i) the Director himself in pushing through the agreed changes; and (ii) the extent to which his 'Inner Cabinet' was fully prepared to apply the outcomes agreed in practice.

There was a risk that the director could lose heart-and lose his energy for change- for these internal reforms and whether or not the director could and would exert his influence and deliver on the positive changes which had emerged from the Retreat and not allow them to become bogged down through protracted administrative procedures. In particular, much rested on the willingness of the three top executives below the director-the so-called 'Inner Cabinet'-to foster and embed the changes agreed at the Retreat because they were the actual driving forces within the Division. The Director's role was primarily a 'political' one and as a key figurehead for ITS. Progress was made however, and the reputation of the Division externally and internal organizational cohesion improved, although much still needed to be done to fully realize the agreements made, as given in Table 1.

The Retreat made an immediate difference as evidenced by more frequent, less confrontive and more collegial relationships between the key players. There was a better spirit between the various departments and overall the tone and working climate within the Division were brighter and more positive than before. My visit back two years later showed positive changes had been achieved and I was warmly welcomed, and dined in the special visitors dining room, yet more work was still needed. It was a continuing 'work-in-progress'.

Conclusion
Essentially, the Management Retreat was an initiative to redefine and reshape the direction of this critical Division's work for the following 1 to 2 years. In doing so, there was an urgent need to establish better working relationships within the top team of 10. Crucial to achieving that was the need to review existing roles and relationships. Only once that had been achieved, could allocation of specific responsibilities be made.

From the perspective of an internal change consultant and facilitator, I did my best to remain true to the following guidelines during the emotional ups-and-downs of the Retreat: To work from the issues of the client group, not mine
To work from/towards shared understandings and commitments
To pace it, my interventions and tune into the energies of the participants
To listen and watch with great care
To share the data I had with all involved
To own up to any confusions and muddles I had about what they were saying etc. and what I had not understood
To be firm and consistent in my behavior (i.e., to model the behavior I felt they could emulate)
Be very open about what I was seeking to help them achieve
To stress the importance of being straightforward.

What is most significant, however, is that the core issues which had plagued this top team were not complex, esoteric or new ones.

The core issues were frankly fundamental matters which any organization has to address and they revolve around (i) what are we seeking to achieve, (ii) who is to do what and why them, (iii) how can we best manage ourselves as a cooperative group, (iv) following a coherent and logical work plan, and (v) managing and tracking our progress and success. No matter how prestigious an organization presents itself to be and no matter how smart and well-appointed the key executives are, if these fundamental issues are not addressed, that organization will, at best, function sub-optimally.