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Managing For Better Outcomes
From: Columbia University
| By:
William Eimicke |
EDITOR'S INTRODUCTION |
Managers must maintain leadership  and balance structure, predictability, and change in order to be competitive and innovative in today's global marketplace. These fundamental tools of management are as applicable today as they were 20 years ago, but the pace of change and innovation has radically altered the need for constant creative management.
The story of Transitional Work Corporation (TWC) demonstrates how one organization capitalized on a timely and much needed commodity, an innovative management plan, and generous funding from The Pew Charitable Trusts to create a successful initiative for welfare to work training. When their structure began to show signs of weakening, they expended ample resources to discover what wasn't working and ultimately to restructure.
William Eimicke, director of the Picker Center for Executive Education at Columbia University's School of International and Public Affairs (SIPA), advised TWC CEO Richard Greenwald, a graduate of Columbia's SIPA program, during its reorganization. Eimicke also guided Greenwald in the creation of a multimedia case study to document the development of TWC's welfare to work program, and its process of reorganization. Eimicke explains that innovation and change are fundamental to an organization's vitality, but they are also necessary to innovate and repackage themselves in an economy where one year a company is at the top, and the next it may be struggling to survive. In both cases, Eimicke conveys that the specific lessons of this case study apply to all managers who want to get the most out of their staff. |
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| Transitional Work Corporation CEO Richard Greenwald, his staff, and clients explain how TWC is in the business of helping people on public assistance get and keep jobs. | |
Fathom: What is the Transitional Work Corporation? |
William Eimicke: The Transitional Work Corporation (TWC) is a product of Welfare Reform, which was the national change approximately six years ago in how we provide support for primarily unemployed women with children in the United States. |
Transitional Work Corporation, based in Philadelphia, is in many respects the brainchild of the staff at The Pew Charitable Trust, which supports non-profit educational, health and human services activities amongst others that involve citizen participation to effect social change. They were seeking to bring together the state and the city of Philadelphia, who had distinctly different ideas of the way welfare reform should go. In short, the state was very strict--make people get a job, get them off welfare--tough love. The city was the opposite--these people are troubled, they have lots of problems, it would be hard for them to get a job, we think we should err on the side of being soft. |
Pew saw a way to bring the two sides together, put their money up, and ultimately the Transitional Work Corporation was born. |
Fathom: What is TWC's philosophy and how have they succeeded where other organizations with the same goals to move people from welfare into the workplace have failed? |
Eimicke: They focused on employment rather than social services, and created a true business-like environment. Instead of characterizing themselves as a social service agency, they characterize themselves as an employment agency. They treat their participants as candidates as you might at a search firm for higher-level employment. So the message is you're a candidate for a job, and how can we polish you, find a match for you, and bring out your highlights. |
The historical approach is that you train, educate, train, educate, and ultimately people are ready for work. Part of the basic philosophy of TWC is the way you learn how to work is to work, and that's where the "transitional" comes in. Who's going to hire somebody with a horrible resume and no experience? The TWC approach is using a network of employers through The Pew Charitable Trust. They've gone to non-profits and asked for their help by training someone if TWC takes care of their education and support. Most non-profits need help and under the circumstances will give them an opportunity to work. |
You can't just use tough love and make people go out and get a job if they've never had a job and have all these other issues. No matter how tough a person is, even if they get a job it's going to fall apart. I think what TWC has tried to do is to recognize the realities that people need skill building and barrier busting, but that in order for them to learn how to work, they must work. And that's been the marriage--their bright idea--and it has turned out to be successful. |
Fathom: There's a strong motivation at TWC to be successful, and to constantly reevaluate their strategies, which makes them unique. What drove the leadership behind TWC, the president and CEO, Richard Greenwald and others to manage so enthusiastically and creatively? |
Eimicke: The way our world is advancing on almost a geometric level, being successful is not enough. The world keeps changing so rapidly that success in 1999 can very easily turn into at best pedestrian performance in 2000, if not failure or going under. And it's not just the Internet boom; you can go industry by industry. The exciting thing about our times is that because of rapid communication, because of an increasingly educated world, because of globalization, because of innovation, we are constantly raising the bar almost daily. Organizations may start to succeed and say, "Great we're successful. We'll be fine." But if you don't keep asking, "How can we be better? How can we do a little more?" You're doomed, and that wasn't the case 15 years ago. It wasn't the case 10 years ago, but it is the case now. |
I think one of the interesting things about TWC is yes; they were innovative when they started and yes, you could say they broke ground. But why didn't they sit still? I think part of it is that the kinds of folks who were there came from a number of innovative organizations and a lot had advanced degrees. They recognized that if they sat still, they'd fall behind. There has been an entrepreneurial basis from the beginning of the organization, but then also a culture that says we'd better keep getting better or we won't be innovative six months down the line. |
Fathom:Is that a universal rule at this point to reevaluate every six months? |
Eimicke: Yes, more or less. The Albert Einstein of management is Peter Drucker. If you do any reading in management you need to read Drucker. Even in his most recent book as he enters his mid nineties, he is saying that change in management is what it's about because the world keeps moving. You cannot have a fixed model. In the mid twentieth century General Motors was the model for everybody. By the late twentieth century, GM was the poster child for failure. Were they stupid to begin with? No. What changed? The environment changed and they didn't change with it. That change just keeps escalating more rapidly, so in today's paper you read about AOL Time Warner--two years ago the most innovative idea in the world and now they are struggling. People are saying that they didn't keep thinking it through. A year and a half later they are in jeopardy, and people are thinking that their model isn't working any more. |
I think we are in a very exciting time where we can keep getting better, but as a manager, it's an extraordinarily challenging time. Even if you start to do things right, you can't say I'll sit back, I've got my standard operating procedures, I've got my folks, I know what I do, we're just going to sit tight and keep pumping out the widgets. Then within eight months, you've gone from 60 percent market share to 20 percent market share. Because everyone else has already learned what you do, and they've innovated and innovated and innovated. |
Fathom: How do you teach management now? Besides being open to change, what are the fundamentals? |
Eimicke: The fundamental components of how to manage an organization don't change. You need a structure, you need a human resource policy, you need to recruit people, you need to promote people, and you need to have a budget system. You need to have performance management indicators, you need to have leadership. The same categories you'd have in a course on management haven't changed all that much, but what's different is you don't fix a strategy and stay with it. You have to constantly be revisiting that strategy. |
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| The transitional job is like a paid internship at a government, city, or non-profit agency. | |
The real challenge for a manager today is how you balance the predictability of an organization, which is one of its key benefits, with the need to change so that you're always competitive. As Drucker says, you have to have a balance, because part of the magic of a good organization is predictability. You want to come in every day and your desk is there and the lights are on, and if it changes everyday you can't function. The great thing about Drucker is that he has simple rules. His current rule is to spend 80 percent of time and resources on keeping an organization going within its predictable structure, and 20 percent of time and resources innovating. You can't innovate every day, and you can't keep changing or nothing works. But the idea, which is different from 10 or 15 years ago, is that both things have to be in your mind all the time as a successful manager. |
Fathom: Why did TWC's initially successful model require restructuring? |
Eimicke: In simple terms, they had a great idea, they had funding, they had acceptance and support, and their model worked. They grew rapidly, starting with three people and growing to 88 people. Growth is always a problem for organizations. New people need more structures. It's quite a change when you go from an entrepreneurial situation with a bunch of people in a room all struggling together to a bureaucratic organization with human resources, a budget, etc. That's one issue that arose for them. The result was a typical response rather than an innovative response. They set up an organization that was basically a bureaucratic, departmental, stove-pipe organization. In other words, the key departments of the organization were functioning as separate companies, with different and often conflicting decision rules--these people work in budget, these people work in employment, these people work in orientation. They continued to function well, but as they looked at their performance indicators, instead of constantly placing more and more people quickly in better jobs that slope of performance was dropping. That set the fire to say we can't keep doing what we're doing. When they analyzed the situation in more detail, several things popped out pretty quickly. One was a failure of communication between the various divisions. Instead of departments cooperating, they were competing. Instead of communicating they were fighting. That was clearly a problem. |
The second thing was that participants, their clients, were falling through the cracks. Things may have worked out well in orientation, but they were lost in employment. So, based on the training and the education of the people involved and their knowledge about management and management science, they searched the literature and other case studies and experiences about how people respond to this type of problem. They learned that a team-based organization was a way to overcome their problems, because it involved bringing people from different divisions together to work collectively in groups, around the customer instead of around the organizational structure. |
Fathom: How can an organization use this evaluation process for other businesses both for profit and not-for-profit? |
Eimicke: I would say that there are a series of questions that virtually any organization can ask themselves. The first thing is that the manager has a series of tools that can affect an organization's performance. Structure is one. That's the one they used, but it's not the only one. Performance indicators are another. Part of the reason they knew they had a problem is because they had performance indicators and they were not looking as good. Leadership is another tool you can use by recruiting different people and having different bonus structures. Part of the lesson here is as a manager, you need to think of management as a tool kit where you have different kinds of techniques you can use to improve an organization's performance. The same tool isn't appropriate for every problem. |
In this particular case, I think they used very good judgment that changing the structure would be effective in improving their performance. But, if you only had six people in your organization, changing the structure is an irrelevant tool because you're working as a team already. You have to think of other things--maybe it's recruitment, maybe it's bonuses, maybe it's getting additional resources, maybe it's new leadership, maybe a different board. |
I think the second important lesson is that you shouldn't get too cocky when you're succeeding. Good management is attentive always--even when things are going well. The outside world is always changing, and people can get stale and lazy doing the same thing over and over again. To some degree I would argue that most managers think you only manage when things are going badly and I think that's when organizations get in such bad trouble that it's too late to do any different. Management is a day- to-day responsibility that needs constant attention. |
Fathom: What was the process of reorganization like for TWC? |
Eimicke: The reorganization of TWC took about 90 days or so. They recognized the problem at the beginning of the calendar year of 2001, and they assembled an internal group of their best analytical people. They talked to virtually everyone in the organization about how they felt about their work, what were the obstacles, what worked well, how they could improve things. It created an open environment of asking, Are you happy here? Is your job productive? What gets in the way of your doing your job? Then they contacted Columbia University and asked if we could put together a team of students who could volunteer to be part of this restructuring effort. |
Over a total period of six months, the team analyzed the problem, came up with viable alternatives or options, finalized a plan, announced a plan and implemented the plan. The reorganization went into effect around July 1, 2001. There was a period of time beginning July 1, where there was a transitional phase where the winners and losers started to sort out how they felt about all this. |
The good news is that as a result of this particular reorganization no one lost their job, no one was fired, no one had their pay reduced. So, yes there were psychological winners and losers, and power winners and losers, but no one really suffered anything extreme in terms of loss of pay or loss of job, which helped it go more smoothly. |
Fathom: How is TWC's reorganization a model for other organizations? |
Eimicke: The gamble of any management change is whether it will work or not, and change is not free. Even if you don't spend money for McKinsey or some high-priced consultant, it takes time and energy. It takes focus away from whatever your product line is, so if you're focusing on reorganizing you're not focusing on production. So, there is a cost and the smaller the organization, the higher the cost. This is not something to enter lightly. Innovation is costly, and it disrupts people's lives. It means you need new standard operating procedures. It means that for a time your customers are confused. You may need to change space. You may need to change titles. You may need to change pay. That being said, you don't need to hire a large, high-priced consulting firm to reorganize. TWC is an example where they were able to get a lot of free help. They were able to get universities to contribute student labor for student projects. They were able to get foundations to provide support. They were able to get help from their board members who all ran their own businesses. There are creative ways to think about change if you believe that change is necessary. |
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| The next step after six months is permanent employment. TWC has a 96 percent rate of hire. | |
I think even the smallest organization that feels some form of change is necessary shouldn't be deterred by the price tag, but there is a price even if it doesn't have a dollar sign, and the price is disruption of your organization as you change. |
When you create change you create fear, uncertainty, and worry. If you're the creator of change you're the protagonist, the troublemaker. So, I think all leaders who create change create problems and make their jobs harder, but it's the price of leadership. I think Greenwald and many other good leaders recognize this, and in the end if you're right, you're a hero. |
Fathom: What happens when an organization is especially dependent upon their CEO and he or she decides to move on? |
Eimicke: That's perhaps one of the most difficult management issues to consider. More than likely the CEO will eventually leave and it's just a question of when. Also, my experience has been that your ability to influence who replaces you is limited. Leaders like to believe they can create a transition plan, but more often than not, it doesn't work out that way. Once you say you're going, your board of directors, whether a non-profit, private sector, or government organization, says thank you very much, you were terrific--now we'll decide what to do. |
That being said, I think the CEO's responsibility is to make sure that their structure is healthy and that they have good people. My advice to leaders would be to invest your time and effort in solidifying that middle and upper middle management because they are the ones who will continue the organization and for the most part they are most influential over the organization. They make the policy day to day that the line employees execute. That doesn't mean that big policy doesn't make big shifts, but the day to day of the organization is really run by middle management. My experience has been that change in leadership is usually not all the way down the line. So, maybe there will be a new CEO, maybe a new COO, maybe a new attorney, budget officer, but then the rest of the organization stays pretty solid. |
Fathom: What happens to an organization like TWC when politics and policy change? |
Eimicke: Some businesses run their course when they outrun their need. This September 2002, there will be a new welfare policy. The question is whether it will be almost the same, or dramatically different. I think most observers sense that given all the things going on in the world--terrorism, the economy, and the priorities of the current administration--the relative success of welfare reform that the reauthorization will be more of a tweaking and this change will be more favorable toward transitional work. In that sense, if you look at organizations such as TWC and similar non-profits or community based organizations, I think their prospects are pretty good in the global sense. But, that doesn't guarantee that TWC will do well even if the federal funding is there. |
Welfare policy and welfare funding in the US is primarily governmental. The Pew Charitable Trust has been important in helping TWC--foundations make a difference, but most social welfare funding in the US comes from the government and that means it's political. So, you also have to play the politics well, and be on the right side of the winners rather than the losers. |
Fathom: Can someone like Greenwald go into for-profit work or another sector after TWC with the skills he has acquired? |
Eimicke: He could work for a for-profit employment agency. He could be a government commissioner or deputy commissioner. He could be a foundation grants officer. He has learned a lot about how foundations work and how governments work, and he has learned a lot about how you get people jobs. |
More and more I think we're seeing and will continue to see people shifting sectors. The typical person leaving college in the 1960s or 1970s went to IBM or the Red Cross or the government, and that's where they hoped, if all went well, they would retire. That's just not the case anymore. There's the theme of innovation and change in managing organizations, but we also need to bring that to a personal level to innovate, repackage, and recreate ourselves so that we are able to move on whether we want to, or we have to. |
Fathom: What would you like Columbia students and those outside Columbia to gain from examining a case study like this? |
Eimicke: You need to have a good tool kit to be successful as a professional. Another lesson is change; the inevitability and the need to constantly change and to do better. You must also measure your performance. If you can't measure your performance, how do you know whether you're up or down? You've got to have indicators. I guess the last point is leadership can make a difference. I think that there's a view that leadership is still in a lot of peoples' minds an image from the Middle Ages of a white man on a white horse leading the charge. But that's not what leadership is. It's a variety of people of different genders and races and skills who are able to articulate to the people they work with a vision, a methodology, and a commitment that says, "I have the means to get us from where we are to where we should be." In the end, that's more powerful than the image of years gone by. If we could transport that tall man here from the Middle Ages, he wouldn't be able to earn a living. |
Management has changed and as a management specialist part of what I continually try to drum into people's heads is, "Don't think you can't be a leader. You can." It's something that's learned. |
Fathom: Is there a way for managers to maintain their own informal case study as a tool? |
Eimicke: Every manager can create their own case study by keeping a kind of journal of what's going on, what problems you're confronting, what strategies have been used, how they work, and how they didn't work. In many ways by doing so, you are creating your own case study. As you look at the thought process, the changes, the applications and the outcomes, you can create your own learning mechanism. |
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Learn more about Transitional Work Corporation's reorganization by viewing their case study, "Managing for Better Outcomes Part 1: Reorganization as a Strategy for Performance Improvement."
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Continue reviewing the case study, "Managing for Better Outcomes Part 2: Implementation Issues."
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