By Patricia McLagan

There is a lot of talk today about knowledge management for organizations. Much of it focuses on the use of information technology to capture, store, and spread information. But there is a more fundamental question. How can we tap into the world’s knowledge about what really works in order to get results that matter?  

The ’80s and ’90s popularized the idea of “best practices,” but in fact many best-practice methodologies are flawed. It is common to first decide what organizations we think are good and then to present what they do as “best.” There are several things wrong with this approach. Such benchmarking may catch an organization at the top of its life-cycle curve just before the fall. It all too often focuses on big-company practices that may be the best of an old paradigm (such as performance management practices that reflect codependent boss-subordinate relationships). Gallup’s First Break All the Rules research presents a different perspective: There really are no great companies—just great work groups.

Part of the problem is that the paradigm is faulty. Instead of working backward from a “model” company to arrive at its practices, a far more interesting and useful approach is to clarify the results we want to investigate and find out what practices relate to those results. This requires a more rigorous approach to research in which the company itself is incidental.

Focus on Results

There are two easy ways to think about organizational results: One involves focusing on constituencies; the other is to identify broad categories of strategic goals. Here are some constituencies and the kinds of results that relate to them:

- Customers—great organizations attract and retain them.

- Employees—great organizations attract, retain, and get high performance from and with people.

- Investors—great organizations get premium funding.

- Future generations—great organizations build (and don’t destroy) value for the future.

- Suppliers and alliance partners—great organizations synergize these relationships.

Here are some broad performance categories that are important to organizations today:

- Globalization—great organizations that globalize do so in ways that synergize self and local interests.

- Change—great organizations constantly improve and innovate.

- Learning—great organizations optimize knowledge acquisition and transfer at all levels.

- Leadership—great organizations have immediate access to the governance competencies they need—their decisions optimize today’s functions and prepare for the future.

Once we determine the results that define great institutions, we can conduct and apply research that identifies the practices leading to those results.

Find Results-Focused Research

For several years, I have been scanning and trying to interpret research that identifies practices related to successful results. I wish there were more of it. Out of a thousand articles and studies on a given topic, only about 10% focus on the results-practice connection. The rest link practices and practices (the relationship between management communication practices and employee actions) or practices and concepts or constructs (the relationship between peer collaboration and motivation). While such studies are interesting and potentially useful, research that investigates the results-practice connection remains scarce— and desperately needed.

A recent massive review of worldwide organization development research by the National Academy of Science concluded that research to date tells us little about practices that work. It also concluded that organization development is a youthful field full of fads. Some of these fads may work, but without research to discover what works and what doesn’t, we continually reinvent the wheel or miss out entirely on key success factors.

A more scientific approach would allow consultants, leaders, and workers to focus their decisions and actions—regarding, say, more productive uses of their time—on the findings from good research. It would allow us to test and refine our theories and to cease practices that don’t work. My views of participation, for example, have shifted and been enriched by explorations of international research. There is substantial evidence that communication about change—its relevance and benefits to customers, the company, and the workforce—can lead to as much employee support as participation can. Furthermore, while participation in decision making may get people enrolled faster, it has little to do with long term commitment and absorption of change. A key to successful change implementation is that the change be one that improves work in some way. In my more philosophy-driven days, I would have given participation the nod and not been as conscious of the more critical determinants of success.

Noteworthy Findings

When we focus on the relationship between results and practices, we confirm what we “know,” become more conscious of what is important, find support for our own beliefs, or find ourselves rethinking views and priorities. Here are a few noteworthy conclusions from worldwide research findings to date. Do you already “know” them? Would it help you to be more conscious of them? Do they support your beliefs? Do they give you a fresh or even a surprising perspective?

Success with Customers

Customer/client satisfaction surveys don’t mean much. The true measures of customer satisfaction is repeat business and the “positive message to a friend” phenomenon. In the latter case, people are likely to tell two or three friends about a good customer experience, and 10 to 15 friends about a bad one. The only rating that matters on a customer-satisfaction survey is the top rating. One typical study found that people rating their satisfaction level as 5 on a five-point scale are six times more likely to repurchase than 4’s.

Success with Employees

While equitable pay is very important, such items as supervision and support methods, communication, hiring, and “having a best friend at work” are the key retention factors for people. Pay ranks near the bottom of the top 10 reasons why people stay in a company. This defuses the myth that you can “buy” talent that stays.

Organizations that encourage positive relationships between employees and clients, and among employees, are more creative than those that do not.

Improving HR practices at the same time as restructuring makes it more likely that the intended changes will work and be sustained.

Success with Investors

One study of over 1,000 companies throughout the world found that simultaneous focus on customers, employees, and shareholders was one of eight traits distinguishing the top 5% in performance.

Organizations that gain and sustain market share are clear, focused, and adamant about vision, goals, and measurement (the “what”). But they are participative and flexible in implementation (the “how”).

Investors will pay premiums for well-managed companies: between 17 and 27% more than if a company is merely financially successful.

Global Success

Organizations that have more complex products and services are more successful globalizers than those with simpler products. The theory is that these companies have mastered the skills of adapting and learning that are critical for success in new environments.

Competition is good for performance. Countries that encourage and support competition are more productive. They have higher GDPs and higher growth rates.

Success with Change

Avoid “one size fits all” approaches to change. One expansive study focusing on all the major changes in the global semiconductor industry between 1985 and 1995 concluded that some changes were revolutionary and required large amounts of experimentation and resources, a much looser structure, and broader involvement in planning. Other changes were evolutionary and could be efficiently managed more traditionally, using standard project management methods.

Understanding and honoring the psychological contract between workers and the organization is a key success factor in change management. A downsizing organization must take a different approach when the expectation is for high loyalty in return for job security, versus a free-agent workforce.

Research findings can stimulate dialogue and ideas about innovation and change in an organization. They can provoke insight and creativity: “What action ideas does this trigger for us?” We are at a stage in the evolution of institutions where we need to find the things that are working and then appreciate, adopt, and build upon them. This is how nature works in evolution. It’s how we can and must evolve our human enterprises.

Fulfilling Drucker’s Dream

Peter Drucker long ago pleaded for us to see management as a practice. He argued for us to be as rigorous and questioning in our management as in our technical approaches. Perhaps we need it even more in management (I mean leadership as well, for those who like to distinguish the two), because management is an amplifier—a lever for change and high performance. Such rigor requires that more of us take a research-savvy view. This means a number of things:

- Be constantly aware of the connection between results and practices. Ask questions like, “What results are we trying to accomplish?” “How will doing this affect results?” “What impact do we expect this program or decision to have, and how will we measure it?”

- Question assumptions and conclusions. When someone makes a claim, “This works . . .” or “research shows . . . ,” ask, “What research?” “Who was studied?” “What is the basis for this claim?” “What is the source?”

-Find and pay attention to articles, books, and presentations that are data based. Fortunately many are in useful formats and language for easy access and practitioner use.

- Do research yourself. Work with Ph.D. candidates to help them focus on results practice research that matters to you, to your organization, and to your field. We need dialogue between practitioners and researchers. We need high-quality case studies and studies that draw information from many organizations and cultures. Get your company involved in research projects and surveys.

- Be ready to challenge your own assumptions. Always be open to insights from well-executed studies.

Interestingly, a recent American Customer Satisfaction Index (ACSI) concludes that the only sector showing improved quality and customer satisfaction ratings today is the government sector. Ratings for private enterprise are dropping!—and this is happening at a time when overall service quality seems to be either stuck or declining. The ACSI credits the government’s implementation of quality programs, but these can only go so far. Real and persistent change requires a sustained change of mind-set and commitment from leaders. Those who choose to take up the challenge will make a difference for decades, perhaps centuries, to come.

Conclusion

The pace of change has accelerated such that major change cycles are happening within our lifetimes rather than across lifetimes. This makes us more aware of change and makes change, innovation, consciousness, flexibility, and openness more prominent concerns and survival tools. I can remember times early in my consulting career (over 30 years ago) when people said—and I agreed—“let’s get this change over with so we can get back to business as usual.” The implication was that stability was the rule, change the exception. Well, the tide has turned. Fortunately, human beings, like all of nature, are programmed for change. The question is, will we change ourselves fast enough to become wise partners in using the information, communication, and workplace technologies we have unleashed?

Too many organizations persist with methods that don’t work, often for social, political, and power reasons. One way to deal with this is to increase people’s consciousness and emotional intelligence. But, we can also take a more scientific approach to governance, culture, and decision making in our institutions. We can bring knowledge from the world’s research into our own practice. This is both our challenge and our responsibility.

PATRICIA McLAGAN (PatMcLagan@cs.com; www.mclaganinternational. com) is CEO of McLagan International, Inc., a 30- year-old change research, training, and consulting company located in Washington, D.C. She has advised on major change projects during critical transition points for NASA, GE, Citibank, financial services companies, telecommunications companies, government agencies, and several prominent organizations in South Africa. She is the author or co-author of many books and articles, including Change Is EVERYBODY’S Business (2002) and The Age of Participation: New Governance for the Workforce and the World (1996).