Over a hundred years ago, Frederick Taylor proposed his now controversial theory of Scientific Management. Since then, views of work, workers, management, and indeed science have changed substantially. Taylor’s raw mathematics of operational efficiency is still alive and well, though often under other names. Whilst managers and academics hanker after a panacea, there is a deep suspicion (or is that a deep acceptance?) that the world, organization, and people are far more complex and messy. Indeed, writers like Marco Verweij (‘Clumsy Solutions for a Wicked World’ AIAA, 2011) and Michael Thompson (‘Organising and Disorganising’ Triarchy Press, 2008) explicitly advocate that there is no single neat solution.

If you look at a lot of case study teaching it bears a resemblance less to the scientific method, and more to mythic inspiration. “There was a monster. The hero used his panacea. The monster died.” Yet we know that the situation was more complex, a lot more happened than is described and the results were more mixed. And when a CEO enters an organization brandishing that same panacea, they do not look like heroes for long, and soon the board calls for another suitor to try his arm!

Scientists generally do not look for a panacea, yet they keep applying a scientific method. If they can develop an adequate description of the starting conditions, the actions taken and the outcomes, they expect that the experiment will be repeatable. They know it will not be a complete description, just an adequate one. Is it possible for managers and academics to have similar expectations of a case study? It will not give us a universal cure for all management ills, but it might help us know what situation we are in and offer a pathway to improvement.

First Principles

Core to the idea of an ‘organization’ as distinct from an arbitrary crowd of individuals, is that there are internal and external organized relationships. There are internal relationships horizontally and vertically between departments, functions, offices, etc. Similarly, there are direct and indirect relationships with a wide range of stakeholders (individuals, communities, and other organizations). If we are to be rigorous about what we are doing, we need a way to describe, monitor, or improve those relationships. Ideally, we would use a structured framework that enables us to distinguish between different types of relationships as well as understand and adjust the relational dynamics of a particular relationship. This article looks at the use of one such framework. (See ‘The Relational Lens: Understanding, Managing and Measuring Stakeholder Relationships’, John Ashcroft et al, Cambridge University Press, 2016) for the most recent outline of the Relational Proximity® framework.

The Relational Proximity® framework seeks to focus existing expertise and understanding so that organizations can constructively pay attention to relationships. It therefore looks at five established domains of knowledge: Power Dynamics; Communication Patterns; Information Sharing; Consistency Management; and Alignment of Purpose. The framework is designed to help understand what would be an appropriate configuration of each domain for a particular relationship and assess what the current configuration is.

My firm, Renuma, uses the framework to help organizations improve their internal and external relationships. Like some of our medical and pharmaceutical clients, we seek to apply an evidence-based approach to ourselves and not just our clients. We want to be able not only to have satisfied clients thriving in their complex noisy world but also we want to know why it worked and where it might work again. The framework helps us understand and explain the relational dynamics at each stage.

When we first engage with organizations, we do find quite a few ostriches, with heads firmly planted in the ground. One legal firm that specializes in crisis management was afraid to look at its relationship with the crisis insurer - “Let’s not open Pandora’s box. If we look, we might find bad things.” Of course, at one level this is quite rational: in theory, inspecting the relationship could itself cause trouble or it could be futile if nothing could be done about issues found. We and the organization have to choose to invest in relational capital to get a relational gain.

Other organizations (and sectors) seem to suffer from ADHD (attention deficit hyperactivity disorder). They perhaps know that relationships are vital and that they should pay attention to them but they are distracted by all the crises around them. This is common in the health and social care sector but we have heard it from manufacturers and bankers as well “We will pay attention to our relationships when we have got them under control.” Again, this is quite rational: there are many urgent things to get done and in a crisis, infrastructural projects are unlikely to get attention no matter how strategic they are. The urgent often eats the important for breakfast. Saying “Our relationship with X is strategically important” is often merely a statement of emotion not attention or resourced intention. Whatever we do with the client must involve minimal management attention and in the process, it must help leaders intentionally choose where their focus is needed. There are also one or two organizations with color blindness. More and more companies are adopting Integrated Reporting at some level or other. Accountancy organizations like CIMA (see, for example, ‘Rethinking the Business Model’, 2016) are increasingly saying organizations must pay attention to more than just their financial capital. Yet when discussing improvement in their relational capital, the most common question is whether doing so will improve the financial capital position. It is as if everything is a shade of grey compared to the vivid color of finances. One director of Organizational Development told us, “The CFO only has authority over the project if it has financial implications. He has said that the project can only go ahead if it is financially beneficial.” It is rational at one level: no organization can survive for long if it continuously depletes its financial capital. However, it is also true that it will not survive if it continuously depletes its relational capital. This means that we have to be able to help pragmatic people see what was previously invisible or intangible or just grey.

An NGO called us because their donor relations team and their HR department were constantly at loggerheads. They liked each other personally and they all cared passionately about the mission of the organization but they could not function effectively together. Terms like ‘mavericks’ and ‘business prevention department’ were often muttered. When we assessed them using the structured framework, they both agreed their objectives were not aligned, but they ironically disagreed about whether they understood each other. The mutual realization that the misalignment was causing perceived misunderstanding helped them see that they needed to help senior management find a way not to manage them in silos. Increased performance and lower costs could only be achieved through better relationships vertically and horizontally.

What follows is a more detailed self-evaluating case study to see how paying attention to relationships is not only possible but effective.

Core Ideas

1) Relationships are fundamentally significant. Central to good leadership of organizations is the need to ensure that the different parts are relating to each other effectively and to the various external stakeholders. Western culture tends to see the individuals but not the relationships between them. Yet it is those relationships that make things possible and relationships are ultimately why we do the things we do.

2) Distinguishing between relationships is vital. There are many relationships at many different levels. The relationship between suppliers and a bank is distinctively different from the one between the customers and that bank. At a lower level, the bank’s relationship with a particular supplier (say, its main IT supplier) is different from the one with other suppliers. Understanding how the relational dynamics are the same and different adds clarity and therefore enables appropriate expectations to be managed.

3) Leaders need to be intentional about relationships. Leaders cannot pay attention everywhere. Attempting to pay attention to the specifics of what is happening in all relationships is impossible. Equally, paying attention at the transactional level is bound to miss much significance. Therefore, strategic leadership must primarily pay attention to the underlying relational infrastructure across which those transactions pass. Like monitoring the network rather than trying to assess each message. Failure to pay attention to the relational infrastructure will create “relational risks” (friction, blockages, and blindness) and therefore operational risk. Paying attention to the relational infrastructure enables an organization to know where relationships need strengthening and where the organization has the “relational capital” to do more.

The Starting Conditions

To most of the world gas utility companies are probably only visible when their civil contractors are digging up roads to deal with a leak, extend the network, or do maintenance. In order to do their core business well these companies need to minimize disruption of the road network and still get all the work done. Our client realized that if they failed to pay attention to their network of pipes or their network of relationships, they would fail in their core business.

Their relationship with the local authorities, who co-ordinate the road works, is critical. As is their relationship with the major civil contracting firms. The utility company suspected that there was a correlation between the strength of the relationship between these three partners and performance; the best regional relationships delivered at lower cost with fewer delays and higher staff morale.

The client chose to evaluate the effectiveness of our method to assess the relationships between one of their street-works teams, the corresponding civil contractor’s team, and a local authority (i.e. a three-way relationship between the teams of the three organizations). They seemed to see us as relational engineers, helping them inspect and maintain their network.

The client chose a set of three teams who were all willing to participate in the study. This was important because the relational dynamics with an uncooperative partner are radically different. Similarly, they chose teams who had some established track record with each other even if their history together was mixed. This generally good relationship was not always operationally effective. For example, the inefficiencies in the relationship meant that there was a backlog of eight complex critical works, with one job blocked for six years.

Representatives of all levels and functions with regular interaction with the other parties were identified. They included managers, admin and support staff, and front-line engineers. At a short briefing for each team, the approach was explained and they were invited to complete an online perception survey about their team’s relationship with each of the other two teams, on the understanding that some of them would then be asked to participate in two half-day workshops to explore and deal with the issues raised. The online survey involves twenty structured questions, based on the Relational Proximity® framework described in The Relational Lens plus two open-text questions. It took the participants three to five minutes to complete the surveys about both teams.

The structured framework looks at five areas: Power Dynamics; Communication Patterns; Information Sharing; Consistency Management; and Alignment of Purpose. By comparing and contrasting the perspectives of each side and level with each other and with other relationships, we recognized patterns in the relational dynamics that were likely to be causing operational issues. Figure 1 shows a summary, comparing the perspective of the local authority with the combined perspective of the utility and contractor teams.

Since the structured framework is about the relational dynamics itself, it is possible for our team to also form their view of how the parties can safely engage together. By brief discussion with the three senior managers, we could confirm that we had an adequate description of the situation and that careful exposure to the dynamics would not cause any untoward harm.

Taking Action

We therefore configured the first workshop to enable the teams to get a mutual understanding of the relation dynamics and agreement in principle to address the issues. By sharing the aggregated data of each team with all the participants simultaneously, all sides could quickly see what they agreed was working well in the relationship, what they agreed needed work, and where they had different perspectives about how it was working. For example, each of the three teams thought that their team took the interests of the external stakeholders (regulators, public,c, etc.) more seriously than the other two. By exploring the expectations of all external stakeholders together, a more collaborative approach to meeting their needs became possible. The data analysis also identified the need to improve communication flows between front-line staff, their counterparts, ts and vertically in their organizations.

The second half-day workshop focused on action planning, giving a chance to practice a new collaborative relational dynamic whilst agreeing on ways to optimize their operational processes together. By the end of the session, those present were confident that their relational dynamics had improved and that they knew what needed to be done to integrate others into the new way of working. For the experienced engineers, the process of improving the relationships was not about awkward emotive exercises but rather a matter of pragmatic problem-solving based on real data.

From our perspective, we ensured that all of the proposed actions were based on an analysis of the description of the starting conditions and provided a reasonable forecast of how things would change if implemented.

Following the workshop, the three teams entered a busy summer period of maintenance whilst implementing the agreed action plans to change the relational dynamics. Normal management procedures were used to ensure that the action plans were implemented as part of normal activities.

Checking the Outcomes

Four months after the workshops, we re-surveyed the participants and looked at the operational outcomes. This enabled us to check whether the workshops and operational actions had the expected effect on the relationships and operations. Figure 2 shows the change in the perceived quality of the relationships, confirming that the actions mostly had the expected effect on the relational dynamics. Underlying that data, there were a couple of areas of lower improvement. These correlated with the action plans that had not yet been fully implemented.

Some of the operational outcomes have a longer lead time (such as staff retention), but there was already a clear improvement in operational performance. In addition to the normal summer work, within the four-month period most of the critical works backlog had been cleared (all eight were cleared within six months) and the compliance with performance targets had increased (resulting in 30% lower fines over the year for the utility company and the contractor).

A third, smaller, sample was surveyed after a year (as part of a wider assessment of relationships with local authorities) which showed that the operational and relational improvements had been maintained.

Discussion

Our client recognizes that positive answers have been demonstrated for criteria 1-4. Criteria 5 will be verified by working with two further sets of teams. The use of the Relational Proximity® framework enables the assessment of similarities and differences between the original set of three teams and the two new sets; wider organizational learning is therefore possible. It also enables us to quickly scan all types of extern stake holdersere relationships, so that during their annual business planning cycle, their senior managers know what relational capital they can depend on and where they need to invest or tread carefully to implement their operational plan.

Having applied this approach more widely, (including addressing internal and external relationships across public and private sectors), we know that assessing the relational capital in a structured way enables both improvement of performance and wellbeing. Where we have willing parties who have awareness of their relationship, the use of the online survey and discussion around the data can be done with minimal disruption and in a controlled manner. The particular approach outlined above requires augmentation when the starting conditions are different (for example, if not all the parties are willing to participate or are not aware of the relationship) but the principle is clear it is beneficial to pay attention to the type and character of relationships. As leaders, we look for ways to understand what is happening and to assess self-critically whether what we are doing is working. A crucial element of that assessment is to be cognizant of our impact on our organization’s relational infrastructure and how the relational infrastructure impacts our leadership.