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The Greenhouse Effect

The Greenhouse Effect

Change is inherently messy. Isolating that messiness in a protected environment gives employees the freedom to experiment with new processes - and the opportunity to learn from mistakes without affecting the bottom lineChange-induced corporate turmoil is certainly painful, but it's equally inescapable. It's kind of like spring cleaning: if you're really cleaning (not just tidying) a room, it will get a lot messier before reaching its final, pristine state. Chairs get shoved around. Magazine stacks teeter in the corner, waiting to hit the dustbin. In fact, many experts say that such transformations inherently beget untidiness. It's unsightly but necessary. Same with business change. All this may sound logical in the abstract. But when change-induced messiness lands in the middle of your career, logic is apt to give way to panic. Then the urge is to fix things fast.

Most corporations seek to discipline change - be it functional or technical - by channelling the whole unruly mess through a structured methodology of some sort. Frankly, the impulse is understandable. After all, a linear and structured process will look much better on a PowerPoint slide than an amorphous cloud shape marked "change". A project manager can explain a methodology in detail; it's much better than pointing to the change cloud and saying airily, "Well, this is where the whole thing gets very messy: users get annoyed, the new processes break down and we get downhearted."But imposing structure on change is tricky. Too much of that rules-based stuff can squash vital creative chaos like an overripe berry. And to add another element to the mix, change-management planners must propagate those new processes and ideas in corporate climates that are sometimes downright hostile.

The trick is to design a structural framework that contains ample space to experiment with and learn from new ideas and processes, and somehow build it so that the fledgling change project can grow to maturity unharmed.

Greener paths

One such framework is the brainchild of the folks at Symmetrix, a management consulting firm in Massachusetts. Called a greenhouse, it can help minimise the risks involved in process change, says company president Don Hawley. The basic idea is to assemble a core greenhouse team that will take whatever you want to change, be it one department or a process that cuts across four different functions, and spend several months analysing the problem and redesigning the environment. Then, rather than trying to implement the new ideas in a department entrenched in old methods, a greenhouse project involves moving the change team to a separate physical environment, giving team members some real live clients to work with and letting them have at it. "It's as close as you can get to taking a small piece of the business and spinning it off as a separate P&L," says Hawley. By keeping the greenhouse away from the rest of the corporation, participants are removed from old-line assumptions and biases. And if greenhouse workers can show measurable benefits from their labours, the rest of the corporation may be more willing to accept the change.

How does it work in practice? Watson Wyatt Worldwide (WW), a human resources benefits consultancy with 89 branches around the world, has run a greenhouse project for more than two years. WW's greenhouse is about four towns and 40 minutes away from the office where executives first conceived the project.

Greenhouse leader Christopher Navarro says the experiment has given his team the freedom to try new things and learn from mistakes without hurting the business. Green-house workers carried only about half a normal workload when they first began the project, devoting the other half of their time to process redesign. Over the project's two-year life, greenhousers ramped up their client loads, and now each one has a full load. Navarro says the greenhouse workers already have cultivated processes that could save time and reduce costs for the entire company. According to Hawley and Symmetrix associate John Lee, who were involved in the early planning stages of the project, Dan Holmes, former WW vice-president and managing consultant for the "seed" office, was drawn to the greenhouse model as a method of cutting both administrative costs and turnaround time. "Wyatt was interested in help with its administrative processes," says Lee, "but [managers] wanted help such that day-to-day activities weren't disrupted. They wanted a concept with a controlled, spreadable environment." The greenhouse methodology met WW's needs, and a team of WW and Symmetrix people started analysing benefits administration problems in early 1995.

WW has retirement consulting practices in a number of areas, the most important of which is "defined benefits," which are retirement pension plans paid for by employers. Benefits administration follows an annual cycle that is highly regulated by the US Federal Government, making much of the administrative work repetitive, rules-based and cyclical. Yet Lee says that the administrators supporting WW's retirement benefits practice, whose duties include calculating a corporation's required annual contribution to a pension plan, followed no governing rules or processes. WW consultants worked with one or two dedicated staff members, who were responsible for the entire administrative process for that consultant's clients. Moreover, consultant/administrative support teams developed highly individualised methods of doing business, which varied from office to office. "There had to be a way to make processes more streamlined and productive," says Lee. "They were all working ungodly hours, and everybody had his or her own special way of doing things."The greenhouse planning team decided to concentrate on defined benefits administration because that constituted the bulk of WW's business. Team members started interviewing WW employees in late February 1995, identifying administrative tasks (as it turned out, about 70 per cent of the work was administrative) and examining how they were carried out. Lee says there was a lot of wasted time in WW's traditional client approach, in which one person performed each step in a linear process. For example, if a benefits administrator were figuring out a company's annual pension contribution, which the company calls a valuation process, he or she would have to send queries for information to the client and other third-party administrators and wait for the answers. "There was a lot of putting down and picking up and getting reacquainted with information," Lee says. "We wanted an environment where you could pick up a different job while waiting for another thing."The planning team designed a parallel valuation process rather than a serial one, based on standard methods of performing tasks. Members also prospected for best practices throughout the company. The planning team wanted greenhouse workers to use agreed-upon processes to work on multiple clients without having to learn dozens of byzantine, client-specific rules. That would allow workers to pick up a task somebody else had begun, using a standard procedure to complete the job.

The team also began to evaluate the different IT systems used to perform benefits administration, with the goal of making the best systems the greenhouse standards. For example, the team decided to use Pencost, a system built by the company's Dallas office and used by perhaps 25 per cent of benefits administrators, to provide standardised worksheets to determine pension valuations.

The greenhouse would also act as a beta site for two new benefits administration systems that were scheduled to be used across the company. Since the greenhouse team was in charge of redesigning defined benefits processes, it was also responsible for working out the bugs in the new IT systems built to support those processes. Thefirst was a "data scrubber," a system developed by WW's Office of Information Technology (OIT). The scrubber's purpose was to validate new pension data, check for missing numbers and anomalies, and reconcile the new data with the previous year's information. The second, a workflow system to be built by Symmetrix, would route and track the administrative work on an enterprise-wide basis.

Building a greenhouse

After locating and renting an office building in early 1995, the greenhouse team faced its next tasks: transforming the physical space into inviting terrain and transplanting suitable greenhouse inhabitants.

Greenhouse leader Navarro says the team rejected the typical "cubes in the middle, offices against the windows" design. Instead, it went with an open floor plan intended to enhance teamwork. The cubes have low walls, and the hallways are wide, with just a single glass-walled office and six unreservable "huddle rooms" situated in the middle of the space. That way, says Navarro, everybody can enjoy the windows. When it came to staffing the greenhouse, the team picked a mixture of in-house WW people and external applicants, but they all had to be eager to try the new methods. The group faced some resistance from other WW offices, says Symmetrix associate Julie Roberts. Some office managers were not comfortable releasing people to work for the greenhouse, fearing a disruption in their own offices. Plus, because greenhouse staff would carry only half a workload, there was a perception among some of the remaining employees that the greenhouse people would not be working hard, even though they were taking on the added responsibility of developing new processes that would ultimately make everyone's job easier. "[But] those are some of the normal challenges of change," says Roberts. She adds that more senior-management support may have helped put those fears to rest. The greenhouse staff was up to about 15 people when it opened in September 1995 (there are now 18 employees). Navarro says his team went through a couple of break-in phases. "It was euphoric at first," he says. "We felt like we were really contributing new ideas." Of course, that high couldn't last forever.

"Then reality sets in," he says. "You realise that you still have deadlines and clients, but you're trying to do it in a brand-new way. You get hit with a sense of, 'Hey, this is a lot of work!' "Navarro and his group worked through the new processes; they held weekly operational meetings to discuss what was and wasn't working and talked informally about processes throughout the week. Navarro credits the new office layout with encouraging ad hoc discussion and a new-found sense of teamwork - far different from the traditional mentality of, "we only work on this client".

He remembers one afternoon when he ran into a problem and asked his next-door cube neighbour to help brainstorm. "All of a sudden, three other people wheeled over, and we started having a conversation about it," he recalls. "We solved the problem right then. In [other WW offices], you can sit next to people and never really interact." It also helped that everybody was working from a standard group of procedures and could discuss issues from a common reference point.

To integrate IT systems into the greenhouse, the greenhouse inhabitants incorporated similar team-based problem-solving methods. For example, they used a "war room" to help refine and debug the data scrubber. The idea, says Navarro, is to stick three or four greenhouse people in one room with a couple of programmers from WW's OIT. Rather than test the scrubber with fake or old data, the greenhouse workers used live client data, which gives more realistic results, says Navarro. As workers came across glitches - whether they were technical bugs or process changes - they told the IS folks, and the OIT representatives made the appropriate adjustment on the spot. "It provided instant feedback," Navarro says, and the greenhouse workers were on hand to make sure the system answered their precise business needs. In fact, greenhouse and OIT workers are taking the same war-room approach to writing the training manual for the system, with an eye toward making it process-oriented, not technically tilted.

The greenhouse group approached Symmetrix's workflow system a little differently. The consulting company delivered a prototype in late November 1995, and, after encountering slow response rates with the system, Navarro's group decided to lower the priority on that system's development and finish it in-house to maintain control over the project. Throughout the past year, greenhouse employees have worked through several iterations of the system with guidance from WW's CIO. Navarro's team plans were to spend April, May and June of 1997 - WW's busiest season - putting it through beta testing, and he estimates the system will be ready later this year. Navarro says the team decided to put development of the workflow system on the back burner because "with a group of 20 people, we could survive without that system. But it will be necessary when we bring in larger groups of people."Just how WW is going to propagate the greenhouse culture throughout the rest of the company is undecided, but Navarro says he's sure it will be worth doing. He is currently measuring and documenting the improvements the greenhouse team has nurtured and says that greenhouse procedures have in some cases cut in half the time devoted to administrative work. WW has also been able to turn around projects more quickly. "What used to take two or three weeks to do now goes by like that - in a matter of a week or less," he says. "We can't believe how fast it gets done."Although Navarro concedes that his team will have to handle the situation carefully, he hopes that the fruits of WW's experiment in controlled messiness will take root and flourish in the real world. He's got a good chance at success if he can show measurable time reductions. After all, as Lee points out, "people argue much less if they see that they can now go home on time."Gardening TipsThinking of starting your own greenhouse? Here's some advice on how to go about it:PLAN BEFORE YOU BUILD Watson Wyatt Worldwide's greenhouse team spent almost four months analysing the company's current processes and framing the new processes before they began implementation.

GET ACTIVE CORPORATE SPONSORSHIP The more they see that senior executives believe in the project, the less comfortable rank-and-file workers will feel about resisting.

PROSPECT FOR BEST PRACTICES THROUGHOUT THE COMPANY It's important to determine whether your company has already developed transplantable ideas before trying to build everything from scratch.

HIRE CHANGE SUPPORTERS It seems self-evident, but the success of the greenhouse depends on the occupants' willingness to live with chaos. Hire folks who promote flexibility rather than structure.

PHYSICAL ENVIRONMENT IS IMPORTANT Spend some time thinking about how to design your greenhouse space to best reflect the goals of the greenhouse. WW's open-space plan eventually won a design award for the company.

DON'T FORGET TECHNOLOGY Starting from ground zero with new processes provides a wonderful opportunity to build systems that truly support the new business needs.


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