Forcing Change - Using the Catalytic Mechanism

A Review by Kathy Millar

Turning Goals into Results: The Power of Catalytic Mechanisms
by Jim Collins
Harvard Business Review, July-August 1999

Obstacles to Change

For career civil servants, the drill is all too familiar. A new agency leader appears and a new plan to "fix" the organization begins barreling its way through the ranks. New committees are marshaled, studies commissioned, investigations launched. Countless hours are spent creating organizational blueprints for restructuring, blueprints which then generate numerous levels of review, undertaken by ad hoc teams convened by organizational hierarchy who mandate specific "outcomes" prescribed by other groups of performance measurement specialists.

The planning process itself quickly becomes so dense and bureaucratic that the new agency head is generally replaced by a successor before any actual change can occur. For some agency leaders and employees, of course, that's the good news -- planning change is generally less risky -- and less threatening -- than implementing it. For agency executives, always sensitive to the political ramifications of even the slightest misstep, preparation is often the best part of the process, insinuating wholehearted commitment while leaving precious "wiggle room" for last minute adjustments.

For agency customers, however -- taxpayers who stand to benefit from the kind of changes that could make government work better, cost less and deliver results Americans care about -- the hollow rituals of planning changes that never materialize only support a growing cynicism and distrust of the federal government.

Moving Past the Status Quo

This dilemma and a series of anecdotal solutions are the focus of Turning Goals into Results: The Power of Catalytic Mechanisms, an article written by Jim Collins and published in the July-August issue of The Harvard Business Review. Collins, who operates a management research lab in Boulder, Colorado, has studied a number of organizations that have used internal change successfully to benefit customers and, in each case, he credits what he calls a catalytic mechanism for creating an unstoppable process of improvement and change.

Reinventors Offer Solution

Collins cites the contribution of two rank and file government "reinventors" who were determined to identify a quick, solid fix to the problem of turning goals into results. Lance Cope and Jeff Goldstein were both government staffers at the then National Performance Review, now the National Partnership for Reinventing Government. Cope and Goldstein understood from first-hand experience how bureaucratic processes can sabotage the production of genuine change. They were leading NPR's reinvention lab initiative when they hit on an idea that would supply the change process with an inner dynamic, a self-generated momentum that neither politics nor self-interest nor the federal bureaucracy could stop.

But first, what is a reinvention lab? Vice President Gore asked federal agencies to create reinvention laboratories across the government to test new ways of doing the government's business, with the idea of sharing their ideas, successes, and lessons across government. There are now over 340 national Reinvention Laboratories at the forefront of reinvention. Many labs found rules within their own agency that could stop their tests cold unless they could get waivers. In some agencies getting a waiver from the bureaucracy proved quite burdensome.

Cope and Goldstein invented the federal government's new waiver rule for reinvention labs -- a catalytic mechanism that Collins says "exemplifies the beauty and power of redistributing power." The waiver rule has two primary components: First, waiver-of-regulation requests must be acted on in 30 days. After 30 days, if no answer is forthcoming, the party asking for the waiver can assume approval and implement the waiver. Second, those officials who have the authority to change regulations can approve waiver requests, but only the head of an agency can deny a request.

President Clinton issued a memorandum on April 21,1998 directing agencies to streamline the granting of waivers to labs. It meant labs could mainly direct their efforts toward reinventing, not getting waivers.

"Think for a minute about the impact of this catalytic mechanism," says Collins. "It subverts the default, knee-jerk tendency of bureaucracies to choose inaction over action, status quo over change, and idiotic rules over common sense. Supervisors can no longer say no or not respond. They would have to champion a no all the way to the head of their agency - the equivalent of the head commandant of the entire U.S. Marine Corps - within 30 days. Instead of having to go out of their way to demonstrate why it is a good idea, they would have to expend great energy to prove it is a bad idea. The catalytic mechanism tilts the balance of power away from inertia and toward change."

Agriculture's APHIS Team Inspired the Waiver Rule

The Department of Agriculture's Animal and Plant Health Inspection Service's Tort Claims Adjudication Team inspired the new waiver rule. The APHIS team worked long and hard to get a waiver from USDA rules. It then used its waiver to reduce the processing time for tort claims of less than $2,500 from 51 days to 8.

Catalytic Mechanisms and the BEHAG

Collins has filled his article with examples of ways other catalytic mechanisms have forced organizations to respond to customer needs. Granite Rock, a company that sells gravel, concrete and sand to construction workers and contractors, had a dream -- a BHAG -- or Big Hairy Audacious Goal -- as Collins calls it. The 99 year old, family-owned company wanted to provide "total customer satisfaction and achieve a reputation for service that met or exceeded that of Nordstrom, the upscale department store that is world famous for delighting its customers."

The question was -- how? Certainly not by galvanizing the organization's leadership, which Collins paints as "a quiet, thoughtful and bookish clan." And not by "hosting hoopla events or launching grand customer service initiatives -- the owners simply didn't believe such efforts left any lasting impact. Instead, the Woolpert family, which owns Granite Rock, decided to initiate a radical policy called "short pay." Collins explains it like this -- "The bottom of every Granite Rock invoice reads, "If you are not satisfied for any reason, don't pay us for it. Simply scratch out the line item, write a brief note about the problem, and return a copy of this invoice along with your check for the balance."

"Imagine," says Collins, "paying for airline tickets after the flight and having the power to short pay depending on your travel experience, not just in the air, but during ticketing and deplaning as well. Or suppose universities issued tuition invoices at the end of the semester, along with the statement, 'if you are not satisfied with the dedication of the professor in any course, simply scratch out that course and send us a tuition check for the balance.' Or suppose your cell phone bill came with a statement that said, 'If you are not satisfied with the quality of connection of any calls, simply identify and deduct those from the total and send a check for the balance."

Clearly, the short-pay policy forces both learning and change. It impels managers, says Collins, "to relentlessly track down the root causes of problems in order to prevent repeated short payments. It signals to employees and customers alike that Granite Rock is dead serious about customer satisfaction that goes far beyond slogans."

Unstoppable Momentum

Turning Goals into Results is filled with remarkable, energizing examples of what can happen when companies and organizations build catalytic mechanisms into their operational strategies -- redistributing power and triggering internal processes that cannot be altered or stopped. In 1956, the 3M company instituted a catalytic mechanism that has since increased 3 M's sales and earnings by 40 percent -- scientists were told to spend 15 percent of their time experimenting and inventing in the area of their own choice and the result was "a stream of profitable innovation."

The Nucor Corporation, the most successful U.S. steel company of the last three decades, used catalytic mechanisms to create a high-performance environment in which those with an innate work ethic thrive and free riders eject in a hurry. At W.L. Gore & Associates, a fabric company worth nearly $2 billion, employees have the authority to fire their bosses -- a catalytic mechanism that builds on the idea of non-hierarchical leadership. A free-lance writer who routinely took on more assignments that she needed to in order to support her family "redistributed power" to her sister (who was tired of being enlisted as a last-minute babysitter) and regained control over her life. The catalytic mechanism? A $200 a day "penalty fee" her sister imposed every day the writer spent working on unnecessary projects.

The Power of Catalytic Mechanisms

The definitions Collins assigns to the catalytic mechanisms he describes are fascinating, enlightening and simple enough to make you wonder why you or your organization didn't come up with a similar notion a long time ago. The examples Collins provides of the way a catalytic mechanism works, the distinctions he makes between what a catalytic mechanism is and is not, and the ways companies and individuals have used catalytic mechanisms to realize the biggest of BHAG's (Big Hairy Audacious Dreams) is reading designed to empower every federal leader, manager and employee. Read but beware -- the distance between planning change and making it happen may not be so great after all.

About the Reviewer

Kathy Millar represents the U.S. Customs Service at the National Partnership for Reinventing Government.

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