"We trained very hard, but it seemed that every time we were beginning to form into teams we would be reorganized. I was to learn later in life that we tried to meet any new situation by reorganizing, and a wonderful method it was for creating the illusion of progress whilst producing confusion, inefficiency and demoralization." Petronius
Contrary to what may be popular belief in some quarters, Gaius Petronius Arbiter (27 - 66 A.D.) was a Roman courtier during the reign of Nero, rather than a claims adjuster in the current era. However, his scathing observations on the subject of reorganization (in his time it was political, rather than corporate) still rings with more verisimilitude than is comfortable to many denizens of the C-suites in insurance companies.
Whether you want to call it reorganizing, re-engineering, retrenching or revamping, this phenomenon (some may say 'plague') has been with civilization from ancient times. The insurance industry (along with banking) seems to be spectacularly "active" in this area over the last quarter century. In too many of these instances, reorganization is code for job loss on a significant scale. It is almost as if senior management admits that it hasn't a clue of how it arrived at a certain place in time in a specific structural format that now is anathema for whatever reason (for example: profits didn't hit Wall Street's expectation). Something must be done. That "something" is often reorganization.
The trend appeared to assume new velocity with the 1993 publication of Reengineering the Corporation by Michael Hammer and James Champy. Now there was academic/intellectual verification that this action was considered necessary for corporate survival and prosperity. A radical change to processes, organization and culture became the objective of many companies.
Please do not misinterpret my vitriol. I'm not of the belief that all corporate change is nothing but gloom, doom, death and destruction. In some instances, change is required because the current iteration of an organization makes no sense. Additionally, I'm not so na´ve to think that when one company acquires another, there will not be massive changes from a structural and employment standpoint. That simply goes with the territory in the mergers-and-acquisition game.
What jars my pickles is change for the sake of change.
The architects of this "activity" (or farce) will usually claim that it is being accomplished to realize a quantum leap in company performance that will result in more profits with less expense, thereby delighting shareholders through an increase in stock value. Of course, when the reorganization is initiated and involves a reduction in employees, the stock market normally reacts in a positive way and the stock price does climb (at least momentarily) because in a white collar business, salaries comprise about 70 percent of expenses.
Desks are emptied, boxes are filled and carried to cars, and employees are ushered gently into that good night. What about the remaining "survivors?" What is palpably better of their new lot in life at work in a leaner company? Did their work load decrease as a result of the reorganization? Were company processes improved so exponentially as to allow the workers to accomplish more with less? Were barriers and obstacles to efficiency lifted as a result of the reorganization? If the answers to these questions were always affirmative, change would indeed be a salutary development in all instances. However, if you believe that is true, it's time to put down the vodka and return to reality.
In the claims environment, reorganizations had other buzzwords associated with the "modification." That had something to do with "teams" and "empowerment." For example, something along the lines of, "Our reorganization involves transitioning to a team environment which will empower our employees to reach optimal efficiency and achieve world-class results with laser-like focus." When you hear an explanation of this nature, your internal BS (blatherskite) warning meter should go off the scale.
Most business people can't properly delineate the difference between "empowerment" and "delegation" (and there is a major difference), but they use the word as though they formulated the original concept. Add to this the dreaded "team" approach, and all is virtually lost. The result will usually be more work for fewer remaining employees without substantial removal of barriers (administrative, system or structural) that pre-existed the change. However, the lay-off survivors at least can still pay their mortgages and buy groceries. That is sad commentary on the "positive takeaways" of many changes in corporate America, particularly in insurance.
So what happened to the Hammer/Champy school of re-engineering the corporation? It was later admitted by both men that they left out a rather important part of the equation; the people! The massive career disruptions caused by their much touted process were overlooked or hidden away like a bad red-headed step child. However, this did give the authors the impetus for a new book, Re-Engineering Management which would correct the deficiency of the first thesis.
The old management aphorism that "people are our most important asset," seems like nothing more than a historical curio these days. Employees are more often treated as raw material than human beings regardless of their talent level and upward loyalty. It's no wonder that employee cynicism seems to be rising like the mushroom cloud of a nuclear explosion.
Lastly, what of Petronius? Unfortunately, our trenchant observer's high position soon made him the object of envy for those at the emperor's court. Tigellinus, the commander of the emperor's guard, began to machinate against Petronius, who was ultimately accused of treason. He was arrested at Cumae in 65 A.D. but did not wait for a sentence. Instead he chose to take his own life. Let's hope the American insurance industry learns a lesson from this shrewd judge of men and institutions, but that's probably asking too much.
August 9, 2012
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