Rediscovering a Business Performance Secret

In 1969, behavioral scientists Walker and Lorsch discovered that two virtually identical workplaces could produce vastly different results according to one simple decision. What they learned is a lesson worth repeating.

The researchers studied two cardboard box manufacturing plants that were like the identical twins in high school you couldn’t tell apart. The plants were part of the same company and were organized essentially the same way. They made the same products. They were managed by similar leadership styles. In fact, both plant managers valued employee initiative and gave employees plenty of latitude to do their jobs.

Even though the two plants were amazingly similar, there was one small distinction. And that made all the difference. The distinction was context. In Plant F, as it was labeled in the study, the plant manager had decided the department or team was the context for work and decision-making. In Plant P the manager determined the entire plant was the context they would operate in.

You may be thinking, “So what? As long as workers are focused on getting the job done, what difference could it make?” Or, thinking that context could make a difference, you may have already picked the plant you believe was the most productive.

Well, here’s how context played out in the two plants.

In Plant F, employees laser-focused on team or department goals. Naturally, maintenance focused on what maintenance had to do just as quality control took care of quality needs. Production, and nobody else, was responsible for production. Since maintenance and quality were so narrowly focused it wasn’t a complete shock when the proverbial tail began to wag the dog and both departments actually complained that production was interfering with their team goals!

In contrast, Plant P employees were concerned first and foremost with the success of their plant. So, they rallied to solve production problems even when it hurt their team’s numbers. Office staffs were not exempt, either. Imagine accountants, buyers, safety personnel and HR staff pitching in to help clean up production areas at the end of each shift and you get the picture.

Plant F managers and engineers were overwhelmed with putting out fires. The plant manager’s decision that each team or department concern itself with its own responsibilities forced problems between them to move up the hierarchy. So, who ended up dealing with them? Those same managers and engineers, and they couldn’t keep up.

Plant P managers and engineers certainly had their own fires to put out, but they mostly worked on solving longer-term problems. That’s because Plant P employees—who were focused on the needs of the greater plant—solved most inter-team problems, themselves.

It turned out that by keeping employees focused on department and team concerns, Plant F held production steady during the three-year study. By taking a more holistic approach Plant P boosted output 23%. Remember, the only real difference between them was the plant managers’ decisions about the context they created for employees to work in. That changed both how employees approached work and the results they produced.

Unfortunately, most workplace change initiatives seem to ignore or underappreciate how much context matters to business performance. But Walker and Lorsch’s nearly fifty-year old discovery is still every bit as relevant today. Maybe it’s time to rediscover it.

Kevin Herring is co-author of Practical Guide for Internal Consultants, and President of Ascent Management Consulting. Kevin can be contacted at kevinh@ascentmgt.com.

Ascent Management Consulting is found at www.ascentmgt.com and specializes in productivity improvement through performance turnarounds, leadership coaching, and appraisal-less performance management.