Module 5 Discussion: Initial Post
The People Who Decide Whether the Billing Cutoff Survives
My capstone at a composite electrical subcontractor found that about 19 of our 71 days of receivables come from our own practices: a 12-day lag before we submit payment applications, missing lien waivers that get applications rejected, and change work started before the change order is signed. The fixes are not technically hard. A firm billing cutoff, a document checklist, and a rule that no change work starts without a signature would do most of it. Whether they survive depends on people, so this week I mapped our stakeholders. Not every cause is ours to fix; research on construction payment finds that the financial position of other parties drives many delays (Ramachandra & Rotimi, 2015), which is why my plan concentrates on the parts we control.
Mitchell et al. (1997) argued that managers attend to a stakeholder in proportion to how many of three attributes it holds: the ability to impose its will, a claim others accept as proper, and a claim that demands prompt action. Applying their framework, the owners have power and legitimacy, and after seeing the findings they have urgency too; they are the definitive stakeholders who approved the project. The general contractors, especially our largest customer, have power, since they approve and pay our applications, and a legitimate interest in complete paperwork, but little urgency about our cash. Project managers are the surprise. On paper they have little formal power over the project, but in practice nothing changes unless they submit quantities by the cutoff, and they can quietly let it slip. Billing staff have legitimacy and urgency, since they absorb the late scramble every month, but little power. Field foremen matter for the change order rule, because they are the ones who hear a general contractor's superintendent say "go ahead."
Kotter (1995) listed errors that sink change efforts, and three shape my plan. First, not establishing enough urgency: I will show project managers what 21 days means in cash, about $2.19 million, and that the company borrows to cover payroll while it waits. Second, not creating a powerful guiding coalition: the change group will include the controller, one owner, and two respected senior project managers, so the cutoff is not seen as an accounting rule imposed on the field. Third, not planning for short-term wins: the pilot on two projects will report the first month's billing lag and rejection count at a company meeting, so people see the change working before it spreads. I will also try to remove an obstacle Kotter emphasizes, by having billing staff pre-fill applications from the schedule of values so that project managers only confirm quantities.
Question for classmates: in your capstones, did the stakeholders with formal authority or the ones who do the daily work turn out to matter more for whether the change stuck?
References
Kotter, J. P. (1995). Leading change: Why transformation efforts fail. Harvard Business Review, 73(2), 59-67.
Mitchell, R. K., Agle, B. R., & Wood, D. J. (1997). Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts. Academy of Management Review, 22(4), 853-886. https://doi.org/10.5465/amr.1997.9711022105
Ramachandra, T., & Rotimi, J. O. B. (2015). Causes of payment problems in the New Zealand construction industry. Construction Economics and Building, 15(1), 43-55. https://doi.org/10.5130/ajceb.v15i1.4214
How this BUS 799 Module 5 example is structured
Aspen's catalog describes BUS 799 as an individualized, work-related capstone. Aspen does not publish module deliverables, so check your classroom for the exact prompt. This example restates the findings that require change, applies a stakeholder framework to each group, translates a change model into actions and asks peers a question.
BUS 799 Module 5 questions, answered
What does the BUS 799 Module 5 discussion usually ask for?
Discussions in the middle of a graduate capstone often ask about stakeholders, change management or implementation challenges for your project. Aspen does not publish module deliverables, so your classroom's instructions govern.
What is stakeholder salience?
A framework by Mitchell, Agle and Wood holding that managers pay attention to stakeholders according to their power, the legitimacy of their claim and the urgency of that claim.
What are Kotter's reasons change efforts fail?
Among them are not establishing enough urgency, not forming a powerful guiding coalition, undercommunicating the vision, not removing obstacles, not planning for short-term wins, declaring victory too soon and not anchoring changes in the culture.
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