Adaptive Models of Organization for Substance Abuse Treatment

Part III
AUGUST, 1998

Introduction

Part I: Organizational Adaptation
     - The Adaptive Systems Framework
     - Orientations Toward Use of Feedback
     - Applying the Adptive Systems Framework

Part II: Studying Organizational Effectivness And Adaptation
     - Levels of Analysis: Micro variables and Macro Patterns
     - A Systems Theoretic Approach
     - Transformational Dynamics in Organizations
     - The Burke-Litwin Model of Individual and Organizational Performance
     - Organizational Learning
     - Conclusions

Part III: Adaptation for Substance Abuse Treatment Organizations
     - Factors Affecting Change in Substance Abuse Treatment Organizations
     - Implications
     - Suggestions for Future Research
     - Conclusions
     - References

Part III: Adaptation for Substance Abuse Treatment Organizations

Although the characteristics of organizational learning, effectiveness, and adaptation presented above apply to organizations in general, special problems are presented by particular types of organizations. Large consumer products firms (e.g., Procter & Gamble), for instance, have particular advertising and promotional concerns that are not relevant for small professional service firms (e.g., a law firm or accounting firm). Substance abuse treatment organizations also have concerns that may not be relevant for other types of organizations. Factors affecting innovation and adaptation in substance abuse treatment organizations, their implications, and recommendations and suggestions for future research are discussed below.

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FACTORS AFFECTING CHANGE IN SUBSTANCE ABUSE TREATMENT ORGANIZATIONS

Many factors that affect public organizations and the delivery of therapeutic services have special implications for adaptation and change in substance abuse treatment organizations. Nutt and Backoff (1987, 1992, 1993), for example, have compiled a body of work on the special nature of strategy development, implementation, and transformation in public- and "third-sector" organizations. Many of the specific issues raised by Nutt and Backoff (1993) are addressed below in the discussion of the implications of (a) the adaptive systems framework and (b) the unique qualities of substance abuse treatment organizations on (c) change and learning in those organizations. That discussion will be facilitated, however, by first briefly reviewing two critical factors affecting change in substance abuse treatment organizations: (a) subsidy and (b) clarity and scope of the services provided. These two factors are important because they affect the way in which the organization interacts with its environment and the nature and use of the organization’s feedback loop (these implications are discussed at length in the next section).

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The generic purpose of any formal organization is to generate more value, either to customers or to society, than it costs to do so. If the costs of adding value exceed the value added, then the activity or program constitutes a net drain on the system in which it operates. Organizations and governments subsidize particular activities to correct inefficiencies. Training and education are good examples of organizational and societal/governmental subsidized interventions, respectively. Thus, an activity may be considered "subsidized" whenever it is funded or supported by resources it does not directly generate.

From an economic perspective, subsidized government interventions are necessary in order to correct market inefficiencies (Arrow & Debreu, 1954). The free market is "inefficient" when it fails to acknowledge important costs or benefits of a particular activity, such as when organizations engage in an activity to a greater extent than is warranted by the overall costs and benefits. Pollution, for instance, tends to have an equally negative impact on polluters and nonpolluters alike, but organizations pollute because they reap all the benefits. Thus, even when total costs outweigh total benefits, the marginal benefits may outweigh the marginal costs for those choosing to engage in the activity. This is the basic concept of externalities, that costs or other effects of an activity or economic transaction are borne by individuals and groups external to that transaction. Externalities explain one reason why subsidized intervention is necessary.

Other forms of subsidized intervention address the opposite problem, that of costs being borne primarily by those choosing to engage in the activity while benefits are less clear and/or more widespread. Research activities are a good example. Absent intervention, the costs of conducting research tend to be borne only by those who engage in it, whereas the benefits tend to spill over and positively affect all who acquire the information generated and who indirectly benefit from its application. Thus, the net benefits of research may be positive overall, but may not be beneficial for those who might engage in the activity. Subsidized intervention in this case might include a private firm’s attempt to restrict spillover, and thus gain competitive advantage from research, or for the government to fund important research directly. Substance abuse treatment can be considered similarly. Although in many cases the cost of treatment cannot be borne by the clients alone, the net gain to society is positive for ethical and practical reasons, thus constituting a spillover that justifies subsidization by society. All of these activities represent what Katz and Kahn (1978) call political and maintenance functions. That is, they are supported (i.e., subsidized) by the production functions that directly generate surplus energy.

Because the resources that sustain subsidized entities are not directly tied to that entity’s performance in the market place, but instead to its budget, publicly funded service institutions strive toward maximization of size, budget, and impact, rather than optimization of efficiency (Drucker, 1985). Thus, they tend to act more like a level 1 or level 2 system, striving not to improve the efficiency or effectiveness of their throughput activities, but simply to increase the flow of resources through the system, maximizing inputs and outputs and attempting to expand or enlarge the system itself.

Budget maximization and bureaucratic inefficiency result from focusing on acquiring more energy and resources rather than doing more with them. Theory and research demonstrate that bureaucratic inefficiency tends to occur whenever the parties engaged in subsidized activities concentrate their energies on claiming existing value rather than adding value (c.f., Downs, 1967; Milgrom & Roberts, 1992; Niskanen, 1991; Onis, 1995). Katz and Kahn (1978) similarly note that, although private companies tend to grow in order to increase value surplus (i.e., margins), subsidized institutions such as public universities may pursue growth regardless of any actual or anticipated marginal value achieved because budgetary allocation from the state, not value added, is proximally responsible for a subsidized entity’s survival and prosperity.

One way to address the bureaucratic inefficiencies that result from subsidization is to impose some form of market or other feedback that rewards optimizing throughput instead of maximizing resource consumption. Although imposing market-type feedback on publicly subsidized activities may not make sense, other forms of feedback mechanisms, when integrated with organization development techniques, can be used to improve organizational efficiency and effectiveness. The task of using performance feedback is particularly difficult for substance abuse treatment organizations, however, because of the unclear scope of the services provided and their long-term impact on clients.

Designing and implementing performance feedback mechanisms is particularly difficult for substance abuse treatment organizations because of the intangibility and ambiguous scope of the services they provide. Management theory and research have conventionally focused, at least in practice, on manufacturing organizations. Increasingly, attention is turning to service organizations (e.g., Schneider, 1990), but even services can be more or less tangible.

Although we tend to think of services as intangible and products as tangible, different products and services can be thought of as possessing varying levels of "tangibility," or conceptual concreteness. McDonald’s, for instance, is a service firm. What they have to offer, above all else, is convenience. But their service is a relatively tangible one, meaning that the service is conceptually clear and concrete. When McDonald’s provides its services to a customer, the customer can measure exactly how long it took to deliver the order and will know immediately whether or not it was delivered promptly and prepared to specification. Similarly, traveling on an airline is a conceptually clear and concrete service. Passengers know exactly when the service starts and ends, and when it is complete, they immediately know whether or not they have safely arrived at the specified destination. Nor is it necessary for the customer to determine these things based on subjective standards. Even naïve external observers would know whether these services were satisfactory or not if they knew what the customer had requested.

Many services are conceptually concrete and easily lend themselves to assessments of quality and customer satisfaction. Substance abuse treatment is different; it is conceptually "fuzzy." Even from the perspective of a single client, it is not clear when the work of the organization begins and ends. The extent and quality of the service are also difficult to measure. When considering all the stakeholders, not just a particular client, by including society and the political constituents who may be providing financial support, the goals and nature of the services provided are even less clear.

When the outputs of an organization are relatively tangible, assessment of quality can be conducted in an objective fashion by checking to see if products have been made to specifications. Alternatively, for private profit-seeking firms, the market will offer feedback through low demand if a product or a service is undesirable or has design flaws. When all else fails, customer satisfaction offers a useful subjective approach to gauging performance effectiveness. Although more elaborate methods can be used to assess the impact and effectiveness of subsidized, intangible services, customer satisfaction is often used as a general barometer for overall service quality. A few subsidized services, however, do not lend themselves to the customer satisfaction approach. With substance abuse treatment organizations, for example, a client’s "satisfaction" may need to get worse before it gets better. Thus, the customer satisfaction bellwether that is useful for so many subsidized services is inadequate for assessing substance abuse treatment organizations. Treating opiate addicts with an unlimited supply of morphine, for instance, might provide a boost to customer satisfaction, but others would not consider it to be an effective form of treatment. Although drug testing provides one way to gauge the impact of the services provided, it does not directly assess quality of service. Because of the inherently intangible quality of the service itself, there is no easy way to assess the performance of substance abuse treatment efforts.

Related to the intangible aspect of the service itself is the human element of the "output." That is, substance abuse treatment organizations can be effective only through the behavior of their clients. Unlike a fast-food restaurant or an airline, where the customer passively consumes the service provided, substance abusers must fully and actively participate in the provision of the service. This is certainly an unusual notion for most organizations. Only in educational and therapeutic settings can it be said that the key "service provider" is not an employee, but the client. The fuzziness of the service extends to the organization itself. In most organizations, the customer is considered part of the external environment, but with substance abuse treatment organizations, given the importance of active participation in treatment, the client may legitimately be considered a member of the organization.

Finally, the fuzziness of substance abuse treatment services applies also to the time frame of intended outcomes, which tends to be longer and more ambiguous for therapeutic organizations than for others. Senge’s advice to concentrate on long-term rather than just short-term outcomes is especially true of substance abuse treatment organizations.

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IMPLICATIONS

The factors described above present unique challenges for the study and operation of therapeutic and human service organizations in the public sector. Nutt and Backoff (1993) provide a useful summary of some key issues related to change in public- and third-sector organizations (see Table 2). Because of subsidization, for example, market characteristics are unclear and goals are vague. Nutt and Backoff (1993) explain as follows:

There is no equivalent for profit that applies to public sector organizations. In such organizations, goals tend to be both vague and disputed. Attempts to sweep away this ambiguity encounter several problems. The difficulty of goal setting can supersede the development of strategic options. Goal-setting processes that become ends in themselves stymie action. However, leaving goals implicit makes it difficult to modify or even evaluate current practices. (p. 313)

Although addressing all of the developmental challenges confronting substance abuse treatment organizations is beyond the scope of this paper, three of the most pressing challenges are highlighted: (a) defining the organization, (b) dealing with political resistance to performance feedback, and (c) fully understanding the impact of treatment.

Table 2. Summary of strategic and organizational change considerations for public-sector organizations (adapted from Nutt & Backoff, 1993).

Given the particular issues that substance abuse treatment organizations must address (see Table 2), such as goal ambiguity, unclear performance expectations, multiple and conflicting stakeholder interests, frequent political influence attempts, regulatory constraints, and heightened public scrutiny, perhaps their most pressing imperative is a definition of the organization and the environment in which it operates. This imperative includes defining the organization’s core identity and purpose, demarcation of organization boundaries, and identification of key client or other stakeholder groups whom the organization is expected to serve or to whom the organization is accountable.

Shared vision and common purpose are necessary to sustain organizational innovation and adaptation. A mutual understanding of "what we do," "who we are," and "whom we serve" by an organization’s members and other stakeholders is a crucial first step to building shared purpose and a common vision. As discussed above, molding a common purpose for an organization is central to transformational leadership and successful organizational development. For transactional change, too, or even resource allocation, clear organizational goals are necessary to regulate throughput and maintain efficient and effective functioning.

Proposition 1. Substance abuse treatment organizations will be more effective when they explicitly identify their core identity and purpose.

Nutt and Backoff (1993) note that this task should not be approached in the same way for public organizations as for private firms

Proposition 2. Substance abuse treatment organizations that explore origins, history, and trends before attempting to change are more likely to create transformational change (i.e., they are more likely to successfully adapt) (Nutt & Backoff, 1993).

Finally, in defining core identity and purpose, private firms may emphasize products or services offered and strategic performance goals for the organization. Public organizations, however, were created not to offer a product or service at a profit, but to enhance the public welfare. Thus, a public organization should emphasize vision, values, and ideals over strategic goals and performance objectives.

Proposition 3. Substance abuse treatment organizations that emphasize values and ideals over specific performance objectives are more likely to create transformational change (i.e., they are more likely to successfully adapt) (Nutt & Backoff, 1993).

Another aspect of defining the organization and its purpose is targeting the appropriate group of clients. Because they are subsidized, it is not always clear who the relevant constituents of a substance abuse treatment organization are, or who the "customers" who directly consume the organization’s services are. Whereas a substance abuse treatment client receiving treatment services clearly belongs to this "customer" group, it is not clear whether a spouse who participates in marital counseling or benefits from other ancillary services is a customer as well, or just an incidental beneficiary. As this example points out, it may not be black and white. Constituency groups within the client system may be prioritized, with currently participating clients targeted as the primary customers; with parents, spouses, and children of current clients as secondary customers; and with others in society such as voters and taxpayers as tertiary customers. Whatever the extent of the client system, using feedback to improve performance requires an understanding of who is being served and how. Thus, it is imperative for substance abuse treatment organizations to define the client system.

Proposition 4. Substance abuse treatment organizations will be more effective when they explicitly define the client system.

A vision and purpose cannot be constructed to guide an organization effectively when there is confusion about who is to be served. Definition of the client system and other relevant stakeholder groups, to the extent it can be measured, may help explain the success of treatment efforts. It could be that a narrower or broader conception of the client system facilitates performance, either in general or under particular environmental and organizational conditions. Although there is little evidence to support an answer one way or the other, it is an empirical question that should be studied.

Proposition 5. The effectiveness of substance abuse treatment organizations will partially depend on how broadly the client system is defined.

Proposition 6. The effectiveness of substance abuse treatment organizations will partially depend on how various stakeholder groups are defined and prioritized in relation to the primary customer or client group.

Defining the organization itself is just as important to clarity of purpose as defining the client system. For example, are family members who actively participate in treatment considered voluntary members of the treatment organization? Although there is no exchange of services for money, these family members are clearly engaged in an exchange of valuable resources. Like the treatment service providers, they are supplying time and energy to assist in the treatment of addicts; in exchange, they hope that treatment of their loved ones will be more successful. Although it is unclear how peripheral members of the organization should be defined, the issue should be addressed. Vision and purpose will not guide a system effectively when it is not clear who is and who is not a part of that system.

Proposition 7. Substance abuse treatment organizations will be more effective when they explicitly define the boundaries of the organization.

Proposition 8. The effectiveness of substance abuse treatment organizations will partially depend on how broadly the organization is defined.

The explicit demarcation of boundaries does not mean that organizational boundaries must be defined with exact specifications in closed or rigid terms. The boundaries of an organization, however identified, can be more or less open (Katz & Kahn, 1978). An organization that is open will be more apt to change, will be more flexible, will more easily absorb environmental perturbations, and will adapt to environmental changes. On the other hand, an organization that is constantly changing may find it difficult to improve coordination and efficiency incrementally. When a steady state is achieved, rigidity and higher control allow a system to improve the efficiency of self-regulation toward a set of fixed performance goals. Perseverance in the face of environmental change may be more desirable under these conditions. However, an organization whose boundaries are rigid and impermeable may not be able to sustain itself in the face of rapid environmental change.

Proposition 9. The effectiveness of substance abuse treatment organizations will partially depend on the openness and flexibility of the organization’s boundaries.

Proposition 10. The success of a given level of boundary openness and adaptive flexibility will depend on the nature and speed changes in the environment (more change requires more openness and flexibility).

The advantages and disadvantages of open and flexible boundaries versus closed and rigid boundaries must be weighed. This is what Nutt and Backoff (1993) refer to as a key issue tension faced by public organizations. They argue that forming issues as tensions is especially appropriate for public-sector organizations and suggest that they "find ways to manage these issue tensions and realize ideals by building on strengths, overcoming weaknesses, exploiting opportunities, and blunting threats" (p. 320).

Proposition 11. Substance abuse treatment organizations will be more effective when they frame boundary issues as tensions (see Nutt & Backoff, 1993).

Substance abuse treatment organizations interact with identifiable systems other than themselves and their clients, such as funding or regulatory agencies; providers of medical, social, and ancillary services; and the criminal justice system. Organization members who interact with these other systems or represent multiple constituencies fill boundary-spanning roles and may experience high levels of role conflict, role ambiguity, and job-related stress (Katz & Kahn, 1978). Because of the fuzziness of substance abuse treatment organizations’ boundaries, they may have more boundary-spanning roles than other organizations. It is important to define these roles, both to enhance the effectiveness of linkages with other groups and organizations and to reduce the ambiguity and stress experienced by those who fill or enact these roles.

Proposition 12. Substance abuse treatment organizations will be more effective when they explicitly define their relationships with groups and organizations that can inhibit or enhance successful treatment of their clients.

Proposition 13. The effectiveness of substance abuse treatment organizations will partially depend on the strategies used to interact with these other groups and organizations.

Proposition 14. The effectiveness of substance abuse treatment organizations will partially depend on the effectiveness of liaisons who link the substance abuse treatment organization with these other groups and organizations.

Because of political influence, many stakeholders, and heightened public scrutiny, public- and third-sector organizations must develop a "cooperative ecology" in order to implement change successfully (Nutt & Backoff, 1993). Both the type of changes that are planned and the ways in which the changes are implemented must be co-developed with key stakeholders. Therefore, they must involve key stakeholder groups in the planning of change and make resource and stakeholder assessments to gauge potential costs, possible negative impact on others, and potential political resistance or support before attempting innovative or adaptive change. Stakeholder resistance, resource gaps, and other barriers likely to block change will be addressed in a more effective and more timely manner when stakeholders participate in fostered and stakeholder assessments.

Proposition 15. Substance abuse treatment organizations that create forums in which the participation of key stakeholders is stressed are more likely to create viable change (Nutt & Backoff, 1993).

Proposition 16. Substance abuse treatment organizations will more successfully implement changes when change strategies are co-developed with key stakeholders.

Proposition 17. Substance abuse treatment organizations that perform explicit, systematic stakeholder and resource assessments are more likely to create viable change strategies (Nutt & Backoff, 1993).

Katz and Kahn (1978) noted that researchers often overlook the inputs of an organization, but that these are the most important variables for continued functioning. Because substance abuse treatment is often subsidized and the services provided are intangible and have a long-term impact that is difficult to measure, inputs are often secured as much by political means as by the provision of effective treatment.

Proposition 18. Nonmarket feedback is more ambiguous than market feedback and therefore more sensitive to political influence.

Proposition 19. Increased number of stakeholders and greater sensitivity to political influence will result in more political influence attempts toward substance abuse treatment organizations.

Proposition 20. Increased number of stakeholders who may affect resource availability, and greater sensitivity to political influence in the absence of market feedback, will result in more political influence attempts toward key stakeholder groups.

Without performance feedback, a subsidized entity will be rewarded not for its value to the suprasystem that supports it, but to the political forces that keep its coffers full. In place of the relatively unambiguous market feedback that private firms receive, evaluation research may be used as performance feedback to maintain adequate efficiency and effectiveness.

Proposition 21. In the absence of market feedback, evaluative research may help align rewards with the performance goals of the organization and key stakeholder groups.

Because evaluators may or may not be independent, and evaluation research is often sensitive to assumptions and interpretations, it is unclear whether feedback provided by evaluative research will curb political dynamics or have the opposite effect. In general, the less conflict there is between stakeholders, the less sensitivity there is to interpretations and assumptions, and the more independent the researchers, the more likely it is that evaluation research will limit instead of heighten political dynamics.

Proposition 22. Because it introduces performance feedback into the system, conducting evaluative research will affect the frequency and intensity of political influence attempts. Whether evaluative research curbs or heightens political dynamics depends on the political climate and the nature and findings of the research.

Proposition 22a. The greater the conflict between various stakeholder groups and the more ambiguous the political environment, the more likely political influence attempts will be used to sway the use or outcome of evaluative research.

Proposition 22b. The more an evaluative research effort is perceived as sensitive to assumptions and interpretations, the more likely political influence attempts will be used to sway the use or outcome of evaluative research.

Proposition 22c. The more evaluation researchers are perceived to be biased or potentially biased, the more likely political influence attempts will be used to sway their methods, results, and recommendations of their research.

By excluding costs from evaluative research examining the impact of subsidized services or continued need for those services, the implications of low impact or persistent need are highly ambiguous. Without relevant cost data, low impact can be used to argue for additional resources and expansion of services provided, or for the opposite, reform or program closure, based on ineffective results. Thus, evaluative research that does not account for costs as well as impact is likely to heighten political dynamics with regard to the interpretation of research results. On the other hand, inclusion of cost data may heighten resistance from the organization under scrutiny, since there is an implication that efficiency is at question and imposition of tighter cost controls, not more resources to expand treatment, is perceived as the likely result.

Proposition 23. Failing to link costs and outcomes will increase political attempts to influence the interpretation of evaluative research results.

Proposition 24. Linking costs and outcomes will increase political resistance to the evaluative effort by the organization and key stakeholders who support it and will undermine change efforts.

Cost-benefit analysis can be applied using a mechanistic mental model and a performance orientation, where program costs and benefits are tallied to determine cost-justifiability (i.e., whether the organization should be expanded, curtailed, or eliminated), or an adaptive mental model and a learning orientation, where feedback is intended to point out the causes of cost-inefficiencies, offer insight into how activities can be improved, and identify opportunities for innovation and adaptation. The obvious consequence of using performance feedback solely for cost-justifiability appraisal (i.e., performance orientation) is that opportunities to improve performance and "expand the pie" through innovation and adaptation may be lost. A perhaps more compelling reason to adopt a developmental focus (i.e., learning orientation) is that cost-justifiability appraisals tend to increase organizational resistance to change and decrease the likelihood that evaluation research results will have any impact at all. As Weiss (1973a, 1973b) notes, a politically favored organization or program will survive despite a negative evaluation, and favorably evaluated programs may still perish due to hostile political forces. Because feedback indicating lack of impact can be justified by a subsidized entity as being due to a lack of resources, thus bolstering arguments for further funding and an increase in budget, but poor performance feedback in the form of cost-benefit analysis results cannot be similarly justified, evaluative research linking costs and outcomes is more likely to be perceived as a threat. Thus, appraisal-focused cost-benefit research will tend to heighten political dynamics rather than attenuate them.

Proposition 25. Performance feedback generated by evaluative research that links costs and outcomes will be less likely to facilitate improved effectiveness (or it will not be conducted in the first place) when powerful stakeholders perceive it as a threat to the organization.

Proposition 26. Performance feedback generated by evaluative research that links costs and outcomes will be more likely to increase political attempts to influence the perceptions and expectations of others, rather than actual performance, when powerful stakeholders perceive it as a threat to the organization.

The threat of a go/no go cost-justifiability evaluation will lead to managing expectations and perceptions to ensure political survival. A learning orientation, however, will facilitate improvement and will help overcome political resistance because the evaluation will not be used to withhold resources or shut down the program. Rather, a developmental approach to cost evaluation is likely to foster a focus on creating value, not just claiming it.

Proposition 27. Performance feedback will be more likely to facilitate improved effectiveness when powerful stakeholders perceive it as an opportunity rather than a threat.

Proposition 28. Performance feedback will be more likely to decrease political dynamics when powerful stakeholders perceive it as an opportunity rather than a threat.

Proposition 29. Evaluative research that links costs and outcomes as part of a developmentally oriented (rather than appraisal oriented) evaluation effort will be more likely to be perceived as an opportunity (rather than a threat) by the organization and key stakeholders who support it.

Proposition 29a. Developmentally oriented evaluation and research will be more likely to attenuate (rather than heighten) political dynamics.

Proposition 29b. Developmentally oriented evaluation and research will be more likely to facilitate (rather than inhibit) successful change efforts.

Because existing cost analysis methodologies do not support this shift away from discrete "yes/no" resource allocation, Yates (1994) and De Smet (1997a) have developed a cost assessment method consistent with an innovative activity improvement orientation.

Finally, substance abuse treatment organizations must develop a better understanding of service activities’ impact on clients. Nutt and Backoff (1993) note that scope of impact may be broadly or narrowly conceived (see Table 2). Similarly, Senge (1990) comments that cause and effect are often far away from one another in time and space. This is particularly problematic for substance abuse treatment. Understanding the nature of treatment impact and the processes that contribute to successful outcomes will stem from (a) an organization’s conception of its identity and purpose and (b) evaluative research linking various activities that occur inside and outside the formal boundaries of the substance abuse treatment organization to short- and long-range socioemotional, behavioral, and economic outcomes. Only by understanding purpose and impact can organizations generate useful performance feedback to effectively self-regulate and learn over time.

Proposition 30. Substance abuse treatment organizations will better understand their impact on clients when the organization has a shared understanding of its own purpose.

Proposition 31. Evaluative research that links basic throughput activities to both short- and long-range outcomes will be more likely to generate information on organizational impact.

Proposition 32. Substance abuse treatment organizations that understand their purpose and their impact are better able to generate useful performance feedback for self-regulation and learning.

The type of self-regulation and/or organizational learning that occurs will depend in part on the nature of the performance feedback and how it is used (see Figure 9).

Proposition 33. Substance abuse treatment organizations that identify optimal methods (i.e., "best practices") by evaluating activities in relation to costs and intended outcomes will improve more effectively through better resource allocation, activity coordination, and activity execution.

Proposition 34. Substance abuse treatment organizations that experiment with different activities and track their impact on valued outcomes will improve more effectively through better innovation.

Proposition 34a. When experimentation and innovation are directed toward improving service technologies (e.g., treatment modalities), innovation is likely to be technology driven.

Proposition 34b. When experimentation and innovation are directed toward improving organizational processes (e.g., internal synergies and linkages), innovation is likely to be capability driven.

Proposition 35. Substance abuse treatment organizations that explicitly identify, reflect on, and revise their purpose based on the interaction of internal strengths and weaknesses with external or environmental demands will improve more effectively through adaptation.

Proposition 35a. When purpose and identity are changed in response to perceived environmental threats, adaptation is likely to be reactive.

Proposition 35b. When purpose and identity are changed in response to perceived opportunities, adaptation is likely to be generative.

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SUGGESTIONS FOR FUTURE RESEARCH

Future research on organizational learning and adaptation, both generally and for substance abuse treatment, has three tasks: (a) generate theories and hypotheses (such as the propositions presented above), (b) develop tools and methodologies for measurement and analysis, and (c) test and refine the theories and hypotheses. The first task, to generate theory, is inductive in nature. A useful starting point is the sociological case study method. These methods, however, are too "blunt" (Katz & Kahn, 1978) and need the assistance of more precise constructs and research tools, many of which do not yet exist. Thus, the second task—to develop the proper tools—must be integrated with theory building. Finally, the theories and hypotheses generated must then be tested and put into practice. Although this is familiar territory for many

social scientists, new approaches to data analysis must be developed here as well. More widespread use of nonlinear statistical techniques, for example, is essential for understanding complex dynamic systems.

Although the field of organization development and learning is still in its infancy, enough is known to at least point researchers and practitioners in some promising directions. Some of the most promising areas of study are (a) the feedback process, (b) environmental variables, and (c) governing variables.

Although the feedback concept is well represented in theories about organizational learning, it has not received much empirical attention. The feedback process itself, including the means by which organizations assess the environment and their actual versus ideal performance, is critical for learning and adaptation. Initial questions could be as simple as, what sort of feedback about their organizations do managers most want to see? It may be that the preference for one type of information over another leads to superior information gathering—even if it is unsystematic and unscientific—and that paying attention to that information is enough to make a difference in performance. One simple way to categorize focus of attention, for example, is internal and external. Studies have shown that individuals, for instance, perform better on certain tasks when their focus of attention is internal (see Carver & Scheier, 1981). Although it is not clear exactly how we might test the attentional focus of an organization instead of an individual, one obvious possibility is to test the self versus the environmental focus of key individual organization members such as leaders or others in powerful or boundary-spanning roles.

The environment is another area ripe for research, particularly in the area of substance abuse treatment. Part of the problem with studying the effects of environmental variables is that the smallest unit of analysis tends to be the organization. As those who have conducted research on groups have found, getting a sufficient sample size can be very difficult even with small groups. Organizations present quite a larger problem. Nevertheless, environmental variables should not be ignored simply because they are difficult to study (c.f., Lawrence & Lorsch, 1967). Theory, along with the research that is available, suggests that the environment may be the most important determinant of organizational functioning and survival.

One key aspect of the environment for substance abuse treatment organizations is the political environment. Aspects of the political environment might include the nature and perceived certainty of funding, the resource and position power of relevant stakeholders, and the likelihood that circumstances will change as new political appointees are ushered in every 4 years or so.

Another important environmental variable is the substance abuse treatment organization’s relationship to other systems, including suprasystems—broader systems within which it operates. Is the organization governed by the state, by a federal agency, or by a board of trustees? What are its relations with local religious and community groups? These types of questions are not traditional, but they are important. To understand a complex system, we must understand its relationship with the environment.

Potentially the most useful research lies in the investigation of governing variables such as mission and strategy, leadership, and culture. Vision and mission statements, for example, are thought to be important for organizational success (Kotter, 1996), yet there is no solid research on whether having a good, well-communicated vision statement enhances organizational performance. Similarly, research on leadership has not been very fruitful, in large part because the construct has been ill-defined and poorly operationalized (c.f., Hogan, Curphy, & Hogan, 1994; Rost, 1991). To be useful, future research efforts on these topics need to be grounded in constructs and theories that are relevant for complex organizations. Open systems theory, the adaptive systems framework, and the Burke-Litwin model may be useful in this respect.

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CONCLUSION

In this final section, it may be helpful to highlight the importance of studying organizational processes related to learning and growing. For example, suppose you were hired to assist or facilitate a reengineering effort to restructure certain aspects of distribution and related services of a large treatment program. At an offsite meeting, key managers and workers gathered to begin redesigning the work. The first step was to assess where they were and where they wanted to go. What emerged from those who actually performed the work was considerably different from what senior managers had previously explained because the formally prescribed work design was no longer viable.

Counseling units within the program, as well as contract counselors and ancillary service providers and linkages with other systems (e.g., welfare, the criminal justice system), had all changed. After a contract clinician and ancillary service providers were brought in, it became clear that the program’s current understanding of operations and requirements of these other providers was also distorted and outdated. These other providers also had changed due to new external demands and internal growth and development.

This example demonstrates two important points. First, the success of the drug treatment was based more on informal learning processes than formal design. Although the organizational architecture had remained unchanged on paper, the social systems involved were constantly reacting and adapting to changing forces in the environment, an ever-shifting service landscape, and intense pressure for change. Second, the key inhibitor to future success was potentially these same processes. Although innovation had occurred at lower levels, the learning process needed to be addressed more formally at the organizational level. Simply redesigning service processes was not the critical task; reengineering represented just another episode of single-loop learning that would again be outdated in short order. The more important task is to institutionalize organizational learning and ensure that performance would evolve over time in a more effective and systematic manner. Substance abuse treatment organizations’ problems are made even more difficult than presented here because of factors related to subsidization and unclear scope of impact. The task for researchers and practitioners is the same: Learn how to learn at both individual and organizational levels.

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REFERENCES

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