Application 4.

Contracting at American Healthways Corporation

Amara Sree Vani (2010PGP006)

After entering American Healthways Corporation the next important step in the OD
intervention is that of contracting. It clarifies how the OD process will proceed. It establishes
the expectations of the parties, the time and resources that will be expended and the
ground rules under which the parties will operate.

In this particular application after entering the organization the relationship between the OD
practitioner and the company furthered once the top management believes in the ability of
the professor. The COO asked for a detailed proposal but, the professor was reluctant as he
considered this to be a waste of time. The professor also felt that as it was a complex
change it could not be predicted accurately. He said that it was important to decide if he
was the right person for the job at hand. If he was, then time should be spent on how the
parties should work together and towards what end. But, some form of explicit contract is
necessary to clarify the client’s and the practitioner’s expectations about the process to fulfil
the expectations of both the parties. So, professor agreed to draft a letter outlining the
goals, proposed process, and other key elements of a working relationship.

The COO and professor had long conversations and clarified their expectations and roles
that needed to be performed. By asking questions the professor understood that his role
was that of advisor to the COO on the process of change and as a source of knowledge and
experience about organization design. He also clarified how the COO would respond if the
process wasn’t moving forward because of his behaviour.

The COO had his set of questions. He wanted to know how long the project would take and
the professor said that as the project was a very complicated one it might take 3 to 6
months to decide upon which structure to implement and probably years to implement.
They also talked about participation, transfer of knowledge and learning. The COO was
interested in speeding up the process as the organization is growing at a fast pace but the
professor had his own doubts about going fast. So they explored further on this topic in the
context of learning speed, and the culture of organization. The professor agreed to propose
an initial process that would move the decision about the new structure forward quickly.

The professor also clarified whether the COO had prior experience in dealing with these
sorts of situations to which the COO responded with a yes. Based on these conversations
both of them agreed to work together and the professor produced a letter of understanding
representing the contract. In the letter the professor wrote about how he intended to carry
out the intervention process and also mentioned about some of his requirements like free
access to information, accommodating each other’s requests, access to potentially sensitive
data, his limitations and about the nondisclosure agreement.