ChangeManagementBook.pdf

“This impressive book on change is an essential read for any professional manager who is serious about getting togrips with the important issues of making change happen.”

Dr Jeff Watkins, former MSc Course Director, University of Bristol

“There has long been a need for a readable, practical but theoretically underpinned book on change whichrecognizes a multiplicity of perspectives. I thoroughly recommend it.”

Professor Colin Carnall, Associate Dean, Executive Programme, Warwick Business School, University of Warwick

“I’ll definitely be placing copies on a couple of desks at White City…”Nicky Campbell, Presenter, Radio Five Live and BBC1’s Watchdog

“This book is a great resource for managers thrown into the midst of change who need to gain understanding ofwhat happens when you try to make significant changes in a business, and how best to manage people through it.”

Andy Newell, former Organizational Effectiveness Director, Allied Domecq plc

“I commend it highly. It has a good coverage of relevant theoretical work while at the same time giving plenty ofpractical examples. It is written in an accessible style that engages the reader and it is full of useful ideas without

being overly prescriptive or formulaic.”Philip Sadler, author and Vice President of Ashridge Business School

Making Sense of Change Management is the classic text in the field of change management. It is aimed atanyone who wants to understand why change happens, and what needs to be done to make change a welcome rather than a dreaded concept. However, this book is not a “one size fits all” simplistic panacea toall change, whatever the circumstances. Instead, it offers considered insights into the many frameworks,models and ways of approaching change and helps the reader to apply the right approach to each unique situation. Topics include:

Written for academics and professionals alike, Making Sense of Change Management identifies and offers explanations of all current models of change, as well as practical guidelines and examples showing thereader why change can go wrong – and how to get it right.

Esther Cameron and Mike Green help organizations and executives to manage and lead change. They workin both the private and public sectors and use a variety of coaching, consultancy and workshop interventionsto support organizational development. Mike tutors in Leadership and Change at Henley Management College and Esther lectured on change management for the University of Bristol for ten years. Both are established authors in the area of change and leadership and are co-authors of Making Sense of Leadership(also published by Kogan Page).

Kogan Page120 Pentonville RoadLondon N1 9JNUnited Kingdomwww.koganpage.com

Kogan Page US525 South 4th Street, #241Philadelphia PA 19147USA

I S B N 978-0-7494-5310-7

9 7 8 0 7 4 9 4 5 3 1 0 7

£27.50US $45.00

Business and management

A complete guide to the models, tools & techniques of organizational change 2nd edition

Esther Cameron & Mike Green

MAKING SENSE OFCHANGEMANAGEMENT

KIN

G S

Cam

eron

reen

2nd edition

ISBN: 978-0-7494-5310-7

• individual change;• team change; • organizational change;• leading change;• structural change;

• mergers and acquisitions; • cultural change; • IT-based process change;• complex change; • how best to implement change.

making sense change mana_aw:Layout 1 4/3/09 12:11 Page 1

Praise for the first edition of Making Sense of Change Management

‘I commend it highly. It has a good coverage of relevant theoretical work while atthe same time giving plenty of practical examples. It is written in an accessiblestyle that engages the reader and it is full of useful ideas without being overlyprescriptive or formulaic.’Philip Sadler, author of a number of acclaimed business titles and formerchief executive of Ashridge Business School

‘I really enjoyed this book. I like the straightforward approach, the inclusion of theauthor’s opinion and the insight provided by the case studies. This book will bevery useful for those business managers in my organization who need to preparethemselves for tackling major organizational change.’Andy Houghton, former Head of Organization Development, RetailDirect, Royal Bank of Scotland Group

‘There has long been a need for a readable, practical but theoretically under-pinnedbook on Change which recognized a multiplicity of perspectives. By combining thebehavioural, humanistic, organizational and cognitive perspectives and by helpingthe reader make sense of what each perspective brings to understanding Change,this book should help students and practitioners. By linking in work on personalitytests such as MBTI™ the book breaks new ground from a practitioner point of viewnot least because these tests are widely used in practice. I thoroughly recommend it.’Professor Colin Carnall, Associate Dean, Executive Programme, WarwickBusiness School, University of Warwick

‘If you’re interested in successfully managing and leading change, then read thisbook! It not only covers change from both the individual and organizationalperspective, but also increases the number of options available to you.’Judi Billing, Director of IDeA Leadership Academy, Improvement andDevelopment Agency

‘Change is a huge thing wherever you work. The key is to make change happen,and make it happen well – with everyone on side, and everyone happy. This bookprovides an extremely stimulating and accessible guide to doing just that. Thereare a few people at the Beeb who could do with this. I’ll definitely be placing copieson a couple of desks at White City.’Nicky Campbell, Presenter Radio Five Live and BBC1’s Watchdog

‘This book is a great resource for managers thrown into the midst of change, whoneed to gain understanding of what happens when you try to make significantchanges in a business, and how best to manage people through it. The authors havetackled a complex topic in a lively and engaging way, leading readers through themaze of theory available and offering just the right amount of practical advice.’Andy Newall, former Organizational Effectiveness Director, AlliedDomecq plc

‘This impressive book on change is an essential read for any professionalmanager who is serious about getting to grips with the important issues ofmaking change happen.’Dr Jeff Watkins, former MSc Course Director, Management ResearchCentre, University of Bristol

‘This practical handbook, combining contemporary management theory with verypractical suggestions, is an indispensable tool for any manager involved in changeprocesses. And aren’t we all…’Adriaan Vollebergh, Director, Corus Metal Services Europe

‘This is a book which lives up to its title. By combining a guide to the ideas of keythinkers on change and useful tips for making change happen, it really doesprovide a toolkit to help us to make sense of change. It is useful to see a focus onthe individual, team and organizational levels, and in particular, on the role of theleader in the change process. It is written in a way that makes the book interestingto read both at length as well as to dip into.’Richard McBain, Director of Studies Distance Learning MBA, HenleyManagement College

iii

MAKING SENSE OFCHANGE

MANAGEMENT

THIS PAGE IS INTENTIONALLY LEFT BLANK

A complete guide to the models, tools& techniques of organizational change

Esther Cameron & Mike Green

MAKING SENSE OFCHANGE

MANAGEMENT

London and Philadelphia

2nd edition

Publisher ’s noteEvery possible effort has been made to ensure that the information contained in this bookis accurate at the time of going to press, and the publishers and authors cannot acceptresponsibility for any errors or omissions, however caused. No responsibility for loss ordamage occasioned to any person acting, or refraining from action, as a result of the mate-rial in this publication can be accepted by the editor, the publisher or any of the authors.

First published in Great Britain and the United States in 2004 by Kogan Page LimitedReprinted 2004 (twice), 2005, 2006, 2007 (three times)Second edition 2009

Apart from any fair dealing for the purposes of research or private study, or criticism orreview, as permitted under the Copyright, Designs and Patents Act 1988, this publicationmay only be reproduced, stored or transmitted, in any form or by any means, with the priorpermission in writing of the publishers, or in the case of reprographic reproduction in accor-dance with the terms and licences issued by the CLA. Enquiries concerning reproductionoutside these terms should be sent to the publishers at the undermentioned addresses:

120 Pentonville Road 525 South 4th Street, #241London N1 9JN Philadelphia PA 19147United Kingdom USAwww.koganpage.com

The right of Esther Cameron and Mike Green to be identified as the authors of this workhas been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.

ISBN 978 0 7494 5310 7

British Library Cataloguing-in-Publication Data

A CIP record for this book is available from the British Library.

Library of Congress Cataloging-in-Publication Data

Cameron, Esther.Making sense of change management : a complete guide to the models, tools and

techniques of organizational change / Esther Cameron and Mike Green. — 2nd ed.p. cm.

Includes bibliographical references and index.ISBN 978-0-7494-5310-7

1. Organizational change–Management. 2. Teams in the workplace–Management. 3.Reengineering (Management) 4. Information technology–Management. I. Green,Mike, 1959- II. Title.

HD58.8.C317 2008658.4�06–dc22

2008034689

Typeset by Saxon Graphics Ltd, DerbyPrinted and bound in India by Replika Press Pvt Ltd

vii

Contents

Acknowledgements x

Introduction 1Who this book is aimed at 2; The basic content of the book 3;Why explore different approaches to change? 3; Overview ofstructure 7; Message to readers 8

PART ONE: THE UNDERPINNING THEORY 9

1 Individual change 12Introduction 12; Learning and the process of change 14; The behavioural approach to change 19; The cognitiveapproach to change 25; The psychodynamic approach tochange 32; The humanistic psychology approach to change 40; Personality and change 50; Managing change inself and others 53; Summary and conclusions 60

2 Team change 62Introduction 62; What is a group and when is it a team? 63;Why we need teams 65; The types of organizational teams 66;How to improve team effectiveness 74; What team changelooks like 78; The leadership issues in team change 82; How individuals affect team dynamics 86; How well teamsinitiate and adapt to organizational change 91; Summary andconclusions 95

3 Organizational change 97How organizations really work 98; Models of and approachesto organizational change 109; Summary and conclusions 134

4 Leading change 138Introduction 138; Visionary leadership 142; Roles that leadersplay 153; Leadership styles and skills 159; Different leadershipfor different phases of change 166; The importance of self-knowledge and inner resources 173; Summary andconclusions 178

PART TWO: THE APPLICATIONS 181Strategic change process 182; Overview of structure 182

5 Restructuring 187Reasons for restructuring 189; The restructuring process 190;Restructuring from an individual change perspective: thespecial case of redundancy 209; Enabling teams to addressorganizational change 214; Conclusion 221

6 Mergers and acquisitions 222The purpose of merger and acquisition activity 223; Lessonsfrom research into successful and unsuccessful mergers andacquisitions 228; Applying the change theory: guidelines forleaders 242; Summary 253

Contents

viii

7 Cultural change 255Guidelines for achieving successful cultural change 259; Casestudy one: aligning the organization 262; Case study two:rebranding the organization 268; Case study three: creatingan employer brand 275

8 IT-based process change 281Strategy and IT 284; The role of IT management 287; The need for IT change managers 292; Achieving processchange 296; Changing the information culture 303; New rules for a new age 305; Summary and conclusions 306

PART THREE: EMERGING INQUIRIES 309

9 Complex change 310Introduction 310; When is change complex? 311;Understanding how complexity science applies toorganizational change 312; Tools that support complex change 321; The role of leaders in complex change 327;Summary and conclusions 330

10 The right way to manage change? 331Introduction 331; What the research says 332; Different approaches to getting ready for change 338; Leading change 343; How do you know whether change isworking? 345; Summary and conclusions 349

Conclusion 351The importance of peripheral vision 351; Finding the space toreflect 352; How to get in touch with the authors of this book 353

References 354Index 363

Contents

Acknowledgements

We want to start by acknowledging the many people in organizationswith whom we have worked over the years. You are all in here in someshape or form! We have worked with many generous, courageous andinspiring managers of change who we thank for the privilege of workingalongside them to make real change happen. Without these experiencesthe book would be a dry catalogue of theory, devoid of life and character.

Then of course there are our colleagues who challenge and support usevery day as we reflect on our work, and make decisions about what todo next. Particular thanks go from Mike to Andy Holder, Mhairi Cameron,Philip Darley and Tim Hockridge, who probably do not know how muchthey are appreciated, and to colleagues and MBA students at HenleyManagement College for a never-ending supply of ideas and challenges.Esther wants to specially acknowledge Anne-Marie Saunders and AlexClark for their wisdom, humour and friendship, and their generosity insharing their expertise. Many of their ideas and thoughts are embeddedin this book. Also, thanks go to Esther ’s learning set who have been asource of strength throughout the last few years, and who really boostedthe leadership chapter in particular. Thanks too to Bill Critchley for hisideas on linking metaphor and change, which form the bedrock of theorganizational change chapter.

Really special thanks go to Ailsa Cameron for her wonderful pictures,which soften the pages so beautifully.

We also want to thank from the bottom of our hearts the hard-workingreviewers who squeezed the time out of their busy agendas to read draftversions of these chapters. Special thanks go to Louise Overy, SteveSummers, Duncan Cameron, Mervyn Smallwood, Peter Hyson andRichard Lacey for their timely and thoughtful suggestions throughout theiterative process of writing the book.

Our families have helped too by being very patient and supportive. Solove and thanks to Jane, Lewin, Oliver and Brigit. Love, and thanks too toDuncan, Ailsa, Ewan and Katka.

We also want to thank each other. We have learnt a lot from this richand sometimes rocky process of writing a book together. We do notalways see things the same way, and we do not work from an identical setof assumptions about change, so the book is the culmination of muchhealthy airing of views. Let’s hope we are still writing, talking andenjoying each other ’s company many years from now.

Note: The Myers-Briggs Type Indicator™ and MBTI™ are registered trade-marks of Consulting Psychologists Press. Anyone interested in knowingmore about Myers-Briggs should contact Consulting Psychologists Pressin the US (800-624-1765) and OPP in the UK (08708 728 727).

Acknowledgements

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xii

Introduction

I balance on a wishing well that all men call the world.We are so small between the stars, so large against the sky,

and lost amongst the subway crowd I try and catch your eye.

L Cohen

This book is about making sense ofchange management. The world we livein continues to change at an intenserate. Not a day goes by, it seems,without another important discovery orboundary-pushing invention in thescientific fields. The economics of glob-alization seems to dominate much ofour political and corporate thinking,while the shadow side of globalization –refugees, exploitation, terrorism and the

like – develops at an equally alarming pace.The rate of change and discovery outpaces our individual ability to

keep up with it. The organizations we work in or rely on to meet our

needs and wants are also changing dramatically, in terms of their strate-gies, their structures, their systems, their boundaries and of course theirexpectations of their staff and their managers.

WHO THIS BOOK IS AIMED AT

Making Sense of Change Management is aimed at anyone who wants tobegin to understand why change happens, how change happens andwhat needs to be done to make change a more welcoming concept. Inparticular we hope that leaders and managers in organizations mightappreciate a book that does not give them the one and only panacea, butoffers insights into different frameworks and ways of approachingchange at an individual, team and organizational level.

We are mindful of the tremendous pressures and priorities of practisingmanagers – in both the private and the public sector – and Making Senseof Change Management is our attempt at making their lives that little biteasier. It is also our attempt at convincing them that addressing the issuesthat cause change to be so poorly managed in organizations will lead notonly to more satisfying experiences for them, but to more fulfilling livesfor their staff.

Framework: an essential supporting structure;Model: a simplified description of a system;Tool: a thing used in an occupation or pursuit;Technique: a means of achieving one’s purpose.

Concise Oxford Dictionary

Students of learning – be they MBA or MSc programme members, or indi-viduals who just want to do things better – will hopefully find somemodels, tools and techniques which bridge the gap between the purelyacademic and the more pragmatic aspects of management theory andpractice. The intention is to help them to make sense of the changes thatthey will undergo, initiate and implement.

Making sense of change management

THE BASIC CONTENT OF THE BOOK

We focus our attention on individual, team and organizational changewith good reason. Many readers will be grappling with large-scalechange at some point, which might be departmental, divisional or wholeorganizational change. Whatever the level or degree of organizationalchange, the people on the receiving end are individual human beings. Itis they who will ultimately cause the change to be a success or a failure.Without looking at the implications of change on individuals we cannever really hope to manage large-scale change effectively.

In addition, one of the themes of organizational life over recent yearshas been the ascendancy of the team. Much of today ’s work is organizedthrough teams and requires team collaboration and team working for it tosucceed. Very little has been written about the role of teams in organiza-tional change, and we have attempted to offer some fresh ideas mixedwith some familiar ones.

A thread running through the book is the crucial role of leadership. Ifmanagement is all about delivering on current needs, then leadership is allabout inventing the future. There is a specific chapter on leadership, butyou will find the importance of effective leadership arising throughout.

In some respects the chapters on individual, team and organizationalchange, together with the chapter on leadership of change are free-standing and self-contained. However, we have also included applicationchapters where we have chosen a number of types of change, some ofwhich, no doubt, will be familiar to you. These chapters aim to provideguidelines, case studies and learning points for those facing specific orga-nizational challenges. Here the individual, team and organizationalaspects of the changes are integrated into a coherent whole.

For this new edition we have added two new chapters, one on managingcomplex change and one on whether there’s a single ‘right’ way ofmanaging change.

WHY EXPLORE DIFFERENT APPROACHES TO CHANGE?

Managers in today ’s organizations face some bewildering challenges.Paul Evans (2000) says that 21st century leadership of change issues is notsimple; he sees modern leadership as a balancing act. He draws our atten-tion to the need for leaders to accept the challenge of navigating between

Introduction

opposites. Leaders have to balance a track record of success with theability to admit mistakes and meet failure well. They also have to balanceshort term and long term goals, be both visionary and pragmatic, payattention to global and local issues and encourage individual account-ability at the same time as enabling team work.

It is useful to note that while some pundits encourage leaders to leadrather than manage, Paul Evans is emphasizing the need for leaders topay attention to both management and leadership. See the box for a listof paradoxes that managers at Lego are asked to manage.

THE 11 PARADOXES OF LEADERSHIP THAT HANGON THE WALL OF EVERY LEGO MANAGER

• To be able to build a close relationship with one’s staff, and to keep asuitable distance.

• To be able to lead, and to hold oneself in the background.

• To trust one’s staff, and to keep an eye on what is happening.

• To be tolerant, and to know how you want things to function.

• To keep the goals of one’s department in mind, and at the same timeto be loyal to the whole firm.

• To do a good job of planning your own time, and to be flexible withyour schedule.

• To freely express your view, and to be diplomatic.

• To be a visionary, and to keep one’s feet on the ground.

• To try to win consensus, and to be able to cut through.

• To be dynamic, and to be reflective.

• To be sure of yourself, and to be humble.

Source: Evans (2000)

We believe that anyone interested in the successful management ofchange needs to develop the ability to handle such paradoxes.Throughout this book we offer a range of ideas and views, some of whichare contradictory. We would urge you to try to create a space within your-self for considering a variety of perspectives. Allow your own ideas andinsights to emerge, rather than looking for ideas that you agree with, and

Making sense of change management

discarding those you do not care for. It is highly probable that there issome merit in everything you read in this book!

With so many choices and so many dynamic tensions in leadership,how does a manager learn to navigate his or her way through the maze?We have developed a straightforward model of leadership that acts as astrong reminder to managers that they need to balance three keydimensions. See Figure 0.1.

Managers usually learn to focus on outcomes and tangible results veryearly on in their careers. This book is a reminder that although outcomesare extremely important, the leader must also pay attention to underlyingemotions, and to the world of power and influence, in order to sustainchange and achieve continued success in the long term. Leaders ofchange need to balance their efforts across all three dimensions of anorganizational change:

Introduction

OutcomesDeveloping and delivering

business outcomes

EmotionsEnabling people &

culture to adapt

InterestsMobilizing influence, authority and power

Organizationalcontext

Personalleadership

Figure 0.1 Three dimensions of leadershipSource: developed by Mike Green, Andy Holder and Mhairi Cameron

• outcomes: developing and delivering clear outcomes;

• interests: mobilizing influence, authority and power;

• emotions: enabling people and culture to adapt.

Leaders are at the centre of all three. They shape, direct and juggle them.One dimension may seem central at any time: for example, developing astrategy. However, leadership is about ensuring that the other dimensionsare also kept in view. The three balls must always be juggled successfully.

In our experience, if you as leader or manager of change are unawareof what is happening (or not happening) in each of the three dimensionsthen you will have ‘taken your eye off the ball’. Your chances ofprogressing in an effective way are diminished.

The early chapters of this book give the reader some underpinningtheory and examples to illustrate how people initiate change and react tochange at an individual level, when in teams, or when viewed as part ofa whole organization. This theory will help managers to understand whatis going on, how to deal with it and how to lead it with the help of others.

Making sense of change management

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Individual xxx x x xx x x x x

Team xxx x x xx x x x x

Organizational x x x xxx x x xx xx xx xx xx xx

Leading change x x x x xxx xx x x x xx

Table 0.1 Where to read about individual, team, organizational change and leading change

The later chapters take real change situations and give specific tipsand guidelines on how to tackle these successfully from a leadershippoint of view.

OVERVIEW OF STRUCTURE

We have structured the book principally in three parts.Part One, ‘The underpinning theory’, comprises four chapters and

aims to set out a wide range of ideas and approaches to managingchange. Chapter 1 draws together the key theories of how individuals gothrough change. Chapter 2 compares different types of team, and exam-ines the process of team development and also the way in which differenttypes of team contribute to the organizational change process. Chapter 3looks at a wide range of approaches to organizational change, using orga-nizational metaphor to show how these are interconnected and related.Chapter 4 examines leadership of change, the role of visionary leadership,the roles that leaders play in the change process and the competenciesthat a leader needs to become a successful leader of change.

These chapters enable the reader to develop a broader understandingof the theoretical aspects of individual, team and organizational change,and to learn more about a variety of perspectives on how best to be aleader of change. This lays firm foundations for anyone wanting to learnabout new approaches to managing change with a view to becomingmore skilled in this area.

Part Two, ‘The applications’, focuses on specific change scenarios with aview to giving guidelines, hints and tips to those involved in these differenttypes of change process. These chapters are illustrated with case studies andmake reference to the models and methods discussed in Part One. Chapter5 looks at organizational restructuring, why it goes wrong, and how to getit right. Chapter 6 tackles mergers and acquisitions by categorizing thedifferent types of activity and examining the learning points resulting fromresearch into this area. Chapter 7 examines cultural change by describingsome diverse case studies and extracting the learning points, and Chapter 8attempts to shed some light on IT-based process change, why it so oftengoes awry and what organizations can do to improve on this.

Part Three is a new section that we have included for the second edition.One of the clear things that has emerged for us in helping others lead and

Introduction

manage change is the tension between overly planning and controllingchange on the one hand, and the fact that change is often not simpleenough to plan or control on the other. Chapter 9 looks at the whole areaof complexity science and how it can inform your approach whenmanaging complex change. Chapter 10 looks at how and why manychange efforts fail to deliver all that they set out to do. In this chapter weask the question ‘Is there one right way of managing change?’ and (withoutgiving anything away right now) if not, explores how we can approachchange at least with some confidence in managing it successfully.

Please do not read this book from beginning to end in one sitting. It istoo much to take in. We recommend that if you prefer a purely pragmaticapproach you should start by reading Part Two. You will find concreteexamples and helpful guidelines. After that, you might like to go back intothe theory in Part One to understand the choices available to you as aleader of change.

Likewise, if you are more interested in understanding the theoreticalunderpinning of change, then read Part One first. You will find a range ofapproaches together with their associated theories of change. After that,you might like to read Part Two to find out how the theory can be appliedin real situations.

MESSAGE TO READERS

We wish you well in all your endeavours to initiate, adapt to and survivechange. We hope the book provides you with some useful ideas andinsights, and we look forward to hearing about your models, approachesand experiences, and to your thoughts on the glaring gaps in this book.We are sure we have left lots of important things out!

Do e-mail us with your comments and ideas, or visit us at:

Esther –Website: www.cameronchange.co.ukE-mail: [email protected]

Mike –Website: www.transitionalspace.co.ukE-mail: [email protected]

Making sense of change management

Part One

The underpinningtheory

All appears to change when we change.Henri Amiel

Individual change is at the heart of everything that is achieved in organiza-tions. Once individuals have the motivation to do something different, thewhole world can begin to change. The conspiracy laws in the UK recognizethis capacity for big change to start small. In some legal cases, the merestnod or a wink between two people seems to be considered adequateevidence to indicate a conspiratorial act. In some respects this type of lawindicates the incredible power that individuals have within them to chal-lenge existing power strongholds and alter the way things are done.

However, individuals are to some extent governed by the norms of thegroups they belong to, and groups are bound together in a whole systemof groups of people that interconnect in various habitual ways. So thestory is not always that simple. Individuals, teams and organizations allplay a part in the process of change, and leaders have a particularlyonerous responsibility: that is, making all this happen.

We divided this book into three parts so that readers could have theoption either to start their journey through this book by first readingabout the theory of change, or to begin by reading about the practicalapplications. The third part looks at managing complex change andwhether there is one right way of managing change. We understand thatpeople have different preferences. However, we do think that a thoroughgrounding in the theory is useful to help each person to untangle andarticulate his or her own assumptions about how organizations work, andhow change occurs. Do you for instance think that organizations can bechanged by those in leadership positions to reach a predetermined endstate, or do you think that people in organizations need to be collectivelyaware of the need for change before they can begin to adapt?Assumptions can be dangerous things when not explored, as they canrestrict your thinking and narrow down your options.

Part One comprises four chapters. These have been chosen to representfour useful perspectives on change: individual change, team change,organizational change and leading change. Chapter 1 draws together thefour key approaches to understanding individual change. These are thebehavioural, cognitive, psychodynamic and humanistic psychologyapproaches. This chapter also looks at the connection between person-ality and change, and how to enable change in others when you areacting in a managerial role.

Chapter 2 identifies the main elements of team and group theory thatwe believe are useful to understand when managing change. Thischapter compares different types of team, looks at the area of team effec-tiveness, and examines the process of team development. The composi-tion of the team and the effect this has on team performance are alsoexamined, as well as the way in which different types of team contributeto the organizational change process.

Chapter 3 looks at a wide range of approaches to organizationalchange, using organizational metaphor to show how these are intercon-nected and related. Familiar and unfamiliar models of the change processare described and categorized by metaphor to enable the underpinningassumptions to be examined, and we give our views on how useful thesevarious models are to leaders of change.

Chapter 4 examines the leadership of change. We start by looking at thevariety of leadership roles that arise from using different assumptionsabout how organizations work. The need for visionary leadership, the

The underpinning theory

characteristics of successful leaders and some thoughts on the need for adifferent sort of leadership in the 21st century are all aired. The chapteralso examines how communities of leaders can work together to makechange happen, and what styles and skills are required of a leader,including the need for emotional competencies. The phases of a changeprocess are looked at in order to illuminate the need for different leader-ship actions and attention during the different phases of change, and theimportance of self-knowledge and self-awareness is highlighted.

The underpinning theory

Individual change

INTRODUCTION

This chapter draws together the key theories of how individuals gothrough change, using various models to explore this phenomenon. Theaims of this chapter are to give managers and others experiencing orimplementing change an understanding of the change process and howit impacts individuals, and strategies to use when helping people throughchange to ensure results are achieved.

This chapter covers the following topics, each of which takes a differentperspective on individual change:

• Learning and the process of change – in what ways can models oflearning help us understand individual change?

• The behavioural approach to change – how can we change people’sbehaviour?

• The cognitive approach to change – how change can be made attrac-tive to people and how people can achieve the results that they want.

• The psychodynamic approach to change – what’s actually going onfor people.

• The humanistic psychology approach to change – how can peoplemaximize the benefits of change?

• Personality and change – how do we differ in our responses to change?

• Managing change in self and others – if we can understand people’sinternal experience and we know what changes need to happen,what is the best way to effect change?

As the box points out, a key point for managers of change is to under-stand the distinction between the changes being managed in the externalworld and the concurrent psychological transitions that are experiencedinternally by people (including managers themselves).

FOOD FOR THOUGHT

It was the ancient Greek philosopher, Heraclitus, who maintained that younever step into the same river twice. Of course most people interpret thatstatement as indicating that the river – that is, the external world – neverstays the same, is always changing: constant flux, in Heraclitus’s wordsagain. However, there is another way of interpreting what he said.Perhaps the ‘you’ who steps into the river today is not the same ‘you’ whowill step into the river tomorrow. This interpretation – which might openup a whole can of existential and philosophical worms – is much more todo with the inner world of experience than with the external world of factsand figures.

Immediately therefore we have two ways of looking at and respondingto change: the changes that happen in the outside world and thosechanges that take place in the internal world. Often though, it is theinternal reaction to external change that proves the most fruitful area ofdiscovery, and it is often in this area that we find the reasons externalchanges succeed or fail.

In order to demonstrate this, we will draw on four approaches to change.These are the behavioural, the cognitive, the psychodynamic and thehumanistic psychological approaches, as shown in Figure 1.1.

Individual change

The underpinning theory

We will also look at Edgar Schein’s analysis of the need to reduce theanxiety surrounding the change by creating psychological safety. This isfurther illuminated by discussion of the various psychodynamics thatcome into play when individuals are faced with change, loss and renewal.

Finally we will explore tools and techniques that can be used to makethe transition somewhat smoother and somewhat quicker. This willinclude a summary of how the Myers-Briggs Type Indicator™, which isused to develop personal and interpersonal awareness, can illuminate themanagerial challenges at each stage of the individual change process. Butfirst we will begin our exploration by looking at how individuals learn.

LEARNING AND THE PROCESS OF CHANGE

Buchanan and Huczynski (1985) define learning as ‘the process ofacquiring knowledge through experience which leads to a change inbehaviour ’. Learning is not just an acquisition of knowledge, but theapplication of it through doing something different in the world.

Many of the change scenarios that you find yourself in require you tolearn something new, or to adjust to a new way of operating, or to unlearnsomething. Obviously this is not always the case – a company takes overyour company but retains the brand name, the management team and itis ‘business as usual’ – but often in the smallest of changes you need tolearn something new: your new boss’s likes and dislikes, for example.

A useful way of beginning to understand what happens when we gothrough change is to take a look at what happens when we first start to

Behavioural

Changing behaviours

Cognitive

Achieving results

Psychodynamic

The inner world of change

Humanistic psychology

Maximizing potential

Figure 1.1 Four approaches to individual change

learn something new. Let us take an example of driving your new car for thefirst time. For many people the joy of a new car is tempered by the nervous-ness of driving it for the first time. Getting into the driving seat of your oldcar is an automatic response, as is doing the normal checks, turning the keyand driving off. However, with a new car all the buttons and control panelsmight be in different positions. One can go through the process of locatingthem either through trial and error, or perhaps religiously reading throughthe driver ’s manual first. But that is only the beginning, because you knowthat when you are actually driving any manner of things might occur thatwill require an instantaneous response: sounding the horn, flashing yourlights, putting the hazard lights on or activating the windscreen wipers.

All these things you would have done automatically but now you needto think about them. Thinking not only requires time, it also requires a‘psychological space’ which it is not easy to create when driving along atyour normal speed. Added to this is the nervousness you may have aboutit being a brand new car and therefore needing that little bit more atten-tion so as to avoid any scrapes to the bodywork.

As you go through this process, an external assessment of your perfor-mance would no doubt confirm a reduction in your efficiency and effec-tiveness for a period of time. And if one were to map your internal stateyour confidence levels would most likely dip as well. Obviously thisanxiety falls off over time. This is based on your capacity to assimilate newinformation, the frequency and regularity with which you have changedcars, and how often you drive.

Individual change

Time

rfo

rma

nce

Figure 1.2 The learning dip

Conscious and unconscious competence and incompetence

Another way of looking at what happens when you learn something newis to view it from a Gestalt perspective. The Gestalt psychologists suggestedthat people have a worldview that entails some things being in the fore-ground and other things being in the background of their consciousness.

To illustrate this, the room where I am writing this looks out on to agravel path which leads into a cottage garden sparkling with the sunshining on the frost-covered shrubs. Before I chose to look up, the gardenwas tucked back into the recesses of my consciousness. (I doubt whetherit was even in yours.) By focusing attention on it I brought it into the fore-ground of my consciousness. Likewise all the colours in the garden are ofequal note, until someone mentions white and I immediately start tonotice the snowdrops, the white narcissi and the white pansies. Theyhave come into my foreground.

Now in those examples it does not really matter what is fully conscious ornot. However in the example of driving a new car for the first time some-thing else is happening. Assuming that I am an experienced driver, many ofthe aspects of driving, for me, are unconscious. All of these aspects I hope-fully carry out competently. So perhaps I can drive for many miles on amotorway, safe in the knowledge that a lot of the activities I am performingI am actually doing unconsciously. We might say I am unconsciously compe-tent. However, as soon as I am in the new situation of an unfamiliar car Irealize that many of the things I took for granted I cannot now do as well asbefore. I have become conscious of my incompetence. Through some trialand error and some practice and some experience I manage – quiteconsciously – to become competent again. But it has required focus andattention. All these tasks have been in the forefront of my world and myconsciousness. It will only be after a further period of time that they recedeto the background and I become unconsciously competent again (Figure 1.3).

Of course there is another cycle: not the one of starting at unconsciouscompetence, but one of starting at unconscious incompetence! This iswhere you do not know what you do not know, and the only way of real-izing is by making a mistake (and reflecting upon it), or when someonekind enough and brave enough tells you. From self-reflection or fromothers’ feedback your unconscious incompetence becomes conscious, andyou are able to begin the cycle of learning.

The underpinning theory

Individual change

Kolb’s learning cycleDavid Kolb (1984) developed a model of experiential learning, whichunpacked how learning occurs, and what stages a typical individual goesthrough in order to learn. It shows that we learn through a process ofdoing and thinking. (See Figure 1.4.)

Following on from the earlier definition of learning as ‘the process ofacquiring knowledge through experience which leads to a change in

Concreteexperience

Activist

Reflectiveobservation

Reflector

TheoreticalconceptsTheorist

Practicalexperimentation

Pragmatist

Figure 1.4 Kolb's learning cycle

��

Figure 1.3 Unconscious competence

behaviour ’, Kolb saw this as a cycle through which the individual has aconcrete experience. The individual actually does something, reflectsupon his or her specific experience, makes some sense of the experienceby drawing some general conclusions, and plans to do things differentlyin the future. Kolb would argue that true learning could not take placewithout someone going through all stages of the cycle.

In addition, research by Kolb suggested that different individuals havedifferent sets of preferences or styles in the way they learn. Some of us are

quite activist in our approach to learning. Wewant to experience what it is that we need tolearn. We want to dive into the swimming pooland see what happens (immerse ourselves in thetask). Some of us would like to think about itfirst! We like to reflect, perhaps on others’ experi-ence before we take action. The theorists mightlike to see how the act of swimming relates toother forms of sporting activity, or investigatehow other mammals take the plunge. The prag-matists amongst us have a desire to relate what is

happening to their own circumstances. They are interested in how the actof swimming will help them to achieve their goals.

Not only do we all have a learning preference but also the theorysuggests that we can get stuck within our preference.

FOOD FOR THOUGHT

If you were writing a book on change and wanted to maximize thelearning for all of your readers perhaps you would need to:

• encourage experimentation (activist);

• ensure there were ample ways of engendering reflection throughquestioning (reflector);

• ensure the various models were well researched (theorist);• illustrate your ideas with case studies and show the relevance of what

you are saying by giving useful tools, techniques and applications(pragmatist).

The underpinning theory

So activists may go from one experience to the next one, not thinking toreview how the last one went or planning what they would do differ-ently. The reflector may spend inordinate amounts of time conductingproject and performance reviews, but not necessarily embedding anylearning into the next project. Theorists can spend a lot of time makingconnections and seeing the bigger picture by putting the current situationinto a wider context, but they may not actually get around to doinganything. Pragmatists may be so intent on ensuring that it is relevant totheir job that they can easily dismiss something that does not at firstappear that useful.

STOP AND THINK!Q 1.1 A new piece of software arrives in the office or in your home. How

do you go about learning about it?

• Do you install it and start trying it out? (Activist)

• Do you watch as others show you how to use it? (Reflector)

• Do you learn about the background to it and the similaritieswith other programmes? (Theorist)

• Do you not bother experimenting until you find a clear purposefor it? (Pragmatist)

THE BEHAVIOURAL APPROACH TO CHANGE

The behavioural approach to change, as the name implies, very muchfocuses on how one individual can change another individual’sbehaviour using reward and punishment, to achieve intended results. Ifthe intended results are not being achieved then an analysis of the indi-vidual’s behaviour will lead to an understanding of what is contributingto success and what is contributing to non-achievement. In order to elicitthe preferred behaviour the individual must be encouraged to behavethat way, and discouraged from behaving any other way. This approachhas its advantages and disadvantages.

For example, an organization is undergoing a planned programme ofculture change, moving from being an inwardly focused bureaucraticorganization to a flatter and more responsive customer oriented organi-zation. Customer facing and back office staff will all need to change the

Individual change

way they behave towards customers andtowards each other to achieve thischange. A behavioural approach tochange will focus on changing thebehaviour of staff and managers. Theobjective will be behaviour change, andthere will not necessarily be any atten-tion given to improving processes,improving relationships or increasinginvolvement in goal setting. There willbe no interest taken in how individualsspecifically experience that change.

This whole field is underpinned by the work of a number of practi-tioners. The names of Pavlov and Skinner are perhaps the most famous.Ivan Pavlov noticed while researching the digestive system of dogs thatwhen his dogs were connected to his experimental apparatus and offeredfood they began to salivate. He also observed that, over time, the dogsstarted to salivate when the researcher opened the door to bring in thefood. The dogs had learnt that there was a link between the door openingand being fed. This is now referred to as classical conditioning.

CLASSICAL CONDITIONING

Unconditioned stimulus (food) leads to an unconditioned response(salivation).

If neutral stimulus (door opening) and unconditioned stimulus (food)are associated, neutral stimulus (now a conditioned stimulus) leads tounconditioned response (now a conditioned response).

Pavlov (1928)

Further experimental research led others to realize that cats could learn howto escape from a box through positive effects (rewards) and negative effects(punishments). Skinner (1953) extended this research into operant condi-tioning, looking at the effects of behaviours, not just at the behaviours them-selves. His experiments with rats led him to observe that they soon learntthat an accidental operation of a lever led to there being food provided. Thereward of the food then led to the rats repeating the behaviour.

The underpinning theory

Using the notion of rewards and punishments, four possible situationsarise when you want to encourage a specific behaviour, as demonstratedin Table 1.1.

STOP AND THINK!Q 1.2 What rewards and what punishments operate in your organization?

How effective are they in bringing about change?

So in what ways may behaviourism help us with individuals goingthrough change? In any project of planned behaviour change a numberof steps will be required:

• Step 1: The identification of the behaviours that impact performance.

• Step 2: The measurement of those behaviours. How much are thesebehaviours currently in use?

• Step 3: A functional analysis of the behaviours – that is, the identifica-tion of the component parts that make up each behaviour.

• Step 4: The generation of a strategy of intervention – what rewardsand punishments should be linked to the behaviours that impactperformance.

• Step 5: An evaluation of the effectiveness of the intervention strategy.

Individual change

Table 1.1 Rewards and punishments

Actions Positive Negative

Addition Positive reinforcement PunishmentPleasurable and increases Unpleasant (for example, an probability of repeat ‘good’ electric shock) leading to behaviour decrease in repeat ‘bad’

behaviour

Subtraction Extinction Negative reinforcementRemoval of an unpleasant Removal of a pleasant stimulus stimulus increases the decreases the likelihood of likelihood of repeat ‘good’ repeat ‘bad’ behaviourbehaviour

Reinforcement strategies

When generating reward strategies at Step 4 above, the following possi-bilities should be borne in mind.

Financial reinforcement

Traditionally financial reinforcement is the most explicit of the reinforce-ment mechanisms used in organizations today, particularly in salesoriented cultures. The use of bonus payments, prizes and other tangiblerewards is common. To be effective the financial reinforcement needs tobe clearly, closely and visibly linked to the behaviours and performancethat the organization requires.

A reward to an outbound call centre employee for a specific number ofappointments made on behalf of the sales force would be an example ofa reinforcement closely linked to a specified behaviour. A more sophisti-cated system might link the reward to not only the number of appoint-ments but also the quality of the subsequent meeting and also the qualityof the customer interaction.

An organization-wide performance bonus unrelated to an individual’scontribution to that performance would be an example of a poorly linkedreinforcement.

Non-financial reinforcement

FeedbackNon-financial reinforcement tends to take the form of feedback given toan individual about performance on specific tasks. The more specific thefeedback is, the more impactful the reinforcement can be. This feedbackcan take both positive and negative forms. This might well depend on theorganizational culture and the managerial style of the boss. This feedbackperhaps could take the form of a coaching conversation, where specificeffective behaviours are encouraged, and specific ineffective behavioursare discouraged and alternatives generated.

Social reinforcementSocial reinforcement takes the form of interpersonal actions: that is,communications of either a positive or negative nature. Praise, compli-ments, general recognition, perhaps greater (or lesser) attention can all actas a positive reinforcement for particular behaviours and outcomes.

The underpinning theory

Similarly social reinforcement could also take the form of ‘naming andshaming’ for ineffective performance.

Social reinforcement is not only useful for performance issues, but canbe extremely useful when an organizational culture change is under way.Group approval or disapproval can be a determining factor in definingwhat behaviours are acceptable or unacceptable within the culture. Newstarters in an organization often spend quite some time working outwhich behaviours attract which reactions from bosses and colleagues.

Motivation and behaviour

The pure behaviourist view of the world, prevalent in industry up to the1960s, led to difficulties with motivating people to exhibit the ‘right’behaviours. This in turn led researchers to investigate what managementstyles worked and did not work.

In 1960 Douglas McGregor published his book The Human Side ofEnterprise. In it he described his Theory X and Theory Y, which looked atunderlying management assumptions about an organization’s workforce,as demonstrated in Table 1.2.

Theory X was built on the assumption that workers are not inherentlymotivated to work, seeing it as a necessary evil and therefore needing

Individual change

Table 1.2 Theory X and Theory Y

Theory X assumptions Theory Y assumptions

People dislike work People regard work as natural and normalThey need controlling and They respond to more than just control direction or coercion, for example recognition and They require security encouragementThey are motivated by threats They commit to the organization’s of punishment objectives in line with the rewards They avoid taking responsibility offeredThey lack ambition They seek some inner fulfilment from workThey do not use their Given the right environment people imagination willingly accept responsibility and

accountabilityPeople can be creative and innovative

Source: McGregor (1960)

The underpinning theory

close supervision. Theory Y stated that human beings generally have aneed and a desire to work, and given the right environment are more thanwilling to contribute to the organization’s success. McGregor ’s researchappeared to show that those managers who exhibited Theory Y beliefswere more successful in eliciting good performance from their people.

Frederick Herzberg also investigated what motivated workers to givetheir best performance. He was an American clinical psychologist whosuggested that workers have two sets of drives or motivators: a desire toavoid pain or deprivation (hygiene factors) and a desire to learn and develop(motivators). (See Table 1.3.) His work throughout the 1950s and 1960ssuggested that many organizations provided the former but not the latter.

An important insight of his was that the hygiene factors did not motivateworkers, but that their withdrawal would demotivate the workforce.Although later research has not fully replicated his findings, Herzberg’sseminal One more time: How do you motivate employees? (1968) has generatedmore reprints than any other Harvard Business Review article.

STOP AND THINK!Q 1.3 What are the underlying assumptions built into the behaviourist

philosophy, and how do they compare to McGregor’s theories?

Q 1.4 In a change programme based on the behaviourist approach,what added insights would Herzberg’s ideas bring?

Q 1.5 If one of your team members is not good at giving presentations,how would you address this using behaviourist ideas?

Table 1.3 Herzberg’s motivating factors

Hygiene factors Motivators

Pay AchievementCompany policy RecognitionQuality of supervision/management ResponsibilityWorking relations AdvancementWorking conditions LearningStatus The type and nature of the workSecurity

Source: adapted from Herzberg (1968)

Summary of behavioural approach

If you were to approach change from a behaviourist perspective you aremore likely to be acting on the assumption of McGregor ’s Theory X: theonly way to motivate and align workers to the change effort is through acombination of rewards and punishments. You would spend time andeffort ensuring that the right reward strategy and performance manage-ment system was in place and was clearly linked to an individual’sbehaviours. Herzberg’s ideas suggest that there is something more at playthan reward and punishment when it comes to motivating people. That isnot to say that the provision of Herzberg’s motivators cannot be used assome sort of reward for correct behaviour.

THE COGNITIVE APPROACH TO CHANGE

Cognitive psychology developed out of afrustration with the behaviourist approach.The behaviourists focused solely on observ-able behaviour. Cognitive psychologists weremuch more interested in learning aboutdeveloping the capacity for language and aperson’s capacity for problem solving. Theywere interested in things that happen withina person’s brain. These are the internalprocesses which behavioural psychology didnot focus on.

Cognitive theory is founded on thepremise that our emotions and our problems are a result of the way wethink. Individuals react in the way that they do because of the way theyappraise the situation they are in. By changing their thought processes,individuals can change the way they respond to situations.

People control their own destinies by believing in and acting on the values andbeliefs that they hold.

R Quackenbush, Central Michigan University

Individual change

The underpinning theory

Much groundbreaking work has been done by Albert Ellis on rational-emotive therapy (Ellis and Grieger, 1977) and Aaron Beck on cognitivetherapy (1970). Ellis emphasized:

[T]he importance of 1) people’s conditioning themselves to feel disturbed(rather than being conditioned by parental and other external sources); 2) theirbiological as well as cultural tendencies to think ‘crookedly’ and to needlesslyupset themselves; 3) their uniquely human tendencies to invent and createdisturbing beliefs, as well as their tendencies to upset themselves about theirdisturbances; 4) their unusual capacity to change their cognitive, emotive andbehavioural processes so that they can: a) choose to react differently from theway they usually do; b) refuse to upset themselves about almost anything thatmay occur, and c) train themselves so that they can semi-automatically remainminimally disturbed for the rest of their lives. (Ellis, in Henrik, 1980)

If you keep doing what you’re doing you’ll keep getting what you get.

Anon

Beck developed cognitive therapy based on ‘the underlying theoreticalrationale that an individual’s affect (moods, emotions) and behaviour arelargely determined by the way in which he construes the world; that is,how a person thinks determines how he feels and reacts’ (A John Rush,in Henrik, 1980).

Belief system theory emerged principally from the work of Rokeachthrough the 1960s and 1970s. He suggested that an individual’s selfconcept and set of deeply held values were both central to that person’sbeliefs and were his or her primary determinant. Thus individuals’ valuesinfluence their beliefs, which in turn influence their attitudes.Individuals’ attitudes influence their feelings and their behaviour.

Out of these approaches has grown a way of looking at change withinindividuals in a very purposeful way. Essentially individuals need to lookat the way they limit themselves through adhering to old ways ofthinking, and replace that with new ways of being.

This approach is focused on the results that you want to achieve, althoughcrucial to their achievement is ensuring that there is alignment throughoutthe cause and effect chain. The cognitive approach does not refer to the

Individual change

external stimuli and the responses to the stimuli. It is more concerned withwhat individuals plan to achieve and how they go about this.

Achieving resultsKey questions in achieving results in an organizational context, as shownin Figure 1.5, are:

• Self concept and values: what are my core values and how do theydovetail with those of my organization?

• Beliefs and attitudes: what are my limiting beliefs and attitudes andwith what do I replace them?

• Feelings: what is my most effective state of being to accomplish mygoals and how do I access it?

• Behaviour: what specifically do I need to be doing to achieve my goalsand what is my first step?

• Results: what specific outcomes do I want and what might get in theway?

Setting goals

The cognitive approach advocates the use of goals. The assumption is thatthe clearer the goal, the greater the likelihood of achievement. Considerthe following case study. Graduates at Yale University in the United Stateswere surveyed over a period of 20 years. Of those surveyed, 3 per centwere worth more than the other 97 per cent put together. There were nocorrelations with parental wealth, gender or ethnicity. The only differencebetween the 3 per cent and the 97 per cent was that the former had clearlyarticulated and written goals, and the latter grouping did not. (This isperhaps just an apocryphal story, as the details of this case study are muchquoted on many ‘positive thinking’ websites but we have been unable totrace the research back to where it should have originated at Yale.)

Self concept & values � Beliefs � Attitudes � Feelings � Behaviour � Results

Figure 1.5 Achieving results

However, research undertaken by one of the authors (Green, 2001) intowhat makes for an outstanding sales person suggests that in the two keyareas of business focus and personal motivation, goals setting looms large.The outstanding sales people had clearer and more challenging businesstargets that they set themselves. These were coupled with very clearpersonal goals as to what the sales person wanted to achieve personallywith the rewards achieved by business success.

This is further backed up by research conducted by Richard Bandler andJohn Grinder (1979), creators of neuro-linguistic programming, who foundthat the more successful psychotherapists were those who were able to gettheir clients to define exactly what wellness looked like. This in turn led tothe idea of a ‘well-formed outcome’ which enabled significantly betterresults to be achieved by those who set clear goals as opposed to thosewith vague goals. The goals themselves were also more ambitious.

Making sense of our results

The cognitive approach suggests we pay attention to the way in whichwe talk to ourselves about results. For example, after a particularly goodperformance one person might say things such as, ‘I knew I could do it,I’ll be able to do that again.’ Another person might say something like,‘That was lucky, I doubt whether I’ll be able to repeat that.’ Likewise aftera poor or ineffective performance our first person might say somethinglike, ‘I could do that a lot better next time’, while the second person mightsay, ‘I thought as much, I knew that it would turn out like this.’

Once we have identified our usual way of talking to ourselves we canlook at how these internal conversations with ourselves limit us, thenconsider changing the script.

FOOD FOR THOUGHT

Reflect upon a time when you did not achieve one of your results.What did you say to yourself?What was your limiting belief?What is the opposite belief?What would it be like to hold the new belief?How might your behaviour change as a result?What results would you achieve as a consequence?

The underpinning theory

Individual change

Techniques for change

The cognitive approach has generated numerous techniques forchanging the beliefs of people and thereby improving their performance.These include the following.

Positive listings

Simply list all the positive qualities you have, such as good feelings, goodexperiences, good results, areas of skills, knowledge and expertise. Byaccepting that these are all part of you, the individual, you can reinforceall these positive thoughts, feelings and perceptions, which then lead toenhanced beliefs.

Affirmations

An affirmation is a positive statement describing the way that you wantto be. It is important that the statement is:

• personal: ‘I am always enthusiastic when it comes to work!’ It is youwho this is about, and it is as specific as you can make it;

• present tense: ‘I am always enthusiastic when it comes to work!’ It isnot in the future, it is right now;

• positive: ‘I am always enthusiastic when it comes to work!’ Itdescribes a positive attribute, not the absence of a negative attribute;

• potent: ‘I am always enthusiastic when it comes to work!’ Use wordsthat mean something to you.

Try writing your own affirmation. Put it on a card and read it out 10 timesa day. As you do so, remember to imagine what you would feel, what youwould see, what you would hear if it were true.

Visualizations

Visualizations are very similar to affirmations but focus on a positive,present mental image. Effective visualizations require you to enter arelaxed state where you imagine a specific example of the way you wantto be. You imagine what you and others would see, what would be heard

and what would be felt. Using all your senses you imagine yourselfachieving the specific goal. You need to practise this on a regular basis.

Reframing

Reframing is a technique for reducing feelings and thoughts that impactnegatively on performance. You get daunted when going in to see thesenior management team? Currently you see them looming large, full ofcolour, vitality and menacing presence? Imagine them in the boardroom,but this time see them all in grey. Maybe shrink them in size, as youwould a piece of clip art in a document that you are word processing.Turn down their volume so they sound quite quiet. Run through thisseveral times and see what effect it has on your anxiety.

Pattern breaking

Pattern breaking is a technique of physically or symbolically taking atten-tion away from a negative state and focusing it on a positive. Take theprevious example of going into the boardroom to meet the seniormanagement team (or it could be you as the senior manager going out tomeet the staff and feeling a little awkward). You find you have slippedinto being a bit nervous, and catch yourself. Put your hand in the shapeof a fist to your mouth and give a deep cough, or at an appropriatemoment clap your hands firmly together and say, ‘Right, what I wasthinking was…’. Once you’ve done the distraction, you can say to your-self, ‘That wasn’t me. This is me right now.’

Detachment

This is a similar technique with the same aim. Imagine a time when you didnot like who you were. Perhaps you were in the grip of a strong negativeemotion. See yourself in that state, then imagine yourself stepping outsideor away from your body, leaving all that negativity behind and becomingquite calm and detached and more rational. When you next catch yourselfbeing in one of those moods, try stepping outside of yourself.

Anchoring and resource states

These are two techniques where you use a remembered positive experi-ence from the past which has all the components of success. For example,

The underpinning theory

remember a time in the past where you gave an excellent presentation.What did you see? What did you hear? What did you feel? Really enterinto that experience, then pinch yourself and repeat a word that comes tomind. Rerun the experience and pinch yourself and say the word. Nowtry it the other way, pinch yourself and say the word – and the experienceshould return. Before your next presentation, as you go into the roomreconnect to the positive experience by pinching yourself and saying theword. Does it work? If it does not, simply try something else.

Rational analysis

Rational analysis is a cognitive technique par excellence. It is based on thenotion that our beliefs are not necessarily rational: ‘I could never do that’or ‘I’m always going to be like that’. Rational analysis suggests you writedown all the reasons that is incorrect. You need to be specific and notgeneralize (for example, ‘I’m always doing that’ – always?). You need to setmeasurable criteria, objectively based, and you need to use your powersof logic. By continuously proving that this is an irrational belief you willeventually come to disbelieve it.

STOP AND THINK!Q 1.6 What might the main benefits be of a cognitive approach?

Q 1.7 What do you see as some of the limitations of this approach?

Summary of cognitive approach

The cognitive approach builds on the behaviourist approach by puttingbehaviour into the context of beliefs, and focusing more firmly onoutcomes. Many cognitive techniques are used in the field of manage-ment today, particularly in the coaching arena. This approach involvesfocusing on building a positive mental attitude and some stretching goals,backed up by a detailed look at what limiting beliefs produce behaviourthat becomes self-defeating.

A drawback of the cognitive approach is the lack of recognition of theinner emotional world of the individual, and the positive and negativeimpact that this can have when attempting to manage change. Someobstacles to change need to be worked through, and cannot be made ‘OK’by reframing or positive talk.

Individual change

THE PSYCHODYNAMIC APPROACH TO CHANGE

The idea that humans go through apsychological process during changebecame evident due to researchpublished by Elizabeth Kubler-Ross(1969). The word ‘psychodynamic’ isbased on the idea that when facingchange in the external world, an indi-vidual can experience a variety of

internal psychological states. As with the behavioural and cognitiveapproaches to change, research into the psychodynamic approach begannot in the arena of organizations, but for Kubler-Ross in the area of termi-nally ill patients. Later research showed that individuals going throughchanges within organizations can have very similar experiences, thoughperhaps less dramatic and less traumatic.

The Kubler-Ross model

Kubler-Ross published her seminal work On Death and Dying in 1969. Thisdescribed her work with terminally ill patients and the different psycho-logical stages that they went through in coming to terms with their condi-tion. Clearly this research was considered to have major implications forpeople experiencing other types of profound change.

Kubler-Ross realized that patients – given the necessary conditions –would typically go through five stages as they came to terms with theirprognosis. The stages were denial, anger, bargaining, depression andfinally acceptance.

Denial

People faced with such potentially catastrophic change would often notbe able to accept the communication. They would deny it to them-selves. That is, they would not actually take it in, but would becomeemotionally numb and have a sense of disbelief. Some would arguethat this is the body ’s way of allowing people to prepare themselves forwhat is to follow. On a more trivial scale, some of us have experiencedthe numbness and disbelief when our favourite sports team is defeated.There is little that we can do but in a sense ‘shut down’. We do not want

The underpinning theory

to accept the news and expose ourselves to the heartache that thatwould bring.

Anger

When people allow themselves to acknowledge what is happening theyenter the second stage, typically that of anger. They begin to ask them-selves questions like, ‘Why me?’, ‘How could such a thing happen tosomeone like me? If only it had been someone else’, ‘Surely it’s thedoctors who are to blame – perhaps they ’ve misdiagnosed’ (back intodenial). ‘Why didn’t they catch it in time?’

Anger and frustration can be focused externally, but for some of us it isourselves we blame. Why did we not see it coming, give up smoking? ‘It’salways me who gets into trouble.’

In some ways we can see this process as a continuation of our notwanting to accept the change and of wanting to do something, anything,other than fully believe in it. Anger is yet another way of displacing ourreal feelings about the situation.

Bargaining

When they have exhausted themselves by attacking others (or themselves)people may still want to wrest back some control of the situation or of theirfate. Kubler-Ross saw bargaining as a stage that people would enter now.

For those who themselves are dying, and also for those facing the deathof a loved one, this stage can be typified by a conversation with them-selves. Or if they are religious, this may be a conversation with God,which asks for an extension of time. ‘If I promise to be good from now on,if I accept some remorse for any ills I have committed, if I could just beallowed to live to see my daughter ’s wedding, I’ll take back all the nastythings I said about that person if you’ll only let them live.’

Once again we can see this stage as a deflection of the true gravity ofthe situation. This is bargaining, perhaps verging on panic. The person isdesperately looking around for something, anything, to remedy the situ-ation. ‘If only I could get it fixed or sorted everything would be all right.’

Depression

When it becomes clear that no amount of bargaining is going to providean escape from the situation, perhaps the true momentousness of it

Individual change

kicks in. How might we react? Kubler-Ross saw her patients enter adepression at this stage. By depression we mean a mourning or grievingfor loss, because in this situation we will be losing all that we have everhad and all those we have ever known. We shall be losing our future,we shall be losing our very selves. We are at a stage where we are readyto give up on everything. We are grieving for the loss that we are aboutto endure.

For some, this depression can take the form of apathy or a sense ofpointlessness. For others it can take the form of sadness, and for some amixture of intense emotions and disassociated states.

Acceptance

Kubler-Ross saw many people move out of their depression and enter afifth stage of acceptance. Perhaps we might add the word ‘quiet’ to accep-tance, because this is not necessarily a happy stage, but it is a stage wherepeople can in some ways come to terms with the reality of their situationand the inevitability of what is happening to them. People have a sense ofbeing fully in touch with their feeling about the situation, their hopes andfears, their anxieties. They are prepared.

Further clinical and management researchers have added to Kubler-Ross’s five stages, in particular Adams, Hayes and Hopson (1976) asfollows and as illustrated in Figure 1.7:

The underpinning theory

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Figure 1.6 The process of change and adjustmentSource: based on Kubler-Ross (1969)

Individual change

• relief: ‘At least I now know what’s happening now, I had my suspi-cions, I wasn’t just being paranoid’;

• shock and/or surprise: really a subset of denial but characterized by asense of disbelief;

• denial: total non-acceptance of the change and maybe ‘proving’ tooneself that it is not happening and hoping that it will go away;

• anger: experiencing anger and frustration but really in an unawaresort of way, that is, taking no responsibility for your emotions;

• bargaining: the attempt to avoid the inevitable;

• depression: hitting the lows and responding (or being unresponsive)with apathy or sadness;

• acceptance: the reality of the situation is accepted;

• experimentation: after having been very inward looking with accep-tance, the idea arrives that perhaps there are things ‘out there’.‘Perhaps some of these changes might be worth at least thinking about.Perhaps I might just ask to see the job description of that new job’;

• discovery: as you enter this new world that has changed there may bethe discovery that things are not as bad as you imagined. Perhaps thecompany was telling the truth when it said there would be newopportunities and a better way of working.

Figure 1.7 Adams, Hayes and Hopson's (1976) change curve

The underpinning theory

Virginia Satir model

Virginia Satir, a family therapist, developed her model (Satir et al, 1991)after observing individuals and families experience a wide range ofchanges. Her model not only has a number of stages but also highlightstwo key events that disturb or move an individual’s experience along: theforeign element and the transforming idea (Figure 1.8).

She describes the initial state as one of maintaining the status quo. Wehave all experienced periods within our lives – at home or at work –where day to day events continue today as they have done in previousdays, and no doubt will be the same tomorrow. It may be that the organi-zation you are working in is in a mature industry with well establishedworking practices which need little or no alteration. This is a state inwhich if you carry on doing what you are doing, you will continue to getwhat you are getting. The situation is one of relative equilibrium whereall parts of the system are in relative harmony. That is not to say, of course,that there is no dissatisfaction. It is just that no one is effecting change.

This changes when something new enters the system. Satir calls it a‘foreign element’ in the sense that a factor previously not present is intro-duced. As with the examples from the two previous models it might bethe onset of an illness, or in the world of work, a new chief executive with

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Figure 1.8 Satir's model

ideas about restructuring. Whatever the nature of this foreign element, ithas an effect.

A period of chaos ensues. Typically this is internal chaos. The worlditself may continue to function but the individual’s own perceived worldmight be turned upside down, or inside out. He or she may be in a stateof disbelief – denial or emotional numbness – at first, not knowing whatto think or feel or how to act. Individuals may resist the notion that thingsare going to be different. Indeed they may actually try to redouble theirefforts to ensure that the status quo continues as long as possible, even tothe extent of sabotaging the new ideas that are forthcoming. Theirsupport networks, which before had seemed so solid, might now not betrusted to help and support the individual. They may not know who totrust or where to go for help.

During this period of chaos, we see elements of anger and disorganiza-tion permeating the individual’s world. Feelings of dread, panic anddespair are followed by periods of apathy and a sense of pointlessness. Atmoments like this it may well seem like St John of the Cross’s Dark Nightof the Soul (2003) when all hope has vanished.

But it is often when things have reached their very worst that fromsomewhere – usually from within the very depths of the person – thegerm of an idea or an insight occurs. In terms of the Kubler-Ross modelthe individual is coming to terms with the reality of the situation andexperiencing acknowledgement and acceptance. He or she has seen thelight, or at least a glimmer of hope. An immense amount of work may stillneed to be done, but the individual has generated this transforming idea,which spreads some light on to the situation, and perhaps shows him orher a way out of the predicament.

Once this transforming idea has taken root, the individual can beginthe journey of integration. Thus this period of integration requires thenew world order to be assimilated into the individual’s own world.

Imagine a restructuring has taken place at your place of work. You havegone through many a sleepless night worrying what job you may end upin, or whether you will have a role at the end of the change. The jobs onoffer do not appeal at all to you at first (‘Why didn’t they ask me for myviews when they formulated the new roles?’ ‘If they think I’m applyingfor that they have another think coming!’). However as the chief execu-tive’s thinking is made clearer through better communications, yougrudgingly accept that perhaps he did have a point in addressing the

Individual change

complacency within the firm. Then perhaps one day you wake up andfeel that maybe you might just have a look at that job description for thejob in Operations. You have never worked in that area before and youhave heard a few good things about the woman in charge.

You begin to accept the idea of a new role and ‘try it on for size’.Perhaps at first you are just playing along, but soon it becomes moreexperimentation and more of an exploration. As time moves on therestructure is bedded into the organization, roles and responsibilities clar-ified, new objectives and ways of working specified and results achieved.A new status quo is born. The scars are still there perhaps but they are nothurting so much.

Gerald Weinberg (1997), in his masterly book on change, but with a titlethat might not appeal to everyone (Quality Software Management, Volume4: Anticipating Change) draws heavily on the Satir model and maps on toit the critical points that can undermine or support the change process.(See Figure 1.9.) Weinberg shows that if the change is not planned wellenough, or if the receivers of change consciously or unconsciously decideto resist, the change effort will falter.

Summary of psychodynamic approach

The psychodynamic approach is useful for managers who want to under-stand the reactions of their staff during a change process and deal withthem. These models allow managers to gain an understanding of whypeople react the way they do. It identifies what is going on in the innerworld of their staff when they encounter change.

As with all models, the ones we have described simplify what can bequite a complex process. Individuals do not necessarily know that theyare going through different phases. What they may experience is a rangeof different emotions (or lack of emotion), which may cluster togetherinto different groupings which could be labelled one thing or another.Any observer, at the time, might see manifestations of these differentemotions played out in the individual’s behaviour.

Research suggests that these different phases may well overlap, with thepredominant emotion of one stage gradually diminishing over time as apredominant emotion of the next stage takes hold. For example, the deepsense of loss and associated despondency, while subsiding over time,might well swell up again and engulf the individual with grief, either for

The underpinning theory

no apparent reason, or because of a particular anniversary, contact with aparticular individual or an external event reported on the news.

Individuals will go through a process which, either in hindsight orfrom an observer ’s point of view, will have a number of different phaseswhich themselves are delineated in time and by different characteristics.However the stages themselves will not necessarily have clear begin-nings or endings, and characteristics from one stage may appear inother stages.

Satir ’s model incorporates the idea of a defining event – the trans-forming idea – that can be seen to change, or be the beginning of thechange for, an individual. It may well be an insight, or waking up onemorning and sensing that a cloud had been lifted. From that point onthere is a qualitative difference in the person undergoing change. He or

Individual change

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CHAOS

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Figure 1.9 Critical points in the change processSource: Weinberg (1997)

she can see the light at the end of the tunnel, or have a sense that there isa future direction.

Key learnings here are that everyone to some extent goes through thehighs and lows of the transitions curve, although perhaps in differenttimes and in different ways. It is not only perfectly natural and normalbut actually an essential part of being human.

STOP AND THINK!Q 1.8 Think of a current or recent change in your organization.

• Can you map the progress of the change on to Satir’s orWeinberg’s model?

• At what points did the change falter?

• At what points did it accelerate?

• What factors contributed in each case?

THE HUMANISTIC PSYCHOLOGY APPROACH TO CHANGE

The humanistic psychological approach to change combines some of theinsights from the previous three approaches while at the same time devel-oping its own. It emerged as a movement in the United States during the1950s and 1960s. The American Association of Humanistic Psychologydescribes it as ‘concerned with topics having little place in existing theoriesand systems: e.g. love, creativity, self, growth… self-actualization, highervalues, being, becoming, responsibility, meaning… transcendental experi-ence, peak experience, courage and related concepts’.

In this section we look at how the humanistic approach differs fromthe behavioural and cognitive approaches, list some of the key assump-tions of this approach, and look at three important models withinhumanistic psychology.

Table 1.4 charts some of the similarities and differences between thepsychoanalytic, behavioural, cognitive and humanistic approaches.Although taken from a book more concerned with counselling andpsychotherapy, it illustrates where humanistic psychology stands in rela-tion to the other approaches.

The underpinning theory

Individual change

Table 1.4 The psychoanalytic, behaviourist, cognitive and humanisticapproaches

Theme Psychoanalytic Behaviourism Cognitive Humanistic

Psychodynamic Yes No Yes Yesapproach – looking for what is behind surface behaviour

Action approach – No Yes Yes Yeslooking at actual conduct of person, trying new things

Acknowledgement of Yes No No Yesimportance of sense-making, resistance, etc

Use of imagery, No Yes Yes Yescreativity

Use in groups as Yes No No Yeswell as individual

Emphasis on whole No No No Yesperson

Emphasis on No No No Yesgratification, joy, individuation

Adoption of medical Yes Yes Yes Nomodel of mental illness

Felt experience of the Yes No No Yespractitioner important as a tool for change

Mechanistic No Yes Yes Noapproach to client

Open to new No No Yes Yesparadigm research methods

Source: adapted from Rowan (1983)Note: Although the humanistic and psychoanalytic approaches are both psychodynamic,we have differentiated between them in order to focus on the maximizing potentialaspect of the humanistic school.

The underpinning theory

Humanistic psychology has a number of key areas of focus:

• the importance of subjective awareness as experienced by the indi-vidual;

• the importance of taking responsibility for one’s situations – or at leastthe assumption that whatever the situation there will be an elementof choice in how you think, how you feel and how you act;

• the significance of the person as a whole entity (a holistic approach)in the sense that as humans we are not just what we think or what wefeel, we are not just our behaviours. We exist within a social andcultural context.

In juxtaposition with Freud’s view of the aim of therapy as moving theindividual from a state of neurotic anxiety to ordinary unhappiness,humanistic psychology has ‘unlimited aims… our prime aim is to enablethe person to get in touch with their real self ’ (Rowan, 1983).

Maslow and the hierarchy of needs

Maslow did not follow the path of earlier psychologists by looking forsigns of ill health and disease. He researched what makes men andwomen creative, compassionate, spontaneous and able to live their livesto the full. He therefore studied the lives of men and women who hadexhibited these traits during their lives, and in so doing came to his theoryof motivation, calling it a hierarchy of needs. (See Figure 1.10.)

Maslow believed that human beings have an inbuilt desire to grow anddevelop and move towards something he called self-actualization.However, in order to develop self-actualization an individual has to over-come or satisfy a number of other needs first.

One of Maslow’s insights was that until the lower level needs were metan individual would not progress or be interested in the needs higher upthe pyramid. He saw the first four levels of needs as ‘deficiency ’ needs.By that he meant that it was the absence of satisfaction that led to theindividual being motivated to achieve something.

Physiological needs are requirements such as food, water, shelter andsexual release. Clearly when they are lacking the individual will experiencephysiological symptoms such as hunger, thirst, discomfort and frustration.

Safety needs are those that are concerned with the level of threat and desirefor a sense of security. Although safety needs for some might be concernedwith actual physical safety, Maslow saw that for many in the western worldthe need was based more around the idea of psychological safety. We mightexperience this level of need when faced with redundancy.

Love and belonging needs are more interpersonal. This involves theneed for affection and affiliation on an emotionally intimate scale. It isimportant here to note that Maslow introduces a sense of reciprocity intothe equation. A sense of belonging can rarely be achieved unless an indi-vidual gives as well as receives. People have to invest something of them-selves in the situation or with the person or group. Even though it is higherin the hierarchy than physical or safety needs, the desire for love andbelonging is similar in that it motivates people when they feel its absence.

Self-esteem needs are met in two ways. They are met through the satis-faction individuals get when they achieve competence or mastery indoing something. They are also met through receiving recognition fortheir achievement.

Maslow postulated one final need – the need for self-actualization. Hedescribed it as ‘the desire to become more and more what one is, tobecome everything that one is capable of becoming’. He observed thatpeople continued to search for something else once all their other needswere being satisfied. Individuals try to become the person they believe or

Individual change

Self-actualization needs

Self-esteem needs

Love and belonging needs

Safety needs

Physiological needs

Figure 1.10 Maslow's hierarchy of needs Source: Maslow (1970)

feel that they are capable of becoming. It is a difficult concept to put intowords. Perhaps it is a longing for something to emerge from the depths ofyour being.

Before his death, Rabbi Zusya said, ‘In the coming world, they will notask me, “Why were you not Moses?” They will ask me, “Why were younot Zusya?”’

Martin Buber, 1961, Tales of the Hasidim

Self-actualization can take many forms, depending on the individual. Thesevariations may include the quest for knowledge, understanding, peace, self-fulfilment, meaning in life, or beauty… but the need for beauty is neitherhigher nor lower than the other needs at the top of the pyramid. Self-actu-alization needs aren’t hierarchically ordered.

(Griffin, 1991)

Rogers and the path to personal growthCarl Rogers is one of the founders of the humanistic movement. He haswritten extensively on the stages through which people travel on theirjourney towards ‘becoming a person’. Rogers’ work was predominatelybased on his observations in the field of psychotherapy. However, he wasincreasingly interested in how people learn, how they exercise power andhow they behave within organizations.

Rogers is an important researcher and writer for consultants, as his‘client-centred approach’ to growth and development provides clues andcues as to how we as change agents might bring about growth and devel-opment with individuals within organizations. Rogers (1967) highlightedthree crucial conditions for this to occur:

• Genuineness and congruence: to be aware of your own feelings, to bereal, to be authentic. Rogers’ research showed that the more genuineand congruent the change agent is in the relationship, the greater theprobability of change in the personality of the client.

• Unconditional positive regard: a genuine willingness to allow theclient’s process to continue, and an acceptance of whatever feelings

The underpinning theory

Individual change

are going on inside the client. Whatever feeling the client is experi-encing, be it anger, fear, hatred, then that is all right. It is saying thatunderneath all this the person is all right.

• Empathic understanding: in Rogers’ words, ‘ it is only as I understandthe feelings and thoughts which seem so horrible to you, or so weak,or so sentimental, or so bizarre – it is only as I see them as you seethem, and accept them and you, that you feel really free to explore allthe hidden roots and frightening crannies of your inner and oftenburied experience.’

Rogers continues, ‘in trying to grasp and conceptualize the process ofchange… I gradually developed this concept of a process, discriminatingseven stages in it’. The following are the consistently recurring qualities ateach stage as described by Rogers:

• One:– an unwillingness to communicate about self, only externals;– no desire for change;– feelings neither recognized nor owned;– problems neither recognized nor perceived.

• Two:– expressions begin to flow;– feelings may be shown but not owned;– problems perceived but seen as external;– no sense of personal responsibility;– experience more in terms of the past not the present.

• Three:– a little talk about the self, but only as an object;– expression of feelings, but in the past;– non-acceptance of feelings; seen as bad, shameful, abnormal;– recognition of contradictions;– personal choice seen as ineffective.

• Four:– more intense past feelings;– occasional expression of current feelings;– distrust and fear of direct expression of feelings;

– a little acceptance of feelings;– possible current experiencing;– some discovery of personal constructs;– some feelings of self-responsibility in problems;– close relationships seen as dangerous;– some small risk-taking.

• Five:– feelings freely expressed in the present;– surprise and fright at emerging feelings;– increasing ownership of feelings;– increasing self-responsibility;– clear facing up to contradictions and incongruence.

• Six:– previously stuck feelings experienced in the here and now;– the self seen as less of an object, more of a feeling;– some physiological loosening;– some psychological loosening – that is, new ways of seeing the

world and the self;– incongruence between experience and awareness reduced.

• Seven:– new feelings experienced and accepted in the present;– basic trust in the process;– self becomes confidently felt in the process;– personal constructs reformulated but much less rigid;– strong feelings of choice and self-responsibility.

There are a number of key concepts that emerge from Rogers’ workwhich are important when managing change within organizations at anindividual level:

• The creation of a facilitating environment, through authenticity, posi-tive regard and empathic understanding, enables growth and devel-opment to occur.

• Given this facilitating environment and the correct stance of thechange agent, clients will be able to surface and work through anynegative feelings they may have about the change.

The underpinning theory

• Given this facilitating environment and the correct stance of thechange agent, there will be a movement from rigidity to more fluidityin the client’s approach to thinking and feeling. This allows morecreativity and risk-taking to occur.

• Given this facilitating environment and the correct stance of thechange agent, clients will move towards accepting a greater degree ofself-responsibility for their situation, enabling them to have moreoptions from which to choose.

Gestalt approach to individual and organizational change

Gestalt therapy originated with Fritz Perls, who was interested in the hereand now. Perls believed that a person’s difficulties today arise because ofthe way he or she is acting today, here and now. In Perls’s words:

[T]he goal… must be to give him the means with which he can solve hispresent problems and any that may arise tomorrow or next year. The tool isself-support, and this he achieves by dealing with himself and his problemswith all the means presently at his command, right now. If he can be trulyaware at every instant of himself and his actions on whatever level – fantasy,verbal or physical – he can see how he is producing his difficulties, he cansee what his present difficulties are, and he can help himself to solve themin the present, in the here and now.

(Perls, 1976)

A consultant using a Gestalt approach has the primary aim of showingclients that they interrupt themselves in achieving what they want.Gestalt is experiential, not just based on talking, and there is anemphasis on doing, acting and feeling. Gestaltists use a cycle of experi-ence to map how individuals and groups enact their desires, but moreoften than not how they block themselves from completing the cycle asshown in Figure 1.11.

A favourite saying of Fritz Perls was to ‘get out of your mind and cometo your senses’. Gestalt always begins with what one is experiencing inthe here and now. Experiencing has as its basis what one is sensing.‘Sensing determines the nature of awareness’ (Perls, Hefferline andGoodman, 1951).

Individual change

What we sense outside of ourselves or within leads to awareness.Awareness comes when we alight or focus upon what we are experi-encing. Nevis (1998) describes it as ‘the spontaneous sensing of whatarises or becomes figural, and it involves direct, immediate experience’.He gives a comprehensive list of the many things that we can be aware ofat any one moment, including the following:

• what we sense: sights, sounds, textures, tastes, smells, kinaestheticstimulations and so on;

• what we verbalize and visualize: thinking, planning, remembering,imagining and so on;

• what we feel: happiness, sadness, fearfulness, wonder, anger, pride,empathy, indifference, compassion, anxiety and so on;

• what we value: inclinations, judgements, conclusions, prejudices andso on;

• how we interact: participation patterns, communication styles,energy levels, norms and so on.

The underpinning theory

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Figure 1.11 The Gestalt cycle

Individual change

Although your awareness can only ever be in the present, this awarenesscan include memory of the past, anticipation of the future, inner experi-ence and awareness of others and the environment.

Mobilization of energy occurs as awareness is focused on a specific facet.Imagine you have to give a piece of negative feedback to a colleague. Asyou focus on this challenge by bringing it into the foreground, you mightstart to feel butterflies in your stomach, or sweaty palms. This is like usinga searchlight to illuminate a specific thing and bring it into full awareness.In Nevis’s terminology this brings about an ‘energized concern’.

This energy then needs to be released typically by doing something, bytaking action, by making contact in and with the outside world. You givethe feedback.

Closure might come when the colleague thanks you for the feedbackand compliments you on the clarity and level of insight. Or perhaps youhave an argument and agree to disagree. You will then experience areduction in your energy, and will complete the cycle by having come toa resolution, with the object of attention fading into the background oncemore. The issue of the colleague’s performance becomes less important.

For real change to have occurred (either internally or out in the world)the full Gestalt cycle will need to have been experienced.

Nevis shows how the Gestalt cycle maps on to stages in managerialdecision making:

AwarenessData generation, Seeking information, Sharing information, Reviewing pastperformance, Environmental scanningEnergy/actionAttempts to mobilize energy and interest in ideas or proposals, Supportingideas presented by others, Identifying and experiencing differences andconflicts of competing interests or views, Supporting own position, Seekingmaximum participationContactJoining in a common objective, Common recognition of problem definition,Indications of understanding, not necessarily agreement, Choosing a courseof possible future actionResolution/closureTesting, checking for common understanding, Reviewing what’s occurred,Acknowledgement of what’s been accomplished and what remains to bedone, Identifying the meaning of the discussion, Generalizing from what’sbeen learned, Beginning to develop implementation and action plans

The underpinning theory

WithdrawalPausing to let things ‘sink in’Reducing energy and interest in the issueTurning to other tasks or problemsEnding the meeting.

STOP AND THINK!Q 1.9 Use the Gestalt curve to describe how a manager moves from a

concern about the team’s performance to launching andexecuting a change initiative.

Summary of humanistic psychology approach

For the manager, the world of humanistic psychology opens up someinteresting possibilities and challenges. For years we have been told thatthe world of organizations is one that is ruled by the rational mind.Recent studies such as Daniel Goleman’s (1998) on emotional intelligenceand management competence (see Chapter 4) suggest that what makesfor more effective managers is their degree of emotional self-awarenessand ability to engage with others on an emotional level. Humanisticpsychology would not only agree, but would go one step further instating that without being fully present emotionally in the situation youcannot be fully effective, and you will not be able to maximize yourlearning, or anyone else’s learning.

PERSONALITY AND CHANGE

We have looked at different approaches to change, and suggested thatindividuals do not always experience these changes in a consistent oruniform way. However, we have not asked whether people are different,and if so, whether their difference affects the way they experience change.

We have found in working with individuals and teams through changethat it is useful to identify and openly discuss people’s personality types.This information helps people to understand their responses to change. Italso helps people to see why other people are different from them, and tobe aware of how that may lead to either harmony or conflict.

The most effective tool for identifying personality type is the Myers-Briggs Type Indicator™ (MBTI)™. This is a personality inventory developedby Katherine Briggs and her daughter Isabel Myers. The MBTI™ is basedon the work of the Swiss analytical psychologist Carl Jung. The MBTI™identifies eight different personality ‘preferences’ that we all use atdifferent times – but each individual will have a preference for one partic-ular combination over the others.

These eight preferences can be paired as set out below.

Where individuals draw their energy

Extraversion is a preference for drawing energy from the external world,tasks and things, whereas Introversion is a preference for drawingenergy from the internal world of one’s thoughts and feelings.

What individuals pay attention to and how they receive data andinformation

Sensing is concerned with the five senses and what is and has beenwhereas Intuition is concerned with possibilities and patterns and whatmight be.

How an individual makes decisions

Thinking is about making decisions in an objective, logical way based onconcepts of right and wrong whereas Feeling is about making decisionsin a more personal values-driven and empathic way.

What sort of lifestyle an individual enjoys

Judging is a preference for living in a more structured and organizedworld which is more orderly and predictable, whereas Perceiving is apreference for living in a more flexible or spontaneous world whereoptions are kept open and decisions not made until absolutely necessary.

So for example, a person who has a preference for Introversion, Intuition,Thinking and Judging (an INTJ, in the jargon) will have certain character-istics. Likewise an individual with a preference for Extroversion, Sensing,Feeling and Perceiving (ESFP) will have quite different characteristics.

Individual change

The MBTI™ has been researched and validated for over 50 years now,and people rarely move permanently from their preferred ‘home’ type.That is not to say that Extroverts cannot spend time reflecting and beingon their own, nor Introverts spend time in large groups discussing abroad range of issues. What it means is that if you are a particular typeyou have particular preferences and are different from other people ofdifferent types. This means that when it comes to change, people withdifferent preferences react differently to change, both when they initiateit and when they are on the receiving end of it.

Although there are 16 MBTI™ types, in our work with managers andleaders we have found that grouping them into four categories cangenerate significant understanding of the change process (see forexample Green, 2007). One group of people will be cautious andcareful about change – the Thoughtful Realists (those who are intro-verted sensing types). A second group will generate concepts thatrepresent how things should be – the Thoughtful Innovators (intro-verted intuitives). A third group will have the energy and enthusiasmto get things done – the Action Oriented Realists (extraverted sensing).Meanwhile the fourth group – the Action Oriented Innovators(extraverted intuitives) – will be wanting to move into new areas andsoon! (See Table 1.5.)

STOP AND THINK!Q 1.10 Use the Myers-Briggs quadrants to identify your reactions to

change.

• In what ways do you fit the various profiles and in what waysdo you differ?

• How would you deal with someone like this when goingthrough a challenging change process?

• How do you like to be managed through change?

The underpinning theory

MANAGING CHANGE IN SELF AND OTHERS

We now look at some of the factors that arise when you as a manager arerequired to manage change within your organization. We will:

• discuss individual and group propensity for change;

• introduce the work of Edgar Schein and his suggestions for managingchange;

• describe some of the ways that change can be thwarted;

• identify how managers or change agents can help others to change.

Individual change

Table 1.5 Myers-Briggs Type Indicator™ types

MBTI™ type by IS Thoughtful Realist IN Thoughtful Quadrant Innovator

What they are most Practicalities Thoughts, ideas, concerned with concepts

How they learn Pragmatically and by Conceptually by reading and observing reading, listening and

making connections

Where they focus Deciding what should be Generating new ideas their change efforts kept and what needs and theories

changing

Motto ‘If it isn’t broke don’t fix it’ ‘Let’s think ahead’

MBTI™ type by ES Action Oriented EN Action Oriented Quadrant Realist Innovator

What they are most Actions New ways of doing concerned with things

How they learn Actively and by Creatively and with experimentation others

Where they focus Making things better Putting new ideas into their change efforts practice

Motto ‘Let’s just do it’ ‘Let’s change it’

RESPONSES TO CHANGE

Those who let it happen.Those who make it happen.Those who wonder what happened.

Anon

Propensity for change

We have isolated five factors, as shown in Figure 1.12, that have an influ-ence on an individual’s response to change. As a manager of change youwill need to pay attention to these five areas if you wish to achieve posi-tive responses to change:

• The nature of the change varies. Changes can be externally imposedor internally generated. They can be evolutionary or revolutionary innature. They can be routine or one-off. They can be mundane ortransformative. They can be about expansion or contraction.Different types of change can provoke different attitudes anddifferent behaviours.

The underpinning theory

3. Organizationalhistory

4. Type of individual

5. Individual history

2. Consequencesof the change

1. Nature of thechange

Response to change

Figure 1.12 Five factors in responding to change

Individual change

• The consequences of the change are significant. For whose benefit arethe changes seen to be (employees, customers, the community, theshareholders, the board)? Who will be the winners and who will bethe losers?

• The organizational history matters too. This means the track record ofhow the organization has handled change in the past (or how theacquiring organization is perceived), what the prevailing culture is,what the capacity of the organization is in terms of managementexpertise and resources to manage change effectively, and what thefuture, beyond the change, is seen to hold.

• The personality type of the individual is a major determining factor inhow she or he responds to change. The Myers-Briggs type of the indi-vidual (reviewed earlier) can give us an indication of how an indi-vidual will respond to change. People’s motivating forces are alsoimportant – for example, are they motivated by power, status, moneyor affiliation and inclusion?

• The history of an individual can also give us clues as to how he or shemight respond. By history we mean previous exposure and responsesto change, levels of knowledge, skills and experience the individualhas, areas of stability in his or her life and stage in his or her career. Forexample an individual who has previously experienced redundancymight re-experience the original trauma and upheaval regardless ofhow well the current one is handled. Or he or she may have acquiredsufficient resilience and determination from the previous experienceto be able to take this one in his or her stride.

Schein’s model of transformative change

Edgar Schein has been a leading researcher and practitioner in the fieldsof individual, organizational and cultural change over the last 20 years.His seminal works have included Process Consultation (1988) andOrganizational Culture and Leadership (1992).

Schein elaborated on Lewin’s (1952) model by drawing on other disci-plines such as clinical psychology and group dynamics. This model influ-enced much OD and coaching work throughout the 1990s. See Chapter 3for Lewin’s original model.

SCHEIN’S ELABORATION OF LEWIN’S MODEL

Stage OneUnfreezing: Creating the motivation to change:

• Disconfirmation.• Creation of survival anxiety or guilt.• Creation of psychological safety to overcome learning anxiety.Stage TwoLearning new concepts and new meanings for old concepts:

• Imitation of and identification with role models.• Scanning for solutions and trial-and-error learning.Stage ThreeRefreezing: Internalizing new concepts and meanings:

• Incorporation into self-concept and identity.• Incorporation into ongoing relationships.

Schein sees change as occurring in three stages:

• unfreezing: creating the motivation to change;

• learning new concepts and new meanings from old concepts;

• internalizing new concepts and meanings.

During the initial unfreezing stage people need to unlearn certain thingsbefore they can focus fully on new learning.

Schein says that there are two forces at play within every individualundergoing change. The first force is learning anxiety. This is the anxietyassociated with learning something new. Will I fail? Will I be exposed?The second, competing force is survival anxiety. This concerns the pres-sure to change. What if I don’t change? Will I get left behind? These anxi-eties can take many forms. Schein lists four of the associated fears:

• Fear of temporary incompetence: the conscious appreciation of one’slack of competence to deal with the new situation.

The underpinning theory

• Fear of punishment for incompetence: theapprehension that you will somehow lose outor be punished when this incompetence isdiscovered or assessed.

• Fear of loss of personal identity: the innerturmoil when your habitual ways of thinkingand feeling are no longer required, or whenyour sense of self is defined by a role or positionthat is no longer recognized by the organization.

• Fear of loss of group membership: in the same way that your identitycan be defined by your role, for some it can be profoundly affected bythe network of affiliations you have in the workplace. In the same waythat the stable equilibrium of a team or group membership can fosterstates of health, instability caused by shifting team roles or the disinte-gration of a particular group can have an extremely disturbing effect.

What gets in the way of change: resistance to change

Leaders and managers of change sometimes cannot understand why indi-viduals and groups of individuals do not wholeheartedly embrace changesthat are being introduced. They often label this ‘resistance to change’.

Schein suggests that there are two principles for transformative change towork: first, survival anxiety must be greater than learning anxiety, andsecond, learning anxiety must be reduced rather than increasing survivalanxiety. Used in connection with Lewin’s force field (see Chapter 3), we seethat survival anxiety is a driving force and learning anxiety is a restrainingforce. Rather than attempting to increase the individual or group’s sense ofsurvival anxiety, Schein suggests reducing the individual’s learning anxiety.Remember also that the restraining forces may well have some validity.

How do you reduce learning anxiety? You do it by increasing thelearner ’s sense of psychological safety through a number of interventions.Schein lists a few:

• a compelling vision of the future;

• formal training;

• involvement of the learner;

Individual change

• informal training of relevant family groups/teams;

• practice fields, coaches, feedback;

• positive role models;

• support groups;

• consistent systems and structures;

• imitation and identification versus scanning and trial and error.

STOP AND THINK!Q 1.11 Think of a recent skill that you had to learn in order to keep up with

external changes. This could be installing a new piece of software,or learning about how a new organization works.

• What were your survival anxieties?

• What were your learning anxieties?

• What helped you to change?

How managers and change agents help others to change

We have listed in Table 1.6 some of the interventions that an organization andits management could carry out to facilitate the change process. We havecategorized them into the four approaches described earlier in this chapter.

From the behavioural perspective a manager must ensure that rewardpolicies and performance management is aligned with the changes takingplace. For example if the change is intended to improve the quality ofoutput, then the company should not reward quantity of output. Kerr(1995) lists several traps that organizations fall into:

We hope for: But reward:Teamwork and collaboration The best team membersInnovative thinking and risk-taking Proven methods and no mistakesDevelopment of people skills Technical achievementsEmployee involvement and Tight control over operations

empowermentHigh achievement Another year ’s effort

The underpinning theory

Managers and staff need to know in detail what they are expected to do andhow they are expected to perform. Behaviour needs to be defined, espe-cially when many organizations today are promoting ‘the company way’.

From the cognitive perspective a manager needs to employ strategiesthat link organizational goals, individual goals and motivation. This willcreate both alignment and motivation. An additional strategy is toprovide ongoing coaching through the change process to reframe obsta-cles and resistances.

The psychodynamic perspective suggests adapting one’s managerialapproach and style to the emotional state of the change implementers.This is about treating people as adults and having mature conversationswith them. The psychodynamic approach enables managers to see thebenefits of looking beneath the surface of what is going on, and uncov-ering thoughts that are not being articulated and feelings that are notbeing expressed. Working through these feelings can release energy forthe change effort rather than manifesting as resistance to change.

Drawing on the transitions curve we can plot suitable interventionsthroughout the process. (See Figure 1.13.)

Individual change

Table 1.6 Representative interventions to facilitate the change process

Behavioural Cognitive

Performance management Management by objectivesReward policies Business planning and

Values translated into behaviours performance frameworksManagement competencies Results based coaching

Skills training Beliefs, attitudes and Management style cultural interventions

Performance coaching Visioning360 degree feedback

Understanding change dynamics Living the valuesCounselling people Developing the

through change learning organizationSurfacing hidden issues Addressing the hierarchy of needs

Addressing emotions Addressing emotionsTreating employees and Fostering communication and

managers as adults consultation

Psychodynamic Humanistic

The humanistic psychology perspective builds on the psychodynamicethos by believing that people are inherently capable of responding tochange, but require enabling structures and strategies so to do. Healthylevels of open communication, and a positive regard for individuals andtheir potential contribution to the organization’s goals, contribute tocreating an environment where individuals can grow and develop.

SUMMARY AND CONCLUSIONS

• Learning to do something new usually involves a temporary dip inperformance.

• When learning something new, we focus on it and become veryconscious of our performance. Once we have learnt something webecome far less conscious of our performance. We are then uncon-sciously competent. This continues until something goes wrong, orthere is a new challenge.

The underpinning theory

Minimize shockGive full & earlycommunicationof intentions,possibilities andoverall directionof change

Discussimplications ofchange withindividuals andteamsPay attention topeople’s needs& concernsPracticepatience

Listen, empathize,supportDon’t suppress conflictor different views &emotionsHelp individualsweather the stormRecognize how changecan trigger off pastexperiences inindividualsRemember peoplearen’t necessarilyattacking youpersonally

Help otherscompleteAcknowledgethe ending ofan eraAllow othersto takeresponsibilityEncourageCreate goalsCoach

Encourage risktakingFostercommunicationCreatedevelopmentopportunities

Discussmeaning &learningReflect onexperienceCelebratesuccesses

Prepare tomove on

Figure 1.13 Management interventions through the change process

• There are four key schools of thought when considering individualchange:– The behaviourist approach is about changing the behaviours of

others through reward and punishment. This leads to behaviouralanalysis and use of reward strategies.

– The cognitive approach is about achieving results through posi-tive reframing. Associated techniques are goal setting andcoaching to achieve results.

– The psychodynamic approach is about understanding andrelating to the inner world of change. This is especially signifi-cant when people are going through highly affecting change.

– The humanistic psychology approach is about believing in devel-opment and growth, and maximizing potential. The emphasis ison healthy development, healthy authentic relationships andhealthy organizations.

• Personality type has a significant effect on an individual’s ability toinitiate or adapt to change.

• The individual’s history, the organization’s history, the type of changeand the consequence of the change are also key factors in an indi-vidual’s response to change.

• Schein identified two competing anxieties in individual change:survival anxiety versus learning anxiety. Survival anxiety has to begreater than learning anxiety if a change is to happen. He advocatedthe need for managers to reduce people’s learning anxiety rather thanincrease their survival anxiety.

• Each of the four approaches above leads to a set of guidelines formanagers:– Behavioural: get your reward strategies right.– Cognitive: link goals to motivation.– Psychodynamic: treat people as individuals and understand

their emotional states as well as your own!– Humanistic: be authentic and believe that people want to grow

and develop.

Individual change

Team change

INTRODUCTION

This chapter will look at teams, team development and change from anumber of perspectives and will be asking a number of pertinent questions:

• What is a group and when is it a team?

• Why do you need teams?

• What types of organizational teams are there?

• How do you improve team effectiveness?

• What does team change look like?

• What are the leadership issues in team change?

• How do individuals affect team dynamics?

• How well do teams initiate and adapt to organizational change?

The chapter aims to enhance understanding of the nature of teams andhow they develop, identify how teams perform in change situations, and

develop strategies for managing teams through change and changethrough teams.

We open with a discussion around what constitutes a group and whatconstitutes a team. We will also look at the phenomena of different types ofteams: for example, virtual teams, self-organizing teams and project teams.

Models of team functioning, change and development will be explored.We look at the various components of team working, and at how teamsdevelop and how different types of people combine to make a reallyeffective (or not) team.

We take as our basic model Tuckman’s (1965) model of team develop-ment to illustrate how teams change over time. This is the forming,storming, norming and performing model. But we will add to it by differ-entiating between the task aspects of team development and the peopleaspects of team development.

Finally we look at the way in which teams can impact or react to orga-nizational change.

WHAT IS A GROUP AND WHEN IS IT A TEAM?

There has been much academic discussion as to what constitutes a teamand what constitutes a group. In much of the literature the two terms areused indistinguishably. Yet there are crucial differences, and anyoneworking in an organization instinctively knows when he or she is in ateam and when he or she is in a group. We will attempt to clarify theessential similarities and differences. This is important when looking atchange because teams and groups experience change in different ways.

Schein and Bennis (1965) suggest that a group is ‘any number of peoplewho interact with each other, are psychologically aware of each other, andwho perceive themselves to be a group’. Morgan et al (1986) suggest that‘a team is a distinguishable set of two or more individuals who interactinterdependently and adaptively to achieve specified, shared, and valuedobjectives’. Sundstrom, de Meuse and Futrell (1990) define the work teamas ‘A small group of individuals who share responsibility for outcomes fortheir organizations’.

Cohen and Bailey (1997) define a team as ‘a collection of individualswho are interdependent in their tasks, who share responsibility foroutcomes, who see themselves and who are seen by others as an intact

Team change

social entity embedded in one or more larger social systems (for example,business unit or the corporation), and who manage their relationshipsacross organizational boundaries’.

Our own list of differentiators appears in Table 2.1.A group is a collection of individuals who draw a boundary around

themselves. Or perhaps we from the outside might draw a boundaryaround them and thus define them as a group. A team on the other hand,with its common purpose, is generally tighter and clearer about what it isand what its raison d’être is. Its members know exactly who is involvedand what their goal is. Of course it turns out that we are speaking hypo-thetically here, as any one of us has seen teams within organizations thatappear to have no sense at all of what they are really about!

Let us illustrate the difference between a team and a group by using anexample. We might look into an organization and see the FinanceDepartment. The Finance Controller heads up a Finance ManagementTeam that leads, manages and coordinates the activities within this area.

The underpinning theory

Table 2.1 Differences between groups and teams

Group Team or work group

Indeterminate size Restricted in size

Common interests Common overarching objectives

Sense of being part of something or Interaction between members to seen as being part of something accomplish individual and group goals

Interdependent as much as Interdependency between members to individuals might wish to be accomplish individual and group goals

May have no responsibilities other Shared responsibilitiesthan a sense of belonging to the group

May have no accountabilities Individual accountabilitiesother than ‘contractual’ ones

A group does not necessarily have The team works together, physically or any work to do or goals to virtuallyaccomplish

The team members work together on common goals, meet regularly andhave clearly defined roles and responsibilities (usually).

Perhaps the senior management team has decreed that all the highpotential managers in the organization shall be members of the StrategicManagement Group. So the Finance Controller, who is on the high poten-tial list, gets together with others at his or her level to form a collection ofindividuals who contribute to the overall strategic direction of the organi-zation. Apart from gatherings every six months, this group rarely meets orcommunicates. It is a grouping, which might be bounded but does not haveany ongoing goals or objectives that require members to work together.

STOP AND THINK!Q 2.1 Within your working life, what teams are you a member of and to

which groups do you belong?

Q 2.2 Within your personal life, what teams are you a member of and towhich groups do you belong?

Q 2.3 In what ways was it easier to answer in your personal life, and inwhat ways more difficult?

WHY WE NEED TEAMS

Why do we need teams and teamworking? Casey (1993) from AshridgeManagement College researched thisquestion by asking a simple question ofeach team he worked with: ‘Whyshould you work together as a team?’ The simplest answer is, ‘Because ofthe work we need to accomplish.’ Team work may be needed becausethere is a high volume of interconnected pieces of work, or because thework is too complex to be understood and worked on by one person.

What about managers? Do they need to operate as teams, or can theyoperate effectively as groups? The Ashridge-based writers say that amanagement team does not necessarily have to be fully integrated as ateam all of the time. Nor should it be reduced to a mere collection of indi-viduals going about their own individual functional tasks.

Team change

Casey believes that there is a clear link between the level of uncertaintyof the task being handled and the level of team work needed. The greaterthe uncertainty is, the greater the need for team work. The majority ofmanagement teams deal with both uncertain and certain tasks, so need tobe flexible about the levels of team working required. Decisions abouthealth and safety, HR policy, reporting processes and recruitment arerelatively certain, so can be handled fairly quickly without a need formuch sharing of points of view. There is usually a right answer to theseissues, whereas decisions about strategy, structure and culture are lesscertain. There is no right answer, and each course of action involvestaking a risk. This means more team working, more sharing of points ofview, and a real understanding of what is being agreed and what theimplications are for the team.

THE TYPES OF ORGANIZATIONAL TEAMS

Robert Keidal (1984) identified a parallel between sports teams and orga-nizational teams. He uses baseball, American football and basketballteams to show the differences.

A baseball team is like a sales organization. Team members are rela-tively independent of one another, and while all members are required tobe on the field together, they virtually never interact together all at thesame time.

Football is quite different. There are really three subteams within thetotal team: offence, defence, and the special team. When the subteamis on the field, every player is involved in every play, which is not thecase in baseball. But the team work is centred in the subteam, not thetotal team.

Basketball is a different breed. Here the team is small, with all playersin only one team. Every player is involved in all aspects of the game,offence and defence, and all must pass, run, shoot. When a substitutecomes in, all must play with the new person.

Many different types of team exist within organizations. Let us look at arange of types of team found in today ’s organizations (see Table 2.2).

The underpinning theory

Team change

Table 2.2 Types of team

Team Group Work Parallel Project

Continuity Variable Stable Stable or Focused on one-off project project

achievement

Lifespan Variable Unlimited Variable Time limited

Organizational Can be part Part of Outside of Separate links of the formal management normal management

and/or structure management structureinformal structureorganization

Led by Dependent One manager Normally Project on nature or supervisor coordinated managerand purpose or facilitatedof group

Location Variable Co-located Converge for Co-located, meetings dispersed,

virtual

Purpose Variable Business as Maintenance Change or usual function or development

part of change infrastructure

Authority Dependent Through the Depends Via project on nature line manager and and purpose project of group sponsor

Focus Communication Task Communication Task

Work team

Work teams or work groups are typically the type of team that mostpeople within organizations will think of when we talk about teams. Theyare usually part of the normal hierarchical structure of an organization.This means that one person manages a group of individuals. That person

The underpinning theory

Table 2.2 continued

Team Matrix Virtual Network Management Change

Continuity Stable as a Potential Potential Stable Fluidstructure fluid fluidbut fluid by project

Lifespan Unlimited Variable Variable Unlimited Variable

Organi- Part of Can be More Part of Variablezational management part of the distributed management links structure management across the structure

Dual structure organizationaccountability

Led by Project One Potentially One manager Sponsor or manager and manager or distributed change functional supervisor leadership or managerhead coordination

Location Co-located, Dispersed Dispersed Often Co-located, dispersed, co-located dispersed, virtual virtual

Purpose Project BAU or Change or Business as Change and achievement Project development usual development

Change and development

Authority Dual Through the Depends Through the Via project accountability line or line manager and

project project manager sponsor

Focus Task Task Communi- Task and Task and cation communi- communi-

cation cation

is responsible for delivering a particular product or service either to thecustomer or to another part of the organization.

These teams tend to be relatively stable in terms of team objectives,processes and personnel. Their agenda is normally focused on maintenanceand management of what is. This is a combination of existing processes andoperational strategy. Any change agenda that they have is usually on top oftheir existing agenda of meeting the current operating plan.

Self-managed team

A sub-set of the work team is the self-managed team. The self-managedteam has the attributes of the work team but without a direct manager orsupervisor. This affects the way decisions are made and the way in whichindividual and team performance is managed. Generally this is throughcollective or distributed leadership.

Self-managed work teams are more prevalent in manufacturing indus-tries rather than the service arena. Once again there is an emphasis ondelivery of service or product rather than delivering change.

Parallel team

Parallel teams are different from work teams because they are not part ofthe traditional management hierarchy. They are run in tandem or parallelto this structure. Examples of parallel teams are:

• teams brought together to deliver quality improvement (for example,quality circles, continuous improvement groups);

• teams that have some problem-solving or decision-making input,other than the normal line management processes (for example,creativity and innovation groups);

• teams formed to involve and engage employees (for example, staffcouncils, diagonal slice groups);

• teams set up for a specific purpose such as a task force looking at anoffice move.

These teams have variable longevity, and are used for purposes that tendto be other than the normal ‘business as usual’ management. They are

Team change

often of a consultative nature, carrying limited authority. Although notnecessarily responsible or accountable for delivering changes, they oftenfeed into a change management process.

Project team

Project teams are teams that are formed for the specific purpose ofcompleting a project. They therefore are time limited, and we wouldexpect to find clarity of objectives. The project might be focused on anexternal client or it might be an internal one-off, or cross-cutting projectwith an internal client group.

Depending on the scale of the project the team might comprise individ-uals on a full or part-time basis. Typically there is a project manager,selected for his or her specialist or managerial skills, and a project sponsor.Individuals report to the project manager for the duration of the project(although if they work part-time on the project they might also bereporting to a line manager). The project manager reports to the projectsponsor, who typically is a senior manager.

We know the project team has been successful when it delivers thespecific project on time, to quality and within budget. Brown andEisenhardt (1995) noted that cross-functional teams, which are teamscomprised of individuals from a range of organizational functions, werefound to enhance project success.

Project teams are very much associated with implementing change.However, although change may be their very raison d’être it does notnecessarily mean that their members’ ability to handle change is anydifferent from the rest of us. Indeed built into their structure are potentialdysfunctionalities:

• The importance of task achievement often reigns supreme, at theexpense of investing time in meeting individual and team mainte-nance needs.

• The fact that individuals have increased uncertainty concerning theirfuture can impact on motivation and performance.

• The dynamic at play between the project team and the organizationalarea into which the change will take place can be problematic.

The underpinning theory

Matrix team

Matrix teams generally occur in organizations that are run along projectlines. The organization typically has to deliver a number of projects toachieve its objectives. Each project has a project manager, but the projectteam members are drawn from functional areas of the organization.Often projects are clustered together to form programmes, or indeedwhole divisions or business units (for example, aerospace, defence or oilindustry projects). Thus the team members have accountability both tothe project manager and to their functional head. The balance of powerbetween the projects and the functions varies from organization to orga-nization, and the success of such structures often depends on the degreeto which the project teams are enabled by the structure and the degree towhich they are disabled.

Virtual team

Increasing globalization and developments in the use of new technolo-gies mean that teams are not necessarily co-located any more. This hasbeen true for many years for sales teams. Virtual teams either never meetor they meet only rarely. Townsend, DeMarie and Hendrickson (1998)defined virtual teams as ‘groups of geographically and/or organization-ally dispersed coworkers that are assembled using a combination oftelecommunications and information technologies to accomplish an orga-nizational task’. An advantage of virtual teams is that an organization canuse the most appropriately skilled people for the task, wherever they arelocated. In larger companies the probability that the necessary anddesired expertise for any sophisticated or complex task is in the sameplace geographically is low.

Disadvantages spring from the distance between team members.Virtual teams cross time zones, countries, continents and cultures. Allthese things create their own set of challenges. Current research suggeststhat synchronous working (being face to face or remote) is more effectivein meeting more complex challenges. Team leadership for virtual teamsalso creates its own issues, with both day-to-day management tasks anddevelopmental interventions being somewhat harder from a distance.

When it comes to change, virtual teams are somewhat paradoxical. Teammembers can perhaps be more responsive, balancing autonomy and inter-dependence, and more focused on their part of the team objective.

Team change

However change creates an increased need for communication, cleargoals, defined roles and responsibilities, and support and recognitionprocesses. These things are more difficult to manage in the virtual world.

Networked team

National, international and global organizations can use networkedteams in an attempt to add a greater cohesion to their organization, whichwould not otherwise be there. Additionally they may wish to capturelearning in one part of the organization and spread it across the wholeorganization.

We might have grouped virtual and networked teams under the samecategory. However we could think of the networked team as being similarto a parallel team, in the sense that its primary purpose is not business asusual, but part of an attempt by the organization to increase sustainabilityand build capacity through increasing the reservoir of knowledge acrossthe whole organization.

Networked teams are an important anchor for organizations in times ofchange. They can be seen as part of the glue that gives a sense of cohesionto people within the organization.

Management team

Management teams coordinate and provide direction to the sub-units undertheir jurisdiction, laterally integrating interdependent sub-units across keybusiness processes.

(Mohrman, Cohen and Mohrman, 1995)

The management team is ultimately responsible for the overall perfor-mance of the business unit. In itself it may not deliver any product,service or project, but clearly its function is to enable that delivery.Management teams are pivotal in translating the organization’s overar-ching goals into specific objectives for the various sub-units to do theirshare of the organization task.

Management teams are similar to work teams in terms of delivery ofcurrent operational plan, but are much more likely to be in a position ofdesigning and delivering change as well. We expect a more seniormanagement team to spend less time on business-as-usual matters andmore time on the change agenda.

The underpinning theory

The senior management team in any organization is the team mostlikely to be held responsible for the organization’s ultimate success orfailure. It is in a pivotal position within the organization. On the one handit is at the top of the organization, and therefore team members have acollective leadership responsibility. On the other hand it is accountable tothe non-executive board and shareholders in limited companies, or topoliticians in local and central government, or to trustees in not-for-profitorganizations. Along with the change team (see below) the managementteam has a particular role to play within most change scenarios, for it is itsmembers who initiate and manage the implementation of change.

Change team

Change teams are often formed within organizations when a planned orunplanned change of significant proportions is necessary. We have sepa-rated out this type of team because of its special significance. Sometimesthe senior management team is called the change team, responsible fordirecting and sponsoring the changes. Sometimes the change team is aspecial project team set up to implement change. At other times thechange team is a parallel team, set up to tap into the organization and bea conduit for feedback as to how the changes are being received.

Obviously different organizations have different terminologies, sowhat in one organization is called a project team delivering a change willbe a change team delivering a project in another organization.

More and more organizations also realize that the management ofchange is more likely to succeed if attention is given to the people side ofchange. Hence a parallel team drawn from representatives of the wholeworkforce can be a useful adjunct in terms of assessing and responding tothe impact of the changes on people.

We see the change team as an important starting point in the changeprocess.

STOP AND THINK!Q 2.4 Of the teams of which you are a member, which are more suitable

to lead change and which more suitable to implement change?Justify your answer.

Team change

HOW TO IMPROVE TEAM EFFECTIVENESS

Rollin and Christine Glaser (1992) have identified five elements thatcontribute to the level of a team’s effectiveness or ineffectiveness overtime. They are:

• team mission, planning and goal setting;

• team roles;

• team operating processes;

• team interpersonal relationships; and

• inter-team relations.

If you can assess where a team is in terms of its ability to address thesefive elements, you will discover what the team needs to do to developinto a fully functioning team.

Team mission planning and goal setting

A number of studies have found that the most effective teams have astrong sense of their purpose, organize their work around that purpose,and plan and set goals in line with that purpose. Larson and LaFasto(1989) report, ‘in every case, without exception, when an effectively func-tioning team was identified, it was described by the respondent as havinga clear understanding of its objective’.

Clarity of objectives together with a common understanding and agree-ment of these was seen to be key. In addition Locke and Latham (1984)report that the very act of goal setting was a prime motivator for the team;the more your team sets clear goals the more likely it is to succeed. Theyalso reported a 16 per cent average improvement in effectiveness for teamsthat use goal setting as an integral part of team activities.

Clear goals are even more important when teams are involved inchange, partly because unless they know where they are going they areunlikely to get there, and partly because a strong sense of purpose canmitigate some of the more harmful effects of change. The downsideoccurs when a team rigidly adheres to its purpose when in fact the worldhas moved on and other objectives are more appropriate.

The underpinning theory

Team roles

The best way for a team to achieve its goals is for the team to be structuredlogically around those goals. Individual team members need to have clearroles and accountabilities. They need to have a clear understanding notonly of what their individual role is, but also what the roles and account-abilities of other team members are.

When change happens – within, to or by the team – clarity around rolehas two useful functions. It provides a clear sense of purpose and it providesa supportive framework for task accomplishment. However, during changethe situation becomes more fluid. Too much rigidity results in tasks fallingdown the gaps between roles, or overlaps going unnoticed. It might resultin team members being less innovative or proactive or courageous.

Team operating processes

A team needs to have certain enabling processes in place for people tocarry out their work together. Certain things need to be in place that willallow the task to be achieved in a way that is as efficient and as effectiveas possible. Glaser and Glaser (1992) comment, ‘both participation in all ofthe processes of the work group and the development of a collaborativeapproach are at the heart of effective group work. Because of the traditionof autocratic leadership, neither participation nor collaboration arenatural or automatic processes. Both require some learning and practice.’

Typical areas that a team need actively to address by discussing andagreeing include:

• frequency, timing and agenda of meetings;

• problem-solving and decision-making methodologies;

• groundrules;

• procedures for dealing with conflict when it occurs;

• reward mechanisms for individuals contributing to team goals;

• type and style of review process.

In the turbulence created by change all these areas will come under addi-tional stress and strain, hence the need for processes to have beendiscussed and agreed at an earlier stage. During times of change when

Team change

typically pressures and priorities can push people into silo mentality andaway from the team, the team operating processes can act like a lubricant,enabling healthy team functioning to continue.

Team interpersonal relationships

The team members must actively communicate among themselves. Toachieve clear understanding of goals and roles, the team needs to worktogether to agree and clarify them. Operating processes must also bediscussed and agreed.

To achieve this level of communication, the interpersonal relationshipswithin the team need to be in a relatively healthy state. Glaser and Glaser(1992) found that the literature on team effectiveness ‘prescribes opencommunication that is assertive and task focused, as well as creatingopportunities for giving and receiving feedback aimed at the develop-ment of a high trust climate’.

In times of change, individual stress levels rise and there is a tendencyto focus more on the task than the people processes. High levels of trustwithin a team are the bedrock for coping with conflict.

Inter-team relations

Teams cannot work in isolation with any real hope of achieving theirorganizational objectives. The nature of organizations today – complex,sophisticated and with increasing loose and permeable boundaries –creates situations where a team’s goals can rarely be achieved withoutinput from and output to others.

However smart a team has been inaddressing the previous four categories, theauthors have found in consulting withnumerous organizations that attentionneeds to be paid to inter-team relations nowmore than ever before. This is because of therise of strategic partnerships and globalorganizations. Teams need to connect more.It is also because the environment ischanging faster and is more complex, sokeeping in touch with information outsideof your own team is a basic survival strategy.

The underpinning theory

Table 2.3 Effective and ineffective teams

Element Team mission, Team roles Team Team Inter-team planning and operating interpersonal relationsgoal setting processes relationships

Outcome

Team more Clarity of goals Clear roles and Problem solving Open data flow Working effective, and clear responsibilities and decision and high levels across adaptive direction lead to increase making are of team boundaries and greater task individual smoother and working leading ensures that change accomplishment accountability faster. to task organizational oriented and increased and allow Processes accomplishment goals are more

motivation others to work enable task in a supportive likely to be at their tasks accomplishment environment achieved

without undue conflict

Team less Lack of purpose Unclear roles Unclear Dysfunctional Teams effective, and unclear and operating team working working in less goals result in responsibilities processes causes tensions, isolation or adaptive dissipation of lead to increase time conflict, stress against other and energy and increased and effort and insufficient teams reduce change effort conflict and needed to focus on task the likelihood oriented reduced progress task accomplishment of organizational

accountability achievement goal achievement

STOP AND THINK!Q 2.5 Using the five elements above, what is your current team

effectiveness?

Q 2.6 What needs to change, and how would you go about it?

WHAT TEAM CHANGE LOOKS LIKE

All teams go through a change process when they are first formed, andwhen significant events occur such as a new member arriving, a keymember leaving, a change of scope, increased pressure from outside, or achange in organizational climate.

Tuckman (1965) is one of the most widely quoted of researchers into thelinear model of team development. His work is regularly used in teambuilding within organizations. Most people will have heard of it as the‘forming, storming, norming, performing’ model of team development. Hisbasic premise is that any team will undergo distinct stages of developmentas it works or struggles towards effective team functioning. Although wewill describe Tuckman’s model in some detail, we have selected a range ofmodels to illustrate the team development process, as indicated in Table 2.4.

Tuckman’s model of team changeForming

Forming is the first stage. This involvesthe team asking a set of fundamentalquestions:

• What is our primary purpose?

• How do we structure ourselves as a team to achieve our purpose?

• What roles do we each have?

• Who is the leader?

• How will we work together?

• How will we relate together?

• What are the boundaries of the team?

The underpinning theory

Table 2.4 Key attributes in the stages of team development

Tuckman Forming Storming Norming Performing(1965) Attempt at establishing Arising and dealing of Settling down of team Team is now ready and

primary purpose, structure, conflicts surrounding key dynamic and stepping enabled to focus primarily roles, leader, task and questions from forming into team norms and on its task while attending process relationships, and stage agreed ways of working to individual and team boundaries of the team maintenance needs

Schutz In or out Top or bottom Near or far(1982) Members decide whether they are Focus on who has power and Finding levels of commitment and

part of the team or not authority within the team engagement within their roles

Modlin Structuralism Unrest Change Integrationand Faris Attempt to recreate Attempt to resolve power Roles emerge based on Team purpose and structure (1956) previous power within and interpersonal issues task and people needs emerge and accepted,

new team structures Sense of team emerges action towards team goals

Whittaker Preaffiliation Power and control Intimacy Differentiation(1970) Sense of unease, unsure of Focus on who has power Team begins to commit to Ability to be clear about

team engagement, which is and authority within the task and engage with one individual roles and superficial team another interactions become

Attempt to define roles workmanlike

Hill and Orientation Exploration ProductionGruner Structure sought Exploration around team roles and Clarity of team roles and team (1973) relations cohesion

Bion Dependency Fight or flight Pairing(1961) Team members invest the leaders Team members challenge the leaders Team members form pairings in an

with all the power and authority or other members attempt to resolve their anxietiesTeam members withdraw

Scott Peck Pseudocommunity Chaos Emptiness Community(1990) Members try to fake Attempt to establish Giving up of expectations, Acceptance of each other

teamliness pecking order and team assumptions and hope of and focus on the tasknorms achieving anything

The underpinning theory

If we were to take a logical rational view of the team we could imaginethat this could all be accomplished relatively easily and relativelypainlessly. And sometimes, on short projects with less than five teammembers, it is. However human beings are not completely logical rationalcreatures, and sometimes this process is difficult. We all have emotions,personalities, unique characteristics and personal motivations.

As we saw when we were exploring individual change, human beingsreact to change in different ways. And the formation of a new team isabout individuals adjusting to change in their own individual ways.

Initially the questions may be answered in rather a superficial fashion.The primary task of the team might be that which was written down in amemo from the departmental head, along with the structure they firstthought of. The leader might typically have been appointed beforehandand ‘imposed’ upon the team. Individuals’ roles are agreed to in an initialand individual cursory meeting with the team leader.

The team may agree to relate via a set of groundrules using words thatnobody could possibly object to, but nobody knows what they reallymean in practice: ‘be honest’, ‘team before self ’, ‘have fun’, and so on.

Storming

Tuckman’s next stage is storming. This is a description of the dynamic thatoccurs when a team of individuals come together to work on a commontask, and have passed through the phase of being nice to one another andnot voicing their individual concerns. This dynamic occurs as the teamstrives or struggles to answer fully the questions postulated in theforming stage.

Statements articulated (or left unsaid) in some fashion or form mightinclude ones such as:

• I don’t think we should be aiming for that.

• This structure hasn’t taken account of this.

• There are rather a lot of grey areas in our individual accountabilities.

• Why was he appointed as team leader when he hasn’t done thisbefore?

• I don’t know whether I can work productively with these people.

• How can we achieve our goals without the support from others inthe organization?

An alternative word to storming is ‘testing’. Individuals and the team as awhole are testing out the assumptions that had been made when the teamwas originally formed. Obviously different teams will experience this stagewith different degrees of intensity, but important points to note here are:

• It is a natural part of the process.

• It is a healthy part of the process.

• It is an important part of the process.

The storming phase – if successfully traversed – will achieve clarity aroundall the fundamental questions of the first phase, and enable common under-standing of purpose and roles to be achieved. In turn it allows the authorityof the team leader to be seen and acknowledged, and it allows everyone totake up his or her rightful place within the team. It also gives team membersa sense of the way things will happen within the team. It becomes a templatefor future ways of acting, problem solving, decision making and relating.

Norming

The third stage of team development occurs when the team finally settlesdown into working towards achievement of its task without too muchattention needed on the fundamental questions. As further challengesdevelop, or as individuals grow further into their roles, then furtherscrutiny of the fundamental questions may happen. They may bediscussed, but if they instead remain hidden beneath the surface this canresult in loss of attention on the primary task.

Tuckman suggests in his review of the research that this settling processcan be relatively straightforward and sequential. The team movesthrough the storming phase into a way of working that establishes teamnorms. It can also be more sporadic and turbulent, with the team needingfurther storming before team norms are established. Indeed some readersmight have experienced teams that permanently move back and forthbetween the norming and storming stages – a clear signal that some teamissues are not being surfaced and dealt with.

Team change

Performing

The final stage of team development is performing. The team has success-fully traversed the three previous stages and therefore has clarity aroundits purpose, its structure and its roles. It has engaged in a rigorous processof working out how it should work and relate together, and is comfortablewith the team norms it has established. Not only has the team workedthese things through, but it has embodied them as a way of working. It hasdeveloped a capacity to change and develop, and has learnt how to learn.

The team can quite fruitfully get on with the task in hand and attend toindividual and team needs at the same time.

Adjourning

A fifth stage was later added which acknowledged that teams do not lastfor ever. This stage represents the period when the team’s task has beencompleted and team members disperse. Some practitioners call this stagemourning, highlighting the emotional component. Others call it trans-forming as team members develop other ways of working.

THE LEADERSHIP ISSUES IN TEAM CHANGE

FOOD FOR THOUGHT

Ralph Stacey, in his book Strategic Management and OrganisationalDynamics (1993), describes what happens when a group is broughttogether to study the experience of being in a group, without any furthertask and without an appointed leader. Known as a Group RelationsConference and run by the Tavistock Institute in London, this processinvolves a consultant who forms part of the group to offer views on thegroup process but otherwise takes no conscious part in the activity. This:

always provokes high levels of anxiety in the participants… which… findexpression in all manner of strange behaviours. Group discussions take on amanic form with asinine comments and hysterical laughter… the participantsattack the visiting consultant… becoming incredibly rude…

Members try to replace the non-functioning consultant… but they rarelyseem to be successful in this endeavour. They begin to pick on an individual,

The underpinning theory

usually some highly individualistic or minority member of the group, and thentreat this person as some kind of scapegoat. They all become very concernedwith remaining part of the group, greatly fearing exclusion. They show strongtendencies to conform to rapidly established group norms and suppress theirindividual differences, perhaps they are afraid of becoming the scapegoat… theone thing they hardly do at all is to examine the behaviour they are indulgingin, the task they have actually been given.

The situation described in the box offers a way of exploring some of theunconscious group processes that are at work just below the surface.These are not always visible in more conventional team situations. Thework of Bion (1961) and Scott Peck (1990) is useful to illuminate thephases that groups go through and highlight the challenges for leaders.

Moving through dependency

In any team formation the first thing people look for is someone to tellthem what to do. This is a perfectly natural phenomenon, given thatmany people will want to get on with the task and many people willbelieve someone else knows what the task is and how it should be done.

In any unfamiliar situation or environment people can become depen-dent. Jon Stokes (in Obholzer and Roberts, 1994) describes what Bionobserved in his experience with groups and called basic group assumptions:

a group dominated by basic assumption of dependency behaves as if itsprimary task is solely to provide for the satisfaction of the needs and wishesof its members. The leader is expected to look after, protect and sustain themembers of the group, to make them feel good, and not to face them withthe demands of the group’s real purpose.

The job of the leader, and indeed the group, is not only to establish lead-ership credibility and accountability but to establish its limits. This willimbue the rest of the team with sufficient power for them to accomplishtheir tasks. The leader can do this by modelling the taking of individualresponsibility and empowering others to do the same, and by ensuringthat people are oriented in the right direction and have a common under-standing of team purpose and objectives.

Team change

Moving through conflict

Bion’s second assumption is labelled fight or flight. Bion (1961) says:

There is a danger or ‘enemy’, which should either be attacked or fled from…members look to the leader to devise some appropriate action… forinstance, instead of considering how best to organize its work, a team mayspend most of the time worrying about rumours of organizational change.This provides a sense of togetherness, whilst also serving to avoid facing thedifficulties of the work itself. Alternatively, such a group may spend its timeprotesting angrily, without actually planning any specific action to deal withthe perceived threat.

The threat might not necessarily be coming from outside, but insteadmight be an externalization – or projection – from the team. The realthreat is from within, and the potential for conflict is between the leaderand the rest of the team, and between team members themselves. Issuesaround power and authority and where people sit in the ‘pecking order ’may surface at this stage.

The leadership task here is to surface any of these dynamics and workthem through, either by the building of trust and the frank, open andhonest exchange of views, or by seeking clarity and gaining agreement onroles and responsibilities.

Moving towards creativity

The third assumption that Bion explored was that of pairing. This is:

based on the collective and unconscious belief that, whatever the actualproblems and needs of the group, a future event will solve them. The groupbehaves as if pairing or coupling between two members within the group, orperhaps between the leaders of the group and some external person, willbring about salvation… the group is in fact not interested in working practi-cally towards this future, but only sustaining a vague sense of hope as a wayout of its current difficulties… members are inevitably left with a sense ofdisappointment and failure, which is quickly superseded by a hope that thenext meeting will be better.

Once again there is a preoccupation. This time it is about creating some-thing new, but in a fantasized or unreal way, as a defence against doinganything practical or actually performing. The antidote of course is for the

The underpinning theory

leader to encourage the team members to continue in their endeavoursand to take personal responsibility for moving things on. Collaborativeworking requires greater openness of communication and data flow.

Moving through cohesion and cosiness

Turquet (1974) has added a fourth assumption, labelled oneness. This iswhere the team seems to believe it has come together almost for a higherpurpose, or with a higher force, so the members can lose themselves in asense of complete unity.

There are parallels to the stage of performing, but somehow, onceagain, the team has fallen into an unconscious detraction from theprimary task in hand. Attainment of a sense of oneness, cohesiveness orindeed cosiness is not the purpose the team set out to achieve. Good andclose team working is often essential and can be individually satisfying,but it is not the purpose. Too much focus on team cohesion can lead toabdication from the task, and is only a stage on the way to full teamworking. The goal is interdependent working co-existing with collabora-tive problem solving. This requires the leader to set the scene and thepace, and team members to act with maturity.

See Chapter 4 for more ideas on leading change.

STOP AND THINK!Q 2.7 Imagine that you are one of a team of five GPs working at a local

practice. You want to initiate some changes in the way the teamapproaches non-traditional medical approaches such as coun-selling, homeopathy and osteopathy. The GPs meet monthly forone hour to discuss finances and review medical updates. Theydo not really know each other well or work together on patientcare. There is no real team leader, although the Practice Managertakes the lead when the group discusses administration.

Using one of the models of team development described above,explain how you could lead the team towards a new way ofworking together. What obstacles to progress do you predict, andhow might you deal with them?

Team change

HOW INDIVIDUALS AFFECT TEAM DYNAMICS

Here we use the Myers-Briggs Type Indicator™ to see how individualpersonalities might influence and be influenced by the team. We also useMeredith Belbin’s (1981) research into team types to indicate what typesof individuals best make up an effective team.

MBTI™ and teams

The Myers-Briggs Type Indicator™ suggests that if you are a particulartype you have particular preferences and are different from other peopleof different types (see Table 1.5 for MBTI™ types). This means that when

The underpinning theory

‘If it ain’t broke, don’t fix it’ ‘Let’s think ahead’

‘Let’s just do it’ ‘Let’s change it’

it comes to change, people with different preferences react differently tochange, both when they initiate it and when they are on the receivingend of it. This is also true when you are a member of a team. Differentpeople will bring their individual preferences to the table and behave indiffering ways.

When undergoing team change, individual team members will typicallyreact in one of four ways (see illustrations above):

• Some will want to ascertain the difference between what should bepreserved and what could be changed. There will be things theywant to keep.

• Some will think long and hard about the changes that will emergeinternally from their visions of the future. They will be intent onthinking about the changes differently.

• Some will be keen to move things on by getting things to run moreeffectively and efficiently. They will be most interested in doingthings now.

• Some will be particularly inventive and want to try somethingdifferent or novel. They will be all for changing things.

The use of MBTI™, or any other personality-profiling instrument, canhave specific benefits when teams are experiencing or managing change.It can identify where individuals and the team itself might havestrengths to be capitalized on, and where it might have weaknesses thatneed to be supported.

Behaviours exhibited by team members will run ‘true to type’, and thusknowing your preferences and those of the rest of the team will help aidunderstanding. It is also true that different team tasks might be suitablefor different types – either because they are best matched or because itprovides a development opportunity. Surfacing differences helps individ-uals see things from the other person’s perspective, and adds to the effec-tive use of diversity within the team.

Researching in the health care industry, Mary McCaulley (1975) madethe point that similarity and difference within teams can have bothadvantages and disadvantages:

Team change

• The more similar the team members are, the sooner they will reachcommon understanding.

• The more disparate the team members, the longer it takes for under-standing to occur.

• The more similar the team members, the quicker the decision will bemade, but the greater the possibility of error through exclusion ofsome possibilities.

• The more disparate the team members, the longer the decision-making process will be, but the more views and opinions will be takeninto account.

McCaulley also recognized that teams valuing different types can ulti-mately experience less conflict.

A particular case worth mentioning is the management team.Management teams both in the United States and the United Kingdomare skewed from the natural distribution of Myers-Briggs types within thewhole population. Typically they are composed of fewer people of thefeeling types and fewer people of the perceiving types. This means thatmanagement teams, when making decisions around change, are morelikely to put emphasis on the business case for change, and less likely tothink or worry about the effect on people. You can see the result of this inmost change programmes in most organizations. They are also morelikely to want to close things down, having made a decision, rather thankeep their options open – thus excluding the possibility of enhancing andimproving on the changes or responding to feedback.

There are some simple reminders of the advantages and disadvantagesof the preferences for teams making decisions about managing changewithin organizations, as listed in Table 2.5.

Belbin’s team types

What people characteristics need to be present for a team to functioneffectively? Meredith Belbin (1981) has been researching this questionfor a number of years. The purpose of his research was to see whetherhigh and low performing teams had certain characteristics. He looked atteam members and found that in the higher performing teams,

The underpinning theory

members played a role or number of roles. Any teams without membersplaying one of these roles would be more likely to perform at a lowerlevel of effectiveness. Of course different situations require certaindifferent emphases.

He identified the following roles (see Table 2.6) with their contributionsand allowable weaknesses.

Team change

Table 2.5 Complementarity and conflict in teams

Extraversion IntroversionNeeded to raise energy, Where Needed for thinking things show enthusiasm, make individuals through and depth of contacts and take action. draw their understanding.

But they can appear energy from But can appear withdrawn, superficial, intrusive cold and aloof.and overwhelming.

Sensing IntuitionNeeded to base ideas What an Needed to prepare for the

firmly in reality and be individual pays future and generate practical and pragmatic. attention to or innovative solutions.

Can appear rather how he/she Can appear to have head mundane and pessimistic. receives data in the clouds, impractical

and information and implausible.

Thinking FeelingNeeded to balance benefits How an Needed to be in touch with

against the costs and individual emotional intelligence, to make tough decisions. makes negotiate and to reconcile.

Can appear rather critical decisions Can appear irrational and and insensitive. too emotional.

Judging PerceivingNeeded for his/her What sort of Needed for his/her

organization and ability to lifestyle an flexibility, adaptability and complete things and see individual information gathering.

them through. enjoys Can appear rather Can appear overly rigid unorganized and

and immovable. somewhat irresponsible.

The underpinning theory

Table 2.6 Belbin team-role summary sheet

Team-Role DescriptionsContribution Allowable Weakness

This ‘BELBIN’ handout is the property of Belbin Associates, UK and protected by copyright, database, trademark and other intellectualproperty rights. You must retain all copyright and other proprietary notices contained on this original and on any copy you make. Youmay not sell or modify this handout. The use of this handout on any other website is prohibited. You agree not to adapt, translate, modify,decompile, disassemble or reverse engineer the handout. ‘BELBIN’ is a registered trademark of Belbin Associates, UK.

STOP AND THINK!Q 2.8 What team role(s) are you likely to use?

Q 2.9 What are the advantages and disadvantages of each of theeight roles?

Belbin concluded that if teams were formed with individuals’ preferencesand working styles in mind, they would have a better chance of teamcohesion and work-related goal achievement. Teams need to contain agood spread of Belbin team types.

Different teams might need different combinations of roles. Marketingand design teams probably need more Plants, while project implementa-tion teams need Implementers and Completer Finishers. Likewise, thelack of a particular team type can be an issue. A management teamwithout a Co-ordinator or Shaper would have problems. An implementa-tion team without a Complete Finisher might also struggle.

HOW WELL TEAMS INITIATE AND ADAPT TO ORGANIZATIONAL CHANGE

Throughout the last decades of the 20th century many organizationsrepeated the mantra, ‘people are our greatest assets’, and many wouldthen apologize profusely when they were forced into downsizing or‘rightsizing’ the workforce. Similarly many organizations have sung thepraises of teams and how essential they are within the modern organiza-tion. Many organizations have sets of competences or stated values thatimplicitly and explicitly pronounce that their employees need to work inthe spirit of team work and partnership.

It was therefore interesting for the authors to discover that there was areal lack of any authoritative research on the interplay between organiza-tional change and team working. We have seen in a previous chapter theeffect that change has on individuals and groups of individuals; but whathas not been studied is the effect of change on teams. And as a conse-quence there is very little research on strategies for managing and leadingteams through organizational change.

Team change

Whelan-Berry and Gordon (2000), in their research into effective orga-nizational change, conducted a multi-level analysis of the organizationalchange process. To quote them:

they found no change process models at the group or team level of analysisin the organization studies and change literature. Literature exists whichexplores different aspects of team or group development, team or groupeffectiveness, implementation of specific interventions, and organizationaland individual aspects of the change, but not a group/team change processmodel… the lack of change process models for the team or group levelchange process in the context of organizational change leaves a majorportion of the organizational change process unclear.

They continue:

The primary focus of existing organizational change models is what to do asopposed to explaining or predicting the change process. Most of the modelsimplicitly, and a few explicitly, acknowledge, the inherent (sub) processes ofgroup level and individual level change, but do not include the details of theseprocesses in the model. The question is how does the change process varywhen considered across levels of analysis? For example, how does a vision get‘translated,’ that is, take on meaning, in each location or department? In addi-tion, what happens at the point of implementation? We must ‘double click’ atthe point of implementation in the organizational level change process; that is,we must look at the group and individual levels and their respective changeprocesses to understand the translation and implementation of the organiza-tional level change vision and desired change outcomes to group and subse-quently to individual meanings, frameworks, and behaviours.

Table 2.7 examines each type of teampreviously identified, and looks at theway in which this type of team canimpact or react to organizationalchange. We also look at the pros andcons of each team type when involvedin an organizational change process.

Team development processes aredisturbed in times of change. An external event can shift a performingteam back into the storming stage. Only teams that are quite remote fromthe changes can simply incorporate a new scope or a new set of valuesand remain relatively untouched.

The underpinning theory

Table 2.7 Teams going through change

Team type Group Work Parallel Project Matrix

Propensity to Dependent Limited Limited in terms Potentially high Fair given initiate on nature and of organizational depending on propensity to change composition impact integration into address change

of group organization

Propensity to Dependent on Dependent on Dependent on Theoretically high. Dependent on adapt to purpose and team members purpose and team Good for limited degree of change composition and team culture members changes in scope enabling or

of group but not total disabling structure

Advantages Difficult to Good at Good for pilot Good focus for specific Flexible, so good during get alignment implementation schemes implementation goals for initiating ideaschange once it is clear

Disadvantages Useful for Does not like Can become alienated Not good for Leadership during coming up change too often through failure, or tackling complex sometimes not change with out-of- through boasting topics such as clear, so discussion

the-box ideas about success values or leadership can go on for ever

Advice for Good for Need to involve Useful for starting Good for short-range Good for leaders initiating ideas the leaders or things up and tasks such as appointing initiating ideas

and spreading shapers of these proving an idea. consultants or researching and spreadingthe word teams early – Do not let members techniques. Not good for the word

especially if you become too isolated. the complex stuff. Do not need their Encourage them to be tempted to give commitment link in with the complex issues like rather than outside world ‘improve communication’compliance to a project team

94 Table 2.7 continued

Team type Virtual Network Management Change

Propensity to Limited unless Potentially large Theoretically and practically Raison d’êtreinitiate change project specific depending on nature and high. Typically should be the

composition of group team that initiates change

Propensity to Dependent on Dependent on purpose Theoretically and practically high. Theoretically and adapt to change purpose and team and team members Sometimes will have difficulty practically high

members adapting to others’ change

Advantages Brings disparate Wide reaching, so good Powerful, so makes an impact Has increased energy during change groups together for sharing sense of and sense of purpose

if tightly focused purpose and sense of because it was set up urgency to make change

happen

Disadvantages Lack of cohesion Not good for monitoring Often resistant to changing Not impactful if it during change means purpose implementation because through lack of time or lack of lacks influence

may be of lack of process and teamwork, so role modelling of (presence of misunderstood regularity desired changes can be weak. powerful people)and important Focus on events after the launch issues are not often poor due to packed agenda raised and belief that it will all happen

smoothly

Advice for Involve the key virtual Good for Do something surprising yourself Recruit powerful leaders teams early – especially initiating ideas if you want your management people

the leaders and shapers, and spreading team to change the way it works. Work on alignmentbut do not expect them the word Insist on role modelling. Ensure resourcesto implement anything Keep your eye on the ball complicated because there will be problems

SUMMARY AND CONCLUSIONS

• Groups and teams are different, with different characteristics anddifferent reasons for existing.

• Teams are important in organizational life for accomplishing large orcomplex tasks.

• Team work is important for management teams when they work onrisky issues that require them to share views and align.

• There are many different types of organizational team, each withsignificant benefits and downsides.

• Teams can become more effective by addressing five elements:– team mission, planning and goal setting;– team roles;– team operating processes;– team interpersonal relationships;– inter-team relations.

• Teams develop over time. Tuckman’s forming, storming, norming andperforming model is useful for understanding this process.

• The team development process involves different leadership chal-lenges at each stage.

• Bion’s work highlights four possible pitfalls that need to be workedthrough:– dependency;– fight or flight;– pairing;– cosiness.

• The composition of a team is an important factor in determining howit can be successful. Belbin says that well-rounded teams are best.Deficiencies in a certain type can cause problems.

• The Myers-Briggs profile allows mutual understanding of teammember ’s preferences for initiating or adapting to change.

Team change

• Belbin’s team types offer a way of analysing a team’s fitness forpurpose and encouraging team members to do something about anysignificant gaps.

• Leaders need to be aware of the types of team available during achange process, and how to manage these most effectively.

Below is a summary checklist of the key questions you need to be askingand answering before, during and after the change process:

• Where are the teams affected by the change process?

• What types of team are they and how might they respond to change?

• What do they need to be supported through the change process?

• How can we best use them throughout the change process?

• What additional types of team do we need for designing and imple-menting the changes?

• As all teams go through the transition, what resources shall we offerto ensure they achieve their objectives of managing business as usualand the changes?

• How do we ensure that teams that are dispersing, forming, inte-grating or realigning stay on task?

• What organizational process do we have for ensuring teams are clearabout their:– mission, planning and goal setting;– roles and responsibilities– operating processes;– interpersonal relationships;– inter-team relations?

The underpinning theory

Organizational change

This chapter tackles the issue of organizational change. How does theprocess of organizational change happen? Must change be initiated anddriven through by one strong individual? Or can it be planned collectivelyby a powerful group of people, and by sheer momentum, the change willhappen? Perhaps there is a more intellectual approach that can be taken.Are there payoffs to understanding the whole system, determining how tochange it, and predicting where resistance will occur? On the other hand,maybe change cannot be planned at all. Something unpredictable couldspark a change, which then spreads in a natural way.

This chapter addresses the topic of organizational change in three sections:

• how organizations really work;

• models and approaches to organizational change;

• summary and conclusions.

In the first section we look at assumptions about how organizations workin terms of the metaphors that are most regularly used to describe them.This is an important starting point for those who are serious about orga-nizational change. Once you become aware of the range of assumptions

that shape people’s attitudes to and understanding of organizations, youcan take advantage of the possibilities of other ways of looking at things,and you can begin to understand how other people in your organizationmay view the world. You can also begin to see the limitations of eachmindset and the disadvantages of taking a one-dimensional approach toorganizational change.

In the second section, we set out a range of useful models and ideasdeveloped by some of the most significant writers on organizationalchange. This section aims to illustrate the variety of ways in which youcan view the process of organizational change. We also make sense of thedifferent models and approaches by identifying the assumptions under-pinning each one. When you understand the assumptions behind amodel, you can start to see its benefits and limitations.

In the third section, we come to some conclusions about organizationalchange, and stress the importance of being aware of underlying assump-tions and having the flexibility to employ a range of different approaches.

HOW ORGANIZATIONS REALLY WORK

We all have our own assumptions about how organizations work, devel-oped through a combination of experience and education. The use ofmetaphor is an important way in which we express these assumptions.Some people talk about organizations as if they were machines. Thismetaphor leads to talk of organizational structures, job design andprocess reengineering. Others describe organizations as political systems.They describe the organization as a seething web of political intriguewhere coalitions are formed and power rules supreme. They talk abouthidden agendas, opposing factions and political manoeuvring.

Gareth Morgan’s (1986) work on organizational metaphors is a goodstarting point for understanding the different beliefs and assumptionsabout change that exist. He says:

Metaphor gives us the opportunity to stretch our thinking and deepen ourunderstanding, thereby allowing us to see things in new ways and act in newways… Metaphor always creates distortions too… We have to accept thatany theory or perspective that we bring to the study of organization andmanagement, while capable of creating valuable insights, is also incomplete,biased, and potentially misleading.

The underpinning theory

Morgan identifies eight organizational metaphors:

• machines;

• organisms;

• brains;

• cultures;

• political systems;

• psychic prisons;

• flux and transformation;

• instruments of domination.

We have selected four of Morgan’s organizational metaphors to explorethe range of assumptions that exists about how organizational changeworks. These are the four that we see in use most often by managers,writers and consultants, and that appear to us to provide the most usefulinsights into the process of organizational change. These are:

• organizations as machines;

• organizations as political systems;

• organizations as organisms;

• organizations as flux and transformation.

Descriptions of these different organizational metaphors appear below.See also Table 3.1, which sets out how change might be approached usingthe four different metaphors. In reality most organizations use combina-tions of approaches to tackle organizational change, but it is useful to pullthe metaphors apart to see the difference in the activities resulting fromdifferent ways of thinking.

Organizational change

MACHINE METAPHOR?

The new organizational structure represents an injection of fresh skills into theMarketing Function.

Fred Smart will now head up the implementation of the Marketing Plan,which details specific investment in marketing skills training and IT systems. Weintend to fill the identified skills gaps and to upgrade our customer databasesand market intelligence databank. A focus on following correct marketingprocedures will ensure consistent delivery of well-targeted brochures andadvertising campaigns.

MD, Engineering Company

Organizations as machines

The machine metaphor is a well-used metaphor which is worth revisitingto examine its implications for organizational change. Gareth Morgansays, ‘When we think of organizations as machines, we begin to see them

as rational enterprises designed andstructured to achieve predeterminedends.’ This picture of an organizationimplies routine operations, well-defined structure and job roles, andefficient working inside and betweenthe working parts of the machine (thefunctional areas). Procedures and stan-dards are clearly defined, and areexpected to be adhered to.

Many of the principles behind this mode of organizing are deeplyingrained in our assumptions about how organizations should work. Thislinks closely into behaviourist views of change and learning (see descrip-tion of behavioural approach to change in Chapter 1).

The key beliefs are:

• each employee should have only one line manager;

• labour should be divided into specific roles;

The underpinning theory

100

• each individual should be managed by objectives;

• teams represent no more than the summation of individual efforts;

• management should control and there should be employee discipline.

This leads to the following assumptions about organizational change:

• The organization can be changed to an agreed end state by those inpositions of authority.

• There will be resistance, and this needs to be managed.

• Change can be executed well if it is well planned and well controlled.

What are the limitations of this metaphor? The mechanistic view leadsmanagers to design and run the organization as if it were a machine. Thisapproach works well in stable situations, but when the need for a signifi-cant change arises, this will be seen and experienced by employees as amajor overhaul which is usually highly disruptive and therefore encoun-ters resistance. Change when approached with these assumptions istherefore hard work. It will necessitate strong management action, inspi-rational vision, and control from the top down.

See the works of Frederick Taylor and Henri Fayol if you wish toexamine further some of the original thinking behind this metaphor.

Organizations as political systems

When we see organizations as political systems we aredrawing clear parallels between how organizationsare run and systems of political rule. We may refer to‘democracies’, ‘autocracy ’ or even ‘anarchy ’ todescribe what is going on in a particular organization.Here we are describing the style of power ruleemployed in that organization.

The political metaphor is useful because it recognizesthe important role that power play, competing interestsand conflict have in organizational life. Gareth Morgancomments, ‘Many people hold the belief that business

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and politics should be kept apart… But the person advocating the case ofemployee rights or industrial democracy is not introducing a politicalissue so much as arguing for a different approach to a situation that isalready political.’

The key beliefs are:

• You can’t stay out of organizational politics: you’re already in it.

• Building support for your approach is essential if you want to makeanything happen.

• You need to know who is powerful, and who they are close to.

• There is an important political map which overrides the publishedorganizational structure.

• Coalitions between individuals are more important than work teams.

• The most important decisions in an organization concern the alloca-tion of scarce resources, that is, who gets what, and these are reachedthrough bargaining, negotiating and vying for position.

This leads to the following assumptions about organizational change:

• The change will not work unless it’s supported by a powerful person.

• The wider the support for this change the better.

• It is important to understand the political map, and to understandwho will be winners and losers as a result of this change.

• Positive strategies include creating new coalitions and renegotiatingissues.

What are the limitations of this metaphor? The disadvantage of using thismetaphor to the exclusion of others is that it can lead to the potentiallyunnecessary development of complex Machiavellian strategies, with anassumption that in any organizational endeavour, there are always winnersand losers. This can turn organizational life into a political war zone.

See Pfeiffer ’s book, Managing with Power: Politics and influence in organi-zations (1992) to explore this metaphor further.

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Organizations as organismsThis metaphor of organizational life sees the organization as a living, adap-tive system. Gareth Morgan says, ‘The metaphor suggests that differentenvironments favour different species of organizations based on differentmethods of organizing… congruence with the environment is the key tosuccess.’ For instance, in stable environments a more rigid bureaucraticorganization would prosper. In more fluid, changing environments alooser, less structured type of organization would be more likely to survive.

This metaphor represents the organization asan ‘open system’. Organizations are seen as setsof interrelated sub-systems designed to balancethe requirements of the environment withinternal needs of groups and individuals. Thisapproach implies that when designing organiza-tions, we should always do this with the envi-ronment in mind. Emphasis is placed onscanning the environment, and developing ahealthy adaptation to the outside world.Individual, group and organizational health andhappiness are essential ingredients of thismetaphor. The assumption is that if the social needs of individuals andgroups in the organization are met, and the organization is well designedto meet the needs of the environment, there is more likelihood of healthyadaptive functioning of the whole system (socio-technical systems).

The key beliefs are:

• There is no ‘one best way ’ to design or manage an organization.

• The flow of information between different parts of the systems and itsenvironment is key to the organization’s success.

• It is important to maximize the fit between individual, team and orga-nizational needs.

This leads to the following assumptions about organizational change:

• Changes are made only in response to changes in the external envi-ronment (rather than using an internal focus).

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• Individuals and groups need to be psychologically aware of the needfor change in order to adapt.

• The response to a change in the environment can be designed andworked towards.

• Participation and psychological support are necessary strategies forsuccess.

What are the limitations of this metaphor? The idea of the organization asan adaptive system is flawed. The organization is not really just an adap-tive unit, at the mercy of its environment. It can in reality shape the envi-ronment by collaborating with communities or with other organizations,or by initiating a new product or service that may change the environ-ment in a significant way. In addition the idealized view of coherence andflow between functions and departments is often unrealistic. Sometimesdifferent parts of the organization run independently, and do so for goodreason. For example the research department might run in a verydifferent way and entirely separately from the production department.

The other significant limitation of this view is noted by Morgan, andconcerns the danger that this metaphor becomes an ideology. Theresulting ideology says that individuals should be fully integrated with theorganization. This means that work should be designed so that people canfulfil their personal needs through the organization. This can then becomea philosophical bone of contention between ‘believers’ (often, but notalways the HR Department) and ‘non-believers’ (often, but not always, thebusiness directors). See Burns and Stalker ’s book The Management ofInnovation (1961) for the original thinking behind this metaphor.

Organizations as flux and transformation

Viewing organizations as flux and transformation takes us into areas suchas complexity, chaos and paradox. This view of organizational life sees theorganization as part of the environment, rather than as distinct from it. Soinstead of viewing the organization as a separate system that adapts tothe environment, this metaphor allows us to look at organizations assimply part of the ebb and flow of the whole environment, with acapacity to self-organize, change and self-renew in line with a desire tohave a certain identity.

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This metaphor is the only one thatbegins to shed some light on howchange happens in a turbulent world.This view implies that managers cannudge and shape progress, but cannotever be in control of change. GarethMorgan says, ‘In complex systems noone is ever in a position to control ordesign system operations in a comprehensive way. Form emerges. Itcannot be imposed.’

The key beliefs are:

• Order naturally emerges out of chaos.

• Organizations have a natural capacity to self-renew.

• Organizational life is not governed by the rules of cause and effect.

• Key tensions are important in the emergence of new ways of doingthings.

• The formal organizational structure (teams, hierarchies) only repre-sents one of many dimensions of organizational life.

This leads to the following assumptions about organizational change:

• Change cannot be managed. It emerges.

• Managers are not outside the systems they manage. They are part ofthe whole environment.

• Tensions and conflicts are an important feature of emerging change.

• Managers act as enablers. They enable people to exchange views andfocus on significant differences.

What are the limitations of this metaphor? This metaphor is disturbing forboth managers and consultants. It does not lead to an action plan, or aprocess flow diagram or an agenda to follow. Other metaphors of changeallow you to predict the process of change before it happens. With theflux and transformation metaphor, order emerges as you go along, and

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can only be made sense of after the event. This can lead to a sense ofpowerlessness that is disconcerting, but probably realistic!

See Chapter 9 on complex change for further reading on this metaphor.

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Table 3.1 Four different approaches to the change process

Metaphor How change is tackled Who is Guiding principlesresponsible

Machine Senior managers define targets Senior Change must be and timescale. Consultants management driven. Resistance advise on techniques. Change can be managed.programme is rolled out from Targets set at the the top down. Training is given start of the process to bridge behaviour gap. define the direction.

Political system A powerful group Those with There will be of individuals builds a new power winners and losers.coalition with new guiding Change requires principles. There are debates, new coalitions and manoeuvrings and new negotiations.negotiations which eventually leads to the new coalition either winning or losing. Change then ensues as new people are in power with new views and new ways of allocating scarce resources. Those around them position themselves to be winners rather than losers.

Organisms There is first a research phase Business There must be where data is gathered on the improvement/ participation and relevant issue (customer HR/OD involvement, and feedback, employee survey etc). managers an awareness of Next the data is presented to the need for those responsible for making change. changes. There is discussion The change is about what the data means, and collaboratively then what needs to be done. designed as a A solution is collaboratively response to designed and moved towards, changes in the with maximum participation. environment.Training and support are People need to be given to those who need to supported through make significant changes. change.

STOP AND THINK!Q 3.1 Which view of organizational life is most prevalent in your

organization?

What are the implications of this for the organization’s ability tochange?

Q 3.2 Which view are you most drawn to personally?

What are the implications for you as a leader of change?

Q 3.3 Which views are being espoused here? (See A, B, C, D.)

A All staff memo from management team

The whole organization is encountering a range of difficult environmentalissues, such as increased demand from our customers for faster delivery and

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Table 3.1 continued

Metaphor How change is tackled Who is Guiding principlesresponsible

Flux and The initial spark of change is Someone with Change cannot be transformation an emerging topic. This is a authority to act managed; it

topic that is starting to appear emerges. on everyone’s agenda, or is Conflict and tension being talked about over coffee. give rise to change.Someone with authority takes Managers are part the initiative to create a of the process. discussion forum. The Their job is to discussion is initially fairly highlight gaps and unstructured, but well contradictions.facilitated. Questions asked might be ‘Why have you come?’, ‘What is the real issue?’, ‘How would we like things to be?’ The discussion involves anyone who has the energy to be interested.A plan for how to handle the issue emerges from a series of discussions. More people are brought into the net.

Gareth Morgan’s metaphors used with permission of Sage Publications Inc.

higher quality, more legislation in key areas of our work, and rapidly devel-oping competition in significant areas.

Please examine the attached information regarding the above (customersatisfaction data, benchmarking data vs competitors, details of new legisla-tion) and start working in your teams on what this means for you, and howyou might respond to these pressures.

The whole company will gather together in October of this year to beginto move forward with our ideas, and to strive for some alignment betweendifferent parts of the organization. We will present the management’s visionand decide on some concrete first steps.

B E-mail from CEO

A number of people have spoken to me recently about their discomfort withthe way we are tackling our biggest account. This seems to be an importantissue for a lot of people. If you are interested in tackling this one, pleasecome to an open discussion session in the Atrium on Tuesday between10.00 and 12.00 where we will start to explore this area of discomfort. LetSarah know if you intend to come.

C E-mail from one manager to another

John seems to be in cahoots with Sarah on this issue. If we want their supportfor our plans we need to reshape our agenda to include their need for extraresource in the operations team. I will have a one to one with Sarah to checkout her viewpoint. Perhaps you can speak to John.

Our next step should be to talk this through with the key players on theExecutive Board and negotiate the necessary investment.

D Announcement from MD

As you may know, consultants have been working with us to design ournew objective setting process which is now complete. This will be rolledout starting 1 May 2009 starting with senior managers and cascading toteam members.

The instructions for objective setting are very clear. Answers to frequentlyasked questions will appear on the company website next week.

This should all be working smoothly by end of May 2009.

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MODELS OF AND APPROACHES TO ORGANIZATIONAL CHANGE

Now we have set the backdrop to organizational behaviour and ourassumptions about how things really work, let us now examine ways oflooking at organizational change as represented by the range of modelsand approaches developed by the key authors in this field. Table 3.2 linksGareth Morgan’s organizational metaphors with the models of andapproaches to change discussed below.

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Table 3.2 Models of change and their associated metaphors

MetaphorModel or approach Machine Political Organism Flux and

system transformation

Lewin, three-step model ✓ ✓

Bullock and Batten, ✓planned change

Kotter, eight steps ✓ ✓ ✓

Beckhard and Harris, ✓change formula

Nadler and Tushman, ✓ ✓congruence model

William Bridges, ✓ ✓ ✓managing the transition

Carnall, change ✓ ✓management model

Senge, systemic model ✓ ✓ ✓

Stacey and Shaw, complex ✓ ✓responsive processes

Lewin, three-step model: organism, machine

Kurt Lewin (1951) developed his ideas about organizational change fromthe perspective of the organism metaphor. His model of organizationalchange is well known and much quoted by managers today. Lewin isresponsible for introducing force field analysis, which examines thedriving and resisting forces in any change situation (see Figure 3.1). Theunderlying principle is that driving forces must outweigh resisting forcesin any situation if change is to happen.

Using the example illustrated in Figure 3.1, if the desire of a manager isto speed up the executive reporting process, then either the drivingforces need to be augmented or the resisting forces decreased. Or evenbetter, both of these must happen. This means for example ensuring thatthose responsible for making the changes to the executive reportingprocess are aware of how much time it will free up if they are successful,and what benefits this will have for them (augmenting driving force). Itmight also mean spending some time and effort managing customerexpectations and supporting them in coping with the new process(reducing resisting force).

Lewin suggested a way of looking at the overall process of makingchanges. He proposed that organizational changes have three steps. Thefirst step involves unfreezing the current state of affairs. This means

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Spee

d up

exe

cuti

ve r

epor

ting

pro

cess

Figure 3.1 Lewin's force field analysisSource: Lewin (1951)

Management Board asking for this

Will free up time for us

Provides opportunity forquestioning customer

requirements

Good PR for us

We have little time free totackle this

Customers will bedisgruntled by changes

SAP will override all this in2 years time

defining the current state, surfacing the driving and resisting forces andpicturing a desired end state. The second is about moving to a new statethrough participation and involvement. The third focuses on refreezingand stabilizing the new state of affairs by setting policy, rewardingsuccess and establishing new standards. See Figure 3.2 for the key stepsin this process.

Lewin’s three-step model uses the organism metaphor of organizations,which includes the notion of homeostasis (see box). This is the tendency ofan organization to maintain its equilibrium in response to disruptingchanges. This means that any organization has a natural tendency toadjust itself back to its original steady state. Lewin argued that a new stateof equilibrium has to be intentionally moved towards, and then stronglyestablished, so that a change will ‘stick’.

Lewin’s model was designed to enable a process consultant to take agroup of people through the unfreeze, move and refreeze stages. Forexample, if a team of people began to see the need to radically altertheir recruitment process, the consultant would work with the team tosurface the issues, move to the desired new state and reinforce thatnew state.

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UNFREEZE

MOVE

REFREEZE

Take actionMake changesInvolve people

Make changepermanent

Establish new wayof things

Reward desiredoutcomes

Examine statusquo

Increase drivingforces for change

Decrease resistingforces against

change

Figure 3.2 Lewin's three-step modelSource: Lewin (1951)

HOMEOSTASIS IN ACTION

In the 1990s many organizations embarked on TQM (total qualitymanagement) initiatives which involved focusing on customer satisfac-tion (both internally and externally) and process improvement in all areasof the organization. An Economic Intelligence Unit report indicated thattwo-thirds of these initiatives started well, but failed to keep themomentum going after 18 months. Focus groups were very active to startwith, and suggestions from the front line came rolling in. After a while thefocus groups stopped meeting and the suggestions dried up. Specificissues had been solved, but a new way or working had not emerged.Things reverted to the original state of affairs.

Our view

Lewin’s ideas provide a useful tool for those considering organizationalchange. The force field analysis is an excellent way of enabling forinstance a management team to discuss and agree on the driving andresisting forces that currently exist in any change situation. When thisanalysis is used in combination with a collaborative definition of thecurrent state versus the desired end state, a team can quickly move todefining the next steps in the change process. These next steps are usuallycombinations of:

• communicating the gap between the current state and the end stateto the key players in the change process;

• working to minimize the resisting forces;

• working to maximize or make the most of driving forces;

• agreeing a change plan and a timeline for achieving the end state.

We have observed that this model is sometimes used by managers as aplanning tool, rather than as an organizational development process.The unfreeze becomes a planning session. The move translates to imple-mentation. The refreeze is a post-implementation review. This approachignores the fundamental assumption of the organism metaphor that

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groups of people will change only ifthere is a felt need to do so. The changeprocess can then turn into an ill-thought-out plan that does not tackleresistance and fails to harness theenergy of the key players. This israther like the process of blowing up aballoon and forgetting to tie a knot inthe end!

Bullock and Batten, planned change: machine

Bullock and Batten’s (1985) phases of planned change draw on the disci-plines of project management. There are many similar ‘steps tochanging your organization’ models to choose from. We have chosenBullock and Batten’s:

• exploration;

• planning;

• action;

• integration.

Exploration involves verifying the need for change, and acquiring anyspecific resources (such as expertise) necessary for the change to goahead. Planning is an activity involving key decision makers and tech-nical experts. A diagnosis is completed and actions are sequenced in achange plan. The plan is signed off by management before moving intothe action phase. Actions are completed according to plan, with feedbackmechanisms which allow some replanning if things go off track. The finalintegration phase is started once the change plan has been fully actioned.Integration involves aligning the change with other areas in the organiza-tion, and formalizing them in some way via established mechanisms suchas policies, rewards and company updates.

This particular approach implies the use of the machine metaphor oforganizations. The model assumes that change can be defined and movedtowards in a planned way. A project management approach simplifies the

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change process by isolating one part of the organizational machinery inorder to make necessary changes, for example developing leadershipskills in middle management, or reorganizing the sales team to give moreengine power to key sales accounts.

Our view

This approach implies that the organizational change is a technicalproblem that can be solved with a definable technical solution. We haveobserved that this approach works well with isolated issues, but worksless well when organizations are facing complex, unknowable changewhich may require those involved to discuss the current situation andpossible futures at greater length before deciding on one approach.

For example we worked with one organization recently that, onreceiving a directive from the CEO to ‘go global’, immediately set upfour tightly defined projects to address the issue of becoming a globalorganization. These were labelled global communication, global values,global leadership and global balanced scorecard. While on the surface,this seems a sensible and structured approach, there was no upfrontopportunity for people to build any awareness of current issues, or totalk and think more widely about what needed to change to supportthis directive. Predictably, the projects ran aground around the ‘action’stage due to confusion about goals, and dwindling motivation withinthe project teams.

Kotter, eight-steps: machine, political, organism

Kotter ’s (1995) ‘eight steps to transforming your organization’ goes alittle further than the basic machine metaphor. Kotter ’s eight-stepmodel derives from analysis of his consulting practice with 100different organizations going through change. His research high-lighted eight key lessons, and he converted these into a useful eight-step model. The model addresses some of the power issues aroundmaking change happen, highlights the importance of a ‘felt need’ forchange in the organization, and emphasizes the need to communicatethe vision and keep communication levels extremely high throughoutthe process (see box).

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KOTTER’S EIGHT-STEP MODEL

1. Establish a sense of urgency. Discussing today’s competitive realities,looking at potential future scenarios. Increasing the ‘felt-need’ for change.

2. Form a powerful guiding coalition. Assembling a powerful group ofpeople who can work well together.

3. Create a vision. Building a vision to guide the change effort togetherwith strategies for achieving this.

4. Communicate the vision. Kotter emphasizes the need to communi-cate at least 10 times the amount you expect to have to communicate.The vision and accompanying strategies and new behaviours needs tobe communicated in a variety of different ways.

The guiding coalition should be the first to role model new behaviours.

5. Empower others to act on the vision. This step includes getting ridof obstacles to change such as unhelpful structures or systems. Allowpeople to experiment.

6. Plan for and create short-term wins. Look for and advertise short-term visible improvements. Plan these in and reward people publiclyfor improvements.

7. Consolidate improvements and produce still more change.Promote and reward those able to promote and work towards thevision. Energize the process of change with new projects, resources,change agents.

8. Institutionalize new approaches. Ensure that everyone understandsthat the new behaviours lead to corporate success.

Source: Kotter (1995)

Our view

This eight-step model is one that appeals to many managers with whomwe have worked. However, what it appears to encourage is an early burstof energy, followed by delegation and distance. The eight steps do notreally emphasize the need for managers to follow through with as muchenergy on Step 7 and Step 8 as was necessary at the start. Kotter peaksearly, using forceful concepts such as ‘urgency ’ and ‘power ’ and ‘vision’.Then after Step 5, words like ‘plan’, ‘consolidate’ and ‘institutionalize’seem to imply a rather straightforward process that can be managed by

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others lower down the hierarchy. In our experience the change process ischallenging and exciting and difficult all the way through.

When we work as change consultants, we use our own model of orga-nizational change (see Figure 3.3), which is based on our experiences ofchange, but has close parallels with Kotter ’s eight steps. We prefer tomodel the change process as a continuous cycle rather than as a linearprogression, and in our consultancy work we emphasize the importanceof management attention through all phases of the process.

STOP AND THINK!Q 3.4 Reflect on an organizational change in which you were involved.

How much planning was done at the start? What contribution didthis make to the success or otherwise of the change?

Beckhard and Harris, change formula: organism

Beckhard and Harris (1987) developed their change formula from someoriginal work by Gelicher. The change formula is a concise way ofcapturing the process of change, and identifying the factors that need tobe strongly in place for change to happen.

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Establishing theneed for change

Building thechange team

Creating visionand values

Communicatingand engaging

Empoweringothers

Consolidating

Noticingimprovements and energizing

�

��

�

Figure 3.3 Cycle of changeSource: Cameron Change Consultancy Ltd

Beckhard and Harris say:

Factors A, B, and D must outweigh the perceived costs [X] for the change tooccur. If any person or group whose commitment is needed is not sufficientlydissatisfied with the present state of affairs [A], eager to achieve the proposedend state [B] and convinced of the feasibility of the change [D], then the cost[X] of changing is too high, and that person will resist the change.

… resistance is normal and to be expected in any change effort.Resistance to change takes many forms; change managers need to analyzethe type of resistance in order to work with it, reduce it, and secure the needfor commitment from the resistant party.

The formula is sometimes written (A x B x D) > X. This adds somethinguseful to the original formula. The multiplication implies that if any onefactor is zero or near zero, the product will also be zero or near zero and theresistance to change will not be overcome. This means that if the vision is notclear, or dissatisfaction with the current state is not felt, or the plan is obscure,the likelihood of change is severely reduced. These factors (A, B, D) do notcompensate for each other if one is low. All factors need to have weight.

This model comes from the organism metaphor of organizations,although it has been adopted by those working with a planned changeapproach to target management effort. Beckhard and Harris emphasizedthe need to design interventions that allow these three factors to surfacein the organization.

Our view

This change formula is deceptively simple but extremely useful. It can bebrought into play at any point in a change process to analyse how things

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C = [ABD] > XC = ChangeA = Level of dissatisfaction with the status quoB = Desirability of the proposed change or end stateD = Practicality of the change (minimal risk and disruption)X = ‘Cost’ of changing

Figure 3.4 Beckhard's formula

are going. When the formula is shared with all parties involved in thechange, it helps to illuminate what various parties need to do to makeprogress. This can highlight several of the following problem areas:

• Staff are not experiencing dissatisfaction with the status quo.

• The proposed end state has not been clearly communicated to keypeople.

• The proposed end state is not desirable to the change implementers.

• The tasks being given to those implementing the change are toocomplicated, or ill-defined.

We have noticed that depending on the metaphor in use, distinctdifferences in approach result from using this formula as a startingpoint. For instance, one public sector organization successfully usedthis formula to inform a highly consultative approach to organizationalchange. The vision was built and shared at a large-scale event involvinghundreds of people. Dissatisfaction was captured using an employeesurvey that was fed back to everyone in the organization, anddiscussed at team meetings. Teams were asked to work locally on usingthe employee feedback and commonly created vision to define theirown first steps.

In contrast, a FTSE 100 company based in the UK, used the formulaas a basis for boosting its change management capability via a highlyrated change management programme. Gaps in skills were definedand training workshops were run for the key managers in every signif-icant project team around the company. Three areas of improvementwere targeted:

• vision: project managers were encouraged to build and communicateclearer, more compelling project goals;

• dissatisfaction: this was translated into two elements, clear rationaleand a felt sense of urgency. Project managers were encouraged toimprove their ability to communicate a clear rationale for makingchanges. They were also advised to set clear deadlines and stick tothem, and to visibly resource important initiatives, to increase the feltneed for change;

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• practical first steps: project managers were advised to define theirplans for change early in the process and to communicate these in avariety of ways, to improve the level of buy-in from implementersand stakeholders.

Nadler and Tushman, congruence model: political, organism

Nadler and Tushman’s congruence model takes a different approach tolooking at the factors influencing the success of the change process(Nadler and Tushman, 1997). This model aims to help us understandthe dynamics of what happens in an organization when we try tochange it.

This model is based on the belief that organizations can be viewed assets of interacting sub-systems that scan and sense changes in theexternal environment. This model sits firmly in the open systemsschool of thought, which uses the organism metaphor to understandorganizational behaviour. However, the political backdrop is notignored; it appears as one of the sub-systems (informal organization –see below).

This model views the organization as a system that draws inputs fromboth internal and external sources (strategy, resources, environment) andtransforms them into outputs (activities, behaviour and performance ofthe system at three levels: individual, group and total). The heart of themodel is the opportunity it offers to analyse the transformation process ina way that does not give prescriptive answers, but instead stimulatesthoughts on what needs to happen in a specific organizational context.David Nadler writes, ‘it’s important to view the congruence model as atool for organizing your thinking… rather than as a rigid template todissect, classify and compartmentalize what you observe. It’s a way ofmaking sense out of a constantly changing kaleidoscope of informationand impressions.’

The model draws on the sociotechnical view of organizations that looksat managerial, strategic, technical and social aspects of organizations,emphasizing the assumption that everything relies on everything else.This means that the different elements of the total system have to bealigned to achieve high performance as a whole system. Therefore thehigher the congruence the higher the performance.

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In this model of the transformation process, the organization is composedof four components, or sub-systems, which are all dependent on eachother. These are:

• The work. This is the actual day-to-day activities carried out by indi-viduals. Process design, pressures on the individual and availablerewards must all be considered under this element.

• The people. This is about the skills and characteristics of the peoplewho work in an organization. What are their expectations, what aretheir backgrounds?

• The formal organization. This refers to the structure, systems andpolicies in place. How are things formally organized?

• The informal organization. This consists of all the unplanned,unwritten activities that emerge over time such as power, influence,values and norms.

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Informalorganization

People

Formalorganization

Work

INPUTStrategy

ResourcesEnvironment

OUTPUTIndividual, team and

organizationalperformance

Managing change – transformation process

Use by permission of Oxford University Press, Inc.

This model proposes that effective management of change meansattending to all four components, not just one or two components. Imaginetugging only one part of a child’s mobile.The whole mobile wobbles and oscillatesfor a bit, but eventually all the differentcomponents settle down to where theywere originally. So it is with organiza-tions. They easily revert to the originalmode of operation unless you attend toall four components.

For example, if you change onecomponent, such as the type of work done in an organization, you needto attend to the other three components too. The following questionspinpoint the other three components that may need to be aligned:

• How does the work now align with individual skills? (The people.)

• How does a change in the task line up with the way work is organizedright now? (The formal organization.)

• What informal activities and areas of influence could be affected bythis change in the task? (The informal organization.)

If alignment work is not done, then organizational ‘homeostasis’ (seeabove) will result in a return to the old equilibrium and change will fizzleout. The fizzling out results from forces that arise in the system as a directresult of lack of congruence. When a lack of congruence occurs, energybuilds in the system in the form of resistance, control and power:

• Resistance comes from a fear of the unknown or a need for things toremain stable. A change imposed from the outside can be unsettlingfor individuals. It decreases their sense of independence. Resistancecan be reduced through participation in future plans, and byincreasing the anxiety about doing nothing (increasing the felt needfor change).

• Control issues result from normal structures and processes being influx. The change process may therefore need to be managed in adifferent way by, for instance, employing a transition manager.

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• Power problems arise when there is a threat that power might betaken away from any currently powerful group or individual. Thiseffect can be reduced through building a powerful coalition to takethe change forward (see Kotter above).

Our view

The Nadler and Tushman model is useful because it provides a memo-rable checklist for those involved in making change happen. We have alsonoticed that this model is particularly good for pointing out in retrospectwhy changes did not work, which although psychologically satisfying isnot always a productive exercise. It is important to note that this model isproblem-focused rather than solution-focused, and lacks any reference tothe powerful effects of a guiding vision, or to the need for setting andachieving goals.

As an alternative we have found that the McKinsey seven ‘S’ model isa more rounded starting point for those facing organizational change.This model of organizations uses the same metaphor, representing theorganization as a set of interconnected and interdependent sub-systems. Again, this model acts as a good checklist for those setting outto make organizational change, laying out which parts of the systemneed to adapt, and the knock-on effects of these changes in other partsof the system.

The seven ‘S’ categories are:

• staff: important categories of people;

• skills: distinctive capabilities of key people;

• systems: routine processes;

• style: management style and culture;

• shared values: guiding principles;

• strategy: organizational goals and plan, use of resources;

• structure: the organization chart.

See Managing on the Edge by Richard Pascale (1990) for full definitions ofthe seven S framework.

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William Bridges, managing the transition: machine,organism, flux and transformation

Bridges (1991) makes a clear distinction between planned change andtransition. He labels transition as the more complex of the two, andfocuses on enhancing our understanding of what goes on during transi-tion and of how we can manage this process more effectively. In this way,he manages to separate the mechanistic functional changes from thenatural human process of becoming emotionally aware of change andadapting to the new way of things.

Bridges says:

Transition is about letting go of the past and taking up new behaviours orways of thinking. Planned change is about physically moving office, orinstalling new equipment, or re-structuring. Transition lags behind plannedchange because it is more complex and harder to achieve. Change is situ-ational and can be planned, whereas transition is psychological and lesseasy to manage.

Bridges’ ideas on transition lead to a deeper understanding of what isgoing on when an organizational change takes place. While focusingon the importance of understanding what is going on emotionally ateach stage in the change process, Bridges also provides a list of usefulactivities to be attended to during each phase (see Chapter 4 onLeading change).

Transition consists of three phases: ending, neutral zone and newbeginning.

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Ending Neutral zone New beginning

Figure 3.6 Bridges: endings and beginnings

Ending

Before you can begin something new,you have to end what used to be. Youneed to identify who is losing what,expect a reaction and acknowledge thelosses openly. Repeat information about

what is changing – it will take time to sink in. Mark the endings.

Neutral zone

In the neutral zone, people feel disoriented. Motivation falls and anxietyrises. Consensus may break down as attitudes become polarized. It can alsobe quite a creative time. The manager ’s job is to ensure that people recog-nize the neutral zone and treat it as part of the process. Temporary struc-tures may be needed – possibly task forces and smaller teams. The managerneeds to find a way of taking the pulse of the organization on a regular basis.

William Bridges suggested that we could learn from Moses and his timein the wilderness to really gain an understanding of how to managepeople during the neutral zone.

MOSES AND THE NEUTRAL ZONE

• Magnify the plagues. Increase the felt need for change.

• Mark the ending. Make sure people are not hanging on to too muchof the past.

• Deal with the murmuring. Don’t ignore people when they complain.It might be significant.

• Give people access to the decision makers. Two-way communicationwith the top is vital.

• Capitalize on the creative opportunity provided by the wilderness.The neutral zone provides a difference that allows for creative thinkingand acting.

• Resist the urge to rush ahead. You can slow things down a little.

• Understand the neutral zone leadership is special. This is not anormal time. Normal rules do not apply.

Source: Bridges and Mitchell (2002)

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New beginning

Beginnings should be nurtured carefully. They cannot be planned andpredicted, but they can be encouraged, supported and reinforced.Bridges suggests that people need four key elements to help them makea new beginning:

• the purpose behind the change;

• a picture of how this new organization will look and feel;

• a step by step plan to get there;

• a part to play in the outcome.

The beginning is reached when people feel they can make the emotionalcommitment to doing something in a new way. Bridges makes the pointthat the neutral zone is longer and the endings are more protracted forthose further down the management hierarchy. This can lead to impa-tience from managers who have emotionally stepped into a new begin-ning, while their people seem to lag behind, seemingly stuck in anending (see box).

IMPATIENT FOR ENDINGS?

As part of the management team, I knew about the merger very early, soby the time we announced it to the rest of the company, we were readyto fly with the task ahead.

What was surprising, and annoying, was the slow speed with whicheveryone else caught up. My direct reports were asking detailed ques-tions about their job specifications and exactly how it was all going towork when we had fully merged. Of course I couldn’t answer any of thesequestions. I was really irritated by this.

The CEO had to have a long, intensive heart to heart with the wholeteam explaining what was going on and how much we knew about thefuture state of the organization before we could really get moving.

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Our view

This phased model is particularly useful when organizations are facedwith inevitable changes such as closure of a site, redundancy, acquisitionor merger. The endings and new beginnings are real tangible events inthese situations, and the neutral zone important, though uncomfortable.It is more difficult to use the model for anticipatory change or home-grown change where the endings and beginning are more fluid, andtherefore harder to discern.

We use this model when working with organizations embarking onmergers, acquisitions and significant partnership agreements. In partic-ular, the model encourages everyone involved to get a sense of where theyare in the process of transition. The image of the trapeze artist is oftenappreciated as it creates the feeling of leaping into the unknown, andtrusting in a future that cannot be grasped fully. This is a scary process.

The other important message which Bridges communicates well is thatthose close to the changes (managers and team leaders) may experience adifficulty when they have reached a new beginning and their people arestill working on an ending. This is one of the great frustrations of this typeof change process, and we counsel managers to:

• recognize what is happening;

• assertively tell staff what will happen while acknowledging theirfeelings;

• be prepared to answer questions about the future again and againand again;

• say you don’t know, if you don’t know;

• expect the neutral zone to last a while and give it a positive name suchas ‘setting our sights’ or ‘moving in’ or ‘getting to know you’.

Carnall, change management model: political, organism

Colin Carnall (1990) has produced a useful model that brings together anumber of perspectives on change. He says that the effective managementof change depends on the level of management skill in the following areas:

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• managing transitions effectively;

• dealing with organizational cultures;

• managing organizational politics.

A manager who is skilled in managing transitions is able to help people tolearn as they change, and create an atmosphere of openness and risk-taking.

A manager who deals with organizational cultures examines the currentorganizational culture and starts to develop what Carnall calls ‘a moreadaptable culture’. This means for example developing better informationflow, more openness, and greater local autonomy.

A manager who is able to manage organizational politics can understandand recognize different factions and different agendas. He or shedevelops skills in utilizing and recognizing various political tactics such asbuilding coalitions, using outside experts and controlling the agenda.

Carnall (see Figure 3.7) makes the point that ‘only by synthesizing themanagement of transition, dealing with organizational cultures andhandling organizational politics constructively, can we create the envi-ronment in which creativity, risk-taking and the rebuilding of self-esteemand performance can be achieved’.

Our view

Carnall’s model obviously focuses on the role of the manager during achange process, rather than illuminating the process of change. It providesa useful checklist for management attention, and has strong parallels withWilliam Bridges’ ideas of endings, transitions and beginnings.

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Managingtransitionseffectively Creativity

risk-takingInternal & Dealing with and learning Achievingexternal organizational organizational

pressures cultures Rebuilding change and for change self-esteem learning

Managing andorganizational performance

politics

Figure 3.7 Carnall: managing transitionsSource: Carnall (1990). Printed with permission of Pearson Education Ltd.

STOP AND THINK!Q 3.5 Compare the Nadler and Tushman congruence model with

William Bridges’ ideas on managing transitions. How are theseideas the same? How are they different?

Senge et al: systemic model: political, organism, flux andtransformation

If you are interested in sustainable change, then the ideas and concepts inSenge et al (1999) will be of interest to you. This excellent book, The Danceof Change, seeks to help ‘those who care deeply about building new typesof organizations’ to understand the challenges ahead.

Senge et al observe that many change initiativesfail to achieve hoped for results. They reflect on whythis might be so, commenting, ‘To understand whysustaining significant change is so elusive, we needto think less like managers and more like biologists.’Senge et al talk about the myriad of ‘balancingprocesses’ or forces of homeostasis which act topreserve the status quo in any organization.

HOMEOSTASIS IN ACTION

We wanted to move to a matrix structure for managing projects. There wassignificant investment of time and effort in this initiative as we anticipatedpayoff in terms of utilization of staff and ability to meet project deadlines. Thisapproach would allow staff to be freed up when they were not fully utilized, sothat they could work on a variety of projects.

Consultants worked with us to design the new structure. Job specs wererewritten. People understood their new roles. For a couple for months, itseemed to be working. But after four months, we discovered that the projectmanagers were just carrying on working in the old way, as if they still ownedthe technical staff. They would even lie about utilization, just to stop otherproject managers from getting hold of their people.

I don’t think we have moved on very much at all.Business Unit Manager, Research Projects Department

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Senge et al say:

Most serious change initiatives eventually come up against issues embeddedin our prevailing system of management. These include managers’ commit-ment to change as long as it doesn’t affect them; ‘undiscussable’ topics thatfeel risky to talk about; and the ingrained habit of attacking symptoms andignoring deeper systemic causes of problems.

Their guidelines are:

• Start small.

• Grow steadily.

• Don’t plan the whole thing.

• Expect challenges – it will not go smoothly!

Senge et al use the principles of environmental systems to illustrate howorganizations operate and to enhance our understanding of what forcesare at play. Senge says in his book, The Fifth Discipline (1993):

Business and other human endeavours are also systems. They too are boundby invisible fabrics of interrelated actions, which often take years to fully playout their effects on each other. Since we are part of that lacework ourselves,it’s doubly hard to see the whole patterns of change. Instead we tend tofocus on snapshots of isolated parts of the systems, and wonder why ourdeepest problems never seem to get solved.

The approach taken by Senge et al is noticeably different from much ofthe other work on change, which focuses on the early stages such ascreating a vision, planning, finding energy to move forward and decidingon first steps. They look at the longer-term issues of sustaining andrenewing organizational change. They examine the challenges of firstinitiating, second sustaining and third redesigning and rethinkingchange. The book does not give formulaic solutions, or ‘how to’approaches, but rather gives ideas and suggestions for dealing with thebalancing forces of equilibrium in organizational systems (resistance).

What are the balancing forces that those involved in change need tolook out for? Senge et al say that the key challenges of initiating changeare the balancing forces that arise when any group of people starts to dothings differently:

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• ‘We don’t have time for this stuff!’ People working on change initia-tives will need extra time outside of the day to day to devote tochange efforts, otherwise there will be push back.

• ‘We have no help!’ There will be new skills and mindsets to develop.People will need coaching and support to develop new capabilities.

• ‘This stuff isn’t relevant!’ Unless people are convinced of the need foreffort to be invested, it will not happen.

• ‘They ’re not walking the talk!’ People look for reinforcement of thenew values or new behaviours from management. If this is not inplace, there will be resistance to progress.

They go on to say that the challenges of sustaining change come to thefore when the pilot group (those who start the change) becomessuccessful and the change begins to touch the rest of the organization:

• ‘This stuff is _____!’ This challenge concerns the discomfort felt byindividuals when they feel exposed or fearful about changes. This maybe expressed in a number of different ways such as ,‘This stuff is takingour eye off the ball’, or ‘This stuff is more trouble that it’s worth.’

• ‘This stuff isn’t working!’ People outside the pilot group, and some ofthose within the pilot group, may be impatient for positive results.Traditional ways of measuring success do not always apply, and mayend up giving a skewed view of progress.

• ‘We have the right way!’/’They don’t understand us!’ The pilot groupmembers become evangelists for the change, setting up a reactionfrom the ‘outsiders’.

The challenges of redesigning and rethinking change appear when thechange achieves some visible measure of success and starts to impact oningrained organizational habits:

• ‘Who’s in charge of this stuff?’ This challenge is about the conflictsthat can arise between successful pilot groups, who start to want todo more, and those who see themselves as the governing body ofthe organization.

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• ‘We keep reinventing the wheel!’ The challenge of spreading knowl-edge of new ideas and processes around the organization is a toughone. People who are distant from the changes may not receive goodquality information about what is going on.

• ‘Where are we going and what are we here for?’ Senge says,‘engaging people around deep questions of purpose and strategy isfraught with challenges because it opens the door to a traditionallyclosed inner sanctum of top management’.

Our view

We like the ideas of Senge et al very much. They are thought-provokingand highly perceptive. If we can persuade clients to read the book, wewill. However, in the current climate of time pressure and the need forfast results, these ideas are often a bitter pill for managers struggling tomake change happen despite massive odds.

Whenever possible we encourage clients to be realistic in their quest forchange, and to notice and protect areas where examples of the right sortof behaviours already exist. The messages we carry with us resulting fromSenge et al’s thoughts are:

• consider running a pilot for any large-scale organizational change;

• keep your change process goals realistic, especially when it comes totimescales and securing resources;

• understand your role in staying close to change efforts beyond thekick-off;

• recognize and reward activities that are already going the right way;

• be as open as you can about the purpose and mission of your enterprise.

There are no standard ‘one size fits all’ answers in the book, but plentyof thought-provoking ideas and suggestions, and a thoroughly inspira-tional reframing of traditional ways of looking at change. However,those interested in rapid large-scale organizational change are unlikelyto find any reassurance or support in Senge et al’s book. The advice is,start small.

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STOP AND THINK!Q 3.6 Reflect on an organizational change in which you were involved

that failed to achieve hoped-for results. What were the balancingforces that acted against the change? Use Senge et al’s ideas toprompt your thinking.

Stacey and Shaw, complex responsive processes: political,flux and transformation

There is yet another school of thought represented by people such asRalph Stacey (2001) and Patricia Shaw (2002). These writers use themetaphor of flux and transformation to view organizations. The implica-tions of this mode of thinking for those interested in managing andenabling change are significant:

• Change, or a new order of things, will emerge naturally from cleancommunication, conflict and tension (not too much).

• As a manager, you are not outside of the system, controlling it, orplanning to alter it, you are part of the whole environment.

In Patricia Shaw’s book Changing Conversations in Organizations, ratherthan address the traditional questions of ‘How do we manage change?’she addresses the question, ‘How do we participate in the ways thingschange over time?’ This writing deals bravely with the paradox that ‘ourinteraction, no matter how considered or passionate, is always evolvingin ways that we cannot control or predict in the longer term, no matterhow sophisticated our planning tools’.

Our view

This is disturbing stuff, and a paradox that sets up some anxiety inmanagers and consultants who are disquieted by the suggestion that ourintellectual strivings to collectively diagnose problems and design futuresmay be missing the point. Shaw says, ‘I want to help us appreciateourselves as fellow improvisers in ensemble work, constantlyconstructing the future and our part in it’. Stacey says of traditional viewsof organizations as systems, ‘This is not to say that systems thinking has

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no use at all. It clearly does if one is trying to understand, and even more,trying to design interactions of a repetitive kind to achieve kinds ofperformance that are known in advance’.

Ralph Stacey and Patricia Shaw have both written about complexityand change. Managers, and particularly consultants, often find this diffi-cult reading because on first viewing it appears to take away the rationalpowers we have traditionally endowed upon our managers, changeagents and consultants. Patricia Shaw says of the traditional view of theprocess consultant:

I would say that [the] ideal of the reflective practitioner [who can surfacesubconscious needs so that groups of people can consciously create adirected form of change] is the one that mostly continues to grip our imagi-nations and shape our aspirations to be effective and competent individualpractitioners engaged in lifelong learning. Instead, I have been asking whathappens when spontaneity, unpredictability and our capacity to be surprisedby ourselves are not explained away but kept at the very heart [of our work].

In contrast, those working in hugely complex environments such as thehealth sector or government have told us that they find the ideas in thisarea to be a tremendous relief. The notion that change cannot bemanaged reflects their own experiences of trying to manage change; theoverwhelming feeling they have of constantly trying to push heavyweights uphill.

But how can managers and consultants use these ideas in real situa-tions? We have distilled some groundrules for those working withcomplex change processes, although the literature we have researchedstudiously avoids any type of prescription for action.

In complex change, the leader ’s role is to:

• decide what business the organization is in, and stretch people’sthinking on how to get there;

• ensure that there is a high level of connectivity between differentparts of the organization, encouraging feedback, optimizing informa-tion flow, enabling learning;

• focus people’s attention on important differences: between currentand desired performance, between style of working, between pastand present results.

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SUMMARY AND CONCLUSIONS

• It is useful to understand our own assumptions about managingchange, in order to challenge them and examine the possibilitiesoffered by different assumptions. It is useful to compare our ownassumptions with the assumptions of others with whom we work.This increased understanding can often reduce frustration.

• Gareth’s Morgan’s work on organizational metaphors provides auseful way of looking at the range of assumptions that exist abouthow organizations work.

• The four most commonly used organizational metaphors are:– the machine metaphor;– the political metaphor;– the organism metaphor;– the flux and transformation metaphor.

• The machine metaphor is deeply ingrained in our ideas about howorganizations run, so tends to inform many of the well-knownapproaches to organizational change, particularly project manage-ment, and planning oriented approaches.

• Models of organizations as open, interconnected, interdependentsub-systems sit within the organism metaphor. This model is veryprevalent in the human resource world, as it underpins much of thethinking that drove the creation of the HR function in organiza-tions. The organism metaphor views change as a process ofadapting to changes in the environment. The focus is on designinginterventions to decrease resistance to change, and increase theforces for change.

• The political map of organizational life is recognized by many of thekey writers on organizational change as highly significant.

• The metaphor of flux and transformation appears to model the truecomplexity of how change really happens. If we use this lens toview organizational life it does not lead to neat formulae, or concisehow-to approaches. There is less certainty to inform our actions.This can be on the one hand a great relief, and on the other handquite frustrating.

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• There are many approaches to managing and understanding changeto choose from, none of which appears to tell the whole story, most ofwhich are convincing up to a point. See Table 3.3 for a summary of ourconclusions for each model.

• To be an effective manager or consultant we need to be able flexibly toselect appropriate models and approaches for particular situations.See the illustrations of different approaches in Part Two.

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Table 3.3 Our conclusions about each model of change

Model Conclusions

Lewin, three-step model Lewin’s ideas are valuable when analysing the change process at the start of an initiative. His force-field analysis and current state/end state discussionsare extremely useful tools.However, the model loses its worth when it isconfused with the mechanistic approach, and thethree steps become ‘plan, implement, review’.

Bullock and Batten, The planned change approach is good for tackling planned change isolated, less complex issues. It is not good when

used to over-simplify organizational changes, as itignores resistance and overlooks interdependenciesbetween business units or sub-systems.

Kotter, eight steps Kotter ’s eight steps are an excellent starting pointfor those interested in making large or small-scaleorganizational change. The model places mostemphasis on getting the early steps right: buildingcoalition and setting the vision rather than latersteps of empowerment and consolidation.Change is seen as linear rather than cyclical, whichimplies that a pre-designed aim can be reachedrather than iterated towards.

Beckhard and Harris, The change formula is simple but highly effective. It change formula can be used at any point in the change process to

analyse what is going on.It is useful for sharing with the whole team toilluminate barriers to change.

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Table 3.3 continued

Model Conclusions

Nadler and Tushman, The congruence model provides a memorable congruence model checklist for the change process, although we think

the seven ‘S’ model gives a more rounded approachto the same problem of examining interdependentorganizational sub-systems.Both are also useful for doing a post-change analysisof what went wrong!Both encourage a problem focus rather thanenabling a vision-setting process.

William Bridges, Bridge’s model of endings, neutral zone and managing the transition beginnings is good for tackling inevitable changes

such as redundancy, merger or acquisition. It is lessgood for understanding change grown from within,where endings and beginnings are less distinct.

Carnall, change Carnall’s model combines a number of key elements management model of organizational change together in a neat process.

Useful checklist.

Senge, systemic model Senge challenges the notion of top-down, large-scaleorganizational change. He provides a hefty dose ofrealism for those facing organizational change: startsmall, grow steadily, don’t plan the whole thing.However, this advice is hard to follow in today ’sclimate of fast pace, quick results and maximumeffectiveness.

Stacey and Shaw, The complex responsive process school of thought is complex responsive new, exciting and challenging; however it is not for processes the faint-hearted.

There are no easy solutions (if any at all), theleader ’s role is hard to distinguish and the literatureon the subject tends to be almost completely non-prescriptive.

STOP AND THINK!Q 3.7 Which model of organizational change would help you to move

forward with each of the following changes:

• Combining two well-respected universities to form one excel-lent seat of learning.

• Turning Boston Philharmonic Orchestra into BostonImprovisational Jazz Band.

• Evolving a group of mature MBA students into a networkedorganization of management consultants.

Q 3.8 A fast food organization introduced a set of values recently whichwere well communicated and enthusiastically welcomed. Thesenior management team publicly endorsed the values and said,‘This is where we want to be in 12 months’ time so that we areready for industry consolidation. You will all be measured onachieving these values in your day-to-day work.’

The values were put together by a consultancy, which put agreat deal of effort into interviewing a broad range of people in theorganization. People at all levels like the look of the values, butthe situation three months later is that activity and conversationsaround the values are diminishing. A lot of people are saying ‘Weare doing this already.’ There is still some enthusiasm, but peopleare now getting scared that they will fall short of the valuessomehow, and are starting to resent them.

What needs to happen now?

Q 3.9 If Stacey and Shaw have ‘got it right’ with their ideas about howchange emerges naturally, does that make books such as thisone redundant? Answers on a postcard!

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Leading change

INTRODUCTION

In this chapter we look at the leader ’s role in the change process. Theobjectives of the chapter are to:

• enable leaders of change to explore the different roles they and theircolleagues need to play in a change process;

• identify how leaders of change can adapt their style and focus to thedifferent phases of the change process;

• emphasize the importance of self-knowledge and inner resources inany leadership role.

The chapter is divided into six sections:

• visionary leadership;

• roles that leaders play;

• leadership styles and skills;

Leading change

• different leadership for different phases of change;

• the importance of self-knowledge and inner resources;

• summary and conclusions.

It is important to first make the point that good leadership is well-rounded leadership. We believe that all four metaphors of organizationsgive rise to useful notions of leadership. Leaders go wrong when theybecome stuck in one metaphor, or in one way of doing things, and there-fore appear one-dimensional in their range of styles and approaches.

To begin, we link leadership to the ideas presented in Chapter 3 onorganizational change, by looking at the type of leadership that followsfrom approaching organizational change using each of the four keymetaphors (see Table 4.1):

• the machine metaphor;

• the political system metaphor;

• the organism metaphor;

• The flux and transformation metaphor.

Table 4.1 illustrates that the use of each metaphor brings both advantagesand disadvantages for those wishing to be successful leaders of change.

Table 4.1 Leadership linked to organizational metaphors

Metaphor Nature of change Leader ’s Type of Typical pitfalls for role leadership the leader

required

Machine The designed end Chief Project Micro-management state can be designer management. by leader means worked towards. and Goal setting. activity focuses on Resistance must implementer Monitoring measuring, be managed. of the and rather than Change needs to changes. controlling. experimenting or be planned and taking risks.controlled.

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The machine metaphor draws attention to clear goals and the need forstructure, but overuse of this metaphor results in micromanagement ofoutcomes and too little risk taking. The political system metaphor adds

Political Changes must be Politician – Visionary. Change leaders are system supported by a powerful Building a seen as

powerful person. speaker and powerful Machiavellian Change needs a behind the coalition. manipulators.powerful coalition scenes Connecting Leaders cannot be behind it. negotiator. agendas. trusted, so people Winners and losers comply rather than are important. commit. People do

the minimum.Leaders begin to follow their own agenda (cover their backs), rather than some higher purpose.

Organism Change is adaptive. Coach, Coaching The metaphor Individuals and counsellor and becomes an groups need to be and supporting. ideology. The psychologically consultant, change process aware of the holding up becomes ‘felt need’ for change. the mirror. self-serving andEnd state can be achieves very little.defined and worked There is a focus on towards. reacting rather than

initiating. Change happens, but too little too late.

Flux and Change cannot be Facilitator Getting the Leaders and others trans- managed, it emerges. of emergent governing involved become formation Managers are part of change. principles confused and

the system, not right. frustrated. There is outside the system. Enabling chaos. The change Conflict is useful. connectivity. effort becomes Managers enable Amplifying vague and good connections issues. directionless. between people. There is no sense of

progress to motivatefuture effort.Contradictionsbecome stickingpoints.

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the harsh reality of organizational life, and reminds us of the necessityfor involving influential people when change is desired, but overuse canbe seen as manipulation. The organism metaphor highlights the need forpeople to be involved, and to feel the need for change, but runs the riskof moving too slowly and too late. Finally the flux and transformationmodel is useful as a reminder that organizations and their people cannotbe wholly controlled unless we rule by fear! Leaders must encouragediscussion of conflicts and tensions to enable change to emerge, whileavoiding the trap of being too vague and lacking direction.

We believe that successful change leadership is achieved by combiningaspects of all four metaphors. This is evidenced by the models andapproaches introduced in Chapter 3, which combine different metaphorsto some degree (see Table 3.2).

COMBINING THE METAPHORS: REFLECTIVE COACHING SESSION

Once I realized that my boss was using a completely different organizationalmetaphor from myself, I began to see how we were clashing in our discussionsabout how to run projects and how to improve processes.

I prefer the machine metaphor. I like things to be pretty clear. In my area wehave a well-defined structure with clear roles and objectives set for each person.The team runs like a well-oiled machine, with me in the engine room pullinglevers and thinking about plans and processes.

On the other hand, my boss prefers a more fluid style of working. Objectivesare flexible and revised daily, and the hierarchy means very little to him. Ifsomeone shows initiative and promise, he will go directly to that person andhave a quite intense conversation to convey the importance of a particularinitiative. It used to drive me crazy. I couldn’t keep control.

One day we had a chat about this using metaphor to discuss our differences.It was most illuminating, and we started to see the pros and cons of eachapproach. As a result I agreed to incorporate more flexibility in certain projects,and he agreed to stick with the plan rather than review and change other, morestable processes. We still clash from time to time, but it doesn’t cause quite somuch irritation!

Global Services Manager, Oil Company – on use of metaphor to enhanceunderstanding of other people’s viewpoints

Table 4.1 is also useful because it reveals a wide range of styles and skillsrequired of leaders, depending on the metaphor in use:

• goal setting;

• monitoring and controlling;

• coaching and supporting;

• building vision;

• communicating vision;

• building coalitions;

• networking;

• negotiating;

• facilitating;

• dealing with conflict.

The difficulty with a list of skills this long is that is seems unattainable. Inthis chapter we try to help leaders to find a way through the variousrequirements of a leader to pinpoint the most important roles, skills,styles and areas of focus needed to make change happen.

VISIONARY LEADERSHIP

The first basic ingredient of leadership is a guiding vision. The leader has aclear idea of what he wants to do – professionally and personally – and thestrength to persist in the face of setbacks, even failures. Unless you knowwhere you are going, and why, you cannot possibly get there.

Warren Bennis (1994)

Visionary leadership has become some-thing of a holy grail. It seems to be arare commodity which is greatlysought after. Our recent research (seebox) indicates that today ’s businessleaders place considerable value on

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visionary leadership as a tool for organizational change. But is visionaryleadership really the answer?

In our change leadership sessions with private sector senior and middlemanagers in the UK we ask people to name significant leaders of change.The top four names mentioned over the period 1997–2002 were:

• Winston Churchill;

• Margaret Thatcher;

• Nelson Mandela;

• Adolf Hitler.

The top five characteristics that emerged through a typical discussion ofthese significant leaders were:

• clear vision;

• determination;

• great speaker, great presence;

• tough when needed;

• able to stand alone;

Cameron Change Consultancy data 2002

Here we explore the views of the supporters of visionary leadership, andthose who make the case against it.

Bennis on the characteristics of visionary leaders

Warren Bennis identified three basic ingredients of leadership:

• a guiding vision;

• passion;

• integrity.

He also developed a useful comparison of the differences betweenmanagement and leadership (see Table 4.2) which unpacks some of thedifferent qualities of a visionary leader.

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This comparison exercise separates management from leadership in avery clear way. This is useful for those wishing to take on more of a lead-ership role, although it is sometimes interpreted as slightly downplayingthe important role of a good manager in organizational life. Mostmanagers have to do both roles.

Kotter on what leaders really do

Kotter (1996) echoes the ideas of Bennis. He says, ‘we have raised a genera-tion of very talented people to be managers, not leader/managers, and visionis not a component of effective management. The management equivalent tovision creation is planning.’ He says that leaders are different from managers.‘They don’t make plans; they don’t solve problems; they don’t even organizepeople. What leaders really do is prepare organizations for change and helpthem cope as they struggle through it.’ He identifies three areas of focus forleaders and contrasts these with the typical focus of a manager:

• setting direction versus planning and budgeting;

• aligning people versus organizing and staffing;

• motivating people versus controlling and problem solving.

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Table 4.2 Managers and leaders

A manager A leader

Administers InnovatesIs a copy Is an originalMaintains DevelopsFocuses on systems and structure Focuses on peopleRelies on control Inspires trustHas a short-range view Has a long-range perspectiveAsks how and when Asks whyHas his eye on the bottom line Has his eye on the horizonImitates OriginatesAccepts the status quo Challenges the status quoClassic good soldier His own personDoes things right Does the right thing

Source: Bennis (1994)

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VISIONARY LEADERSHIP

We go to liberate, not to conquer.We will not fly our flags in their country.We are entering Iraq to free a people and the only flag which will be flown inthat ancient land is their own.Show respect for them.

There are some who are alive at this moment who will not be alive shortly.Those who do not wish to go on that journey, we will not send.As for the others, I expect you to rock their world.Wipe them out if that is what they choose.But if you are ferocious in battle remember to be magnanimous in victory.Iraq is steeped in history.It is the site of the Garden of Eden, of the Great Flood and the birthplace ofAbraham.Tread lightly there.

You will see things that no man could pay to see– and you will have to go a long way to find a more decent, generous andupright people than the Iraqis.You will be embarrassed by their hospitality even though they have nothing.

Don’t treat them as refugees for they are in their own country.Their children will be poor, in years to come they will know that the light ofliberation in their lives was brought by you.

Extract from speech widely hailed in the UK press at the time as visionary.It was given by Lieutenant Colonel Tim Collins to around 800 men of thebattlegroup of the 1st Battalion of the Royal Irish Regiment, at their FortBlair Mayne camp in the Kuwaiti desert about 20 miles from the Iraqiborder on Wednesday 19 March 2003. His intention was to prepare themen for the battle that lay ahead. Many of the men were young and thesupport from people back in the UK was patchy.

Since 2003 Tim Collins has had cause to reflect on his celebrated visionarycall to action. He says he made assumptions about the motives at higherlevels of the army and government, and is quoted as saying:

What I had not realized is that there was no plan at the higher levels toreplace anything, indeed a simplistic and unimaginative overreliance insome quarters on the power of destruction and crude military might… Iffreedom and a chance to live a dignified and stable life free from terror wasthe motive, then I can think of more than 170 families in Iraq last week whowould have settled for what they had under Saddam.

The Observer, 18th September, 2005

I HAVE A DREAM

I have a dream that one day this nation will rise up and live out the truemeaning of its creed: ‘We hold these truths to be self-evident: that all men arecreated equal.’ I have a dream that one day on the red hills of Georgia the sonsof former slaves and the sons of former slave owners will be able to sit downtogether at the table of brotherhood.

I have a dream that one day even the state of Mississippi, a state swelteringwith the heat of injustice, sweltering with the heat of oppression, will be trans-formed into an oasis of freedom and justice.

I have a dream that my four little children will one day live in a nation where theywill not be judged by the color of their skin but by the content of their character.

I have a dream today.I have a dream that one day, down in Alabama, with its vicious racists, with

its governor having his lips dripping with the words of interposition and nullifi-cation; one day right there in Alabama, little black boys and black girls will beable to join hands with little white boys and white girls as sisters and brothers.

I have a dream today.I have a dream that one day every valley shall be exalted, every hill and moun-

tain shall be made low, the rough places will be made plain, and the crookedplaces will be made straight, and the glory of the Lord shall be revealed, and allflesh shall see it together. This is our hope. This is the faith that I go back to theSouth with. With this faith we will be able to hew out of the mountain of despaira stone of hope. With this faith we will be able to transform the jangling discordsof our nation into a beautiful symphony of brotherhood. With this faith we willbe able to work together, to pray together, to struggle together, to go to jailtogether, to stand up for freedom together, knowing that we will be free one day.

Extract from speech by Martin Luther King, Jr. He was a driving force in thenon-violent push for racial equality in the 1950s and the 1960s. This speechwas given on 28 August 1963, on the steps of the Lincoln memorial. Itmobilized supporters and acted as the catalyst for the 1964 Civil Rights Act.

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Bass: proof that visionary leadership works!

Bass (in Bryman, 1992) developed the notion of transformation leader-ship, which many managers find meaningful and helpful. He distin-guished between transactional leadership and transformationalleadership (see box), and identified through extensive research thatcharismatic and inspirational leadership were the components most likelyto be associated with leadership success.

TRANSFORMATIONAL LEADERSHIP

Transformational leadership involves the leader raising the followers’sense of purpose and levels of motivation. The aims of the leader andthe followers combine into one purpose, and the leader raises thefollowers’ confidence and expectations of themselves. Transformationalleadership comprises:

• charisma;

• inspiration;

• intellectual stimulation;

• individualized consideration.

Transactional leadership is simply an exchange in which the leadershands over rewards when followers meet expectations.

• contingent reward;

• management by exception.

Source: Bryman (1992)

Gardner: the need for leaders to embody a story

Howard Gardner ’s (1996) influential research into the nature ofsuccessful leaders gave rise to some interesting lessons about visionaryleadership. He chose 11 20th century leaders who have really made adifference, and researched their lives and their work by reading theirbiographies and tracking down any speeches, letters, audiotapes andvideotapes that were available.

He chose a mixture of different types of leader, combining businessleaders, political leaders and those who influenced our thinking and

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behaviours without being in a position to leaddirectly. The list included among others Alfred Sloan,head of General Motors, Pope John XXIII, one of themost influential and popular popes of modern times,Martin Luther King, the advocate of AfricanAmericans, and Margaret Mead, a cultural anthro-pologist who deeply influenced our ideas aboutchildhood, family life and society. (There have beenattempts made to discredit her research, but she isstill supported by many as being highly innovativeand influential.)

Gardner ’s findings indicated that those leaders who had really made adifference to the way others thought, felt and acted all appeared to have acentral story or message. Stories not only provide background, but help thefollowers to picture the future. The story must connect with the audience’sneeds and be embodied in the leader him- or herself. Gardner makes thepoint that phonies are never in short supply, and the individual who doesnot embody or act out his or her messages will eventually be found out.

LEADERS’ STORIES

Margaret Thatcher

‘Britain has lost its way in defeatism and socialism. We must reclaim the lead-ership from ‘them’ (socialists, union trouble makers and the ‘wets’) and restoreearlier grandeur.’

Margaret Mead‘As human beings we can make wise decisions about our own lives by studyingoptions that many other cultures pursue.’

Mahatma Gandhi‘We in India are equal in status and worth to all other human beings. Weshould work cooperatively with our antagonists if possible, but be prepared tobe confrontational if necessary.’

Leadership stories from Gardner (1996)

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Heifetz and Laurie: vision is not the answer

Heifetz and Laurie (1997) say that vision is not the answer. They say thatthe senior executive needs to alter his or her approach to match the needsof 21st century organizations. They say that what is needed is adaptiveleadership. This is about challenging people, taking them out of theircomfort zones, letting people feel external pressure and exposing conflict.

‘Followers want comfort and stability, and solutions from their leaders.But that’s babysitting. Real leaders ask hard questions and knock peopleout of their comfort zones. Then they manage the resulting distress.’ Theybelieve the call for vision and inspiration is counter-productive andencourages dependency from employees.

There is a difference between the type of leadership needed to solve aroutine technical problem and the type of leadership needed to enablecomplex organizational change. Leaders of change should concentrate onscanning the environment, and drawing people’s attention to the complexadaptive challenges that the organization needs to address, such as culturechanges, or changes in core processes. This means not solving the problemsfor people, but giving the work back to them. It also means not protectingpeople from bad news and difficulty, but allowing them to feel the distressof things not working well. These ideas are quite a long way from theconcept of transformational leadership mentioned above, which indicatesthat successful leaders are charismatic, visionary and inspirational.

Jean Lipman-Blumen: leaders need to make connectionsrather than build one visionJean Lipman-Blumen (2002) says that vision is no longer the answer. Sheencourages leaders to search for meaning and make connections, ratherthan build one vision. She notes that there is a growing sense that oldforms of leadership are untenable in an increasingly global environment.She says that the sea change in the conditions of leadership imposed bythe new global environment requires new ways of thinking and workingwhich confront and deal constructively with both interdependence (over-lapping visions, common problems) and diversity (distinctive character ofindividuals, groups and organizations).

Lipman-Blumen talks about connective leaders (see box) who perceiveconnections among diverse people, ideas and institutions even when theparties themselves do not. In the new ‘connective era’, she says that

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leaders will need to reach out and collaborate even with old adversaries.Mikhail Gorbachev is a good example of this in the political arena. NelsonMandela is another.

Again, this approach is different from the suggestion that leaders needto develop and communicate clear vision in an inspiring way. JeanLipman-Blumen encourages leaders to help others to make good connec-tions, and to develop a sense of common purpose across boundaries, thusbuilding commitment across a wide domain.

SIX IMPORTANT STRENGTHS FOR CONNECTIVE LEADERS

• Ethical political savvy. A combination of political know-how withstrong ethics. Adroit and transparent use of others and themselves toachieve goals.

• Authenticity and accountability. Authenticity is achieved by dedi-cating yourself to the purpose of the group. Accountability is achievedby being willing to have every choice scrutinized.

• A politics of commonalities. Searching for commonalities andcommon ground, and building communities.

• Thinking long-term, acting short-term. Coaching and encouragingsuccessors, and building for a long-term future despite the currentdemands of the day to day.

• Leadership through expectation. Scrupulously avoiding micro-managing. Setting high expectations and trusting people.

• A quest for meaning. Calling supporters to change the world for thebetter.

Source: Lipman-Blumen (2002)

Leadership for the 21st century: less vision, more connection?

The world is changing. Organizations are more dispersed and less hier-archical. More information is more freely available. People want morefrom their jobs than they used to. Does this then change the role of theleader of change?

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As we write this book, the US and UK governments are trying topersuade the rest of the world that war on Iraq was the only way toensure a peaceful future. However, opinion polls within Europe andthe United States indicate that increasing numbers of people areagainst armed conflict and no longer believe that this is a good way ofresolving international issues. Perhaps things are different now. Theincreasingly globalized economy and access to news and informationare perhaps encouraging people to form cooperative relationships witha measure of independence. Are people’s needs for strong leadershipstarting to shift? Perhaps clear, visionary, authoritative leadership is nolonger working?

When we look inside organizations, the territory is also changing. JohnKotter (1996) draws our attention to changes in organizational structures,systems and cultures (see Table 4.3). What does this mean for leadingchange? We think this means a shift from expectations of one visionaryleader to the need for increased connectivity and overlapping agendasbetween different groups.

STOP AND THINK!Q 4.1 Name your top five contemporary leaders and say why you chose

each one. Reflect on how important visionary leadership is to you.

Q 4.2 What are the most significant changes that have happened in theworld since your childhood? Who was responsible for leadingthese? Did visionary leadership play a key role?

Q 4.3 Draw up a table identifying the pros and cons of:

• visionary leadership;

• adaptive leadership;

• connective leadership.

Q 4.4 Re-read Kotter’s (1996) comparison of 20th and 21st centuryorganizational structures, systems and cultures. Then fill in yourown ideas about leadership of change.

152 Table 4.3 20th century organizations and 21st century organizations

Structure Systems Culture Leadership of change

20th century • bureaucratic; • depend on fewer • inwardly focused; Our thoughts:organizations • multilevelled; performance • centralized; • directive;

• organized with the information systems; • slow to make • visionary;expectation that senior • distribute performance decisions; • charismatic;management will manage; information to • political; • participative at top

• characterized by policies executives only; • risk averse. levels only.and procedures that create • offer management many complicated internal training and support interdependencies. systems to senior

people only.

21st century • non-bureaucratic, with • depend on many • externally Our thoughts:organizations fewer rules and employees; performance information oriented; • scanning and

• limited to fewer levels; systems, providing data • empowering; interpreting • organized with the on customers especially; • quick to make environmental

expectation that • distribute performance decisions; changes;management will lead, information widely; • open and candid; • encouraging lower-level employees • offer management • more risk tolerant. connectedness;will manage; training and support • giving meaning

• characterized by policies systems to many people. and purpose.and procedures that produce the minimal internal interdependence needed to serve customers.

Source: adapted from Kotter (1996)

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ROLES THAT LEADERS PLAY

There are various views about the role a leader should play in the changeprocess (see Table 4.1):

• The machine metaphor implies that the leader sits at the top of theorganization, setting goals and driving them through to completion.

• The political system metaphor implies that the leader needs tobecome the figurehead of a powerful coalition which attractsfollowers by communicating a compelling and attractive vision, andthrough negotiation and bargaining.

• The organism metaphor says the leader ’s primary role is that ofcoach, counsellor and consultant.

• The flux and transformation metaphor says the leader is a facilitatorof emergent change.

How does the leader of a change process ensure that all the necessaryroles are carried out? Should the leader try to perform all these rolespersonally, or select a specific role for him- or herself and distributesupporting roles among his or her colleagues?

Senge: dispersed leadership

Senge (Senge et al, 1999) has some fairly challenging ideas about this. Hesays that successful leadership of change does not have to come from thetop of an organization. It comes from within the organization. He remarksthat senior executives do not have as much power to change things asthey would like to think.

He asks why we are struggling so much with changing our organiza-tions, and he attacks our dependence on the ‘hero leader ’. He claims itresults in a vicious circle. The circle begins with a crisis, which leads to thesearch for a new CEO in whom all hopes are invested. The new CEO actsproactively and aggressively, and makes some dramatic short-termimprovements such as cutting costs and improving productivity. Everyonethen falls in line to please the new CEO, who does not suffer fools gladly.Employees comply rather than work hard to challenge the status quo, and

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a new crisis inevitably occurs. This vicious circle does not result in newthinking or organizational learning or renewal, or even growth, and in turnfeeds our desire to find new hero-leaders. See Figure 4.1.

Senge offers some stark truths about organization change, which coun-teract the reliance on top-level vision set out by Bennis and Kotter:

• Little significant change can occur if it is driven from the top.

• CEO programmes rolled out from the top are a great way to fostercynicism and distract everyone from real efforts to change.

• Top management buy-in is a poor substitute for genuine commitmentand learning capabilities at all levels in an organization.

You can see Senge’s point. How could one or two brave people at the topof an organization really be responsible for envisaging and tackling theenormous range of challenges that present themselves when funda-mental change is attempted? He claims that we need to think aboutdeveloping communities of interdependent leaders across organizations.

��

Figure 4.1 The search for a hero-CEO Source: Senge et al (1999)

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Different types of leaders have different types of role. He identifies threeimportant, interconnected types of leader: local line leaders, executiveleaders and network leaders.

Local line leaders

These are the front-line managers who designthe products and services and make the coreprocesses work. Without the commitment ofthese people, no significant change willhappen. These people are usually very focusedon their own teams and customers. They relyon network leaders to link them with otherparts of the organization, and on executiveleaders to create the right infrastructure for

good ideas to emerge and take root.

Executive leaders

These are management board members. Sengedoes not believe that all change starts here. Rather,he states that these leaders are responsible for threekey things: designing the right innovation envi-ronment and the right infrastructure for assess-ment and reward, teaching and mentoring localline leaders, and serving as role models to demon-strate their commitment to values and purpose.

Network leaders

Senge makes the point that the really signif-icant organizational challenges occur at theinterfaces between project groups, functionsand teams. Network leaders are people whowork at these interfaces. They are guides,advisors, active helpers and accessors(helping groups of people to get resourcefrom elsewhere), working in partnership

with line leaders. They often have the insight to help local line leaders tomove forward and make changes happen across the organization.

The interconnections are hard to achieve in reality. We have observedthe following obstacles to achieving smooth interconnection between thedifferent roles:

• Executive leaders are busy, hard-to-get-hold-of people who canbecome quite disconnected from their local line leaders.

• Executive leaders and local line leaders rarely meet face to face andcommunicate by e-mail, if at all.

• Network leaders, such as internal consultants or process facilitators,are often diverted from their leadership roles by requests either toperform expert tasks or to implement HR-led initiatives.

• Network leaders may be busy and effective, but are usually under-valued as leaders of change. They often have to battle to get recog-nized as important players in the organization.

Senge’s model recognizes the need for all three types of leader, and theneed for connectivity between different parts of the organization ifchange is desired.

O’Neill: four key roles for successful changeMary Beth O’Neill (2000) agrees with Senge’s idea of communities of leaders,and identifies four specific leadership roles necessary for successful andsustained change efforts in organizations. She uses Daryl Conner ’s work onfamily therapy as her model for the change process, and identifies theimportant roles as sponsor, implementer, advocate and agent. See Table 4.4.

Sponsor

The sponsor has the authority to make thechange happen. He or she legitimizes andsanctions the change, and has line authorityover the people who will implement thechange and control of resources – such as time,money and people. There are also sustainingsponsors who are responsible for sponsoringchange in their own area.

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Good sponsors have a clear vision for the change. They identify goalsand measurable outcomes for the initiative. Sustaining sponsors mustbe careful not to telegraph cynicism about the change to the team ofimplementers.

Implementer

Implementers are the people who must actually implement the change.They have direct line responsibilities to the sponsor. Their job is toprovide the sponsor with live feedback from the change initiative. Theycan save the sponsor from tunnel vision, or from being surprised byobstacles that those closest to the change sometimes notice first.

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Table 4.4 Roles in a change process

Role Description Hint

Sponsor Has the authority to make the Needs to have a clear vision for change happen. the change.Has control of resources. Identify goals and measurable

outcomes.

Sustaining Sponsors change in own area, Must be careful not to transmit sponsor although top-level responsibility cynicism.

lies further up the hierarchy.

Implementer Implements the change. Needs to listen, enquire and Reports to sponsor. clarify questions with the sponsor Responsible for giving live at the start of an initiative.feedback to the sponsor on change progress.

Change agent Facilitator of change. Helps Acts as data gatherer, educator, sponsor and implementers advisor, meeting facilitator, coach.stay aligned.Keeps sponsor on board.No direct authority over implementers.

Advocate Has an idea. Needs a sponsor Must make idea appealing to to make it happen. sponsor.Usually highly motivated.

Source: adapted from O’Neill (2000)

Implementers are most effective when they listen, inquire and clarifytheir questions and concerns with the sponsor at the beginning of aninitiative. This means they can commit to an effort rather than falselycomplying early on and sabotaging later.

Change agent

A change agent is the facilitator of the change. He or she helps thesponsor and the implementers stay aligned with each other. The effective-ness of this role depends on the sponsor not abandoning the changeagent to the implementers. The sponsor must not ‘drop the ball’. Whenthis happens the change agent can over-function, making the system inef-fective and unbalanced, and the change temporary.

The change agent acts as data gatherer, educator, advisor, meeting facil-itator and coach. Most often he or she has no direct line authority over theimplementers, and is therefore in a naturally occurring triangle amongsponsor–implementer–agent.

Advocate

An advocate has an idea about how a change can happen but needs asponsor for his or her idea. All change needs to be sponsored.

Advocates are often passionate and highly motivated to make thechange happen. They must remember the key factor, which is to get asponsor. Without this, advocates become frustrated and demoralized.Shrewd advocates promote ideas by showing their compatibility withissues near and dear to sponsors’ change projects and goals.

We have included Mary Beth O’Neill’s definitions of these rolesbecause they provide a clear framework for those approaching organiza-tional change, and illustrate the range of leadership roles necessary forchange to occur. Our experience is that people at all levels in organiza-tions find this framework useful for kicking off and sustaining change,and for judging how well the community of leaders is supporting thechange process. This model seems to provide the necessary amount ofclarity in today ’s organizations, where hierarchy is unclear and jobs andprojects overlap. There is often a need for a simple but flexible way ofdefining who does what in any process of change.

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STOP AND THINK!Q 4.5 Use Mary Beth O’Neill’s four roles to analyse a change process in

your organization. Who performed which role? How well were theroles performed? What contribution did the performance of theseroles make to the level of success of the changes?

LEADERSHIP STYLES AND SKILLS

Much has been written about leadership skills and leadership style. Wehave chosen the work of Goleman because we find it illuminating anduseful when working with leaders at any stage in a change process. Hiswork on leadership styles identifies a set of six styles for the leader tochoose from in any situation and at any point in a change process.Leaders we have worked with find this very useful (see boxed examples).

This set of six styles is underpinned by Goleman’s work on emotionalintelligence, which sets out the underlying competencies associated withsuccessful leadership. This acts as a convenient checklist for thoseassessing their skills.

Goleman: leadership that gets results

In his quest to discover the links between emotionalintelligence and business results, Daniel Goleman (2000)developed a set of six distinct leadership styles throughstudying the performance of over 3,800 executivesworldwide. These six leadership styles, arising fromvarious different components of emotional intelligence,are used interchangeably by the best leaders. Heencourages leaders to view the styles as six golf clubs,with each one being used in a different situation.Goleman also found that each style taken individuallyhas a unique effect on organizational climate over time,some positive and some negative. This in turn has amajor influence on business results.

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Goleman links the competence of leaders directly to business results,but also identifies the situations in which each style is effective:

• Coercive style. Only to be used sparingly if a crisis arises. This is auseful style to employ if urgent changes are required now, but mustbe combined with other styles for positive results long term.Negative effects such as stress and mistrust result if this style isoverused.

• Authoritative style. Useful when a turnaround is required and theleader is credible and enthusiastic. This is the ‘visionary ’ leadershipstyle. Goleman indicates that this style will only work if the leader iswell respected by his or her people, and is genuinely enthusiasticabout the change required. He does acknowledge the strongly posi-tive effect of this approach, given the right prevailing conditions.

• Affiliative style. This style helps to repair broken relationships andestablish trust. It can be useful when the going gets tough in achange process and people are struggling. However, it must beused with other styles to be effective in setting direction andcreating progress.

• Democratic. This is an effective style to use when the team knowsmore about the situation than the leader does. They will be able tocome up with ideas and create plans with the leader operating asfacilitator. However it is not useful for inexperienced team membersas they will go round in circles and fail to deliver.

• Pacesetting. This style can be used effectively with a highly moti-vated, competent team, but does not lead to positive results long termif used in isolation. Overuse of this style alone results in exhaustedstaff who feel directionless and unrewarded. The leader needs toswitch out of this style to move into a change process rather thansimply drive for more of the same.

• Coaching. This is an appropriate style to use if individuals need toacquire new skills or knowledge as part of changes being made.

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THE COERCIVE-AFFILIATIVE MANAGER

I realize on reflection that I have been using just two leadership styles all myworking life. I am 54, and this has been something of a revelation. I have beenusing the coercive style together with the affiliative style. It never occurred tome to do it any other way. I would tell the staff how things would be, give thema dressing down, and make up afterwards by talking about the football orasking about the family.

No one would make suggestions or use their initiative, and no one ever seemedto learn anything new. I was completely in charge of an efficient but stagnant site.

It wasn’t easy incorporating other styles, but once I had cracked thecoaching style, things began to change. The staff began to see me as moreaccessible. Now my people trust me more, and they are prepared to takeresponsibility and to suggest things and to make changes. I use less energy tocarry out my role, and can think more clearly about how best to lead.

General manager of a manufacturing plant

THE PACESETTING MANAGER

At first glance I thought I was using all six styles in the right measure. Then when Ibegan to talk to my team about it, I realized that I was using the pacesetting style85 per cent of the time. Even my attempts at being friendly (or affiliative) turnedout to be pacesetting approaches. People described how a casual chat with mewould end up feeling like an interrogation. People on the shop floor activelyavoided me after a while. Or they spent ages preparing for an encounter with me.

Of course, all my star performers loved this style. They found it thrilling and stim-ulating. The others fell by the wayside as I had no time for coaching at all. My stylebecame a self-fulfilling prophecy. The competent people did well, and those whoneeded to learn didn’t get the airtime from me that they needed, so they failed.

I’m not saying that this has completely changed. But now I do recognizewhen I need to coach and when I need to paceset. My actions are morealigned to my intentions, rather than being simply a question of habit.

Head teacher

See Table 4.5 for our summary of the six different styles and their uses.

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Table 4.5 Our summary of Goleman’s six leadership styles

Coercive Authoritative Affiliative Democratic Pace-setting Coaching

Short Telling people Persuading and Building Asking the team Raising the bar Encouraging definition what to do attracting people relationships what they think, and asking for a and supporting

when. with an with people and listening to bit more. people to try engaging through use this. Increasing the new things. vision. of positive pace. Developing

feedback. their skills.

When to use When there is When step When When the team When team When there is this style a crisis. change is relationships members have members are a skills gap.

required. When are broken. something to highly manager is both contribute. motivated and credible and highly enthusiastic. competent.

Disadvantages Encourages Has a negative Not productive May lead Exhausting if If manager is of this style dependence. effect if if it is the only nowhere if used too much. not a good

People stop manager is not style used. team is Not appropriate coach, or if thinking. credible. inexperienced. when team individual is

members need not motivated, help. this style will

not work.

Goleman: the importance of emotional intelligence forsuccessful leaders

Underpinning Goleman’s six leadership style is his work on emotionalintelligence (see Goleman, 1998). This is worth examining as it sets out allthe competencies required to be a successful leader.

Goleman’s research into the necessity for emotional intelligence isconvincing. First, his investigation into 181 different management compe-tence models drawn from 121 organizations worldwide indicated that 67per cent of the abilities deemed essential for management competencewere emotional competencies. Further research carried out byHay/McBer looked at data from 40 different corporations to determine thedifference in terms of competencies between star performers and averageperformers. Again emotional competencies were found to be twice asimportant as skill-based or intellectual competencies.

EMOTIONAL COMPETENCIES FOR LEADERS

Self-awareness

Knowing one’s internal states, preferences, resources, and intuitions:

• Emotional awareness: recognizing one’s emotions and their effects.

• Accurate self-assessment: knowing one’s strengths and limits.

• Self-confidence: a strong sense of one’s self-worth and capabilities.

Self-management

Managing one’s internal states, impulses, and resources:

• Self-control: keeping disruptive emotions and impulses in check.

• Trustworthiness: maintaining standards of honesty and integrity.

• Conscientiousness: taking responsibility for personal performance.

• Adaptability: flexibility in handling change.

• Achievement orientation: striving to improve or meeting a standard ofexcellence.

• Initiative: readiness to act on opportunities.

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Social awareness

Awareness of others’ feelings, needs, and concerns:

• Empathy: sensing others’ feelings and perspectives, and taking anactive interest in their concerns.

• Organizational awareness: reading a group’s emotional currents andpower relationships.

• Service orientation: anticipating, recognizing, and meeting customers’needs.

Social skills

Adeptness at inducing desirable responses in others:

• Developing others: sensing others’ development needs and bolsteringtheir abilities.

• Leadership: inspiring and guiding individuals and groups.

• Influence: wielding effective tactics for persuasion.

• Communication: listening openly and sending convincing messages.

• Change catalyst: initiating or managing change.

• Conflict management: negotiating and resolving disagreements.

• Building bonds: nurturing instrumental relationships.

• Teamwork and collaboration: working with others toward shared goals.Creating group synergy in pursuing collective goals.

Source: Goleman (1998), reproduced with permission of Bloomsbury Publishing, London

Goleman defined a comprehensive set of emotional competencies forleaders (see box). He grouped these competencies into four categories:

• self-awareness;

• self-management;

• social awareness;

• social skills.

Self-awareness, he says, is at the heart of emotional intelligence. To backthis up, Goleman’s research shows that if self-awareness is not present in

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a leader, the chance of that person being competent in the other threecategories is much reduced.

THE IMPORTANCE OF SELF-MANAGEMENT

The managers that we work with often have high drive levels and are also veryintelligent. When this combination of characteristics is present in an individual,that individual often experiences a lot of frustration. Other people are eithertoo slow, or too relaxed, or simply ‘not getting it’.

This was crystallized by a very dynamic and successful IT manager whom Iworked with recently. When I went through her emotional intelligence feed-back with her using HayGroup’s Emotional Competence Inventory, her self-management scores were low, especially in the area of self-control. I asked herhow often she felt frustrated in her work. She paused for a moment and thenwith a sudden realization she said, ‘All the time.’ Up until that point, she hadnot realized that there was an issue. This had just become a way of life. Otherswere experiencing her as bad tempered, moody and occasionally bullying.Then we started to talk about strategies for dealing with this.

Esther Cameron, 2003

A brief scan of the competence set will confirm that self-awareness,self-management and social awareness are all competencies that arenot necessarily observable. We call this inner leadership. Only the socialskills category contains obvious observable behaviours. We call thisouter leadership.

In our experience those involved in leading change have to developespecially strong inner leadership because of the emotions arising fromtheir own drive to achieve, coupled with potential resistance from manylevels, and the discomfort involved with letting go of old habits. It is avery emotional landscape!

Daniel Goleman says that it is vital that leaders develop emotionalcompetencies. He says:

In the new stripped-down, every-job-counts business climate, these humanrealities will matter more than ever. Massive change is constant; technicalinnovations, global competition, and the pressures of institutional investors are

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ever-escalating forces for flux. As organizations shrink through waves of down-sizing, those people who remain are more accountable – and more visible.

Whereas a bully, or a hypersensitive manager, might have gone unnoticeddeep in many organizations 10 years ago, he or she is much more visible now.

STOP AND THINK!Q 4.6 Draw a pie chart that represents your own use of Goleman’s six

leadership styles. Are you using them in the right proportion? Ifnot, what do you plan to do differently and why? Try this exerciseagain, but this time use the framework to help someone else tofocus on his or her leadership style. Write up the conversation,indicating what insights the exercise provoked.

DIFFERENT LEADERSHIP FOR DIFFERENT PHASES OF CHANGE

In this section we examine the different phases of the change process, toidentify the need for a leader to perform different skills or activitiesduring each phase. We do this by using three different but complimen-tary models of the change process.

Cameron and Green: inner and outer leadership

In our own experience of working with leaders on change processes, it isimportant to establish phases of change so that plans can be made andachievements recognized. This phasing also enables a leader to see theneed for flexibility in leadership style, as the change moves from one phaseinto another phase. We have identified both the outer leadership and innerleadership requirements of a leader of change for each phase. See Table 4.6.

Kotter: the importance of getting the early steps right

Kotter ’s eight steps to transforming your organization (see Chapter 3)form a comprehensive guide to tackling the process of change. Kottersays that good leaders must get all eight steps right. However, he predictsthat the process will be a great deal easier if groundwork is done well.

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Table 4.6 Leadership of change phase by phase, comparing inner and outer leadership requirements

Phase of change Outer leadership – Inner leadership – what observable actions of goes on inside the leaderthe leader

1. Establishing the need Influencing, understanding, Managing emotions, for change researching, presenting, maintaining integrity, being The leader illuminates a listening courageous, being patient, problem area through knowing yourself, judging discussion. whether you really have the

energy to do this

2. Building the change Chairing meetings, Social and organizational team connecting agendas, awareness, self-awareness, The leader brings the right facilitating discussion, managing emotions, people together and building relationships, adaptability, taking establishes momentum building teams, cutting initiative, having the drive through teamwork. through the politics to achieve, maintaining

energy despite knock-backs

3. Creating vision and Initiating ideas, Strategic thinking, taking values brainstorming, encouraging time to reflect, social The leader works with the divergent and creative awareness, drive to group to build a picture of thinking, challenging achieve, managing emotionssuccess. others constructively,

envisaging the future, facilitating agreement

4. Communicating and Persuading and engaging, Patience, analysis of how to engaging presenting with passion, present to different The leader plays his or her listening, being assertive, audiences, managing role in communicating being creative with ways of emotions with regard to direction, giving it communicating other people’s resistance, meaning, being clear about social awareness, timescale and letting adaptability, empathypeople know what part they will be playing.

5. Empowering others Clear target setting, good Integrity, trust, patience, The leader entrusts those delegation, managing drive to achieve, steadiness who have been involved without micromanaging of purpose, empathyin the creation of the new or abdicating, coachingvision with key tasks.

In Leading Change (1996), Kotter describes some of the actions a leaderneeds to take during all eight steps. In Table 4.7 we give some of Kotter ’ssuggestions for the first four steps, as they seem to necessitate the mostdirect action from the leader.

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6. Noticing improvements Playing the sponsorship Steadiness of purpose, and energizing role well, walking the talk, organizational and social The leader stays rewarding and sharing awareness, empathy, interested in the process. success, building on new managing emotions, drive This involves the ability to ideas to achievejuggle lots of different projects and initiatives

7. Consolidating Reviewing objectively, Social awareness, empathy, The leader encourages celebrating success, giving drive to achieve, taking time people to take stock of positive feedback before to reflect, steadiness of where they are, and reflect moving on to what’s next purposeon how much has been achieved

Table 4.7 Kotter ’s recommended actions for the first four change steps

Kotter ’s step Recommended actions

1. Establishing a Push up the urgency level. Create a crisis by exposing issuessense of urgency rather than protecting people from them. Send more data to

people about customer satisfaction, especially where weaknessesare demonstrated. Encourage more honest discussion of theseissues.

2. Creating the Include enough main line managers, enough relevant guiding coalition expertise, enough people with good credibility and reputation in

the organization and enough ability to lead. Avoid big egos andsnakes (who engender distrust).Talk a lot together, build trust and build a common goal.

3. Developing a Vision building is a messy, difficult and sometimes emotionally vision and strategy charged exercise. Take time to do the process properly and expect

it to take months. It is never achieved in a single meeting.

4. Communicating Keep the communication simple and use metaphor and analogy.the change vision Creativity is necessary to ensure that many different forms of

communication are used to repeat the message, includingleading by example. Use two-way discussions and listen to thefeedback.

Rosabeth Moss Kanter: learning how to persevere

Rosabeth Moss Kanter (2002) highlights the need for keeping going in thechange process, even when it gets tough. She says that too often execu-tives announce a plan, launch a task force and then simply hope thatpeople find the answers. Kanter ’s emphasis is different from Kotter ’s. Shesays the difficulties will come after the change is begun.

Kanter says that leaders need to employ the following strategies toensure that a change process is sustained beyond the first flourish:

1. Tune into the environment. Create a network of listening posts tolisten and learn from customers.

2. Challenge the prevailing organizational wisdom. Promote kaleido-scopic thinking. Send people far afield, rotate jobs and create interdis-ciplinary project teams to get people to question their assumptions.

3. Communicate a compelling aspiration. This is not just aboutcommunicating a picture of what could be, it is an appeal to betterourselves and become something more. The aspiration needs to becompelling as there are so many sources of resistance to overcome.

4. Build coalitions. Kanter says that the coalition-building step, thoughobvious, is one of the most neglected steps in the change process.She says that change leaders need the involvement of people whohave the resources, the knowledge and the political clout to makethings happen.

5. Transfer ownership to a working team. Once a coalition is formed,others should be brought on board to focus on implementation.Leaders need to stay involved to guarantee time and resources forimplementers. The implementation team can then build its ownidentity and concentrate on the task.

6. Learn to persevere. Kanter says that everything can look like a failurein the middle. If you stick with the process through the difficult times(see box), good things may emerge. The beginning is exciting and theend satisfying. It is the hard work in the middle that necessitates theleader ’s perseverance.

7. Make everyone a hero. Leaders need to remember to reward andrecognize achievements. This skill is often underused in organizations,

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and it is often free! This part of the cycle is important to motivatepeople to give them the energy to tackle the next change process.

STICKY MOMENTS IN THE MIDDLE OF CHANGEAND HOW TO GET UNSTUCK

• Forecasts fall short. Change leaders must be prepared to acceptserious departures from plans, especially when they are doing some-thing new and different.

• Roads curve. Expect the unexpected. Do not panic when the path ofchange takes a twist or a turn.

• Momentum slows. When the going gets tough it is important to reviewwhat has been achieved and what remains – and to revisit the mission.

• Critics emerge. Critics will emerge in the middle when they begin torealize the impact of proposed changes. Change leaders shouldrespond to this, remove obstacles and move forward.

Source: Kanter (2002)

Bridges: leading people through transition

William Bridges (1991) has very clear ideas about what leaders need to doto make change work. Bridges says that what often stops people frommaking new beginnings in a change process is that they have not yet letgo of the past. He sees the leader as the person who helps to manage thattransition. We see this as a particularly useful frame of thinking when aninevitable change such as a merger, acquisition, reorganization or siteclosure is under way.

In Chapter 3 we referred to his three phases of transition:

• ending;

• neutral zone;

• new beginning.

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Leadership for the ending

Here is Bridges’ advice for how to manage the ending phase (or how toget them to let go):

• Study the change carefully and identify who is likely to lose what.

• Acknowledge these losses openly – it is not stirring up trouble.Sweeping losses under the carpet stirs up trouble.

• Allow people to grieve and publicly express your own sense of loss.

• Compensate people for their losses. This does not mean handouts!Compensate losses of status with a new type of status. Compensateloss of core competence with training in new areas.

• Give people accurate information again and again.

• Define what is over and what is not.

• Find ways to ‘mark the ending’ (see box).

• Honour rather than denigrate the past.

MARKING THE END

When a large publicly owned utility company in the UK split up into amyriad of small privatized units, there was a great sense of loss. Oldteams and old friendships were breaking up. It was the end of an era. Theorganization held a wake, at which everyone moaned and complainedand generally got things off their chest. There was much talk late into thenight. The transition moved more smoothly after that event as peoplebegan to accept the reality and inevitability of the ending.

Leadership for the neutral zone

The neutral zone is an uncomfortable place to be. This is the time whenfor instance, the reorganization has been announced, but the new organi-zation is not in place, or understood, or working. Anxiety levels go up andmotivation goes down, and discord among the team can rise. This phase

needs to be managed well, or it can lead to chaos. A selection of Bridges’tips for this phase are listed below (he itemizes 21 in his book):

• Explain the neutral zone as an uncomfortable time which with carefulattention can be turned to everyone’s advantage.

• Choose a new and more affirmative metaphor with which to describe it.

• Reinforce the metaphor with training programmes, policy changesand financial rewards for people to keep doing their jobs during theneutral zone.

• Create temporary policies, procedures, roles and reporting relation-ships to get you through the neutral zone.

• Set short-range goals and checkpoints.

• Set up a transition monitoring team to keep realistic feedback flowingupward during the time in the neutral zone.

• Encourage experimentation and risk taking. Be careful not to punishall failures.

• Encourage people to brainstorm many answers to the old problems –the ones that people say you just have to live with. Do this for yourown problems too.

Leadership for the new beginning

Here are some of Bridges’ ideas for this phase:

• Distinguish in your own mind the differ-ence between the start, which can happenon a planned schedule, and the beginning,which will not.

• Communicate the purpose of the change.

• Create an effective picture of the changeand communicate it effectively.

• Create a plan for bringing people through the three phases of transi-tion, and distinguish it from the change management plan.

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• Help people to discover the part they will play in the new system.

• Build some occasions for quick success.

• Celebrate the new beginning and the conclusion of the time of transition.

STOP AND THINK!Q 4.7 Reflect on an organizational change in which you were involved.

Did the ‘sticky moments’ suggested by Rosabeth Moss Kanterarise, and how were they dealt with? What could have been donedifferently by those leading the change?

Q 4.8 Imagine that the organization you work for as a line manager isabout to be taken over by one of your key competitors. You havebeen told that everyone in your area will still have a job, but youwill have to learn about the other organization’s way of doingbusiness and drop many of the products and services you delivernow. Use the William Bridges’ tips to list some of the things youwould need to start doing to enable the transition.

THE IMPORTANCE OF SELF-KNOWLEDGE AND INNER RESOURCES

Much is expected of a leader throughout a change process. It takescourage, a sense of purpose, the ability to manage your emotions, highintegrity and a wide range of skills to lead change well. A great deal hasbeen written about skills development, but what about self-knowledgeand inner resources? How great a part does the inner life of the leaderplay in his or her ability to lead change, and how can this capacity bedeveloped or improved?

We believe that this is the key to successful leadership; so does DanielGoleman. See above to read about his research into leadership success,which indicates that self- awareness forms the bedrock of the emotionallyintelligent leader.

Bennis: the role of self-knowledge

Warren Bennis (1994) emphasizes the need to know yourself in order tobecome a good leader. He says that leaders must have self-knowledge if

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they want to be freed up sufficiently to think in new ways. Bennis claimsthat you make your life your own by understanding it, and become yourown designer, rather than being designed by your own experience. Heitemizes four lessons of self-knowledge. These are:

• One: be your own teacher. Leaders assume responsibility for theirown learning, and treat it as a route to self-knowledge and self-expression. No one can teach them the lessons they need to learn.Stumbling blocks can be denial and blame.

• Two: accept responsibility and blame no one. Do not expect otherpeople to take charge, or do things for you.

• Three: you can learn anything you want to learn. Leadershipinvolves a kind of fearlessness, an optimism and a confidence.

• Four: true understanding comes from reflecting on your experience.Leaders make reflection part of their daily life. An honest look at thepast prepares you for the future.

Bennis also notes the potential benefits of leaders recalling their child-hoods honestly, reflecting on them, understanding them, and therebyovercoming the influence that childhood has on them. He quotesErikson, the famed psychoanalyst, who says that there are eight stagesof life each with an accompanying crisis (see Table 4.8). Erikson claimsthat the way in which we resolve the eight crises determines who wewill be. He also notes that we may get stuck at a particular stage if wedo not manage to solve the crisis satisfactorily. For instance many of usnever overcome the inner struggle between initiative and guilt, and sowe lack purpose.

As a leader you may need to overcome some of the habits you devel-oped at an early age, which will be challenging but rewarding. Usuallythis process is accomplished via coaching, counselling or therapydepending on how deep you want or need to go.

Covey: the need for principle-centred leadership

Steve Covey is a writer and teacher who has had a tremendous effect onthe psyche of UK and US managers. His book Principle-Centred

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Leadership (1992) was a New York Times bestseller for 220 weeks. His char-acteristics of principle-centred leaders (see box) and his seven habits(see below) are much quoted in management and leadership trainingcourses. Again, his focus is on inner leadership, that is, on how to berather than on what to do.

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Table 4.8 Development stages and their challenges

Stage Crisis Resolution Conditions for optimal development

Infancy Trust vs Hope or Mirroring(0–18 months) mistrust withdrawal Acceptance

Early childhood Autonomy vs Will or Security (routines (18 months–3 years) shame and compulsion and rituals)

doubt

Play age Initiative vs Purpose or Clear boundaries(3–5 years) guilt inhibition Vision setting

School age Industry vs Competence Spectators(8–12 years) inferiority or inertia Discipline

Adolesence Identity vs Fidelity or Sampling(12–28 years) identity repudiation Modelling

confusion

Young adulthood Intimacy vs Love or Maturity(28–40 years) isolation exclusivity Identity

Adulthood Generativity Care or Balance(40–55 years) vs stagnation rejectivity Mastery

Maturity Integrity vs Wisdom or Support(55+) despair disdain Forgiveness

Source: adapted from Erik Erikson in Bennis (1994)

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EIGHT CHARACTERISTICS OF PRINCIPLE-CENTERED LEADERS

• They are continually learning.

• They are service oriented.

• They radiate positive energy.

• They believe in other people.

• They lead balanced lives.

• They see life as an adventure.

• They are synergistic.

• They exercise for renewal on all four dimensions of human personality– physical, mental, emotional and spiritual.

Source: Covey (1992)

Covey ’s organization runs workshops and programmes underpinned bya humanistic self-development approach. Unlike Bennis, he does notadvocate revisiting your childhood to overcome difficulties, but encour-ages us to focus on visualizing a positive outcome and working withenergy and enthusiasm towards it.

Covey ’s seven habits (Covey, 1989) connect the leader ’s outer habitswith the inner capability, which he labels endowments:

• Habit 1: Be proactive. Know what needs to be done, and decide todo it. Do not be driven by circumstances. (Needs self-awareness andself-knowledge.)

• Habit 2: Begin with the end in mind. Have a clear sense of what youare trying to achieve in each year, month, day, moment. (Needs imag-ination and conscience.)

• Habit 3: Put first things first. This is about organizing how you spendyour time in line with Habit 2. He talks about looking at level ofurgency and level of importance of activities, and comments that wespend too much time responding to urgent issues. (Needs willpower.)

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• Habit 4: Think win–win. Manage all interactions with the assump-tion that mutually beneficial solutions are possible. (Needs an abun-dance mentality.)

• Habit 5: Seek first to understand, then to be understood. Be preparedto clarify what other people are getting at before you put your pointacross. (Needs courage balanced with consideration.)

• Habit 6: Synergize. Value differences in people and work with othersto create a sum that is greater than the parts. (Needs creativity.)

• Habit 7: Sharpen the saw. Avoidthe futility of endless ‘busyness’.Make time to renew. Covey says,‘Without this discipline, the bodybecomes weak, the mind mechan-ical, the emotions raw, the spiritinsensitive, and the person selfish.’(Needs continuous improvementor self-renewal.)

STOP AND THINK!Q 4.9 Identify the top five inner leadership strengths that you believe the

headmaster or headmistress of an underperforming schoolneeds to have. Use the ideas of Bennis and Covey in the sectionabove, and consider also Goleman’s emotional competencies.Justify your choices. How could these areas be developed if theywere lacking?

Q 4.10 Reflect on your own leadership using Covey’s seven habits. Whatare your strengths and weak areas?

Q 4.11 Imagine you have just been asked to lead a cultural changeprogramme in a 10,000 strong organization based throughoutEurope and the United States. The organization is a microelec-tronics company which has grown through acquisition and nowwants to strengthen its unique culture as one organizationemphasizing commercial applications, customer service andinnovation. Using the ideas presented in this chapter, describethe approach you would take to leading this initiative andexplain why.

SUMMARY AND CONCLUSIONS

• Different metaphors of change lead to different assumptions aboutwhat good leaders do. We believe that the most effective ideas aboutchange combine a number of metaphors, bringing the maximumbenefits and avoiding the pitfalls of blinkered thinking.

• A popular notion of leadership is of the hero-leader who leads fromthe front with determination, great vision and independence of mind.– Bennis places visionary leadership high on the agenda, and

makes a point of distinguishing leadership from management.Kotter echoes this view.

– Studies that compared the effects of ‘transformational leader-ship’ with those of ‘transactional leadership’ at the end of the20th century indicated that charismatic and inspirational leader-ship were the elements that led most reliably to team success.

– Howard Gardner ’s research into the minds of significant 20thcentury leaders indicated that leaders who had great influ-ence embodied stories and took care to connect well withtheir audiences.

– Heifetz and Laurie and Jean Lipman-Blumen all argue againstthe need for visionary leadership. Heifetz and Laurie advocateadaptive leadership which is about taking people out of theircomfort zones, letting people feel external pressure and exposingconflict. Jean Lipman-Blumen instead emphasizes the need forleaders to ensure connectivity. She says leaders need to be able toperceive connections among diverse people, ideas and institu-tions even when the parties themselves do not.

• 21st century organizations are different, and the pace of change is evenfaster. This has given rise to new ideas about where leaders need to puttheir energies. Perhaps this means less vision and more connectivity.

• Different metaphors of the change process imply different leadershiproles. Senge advocates dispersed leadership, identifying three keytypes of leader in an organizational system. If these three roles are inplace and are well connected, then change will happen naturally. MaryBeth O’Neill names four key leadership roles in any change process.

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• Inner leadership is about what goes on inside the leader. Outer lead-ership is about what the leader does. Outer and inner leadership areboth important for achieving organizational change.

• Daniel Goleman defines six leadership styles. A leader can select theright style for the right situation, taking into account the necessaryconditions for success and long-term consequences. Goleman’s check-list of emotional intelligence competencies is useful for any leaderwishing to be successful. These competencies include both inner andouter leadership elements.

• Kotter says that the hard work must be put in early in the changeprocess, while Rosabeth Moss Kanter says the hardest part comes inthe middle and that perseverance is key. Bridges identifies specificleadership tasks during endings, the neutral zone and beginnings.

• Bennis and Covey both place high value on the inner life of leaders.Bennis emphasizes the need for self-knowledge, whereas Covey listsa set of principles and guidelines to help leaders to develop positivethinking patterns.

Leadership is a fascinating subject. We all have different experiences anddifferent views about what makes a good leader, and many of these viewsare ones we hold quite strongly. There are many apparent contradictionshere. It is always intriguing to see how leaders with very different stylescan be equally successful. This observation can appear baffling to thosewishing to make a rational assessment of what works in leadership andwhat does not work.

So how do we get to the truth about leaders? Do our heroes give ususeful clues? The hero-leader is an enduring theme in discussions of lead-ership. Even the process of asking people to name their ‘top leaders’encourages an individualist perspective, and automatically results in thenaming of heroes. Perhaps this type of information is flawed, as itdepends so much on the profile-raising skills of the leader, and his or herown personal brand. The facts concerning how these leaders demon-strated good leadership get lost in the general impression of success.

Leaders who offer a vision, or have a strong story, tend to be the mostmemorable. Their stories, or new ways of thinking, if taken on, mayoutlive the leader. Is this a sign of great leadership: when the story begins

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to live outside of the leader? There is also a strong sense that today ’sfollowers need more than just a good story. They need a credible storythat stands up to scrutiny.

On the other hand, those who doubt the viability of the role of visionaryleadership suggest that leaders need to focus instead on connectingagendas and highlighting painful challenges. Our view is that all thesethings are necessary to create change, including the articulation of anattractive vision. Just read the words of Martin Luther-King again to feelthe power of a well-articulated vision. Other things need to be in place too:the timing has to be right, and the vision has to be accepted by followers.

The leader of change has to be courageous and self-aware. He or shehas to choose the right action at the right time, and to keep a steady eyeon the ball. However, the leader cannot make change happen alone. Ateam needs to be in place, with well-thought-out roles, and committedpeople who are in for the duration, not just for the kick-off.

One thing is certain: the going will not be smooth.

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Part Two

The applications

Strategy is the pattern or plan that integrates an organization’s majorgoals, policies and action sequences into a cohesive whole.

James Quinn (1980)

In Part One we looked at change and the management of change fromthree different perspectives: the individual, the team and the organiza-tion. We also examined the roles, styles and skills needed to become asuccessful leader of change.

In Part Two we apply this learning to specific types of change. We haveidentified four generic change scenarios, and we look at the particularmanagement challenges involved in initiating and implementing eachtype of change. These change scenarios are:

• structural change;

• mergers and acquisitions;

• cultural change;

• IT-based process change.

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We look at what differentiates these changes, and for each scenario weidentify which approach to managing organizational change is the mostrelevant, and look at the implications for individuals and teams. We alsogive tips and resources for managers in these situations.

In this introduction we briefly review the strategic change process,identifying the elements that make a strategic change process successful.

STRATEGIC CHANGE PROCESS

When we look at Figure II.1, or probably more realistically Figure II.2, wecan see that typically the whole process begins with an internal orexternal trigger for change. In a way we compartmentalize the universein order to make sense of it. This whole book is an attempt to make orderout of the chaos we sometimes feel around change. It is very rare thatanyone could say for sure that this change began on that particular dayor at that particular meeting. But in our ideal universe these triggers forchange make us take a long hard look at the market or industry we are in,examine our customer and stakeholder relationships, and scrutinize ourorganizational capability. And as a result we review where we want to be,how we want to get there and what we need to do to get there. Wedevelop our new vision, mission and values.

Now all sorts of changes may need to happen as a result of this exer-cise, but typically we will need to adjust one or all of the following:

• the organizational structure;

• the commercial approach;

• the organizational culture;

• the relevant processes.

OVERVIEW OF STRUCTURE

We tackle all four types of change identified above. In Chapter 5 wetackle structural changes head on. This is because we observe howmany strategic changes result in structural changes, and we wanted towrite something helpful about how to make this approach work well.

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Internal and/or externaldrivers for change

Learningreviewcycle

Experience

Review

Develop

Integrate

Creating and defining� Vision� Mission� Values/culture

Org

aniz

atio

nal and m

anagem

ent

capabili

ty a

nd c

apaci

ty b

uild

ing

Implementing thechanges

Managing the changes

Change initiatives

Alignment Attunement

Critical mass

More change

Market industry analysis

Customer analysis

Stakeholder analysis

Organizational analysis

Change management plan

Figure II.1 The strategic change process (1)

Chapter 6 tackles mergers and acquisitions, and deals with change situ-ations when competitors or suppliers (and indeed customers) arebrought into the organization. Although it is not specifically addressed,many of the issues raised are pertinent to partnering as well. Chapter 7focuses on cultural change, and specifically deals with three areas:aligning the organization to a market and customer focus, aligning theorganization to its overarching objectives, and developing an employeebrand. All three areas have something important to say about how to

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lenses/filters

stakeholdersidentificationunderstandingmanagement

internal drivers

external drivers

analysis direction

changeapproach

metaphorsparadigmsmindsets

adjustinglenses leadership

styles & roles

building capacity,capability & readiness

managingtransition

implementingthe changes

aligning theorganization

individual, team &organizational learningattuning

individuals,teams &organization

scanning

Figure II.2 The strategic change process (2)

tackle cultural change. Finally Chapter 8 is focused on IT-enabledprocess change, as so many of us have undergone change as a directresult of developments in technology or the re-engineering of processes.

Other important aspects of the change process

There are six other essential characteristics of successful strategicchange initiatives:

• Alignment is an important feature of a successful change initiative.This is about ensuring that all the components of the change plan arean integrated whole. This means that they have an internal integritybut are also linked into the whole organizational system and beyond,if necessary.

• Attunement is important too. This is about mirroring the preferredorganizational culture, and ensuring that all aspects of the change arecarried out in line with organizational values and with sufficientattention to the human side of change.

• Critical mass is vital. The aim of a change management plan is todevelop momentum and build sustainability. This occurs when asufficiently critical mass of people are aligned and in tune with seniormanagement.

• Building organizational capacity, capability and readiness.Change management capacity and capability within organizationsvary dramatically. Even organizations that seem to go throughconstant change do not necessarily have this as a key competencywithin their people. Our contention is that the more the seniormanagement recognizes the need to develop this capability withinitself and a significant proportion of its managers, the soonerchange can become a way of life and not something to be feared,shunned and avoided.

• Encouraging individual, team and organizational learning. Changemanagers should be well supported with training and coaching ifthey are to be successful. Some succeed without this, but they are theexception. Usually the demands of implementing change, togetherwith a need to keep the day-to-day requirements of the job going,

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mean that everything gets done in a rush, without pausing to review,develop or integrate. The habit is then set: managers hop from expe-rience to experience without learning very much. Learning it clearlydoesn’t stop at an individual level. Mentoring, reviewing and feed-back mechanisms help the change process and also build ongoingchange capability.

• Mindset. The whole of the change process will operate within acertain mindset or prevailing culture. It is important to understandthat all our observations, calculations and decisions will be influ-enced by the lens through which we look.

As you go through the following chapters, it may help to refer back toFigures II.1 and II.2 as you think through how each type of change can beachieved successfully as part of an organization-wide strategic change.

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Restructuring

We trained hard. But is seemed that every timewe were beginning to form into teams, wewould be reorganized. I was to learn later in lifethat we tend to meet any new situation byreorganizing. And what a wonderful method itcan be for creating the illusion of progress whileproducing confusion, inefficiency, anddemoralization.

Gaius Petronius Arbiter, The Satyricon,1st century AD

These words spoken two millennia ago might be very familiar to some ofyou. They certainly are to us, and we believe they are as insightful now asthey were then. However, even though these words have been muchquoted, organizations do not necessarily take any notice of them!

Although some managers are now getting this process right, mostpeople’s experience of restructuring is negative. People often roll theireyes and say ‘Not again’, ‘It failed’, ‘Why didn’t they manage it better?’,and ‘Why can’t they leave us to just get on with the job?’

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Restructuring as a theme for change might seem a little strange becauserestructuring as a key strategic objective is not particularly meaningful.Surely we should be looking at the reasons behind the change. There area number of important points here:

• It seems that restructuring becomes the solution to a variety of orga-nizational issues, and in that sense we need to look at the restruc-turing process itself as it impacts on so many people’s lives.

• Given that managers and staff are restructured so often, it is impor-tant to understand the dynamics of restructuring, what typically goeswrong and what a good process looks like.

• In our view restructuring should be the last option considered bymanagement rather than the first option. It is often a method for notaddressing the organizational issues that it seeks to resolve.

• Many of the tools are useful in other change situations.

This chapter looks at:

• the reasons for restructuring;

• the restructuring processes:– strategic review and reasons for change;– critical success factors, design options and risk assessment;– learnings from previous projects and best practice;– project planning and project implementation;– monitoring and review;

• restructuring from an individual change perspective – the special caseof redundancy;

• enabling teams to address organizational change.

In the UK the Chartered Institute of Personnel and Development (CIPD)is running an ongoing research project ‘Organising for Success in the21st century ’ (www.cipd.org.uk) looking at current and future themesof restructuring in organizations today. It stresses the importance tocompanies of this process:

[W]hen DuPont announced its reorganization in February 2002, its stockprice rose 12%, putting a valuation on the new organization design of $7billion (£4.5 billion). Less fortunate was the reception of Proctor andGamble’s… launched in 1999 by the company’s new chief executive, DurkJager, this reorganization had a $1.9 billion (£1.2 billion) budget over sixyears. Within 18 months, the perceived difficulties… had cost Jager his job.

On a macro level, the survey found that during the 1990s the top 50 UKcompanies moved from having on average one major reorganizationevery five years to having one every three years. On a micro level, indi-vidual managers had personally experienced seven reorganizationswithin their organizations. Not all of the seven were major organization-wide change, some were more local. Nonetheless managers encounteredvarious challenges as a result: managing the changes within themselves,managing the changes within their staff, ensuring that both large-scaleand minor changes were aligned to the wider organizational strategies,and last but by no means least, delivering on business as usual andensuring staff were motivated to deliver on business as usual.

REASONS FOR RESTRUCTURING

We are concerned in this chapter with the dynamics of change andrestructuring, less so with why the organization or part thereof is beingrestructured. Restructuring can occur for numerous reasons:

• downsizing or rightsizing (market conditions or competitiveness);

• rationalization or cost-cutting (market conditions or competitiveness);

• efficiency or effectiveness (drive towards internal improvement);

• decentralization or centralization (drive towards internal improvement);

• flattening of the hierarchy (drive towards internal improvement);

• change in strategy (strategy implementation);

• merger or acquisition (strategy implementation);

• new product or service (strategy implementation);

• cultural change (strategy implementation);

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• internal market re-alignment (strategy implementation);

• change of senior manager (leadership decision);

• internal or external crisis (unforeseen/unplanned change).

We believe that restructuring should only take place as a result of achange in strategy. It should have a clear rationale and should be done inconjunction with other parallel changes such as process change andculture change. Of course this is not always the case. Sometimes otherevents kick off restructuring processes, such as a new boss arriving, aprocess or product failure, an argument, a dissatisfied client or an under-performing person or department. In these cases it is sometimes difficultfor employees to curb their cynicism when changes in structure seem tobe a knee-jerk reaction, which lacks direction, appears cosmetic and failsto lead to any real improvement.

We look at specific cases of restructuring such as mergers and acquisi-tions, cultural change, rebranding and IT-based change in the otherapplication chapters.

THE RESTRUCTURING PROCESS

Whereas some of the other change scenarios we discuss in this book aremore problematic (for instance, culture change and merger/acquisition), onthe surface a restructuring of the organization should be a relativelystraightforward affair. If we recollect the organizational change metaphors,the restructure could be quite neatly placed into the machine metaphor.

The key beliefs of the machine metaphor are:

• Each employee should have only one line manager.

• Labour should be divided into specific roles.

• Each individual should be managed by objectives.

• Teams represent no more than the summation of individual efforts.

• Management should control and there should be employee discipline.

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This leads to the following assumptions about organizational change:

• The organization can be changed to an agreed end state by those inpositions of authority.

• There will be resistance, and this needs to be managed.

Change can be executed well if it is well planned and well controlled.

Within this metaphor we could perhaps draw on Kurt Lewin’s three-stepprocess of organizational change. The first step involves unfreezing thecurrent state of affairs. This means defining the current state, surfacingthe driving and resisting forces and picturing a desired end state. Thesecond step is about moving to a new state through participation andinvolvement. The third step focuses on refreezing and stabilizing the newstate of affairs by setting policy, rewarding success and establishing newstandards. Clearly an organizational restructuring process could followthis model. There is a current state that needs unfreezing and a perceivedend state that is required. The main focus therefore is the need to ensurethat movement between the former to the latter state is as smooth andquick as necessary.

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Unfreeze

Move

Refreeze

Take actionMake changesInvolve people

Make changepermanent

Establish new wayof things

Reward desiredoutcomes

Examine statusquo

Increase drivingforces for change

Decrease resistingforces against

change

Figure 5.1 Lewin's three-step modelSource: Lewin (1951)

However, our experience when facilitating organizational change is that arestructuring process will not be successful if it is focused solely on gener-ating organizational structure charts and project plans. It is disappointingto note that the CIPD research (CIPD, 2003) suggests that organizationstypically devote much more time during restructuring to areas other thanhuman resources. The finance and systems functions accounted fordouble the time and attention that HR issues received. Anyone managingor experiencing restructuring knows that there are many other factors toconsider. The politics of the situation and the psychological needs ofmanagers and staff play a key role. It is also important to ensure that therestructuring process is positioned as a framework to enable the organi-zation to do something it has not done before, rather than simply as a toolfor changing the structure around.

It is therefore useful to remind ourselves of Nadler and Tushman’scongruence model, which derives from the political and organismmetaphors. One of the key aspects of the congruence model is that if youchange something in one part of the organizational system, the wholesystem and other component parts are affected. If you do not factor thisinto your change equation you may well face unintended consequences.For example, restructuring in one part of the organization means thatpeople in other areas may well have to develop a whole new set of rela-tionships. Very often little is done to communicate the changes, let aloneactively work to foster new working relationships.

The authors have witnessed numerous restructures in a variety ofpublic and private sector organizations, and have concluded that perhapsthe best way to approach the restructuring process is as a mixture of themachine and organism metaphors. Beckhard and Harris’ change formulais useful here:

C = [ABD] > X

C = ChangeA = Level of dissatisfaction with the status quoB = Desirability of the proposed change or end stateD = Practicality of the change (minimal risk and disruption)X = ‘Cost’ of changing.

According to this formula, important factors in any restructuring are three-fold. First, the reasons, timing and rationale for the restructure must be

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made very clear. Second, the end goal or vision must be communicated inan appealing way. Third, the whole exercise must appear doable by beingwell planned and well implemented. For the majority of individuals theoverwhelming experience is one of upheaval. The cost of changing is high.It is therefore imperative that the benefits are accentuated and thenplanned for in the most authentic and genuine way as possible.

In Figure 5.2 we outline our generic approach to restructuring, whichcan be tailored to individual circumstances. We highlight areas of poten-tial problems and also suggest ways of making it a more effective process.

Strategic review and reasons for change

Any attempt to restructure needs to have a clear communicable rationale.This will typically come from a review of strategy that highlights the need

Strategic review

⇓Reasons for change

⇓Critical success factors

⇓Design options

⇓Risk assessment

⇓Learning from previous

projects

⇓Learning from best

practice

⇓Project plan

⇓Project implementation

⇓Continuous monitoring

feedback and adjustment

⇓Review

Figure 5.2 A generic approach to restructuring

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to address a specific issue relating to the internal or external businessenvironment. In the CIPD research cited above, restructuring was oftendone to improve customer responsiveness, gain market share or improveorganizational efficiency. Key drivers in the private sector were ‘typicallyperformance declines, mergers and acquisitions and a change of chiefexecutive. In the public sector, key drivers are the need for new collabora-tions and legislative and regulatory change, though chief executivechanges are again important.’

Critical success factors

Planning a structure requires the generation of critical success factors,design options and a risk assessment. The purpose of a restructure is toalign the organization to better achieve its strategy. Critical success factorsare important to define, because if they are met, they will ensure successfor the new structure and by implication the strategy. Although identifi-cation of these key factors is an important prerequisite to any restruc-turing, this task is not necessarily clear-cut. The factors themselves willdepend on the organizational strategy, its culture, its market, its infras-tructure and its internal processes.

We give an example from a local government authority that needed toreorientate itself to have a much greater customer and citizen focus. Oneof the explicit strategies was to restructure the organization in a way thatwould dissolve the traditional departmental boundaries and their associ-ated destructive tensions and unhelpful silo mentality.

CRITICAL SUCCESS FACTORS FOR A LOCAL AUTHORITY

Public service users (and relevant stakeholders) not providers arethe focus

Will this structure result in clear, measurable deliverables to the customersand citizens?

To what extent have we consulted with our customers?

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New working relationships are accommodated such as communityleadership, neighbourhood working and political managementarrangements

Does the structure reflect and support key changes in the politicalarrangements and thinking?

A realistic interaction is demonstrated between policy planning in allits forms, business development and financial planning at every level

Does the structure enable clear links between the different types of plansand the relevant timescales?

Better prioritization of objectives and decision making onworkloads and resourcing can take place

Does the structure enable clarity around the authority’s strategic objectives?Are there linkages across the organization?Is there clarity as to who is accountable for what?Are there supporting processes that manage potentially conflicting

priorities?

Individuals are clear about their responsibilities andaccountabilities and can act in an empowered way

Does the structure enable better application of the performancemanagement system?Are individual and team development needs identified and resourced tomeet business outcomes?

A performance and feedback culture is developed across theorganization, internally and externally

Does the structure help strengthen the performance and feedback culture?

Design optionsOnce it has been decided what factors it isimportant for the restructure to meet, it isimportant to demonstrate that these are betterachieved through this structure rather than anyother one.

Design options are the different ways inwhich the particular organization can be struc-tured. It is not within the scope of this book to

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discuss in depth the different types of organizational structure – readersare encouraged to read an overview in Organization Theory edited by D SPugh (1990). However, we are interested not only in the general impact ofrestructuring but also in any specifics relating to a move from one type ofstructure to another. Miles and Snow (1984) detailed the evolution oforganizational structure and its relationship to business strategy:

• an entrepreneurial structure when there is a single product or service,or local/regional markets;

• a functional structure when there is a limited, standardized productor service line, or regional/national markets;

• a divisional structure when there is a diversified, changing product orservice line, or national/international markets;

• a matrix structure when there are standard and innovative productsor services, or stable and changing markets;

• a dynamic network when there is the need for product or servicedesign or global changing markets.

The majority of organizations are structured according to anentrepreneurial, functional, divisional or matrix structure. All have theiradvantages and their limitations, as outlined in Table 5.1.

Risk assessment

As you can detect from the limitations described for each of the organi-zational structures, there are risks attached to the restructuring process.Those identified here are obviously generic risks; however each organi-zation will need to identify the specific risks associated with movingfrom one structure to another. The management therefore needs tounderstand fully the nature of these risks. As a concrete example wehave included in the box excerpts from a risk assessment generated for amedium-sized company that had decided to move from a function-orientated organization to a divisionalized structure incorporating fiveproduct-based business units together with a centralized ‘sharedservices’ and financial control unit.

RISKS OF NEW STRUCTURE

Structure and interdependencies

Business unit structures will require some level of consistency (shape,size, roles and responsibilities, reporting lines, etc) amongst themselvesto ensure that they can be adequately serviced from the centre.

Being very clear about the boundaries of the businesses we are in. Thatis, boundaries of the markets and boundaries between the business units.

There needs to be clarity of role and responsibility between the centralservices, shared services and business units.

Shared services/central service effectiveness

Shared services and, to a slightly lesser degree, central services need tobe closely aligned culturally and process-wise with the business unitsthat they interact with, to encourage efficient and effective managementacross the boundary.

How support services are devolved, shared and centralized requirescareful planning to ensure cost-effective, efficient and productive functions.

Corporate identity

The corporate identity will be dissipated and may not be replaced.In some areas staff’s ‘affinity’ will be significantly diminished – how can

this be managed?

Synergies

Synergies may be harder to exploit (eg deploying e-commerce solutionsacross business units).

Cost

Costs are likely to increase if we move to devolved support functions –what are the specific proposals that will increase income?

Cost inefficiency is a risk – the structure will inevitably lead to someduplication of costs across the business units. The structure is not idealfrom a cost point of view.

Root cause

We may not address some true causes of problems that we have bythinking that we are dealing with them by restructuring.

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Table 5.1 Advantages and limitations of different types of organization structure

Structure Entrepreneurial Functional Divisional by product, Matrixgeography or both

Main features Organized Organized around tasks to Divisions likely to be profit Double definition of profit around one be carried out. centres and may be seen as centres.central figure. Centralized. strategic business units for Permanent and full dual control Totally planning and control purposes. of operating units – though one centralized; Divisions/business units headed will be generally more powerful no division by general managers who have than the other.of responsibility. responsibility for their own Authority and accountability

resources. defined in terms of particular Decentralized. decisions.

Situations Simple Small companies, few plants, Growing in size and Large multi-product, where companies in limited product or service complexity. multinational companies with appropriate early stages of diversity. Appropriate divisional/ significant interrelationships

their Relatively stable situations. business splits exist. and interdependencies.development. Organizations growing Small sophisticated service

through mergers and companies.acquisition.Turbulent environments.When producing a numberof different products orservices.Geographic splits with cultural distinctions in company’s markets.

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Advantages Enables the Controlled by strategic Spreads profit responsibility. Decisions can be taken locally, founder, who leaders/chief executive. Enables evaluation of decentralized within a large has a logical or Relatively low overheads. contributions of various corporation, which might intuitive grasp Efficient. activities. otherwise be bureaucratic.of the business, Clearly delineated external Motivates managers and Optimum use of skills and to control its relationships. facilitates development of resources – and high-quality early growth Specialist managers develop both specialists and generalists. informed decisions, reconciling and expertise. Enables adaptive change. conflicts within the organization.development. Relatively simple lines of CEO concentrates on Enables control of growth and

control. corporate strategy. increasing complexity.Can promote competitive Growth through acquisition Opportunities for management advantage through the easier. development.functions. Can be entrepreneurial.

Divestment can be managed more easily.

Limitations Founder may Succession problems – Conflict between divisions Difficult to implement.have insufficient specialists not generalists for resources. Dual responsibilities can cause knowledge in are created. Possible confusion over locus confusion.certain areas. Unlikely to be of responsibility (local or Accounting and control Only appropriate entrepreneurial or adaptive. head office). difficulties.up to a certain Profit responsibility Duplication of efforts and Potential conflict between the size. exclusively with CEO. resources. two wings, with one generally

Becomes stretched by growth Divisions may think more powerful.and product diversification. short-term and concentrate High overhead costs.Functional managers may on profits. Decision making can be slow.concentrate on short-term Divisions may be of different routine activities at the sizes and some may grow expense of longer-term very large.strategic developments. Evaluation of relative Problems of ensuring performances may be difficult.coordination between Coordination of functions – rivalry may interdependent divisions and develop. establishing transfer pricing Functional experts may seek may be difficult.to build mini-empires.

Source: summarized from Thompson (2001)

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The task for the management team was to generate an honest list, assessthe degree of risk (probability x impact) and agree actions to minimize therisks. In addition, and as an example of good practice, a risk assessmentwas also completed for the process of managing the change as well as thechanges themselves, as listed in the box.

RISKS INHERENT IN MANAGING CHANGE

Management of change

The organization will spend another six months to a year with the ‘eye offthe ball’.

There is a lack of change/implementation expertise and skills.The executive management team tends to get ‘bored with the detail’

quickly and therefore may lose interest and impetus and let both the tran-sition and the transformation peter out.

Communications

Staff may see this as ‘yet another restructure’ not tackling the real prob-lems, and therefore become demotivated.

People

We need to ensure the best people possible for each job. We need toensure that we keep the people we want to keep.

Management of synergies

Loss of knowledge – we need to capture and transfer knowledge of, forexample, strategy formulation and implementation.

We need to ensure best practice in one part of the company is trans-ferred across the company.

Roles, responsibilities and interdependencies

Risk of business units declaring ‘UDI’ and not fully engaging with centralservices and company-wide issues.

We need to ensure those in the centre are motivated and their perfor-mance measured. We need to establish levers other than the policemanrole and the threat of regulators etc.

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Learning from previous projects and best practice

Clearly you do not have to reinvent the wheel when it comes to restruc-turing. Given the propensity for restructuring that most organizationshave, you and your colleagues will have a reservoir of knowledge as towhat has worked before. You will also know quite a lot about what hasnot worked! Now is the time to check back to see what the learnings arefrom previous change projects. If your organization has not formallyretained this knowledge, a requisite variety of managers and staff canquite easily generate such a list. We include an example list (see box). Theheadings are the central themes that emerged during the session. Thesewere the most relevant issues for the organization under review. Yoursmight well be different.

In terms of best practice there are many resources: this book forexample, a wide range of literature, professional bodies and consultancyfirms. It is important to get the right balance between what has workedelsewhere and what will work in your organization. And there is no guar-anteed formula for that.

LEARNINGS FROM PREVIOUS CHANGE PROJECTS

Change management/project management

Preparation

Utilize previous learning from projects.Check for false assumptions.Always, always do a potential problem analysis.Look for design faults at an early stage and throughout.Significant top-level commitment.

Communication

Induction for all in the change.Ensure earliest possible involvement of stakeholders.Take the board with you.Ensure cohesion across organization.Harness energy and enthusiasm across organization.

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Objectives

Lack of focus produces failures.Link the hard and soft interventions and measures.Have clear objectives.Differentiate between the what and the how.Specific behaviour objectives help.

Implementation

It helps to have people who have been through similar projects before.Network of people and resources.Dedicated project management.Multidisciplinary approach.Build the change management team.

Monitoring

Build in a process of automatic review.Always evaluate, financially and otherwise.To ensure sustainability have follow-through.

Leadership and strategy

Vision, mission and values need to be overt, obvious, communicated andfollowed.Ensure alignment to strategy.

People

Don’t let line managers duck the issues – build responsibilities and account-abilities into the process.Requires involvement of people – as part of buy in, and they can actuallyhelp!Requires communication with people.Be honest with people.All the new teams need to be motivated and built.Get the right people in the right jobs.

Profitability

Always cost the initiative.Be clear where the value is added.Separate infrastructure investment from return on investment.Check for false assumptions.

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Project planning and project implementationLeadership

The restructuring process can create considerable turbulence within anorganization, its managers and its staff. In the box is a copy of a note to achief executive shortly after a restructuring process had begun. It clearlyidentifies the state of confusion that people throughout the organizationwere experiencing.

MEMO TO CEO DESCRIBING THE EFFECT OF CHANGE ON STAFF

People were still very much in the throes of the changes – many clearlystill affected on an emotional level by the restructuring process and allhighlighting areas that need clarifying going forward.

People thought that there was a tremendous energy surrounding thechanges – seeing lots of activity and lots of change being managed at arapid pace. The downside to this was the sense that it was too fast andout of control, certainly outside of their control.

The majority of people felt positive at the ideas introduced at a highlevel by the strategy. Some saw it as new and exciting, others asproviding one clear direction and having a certain theoretical clarity.However the overwhelming feeling was a sense that while the Vision wasfine, there was a real lack of clarity around how it would be translated intoa living workable strategy. They needed something not only motivating toaim for but also something quite specific.

Coupled with people’s sense of the pace of change, many reportedthat not only was the direction somewhat hazy, but they saw differentmanagers going off in different directions.

There was a certain resignation to the fact that the organization wasgoing round and round – a ‘here we go again’ attitude – a sense thatthey had been here before and wondering whether this time would beany different.

They recognized that the direction might be clearer from the top;perhaps they were not in the right place to be seeing the bigger picture.Some people complained of having too little information, while otherscomplained of having too much information. Although one could say thatstaff going through change may never be satisfied – or that management

will always get it wrong (damned if you do, damned if you don’t) – the keyquestion is ‘How do we deliver the right message, at the right time, to theright people, through the right medium?’

Coupled with this theme of communication was the perceived need toprovide answers to the many questions people have when they are expe-riencing (psychologically) the chaos of change. Often people were left withno one to ask, or asking questions of managers who either didn’t know orwere themselves preoccupied with their own reactions to changes theywere going through.

In summary, and from an emotional perspective, the effect ofcombining the various themes described above is quite a heady one.People have reported feelings of being lost and confused, anxious andworried, degrees of uncertainty and puzzlement, an inability to piece thejigsaw together and, to some, the tremendous strain of having to waitwhile the changes were revealed. Points to note here include the feelingof having no control over their destiny and also watching as others (oftentheir managers) were suffering the traumatic effects of the changes whichthey themselves might have to suffer at some stage.

This is often at the very time that ‘business as usual’ efforts need to beredoubled. The tasks of those leading the restructure are to ensure thatbusiness as usual continues; that people are readied for operating withinthe new structure; and that the transition from the old structure to thenew structure is smooth and timely.

Attention to both the task and people sides of the process is imperative.Depending on people’s predisposition, normally one will take prece-dence over the other. There is a need to ensure that plans are in place forall the necessary processes that are part of the change:

• communication plans: what, to whom, when and how;

• selection/recruitment plans: clear guidelines for both those under-going selection, their managers and interested onlookers. Theseshould include criteria for selection, information about the process,timescales and rationale behind the process;

• contingency plans: necessary if key people are unavailable at criticaltimes or if timescales look like slipping.

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Future direction and strategy

For many people the strategy and future direction behind a restructure ishazy. This is very often a case of too much vision and not enough prag-matism, but sometimes a case of too much pragmatism and not enoughvision! A balance is needed.

In any restructure it is imperative to describe a positive future as wellas to explain fully the rationale behind it, how it links to the strategy, howit will work in practice, how it differs from what went before, how it isbetter than what went before and what the benefits will be from it.

Communication

Communication in any change is absolutely essential. However, commu-nications are often variable. There is sometimes too much communica-tion, but more often too little too late. An added problem iscommunication by e-mail. This is such a useful mechanism whenmanagers need large numbers of people to receive the same informationat the same time, but it is so impersonal and so heartless when deliveringmessages of an emotional and potentially threatening nature.

A more tailored or personalized approach is better. The greater theaccess to people who know the answers to the important questions, thebetter. FAQs (frequently asked questions) are useful to compile andcommunicate, but do not expect this to be the end of the story. Justbecause you think you have told someone something it does not mean tosay he or she has heard it or assimilated it or believed it. People do strangethings under stress, like not listen. And they need to see the whites ofyour eyes when you respond!

Key questions in people’s minds will be:

• What is the purpose of the restructure?

• How will it operate in practice?

• Who will be affected and how?

• What are the steps along the way, including milestones and timescales?

• How will new posts be filled and people selected?

• What happens to the others?

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• Where do you go to get help and how do you get involved?

• What is the new structure and what are the new roles?

• What new behaviours be required?

• Will training and development be provided?

Communication needs to be well planned, and these plans need to beclear about how to get the right information to the right people at theright time through the right medium (for the recipient). This includeswell-presented briefing notes for managers if they are to be the channelfor further communication. It is also worth checking for understandingbefore these messengers are required to communicate the message.

Change in any form can trigger a number of emotional responses. If themessages can be personalized the recipient is more likely to receive themin a positive frame of mind. Personalized messages such as face-to-faceand one-to-one communications are especially relevant when an indi-vidual may be adversely affected by the change.

Different communities of interest have different needs when it comesto communications. Some people will need to be involved, someconsulted and some told. It is important that the right people get theappropriate level of communication. It is important for them and it isimportant for those around them. If your manager is seen to be ignored,what does it say about the value of your work section?

Thought needs to be given to the recipients of the communication.Those responsible for communicating need to ask:

• What are their needs for information?

• What is their preferred form of communication?

• When is the best time for them to be communicated with?

For example, people in a contact centre just may not have the time to readendlessly long e-mails informing them of changes in other parts of thebusiness. However, they would probably like to be told face to face ofevents that will involve changes to their management structure, or theintroduction of a new way of working.

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To prevent the rumour mill growing it is important that communica-tion is timely, and reaches each of the chosen communities at the agreedtime. Start–stop–start again communications do not help either. A contin-uing flow of communication will engender more confidence in thechange process.

Implementation process

The complexity of the restructuring task is often underestimated.Timescales are often not met. Staff directly affected by the change andpotentially facing redundancy are subjected to undue stress because thewhole process takes too long to complete.

Managing people’s expectations is key. If you announce a plan, it needsto be adhered to, or changes to plan clearly communicated.

Supporting mechanisms

In order to make the restructuring as smooth aspossible and ensure that the new structure gets upand running quickly, a number of support mecha-nisms need to be in place.

Visible managerial supportA key response of people going through theprocess is that their management was often inef-fectual at managing change during this period.This is not necessarily the manager ’s fault. Manyexperience having to go through a selection process for themselves, manydo not seem to get adequately briefed as to the nature of the changes, andsome either lose their jobs or get appointed into new positions and so donot or cannot provide the necessary support through change.

Management styles across an organization can also be variable. Oftenthere is a reduced management visibility at these times rather than anincreased visibility.

People can see a restructure as just that – a change in structure, ratherthan an internal realignment that would help them and the businessfocus on, for example, their customers and with a different way of doingthings. It is the role of the manager to translate the purpose of the restruc-ture into an understandable and viable way of doing things differently.

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Continued communication of the purposeThere needs to be an ongoing planned and ‘personalized’ communicationprogramme to ensure the right people get the right information at theright time in the right format for them. People need to be told andinvolved in how the organization will be operating differently in thefuture. In these two-way communications staff and managers’ perspec-tives need to be listened to, and where valid, need to be addressed.

Clear selection processDuring any selection process certain things need to be in place: first, aselection process plan that is agreed, is sensible, has an inner integrity, isconsistent, equitable and scheduled; and second, clear guidelines forthose undergoing selection, their managers and interested onlookers.These should include criteria for selection, information about the process,timescales, and rationale behind the process.

Senior management attentionIn most instances where senior management are involved their presenceis generally appreciated, even if the restructure is perceived as a negativechange. The more people see the commitment of senior management thebetter, be it attending meetings, visiting departments, branches or contactcentres to explain the rationale, and face the staff.

Constructive consultation

Different organizations will have different ways of involving staff inchanges. We believe that if middle managers and staff have a say in theplanning of change, some of the inconsistencies and incongruitiesemerging from the change are picked up and addressed at a much earlierstage. If there is more input and involvement at an earlier stage fromthose managers who have a responsibility to manage the changes, thistoo has an impact on the success of the change.

Monitoring and review

Monitoring and review is not something just to be done at the end of theprocess and written up for the next time. If you have adopted themachine approach to restructuring, perhaps you might think that oncethe plan is in place, all it needs is a robotic implementation. Of course

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organizations are not entirely mechanistic, and individuals and groupsgoing through change can react in all sorts of ways. The restructuringplan needs to be monitored constantly to see how both the task andpeople aspects of the plan are progressing. Feedback loops need to bebuilt into the plan so that senior managers and those responsible forimplementation have their fingers on the pulse of the organization.

In our discussion of individual change (see Chapter 1) we remarkedthat a certain amount of resistance to proposed changes is to be expected.Just because people resist change does not mean to say that you are doingit wrong! It is a naturally healthy human reaction for individuals andgroups to express both positive and negative emotions around change.Managers can help this process along by encouraging straight talk.

Also, just because people resist change it does not mean to say that theyhave got it wrong! They might well see gaps and overlaps, or things thatjust are not going to work. Listening to the people who will have to makethe new structure work is not only a nice thing to do, it is a useful thingto do and constitutes effective use of management time.

The process of monitoring and review should begin at the planningstage and be an important part of the whole process, right through to thepoint where you evaluate the effectiveness of the new structure in themonths and years after implementation.

RESTRUCTURING FROM AN INDIVIDUAL CHANGEPERSPECTIVE: THE SPECIAL CASE OF REDUNDANCY

This section looks at redundancy, and how itaffects those made redundant and those whosurvive. David Noer spent many years workingwith individuals in organizations andsupporting them through change. He hascaptured much of this experience in his bookHealing the Wounds: Overcoming the trauma oflayoffs and revitalizing downsized organizations(1993). Although, as the title suggests, the book isprimarily focused on redundancy, there is muchof benefit to anyone who wants to tackle organi-zational change and change management.

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Noer ’s research is useful for illuminating the short, medium andlong-term impact of change. He also suggests how a manager can inter-vene on a number of levels to help smoothen and perhaps quicken thechange process.

Table 5.2 looks at the individual and organizational short to long-termimpact that redundancy can produce. Many of these feelings are notnecessarily disclosed: some are acted upon, others just experienced inter-nally but having a clear effect on morale and motivation. Table 5.3suggests a breakdown of what feelings are disclosed and undisclosed.You might notice that many of the feelings found among those goingthrough this process are precisely the same ones that Kubler-Rossdescribed in her work on the change curve (1969).

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Table 5.2 The individual and organizational short to long-term impact of redundancy

Individual impact Organizational impact

Short to Psychological contract broken Reduced risk takingmedium term Job insecurity Reduced motivation

Unfairness Lack of management Distrust and sense of betrayal credibilityDepression, stress, fatigue Increased short-termismWanting it to be over Dissatisfaction with Guilt planning and Optimism communication

Anger over the processSense of permanent changeContinued commitment

Medium to Insecurity Extra workloadlong term Sadness Decreased motivation

Anxiety Loyalty to job but not to Fear companyNumbness Increased self-relianceResignation Sense of unfairness Depression, stress, fatigue regarding top management

pay and severance

Source: summarized from Noer (1993). Reprinted by permission of John Wiley & Sons, Inc.

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Dealing with redundancy: Noer’s model

Noer sees interventions at four different levels when dealing with redun-dancy in an organizational context. Most managers only progress to levelone, whereas Noer suggests that managers need to work with theirpeople at all four levels. (See Figure 5.3.)

Level one: getting the implementation process right

Level one interventions are all about getting the process of change right.In any change process there needs to be a good level of efficient and effec-tive management. This includes a communication strategy and a processthat is in line with organizational values.

Noer suggests that once the decision is made to effect redundancies, itneeds to be done cleanly and with compassion. This requires open commu-nication – ‘over-communicating is better than under-communicating’ –emotional honesty and authenticity.

Although this is just level one it is hard to get this one absolutely right!

Level two: dealing with emotions

Once you have attended to getting the task process right, the next level isgetting the emotional process right. This involves dealing with thedisclosed and undisclosed feelings mentioned above. Let us be frank: a lotof people are not very good at this. For many, allowing the release of

Table 5.3 Disclosed and undisclosed feelings about redundancy

Feelings Disclosed Undisclosed

Held in Fear, insecurity and uncertainty. Sadness, depression and guilt.Easier to identify and found in Often not acknowledged and every redundancy situation. hidden behind group

bravado.

Acted out Unfairness, betrayal and distrust. Frustration, resentmentOften acted out through blaming and anger.others and constant requests for Often not openly expressed information. but leak out in other ways.

Source: summarized from Noer (1993)

emotions and negative thoughts about the situation feels like they areopening a hornet’s nest. Managers need some support and a considerableamount of self-awareness if they are to handle this well.

There are many ways that managers can facilitate this process, witheither one-to-one meetings or team meetings.

This level is about ‘allowing time for expressions of feelings about situ-ation plus implications for future and next steps for moving on’.

Level three: focusing on the future

The change curve indicates that a period of inner focus is followed by aperiod of outward focus. Noer ’s research suggests that once levels oneand two have been dealt with, the organization now needs to focus onthose surviving the redundancy. This is aimed at ‘recapturing’ their senseof self-control, empowerment and self-esteem. In the same way that thosewho have been made redundant need to go through a process of

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Level onegetting the

process right

Level twodealing with

emotions

Level threefocusing on the

future

Level fourembedding the

changes

Figure 5.3 Noer's four-level redundancy intervention modelSource: Noer (1993)

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regaining their self-worth and focusing on their strengths, thoseremaining need to do the same.

There should be plenty of organizational imperatives for this tohappen! But once again, let it be a considered approach rather thanhaphazard. The organization would not have gone through the changesthat it has without a clear need to do so. It remains to those left to addressthat need – be it cost-efficiency, productivity, culture change or merger.The more that individuals and teams can be involved in shaping the orga-nization’s future, the greater will be the engagement and commitment,and the greater the chances of success.

Level four: embedding the changes

Level four interventions occur at a whole-system level. One option – thelaissez-faire or reactive one – is to pretend that nothing much has changed.In terms of Satir ’s model, as described by Weinberg (1997), the organiza-tion can fail to really address or redress the situation. It could:

• try to reject foreign elements;

• try to accommodate foreign elements in its old model;

• try to transform the old model to receive foreign elements, but fail.

Any of these options creates a scenario in which the changes are notsustainable. Noer suggests embedding any changes made into the newway of working. This includes:

• creating structural systems and processes that treat and/or preventsurvivor syndrome symptoms;

• redefining the psychological contract – being clear about what thenew deal now is between employer and employee;

• enacting and embodying the new culture and its values if that is oneof the stated objectives;

• ensuring all HR practices and management style are aligned with theespoused culture.

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Key lessons that Noer teaches us are:

• to address change on both the task and people level;

• to pay attention, not only to what individuals and groups are goingthrough now, but also the tasks necessary to move the organizationalong; to use these tasks to engage people as they come out of themore negative aspects of the change curve;

• to take the opportunity of the turbulence of the situation to embedinto the organization those structures, systems and processes that willbe necessary to sustain the changes in the longer term.

ENABLING TEAMS TO ADDRESS ORGANIZATIONAL CHANGE

Teams are often strongly impacted by restructuring processes. Theircomposition changes, or they have a new leader, or maybe they have anew purpose. There needs to be a process for quickly establishing indi-vidual and team roles, responsibilities and priorities.

Issues that teams and groups have to contend with during periods oforganizational change brought about by restructuring include:

• loss of individual roles and jobs;

• new individual roles and jobs;

• loss of team members;

• new team members;

• new team purpose and objectives;

• new line manager;

• new organizational or departmental strategy.

Any of these can cause individual members of a team, or the team as awhole, to experience a range of emotions and new ways of thinking abouttheir organization, their colleagues and their own career.

Teams need to develop so that their contribution to the organizationalchanges can be as good as possible as quickly as possible.

From our consultancy experience we findone particular framework useful for newlyrestructured teams. This framework encom-passes a number of the issues we have high-lighted. We encourage teams to workthrough the four-part framework in order toestablish quickly the sense of team cohesionnecessary for tasks to be accomplished in ameaningful and collaborative way. This isbest done in a workshop format.

We have found that if a team spends thetime to focus both on the people and taskside of this process, it will be able to deal with the transition less turbu-lently than one that has not.

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Figure 5.4 The four-stage team alignment model

216 Table 5.4 Addressing team change during restructuring

Forming StormingTask People Task People(orientation) (dependency) (organization) (conflict)

Team purpose Establish purpose of Ensure understanding Ensure clarity around Check out individual change and team and commitment from purpose of change and purpose engagement objectives in relation to team around change team objectives in to (enrolment, change. purpose on an relation to change. enlistment,

intellectual and compliance, emotional level. resistance).

Discuss differences.

Team roles Establish roles and Ensure individuals Ensure clarity of roles Establish degree of responsibilities of understand their roles and responsibilities of comfort with whole team and and those of others. whole team and individual roles and individual members. Establish whether there individual members. establish levels of

are any overlaps or support and grey areas. challenge required.

Highlight areas of team tension.

Team processes Highlight the need Establish groundrules Establish processes for Check out levels of for team processes. for team working. decision making, trust and agreement.

problem solving, Surface areas of team conflict resolution if not tension.already in place.

217

Team relations Highlight the need for Establish groundrules Ensure team is agreed Build safe team processes. for team working. on purpose, objectives, environment for

roles and processes. team to openly express thoughts and feelings.

Inter-team Establish dependencies Highlight the need to Establish process for Engage with other relations on and with other establish protocols with communicating with groupings on how

organizational key organizational other organizational they will work groupings. groupings. groupings. together.

MBTI™* Ensure balance between Balance between Ensure balance between Ensure that different high level vision and acknowledging the tying agreements down types are understood more tangible and business case for the and keeping options and potential pitfalls specific objectives. change and individuals’ open. and communication

feelings about the barriers.change.

Key Belbin Co-ordinator, shaper, Co-ordinator, team Co-ordinator, resource Co-ordinator, team roles plant, implementor. worker. investigator. worker, monitor-

evaluator.

Organizational Ensure alignment of Ensure team members Ensure team structure, Ensure commitment focus team goals to engage on an roles and responsibilities to organizational

organizational change intellectual and fit with proposed goals and operating objectives. emotional level with changes and in line with values.

organizational goals. organizational ethos.

218 Table 5.4 Continued

Norming PerformingTask People Task People(open data flow) (cohesion) (problem solving) (interdependence)

Team purpose Review progress on Review progress, Review progress on Review team team purpose and recognize achievement. team purpose and performance against objectives; adjust as objectives; adjust as purpose, recommit as necessary. necessary. necessary.

Team roles Review roles and Review progress, Review roles and Review individual responsibilities; adjust recognize achievements responsibilities; adjust role performance and as necessary. and development areas. as necessary. structure, recognize

Develop strategies for achievement and improving performance. provide development.

Team processes Review team processes; Review team processes; Review team processes; Review level of team adjust as necessary. adjust as necessary. adjust as necessary. efficiency; adjust as

Develop strategies for necessary.improving performance. Develop strategies

for improving performance.

Team relations Review team relations; Review progress; Review team relations; Reflect upon level of attend to if necessary. recognize achievement. attend to if necessary. team effectiveness.

Develop strategies for Develop strategies improving performance. for improving

performance.

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Inter-team Review level of Review level of Implement actions from Continue to foster relations inter-team working; inter-team working; review if necessary. good working

plan negotiations if engage others in Develop strategies for relations with other necessary. negotiating better improving performance. organizational

relations if necessary. groupings.

MBTI™* Review predominate Review team strengths Balance time between Balance time team type, take and weaknesses and reviewing past between individual appropriate managerial develop blind spots. performance and and team needs, action, if necessary. planning future past performance

changes. and future planning.

Key Belbin Monitor-evaluator, Co-ordinator, monitor- Shaper, (plant), Co-ordinator, roles shaper, implementor, evaluator, team worker. monitor-evaluator, monitor-evaluator,

completer-finisher. completer-finisher. team worker.

Organizational As team begins to Ensure team model Ensure team in all of Ensure team is focus experience less values and espoused its five elements is operating effectively

turbulence, review behaviours within and performing at an across organizational alignment with outside of team. effective level. boundaries.organizational goals and check team performance against milestones.

* MBTI™ = Myers-Briggs Type Indicator™

Four-stage team alignment

1. Understanding one another ’s skills, feelings and values.

It is useful for the team to acknowledge its own journey to where itis today. This means talking about the individuals, the team andother influential parts of the organization, and the processes ofchanges that have been gone through to arrive at the current situa-tion. How much of this it is necessary to acknowledge will dependupon the scale of change and the story so far.

2. Clarifying and prioritizing current work.

The team needs to clarify the current level of demand, and mustwork together to satisfy current customer needs.

3. Clarifying and prioritizing future work and direction.

If teams are facing a large change agenda, they can easily becomeoverwhelmed unless activities are phased and planned. Do-abilitymust be convincing. Teams need to take stock of their currentagenda, ensure it is understood, and agree priorities, responsibilitiesand timing.

4. Functioning effectively as a team.

The impact of stages 1 to 3 can be extremely demanding on a team.The team needs to develop clarity about its roles, dynamics, practical-ities of meetings, phasing of its development activities, communica-tion and follow-through. Most teams will have deficiencies anddevelopment needs in one or more areas. Teams need to assess wherethey need to improve and focus on those areas as a priority.

The specific outcome of this process for individuals and teams is greaterclarity about the practical changes that need to happen and how neces-sary transformations can be managed.

You will have seen from the chapters on individual and team changethat all individuals and teams undergoing change will progress throughvarious stages. The four-stage team alignment model above attempts toaddress some of the key points from those chapters. Table 5.4 on pages216–19 brings all the key team factors together as a useful reference.

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CONCLUSION

Restructuring is an ever-present phenomenon in today ’s organizations,and the process itself can be deeply unrewarding for those who initiateand those who experience it. We have drawn together ideas in Table 5.4,from both a task and a people perspective, which will increase thechances of achieving a smoother journey. However it must be empha-sized that turbulence is one thing you will not avoid. How you manage itwill be the test of how well you can lead change.

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Mergers and acquisitions

This chapter addresses the specific change scenario of tackling a mergeror an acquisition. We pose the following questions:

• Why do organizations get involved in mergers and acquisitions? Arethere different aims, and therefore different tactics involved in makingthis type of activity work?

• Merger and acquisition activity hasbeen very high over the last 15years, and at a global scale. We musthave learnt something from all thisactivity. What are the conclusions?

• Can the theory of change in individ-uals, groups and organizations beused to increase the success rate ofmergers and acquisitions, and if so,how can it be applied?

The chapter has the following four sections:

• the purpose of merger and acquisition activity;

• lessons from research into successful and unsuccessful mergers andacquisitions;

• applying the change theory: guidelines for leaders;

• conclusions.

THE PURPOSE OF MERGER AND ACQUISITION ACTIVITY

We begin with a short history of mergers and acquisitions. It is useful totrack the changes in direction that merger and acquisition activity havegone through over the last 100 years to achieve a sense of perspective onthe different strategies employed. Gaughan (2002) refers to five waves ofmerger and acquisition activity since 1897 (see box), claiming that we arecurrently in the fifth wave of this ever-evolving field. However activityhas slowed, with reported figures showing a 26 per cent reduction inglobal merger and acquisition activity in 2002.

THE FIVE WAVES OF MERGER AND ACQUISITION ACTIVITY

First wave (1897–1904): horizontal combinations and consolidations ofseveral industries, US dominated.

Second wave (1916–29): mainly horizontal deals, but also many verticaldeals, US dominated.

Third wave (1965–69): the conglomerate era involving acquisition ofcompanies in different industries.

Fourth wave: (1981–89): the era of the corporate raider, financed by junkbonds.

Fifth wave: (1992–?): larger mega mergers, more activity in Europe andAsia. More strategic mergers designed to compliment company strategy.

Source: adapted from Gaughan (2002)

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It is important to classify types of merger and acquisition to gain anunderstanding of the different motivations behind the activity. Gaughan(2002) points out that there are three types of merger or acquisition deal:a horizontal deal involves merging with or acquiring a competitor, avertical deal involves merging with or acquiring a company with whomthe firm has a supplier or customer relationship, and a conglomerate dealinvolves merging with or acquiring a company that is neither acompetitor, nor a buyer nor a seller.

There is a new wave of activity in the UK public sector. It is becomingmore common in the public sector world in the UK for mergers betweenpublic institutions to happen, often for economic reasons, but sometimesfor reasons of synergy.

So why do organizations embark on a merger or acquisition? The mainreasons are listed below.

GrowthMost commercial mergers and acquisitions are aboutgrowth. Merging or acquiring another companyprovides a quick way of growing, which avoids the painand uncertainty of internally generated growth.However, it brings with it the risks and challenges ofrealizing the intended benefits of this activity. The attrac-tions of immediate revenue growth must be weighed upagainst the downsides of asking management to run aneven larger company.

Growth normally involves acquiring new customers (for example,Vodafone and Airtouch), but can be about getting access to facilities,brands, trademarks, technology or even employees.

Synergy

Synergy is a familiar word in the mergers and acquisitions world. If twoorganizations are thought to have synergy, this refers to the potentialability of the two to be more successful when merged than they were apart(the whole is greater than the sum of the parts). This usually translates into:

• growth in revenues through a newly created or strengthened productor service (hard to achieve);

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• cost reductions in core operating processes through economies ofscale (easier to achieve);

• financial synergies such as lowering the cost of capital (cost ofborrowing, flotation costs);

• more competent, clearer governance (as in the merger of two hospitals).

However, there may be other gains. Some acquisitions can be motivatedby the belief that the acquiring company has better management skills,and can therefore manage the acquired company ’s assets and employeesmore successfully in the long term and more profitably.

Mergers and acquisitions can also be about strengthening quitespecific areas, such as boosting research capability, or strengthening thedistribution network.

Diversification

Diversification is about growing business outside the company ’s tradi-tional industry. This type of merger or acquisition was very popularduring the third wave in the 1960s (see box). Although General Electric(GE) has flourished by following a strategy that embraced both diversifi-cation and divestiture, many companies following this course have beenfar less successful.

Diversification may result from a company’s need to develop a portfoliothrough nervousness about the earning potential of its current markets, orthrough a desire to enter a more profitable line of business. The latter is atough target, and economic theory suggests that a diversification strategyto gain entry into more profitable areas of business will not be successfulin the long run (see Gaughan, 2002 for more explanation of this).

A classic recent example of this going wrong is Marconi, which tried todiversify by buying US telecoms businesses. Unfortunately, this was justbefore the whole telecoms market crashed, and Marconi suffered badlyfrom this strategy.

Integration to achieve economic gains or better services

Another increasingly common motive for merger and acquisition activityis to achieve horizontal integration. A company may decide to merge

with or acquire a competitor to gain market share and increase itsmarketing strength.

Public sector organizations may merge purely to achieve cost savings(often a guiltily held motivation) or to enhance partnership working inthe service of customers.

Vertical integration is also an attraction. A company may decide tomerge with or acquire a customer or a supplier to achieve at least one ofthe following:

• a dependable source of supply;

• the ability to demand specialized supply;

• lower costs of supply;

• improved competitive position.

Defensive measures

Some mergers are defensive and are a response to other mergers thatthreaten the commercial position of a company.

Pressure to do a deal, any deal

There is often tremendous pressure on the CEO to reinvest cash andgrow reported earnings (Selden and Colvin, 2003). He or she may bebeing advised to make the deal quickly before a competitor does, so muchso that the CEO’s definition of success becomes completion of the dealrather than the longer-term programme of achieving intended benefits.This is dangerous because those merging or acquiring when in this frameof mind can easily overestimate potential revenue increases or costssavings. In short, they can get carried away.

Feldmann and Spratt (1999) warn of the seductive nature of mergerand acquisition activity. ‘Executives everywhere, but most particularlythose in the world’s largest corporations and institutions, have a knack forfalling prey to their own hype and promotion… Implementation issimply a detail and shareholder value is just around the corner. This isquite simply delusional thinking.’

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Table 6.1 Comparison of reasons for embarking on a merger or acquisition

Reason for Advantages Disadvantages Organizational M&A activity implications

Growth Immediate revenue More work for the Top team required to growth pleases top team. make a step change shareholders. Hard to sustain the in performance. New Reduction in benefits once initial arrivals in top team. competition (if other savings have been Probably some party is competitor). made. administrative Good way of Cultural problems efficiencies.overcoming barriers often hard to Integration in some to entry to specific overcome, thus areas if beneficial to areas of business. potential not realized. results.

Synergy May offer significant, More subtle forms of Top teams need to easy cost-reduction synergy such as work closely together benefits. product or service on key areas of Attractive concept gains may be difficult synergy. Other areas for employees to realize without left intact.(unless they have significant effort. ‘heard it all before’). Cultural issues may

cause problems that are hard to overcome.

Diversification May offer the Economic theory Loosely coupled possibility for suggests that management teams, entering new, potential gains of joint reporting, some inaccessible markets. entering more administrative Allows company to profitable profit efficiencies, separateexpand its portfolio streams may not be identities and logos.if uncertain about realized. current business May be hard for top levels. team to agree

strategy due to little understanding of each other ’s business areas.

LESSONS FROM RESEARCH INTO SUCCESSFUL ANDUNSUCCESSFUL MERGERS AND ACQUISITIONS

The following quote from Selden and Colvin (2003) gives us a starting point:

70% to 80% of acquisitions fail, meaning they create no wealth for the shareowners of the acquiring company. Most often, in fact, they destroy wealth…Deal volume during the historic M&A wave of 1995 to 2000 totalled morethan $12 trillion. By an extremely conservative estimate, these deals anni-hilated at least $1 trillion of share-owner wealth.

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Table 6.1 Continued

Reason for Advantages Disadvantages Organizational M&A activity implications

Integration Buyer or supplier More work for the Integated top team, power automatically top team. merged reduced if other party In the case of administrative is buyer or supplier. horizontal integration systems, tightly More control of (other party is a coupled core customer demands competitor), cultural processes, single or supply chain problems often hard corporate identity, respectively. to overcome, thus better partnership Better partnership potential not realized. working, pooled desired for public Complex ‘dual’ resources, better sector organizations. structures often services.Reduction in result to spare egos.competition (if other party is competitor). Increase in market share/marketing strength.

Defensive Enhance the May be very If managed well, it measure company ’s unexpected for staff leads to greater

commercial position and low performance commercial strength.in the face of weighty can result from competition. confusion.

Deal doing Seductive and thrilling. The excitement of the Anyone’s guess!Publicity surrounding deal may cloud the the deal augments CEO’s judgement.the CEO’s and the company ’s profile.

Selden and Colvin put the problems down to companies failing to lookbeyond the lure of profits. They urge CEOs to examine the balancesheet, and say that M&As should be seen as a way to create shareholdervalue through customers, and should start with an analysis of customerprofitability.

However, this contrasting quote from Alex Mandl, CEO of Teligentsince 1996, in a Harvard Business Review interview (Carey, 2000) provides adifferent view:

I would take issue with the idea that most mergers end up being failures. Iknow there are studies in the 1970s and 80’s that will tell you that. But whenI look at many companies today – particularly new economy companies likeCisco and WorldCom – I have a hard time dismissing the strategic power ofM&A. In the last three years, growth through acquisition has been a criticalpart of the success of many companies operating in the new economy.

Carey ’s interview occurred before the collapse of Enron and WorldCom,so he did not know what we know now. The recent demise of both Enronand WorldCom due to major scandals over illegal accounting practiceshas considerably dampened enthusiasm for merger and acquisitionactivity worldwide. These events have raised big questions about compa-nies that finance continuous acquisitions as a core business strategy. Theuse of what BusinessWeek describes as ‘new era’ accounting is makinginvestors nervous, and causing companies to be very careful with theirinvestments and their financial reporting.

Public sector mergers, such as the Inland Revenue merging withCustoms and Excise in the UK, have been plagued with problems, and infull public view. However, the Ofcom merger, which brought togetherfive regulators into one organization, was seen as a great success.

The National Audit Office blame the public sector merger difficulties onthe leadership vacuum between those who decide on the merger andthose who are to implement it. Also, the amount of time taken by thelegislative process and consultation requirements leads to much greateruncertainty for staff and stakeholders than in the private sector.

The discussion about the overall success rate of merger and acquisitionactivity still continues. But what lessons can be learnt from previous expe-rience of undertaking these types of organizational change?

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CASE STUDY OF SUCCESS: ISPAT

Ispat is an international steel-making company which successfullypursues long-term acquisition strategies. It is one of the world’s largeststeel companies and its growth has come almost entirely through adecade-long series of acquisitions.

Ispat’s acquisitions are strictly focused. It never goes outside its corebusiness. It has a well-honed due diligence process which it uses to learnabout the people who are running the target company and convincethem that joining Ispat will give them an opportunity to grow.

The company works with the potential acquisition’s management todevelop a five-year business plan that will not only provide an acceptablereturn on investment, but chime with Ispat’s overall strategy.

Ispat relies on a team of 12 to 14 professionals to manage its acquisi-tions. Based in London, the team’s members have solid operationalbackgrounds and have worked together since 1991.

We have taken several different sources, all of which propose a set of rulesfor mergers and acquisitions, and distilled these into five learning points:

• Communicate constantly.

• Get the structure right.

• Tackle the cultural issues.

• Keep customers on board.

• Use a clear overall process.

Communicate constantly

In the excitement of the deal, company bosses often forget that the mergeror acquisition is more than a financial deal or a strategic opportunity. It isa human transaction between people too. Top managers need to do morethan simply state the facts and figures; they need to employ all sorts ofmethods of communication to enhance relationships, establish trust, getpeople to think and innovate together and build commitment to a jointfuture. They also need to use all the avenues available to them such as:

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• company presentations;

• formal question and answer sessions;

• newsletters;

• team briefings;

• noticeboards;

• newsletters;

• e-mail communication;

• confidential helplines;

• websites with questions and answer session;

• conference calls.

COMMUNICATE CONSTANTLY

The top team had been working on the acquisition plans for over fourmonths. Once the announcement was eventually made to all employeesI just wanted to get on with things. I had so much enthusiasm for the deal.There was just endless business potential.

The difficulties came when I realized that not everyone shared myenthusiasm. My direct reports and their direct reports constantly askedme detailed questions about job roles and terms and conditions. It wasbeginning to really frustrate me that they couldn’t see the big picture.

I found I had to talk about our visions for the future and our schedulefor sorting out the structure at least five times a day, if not more. Peopleneeded to hear and see me say it, and needed me to keep on saying it.I learnt to keep my cool when repeating myself for the fifth time that day.

MD of acquiring company

Devine (1999) of Roffey Park says that managers with merger and acquisi-tion experience tend to agree that it is impossible to over-communicateduring a merger. They advocate the use of specific opportunities for staff todiscuss company communications. They also advise managers to encouragetheir people to read e-mails and attend communication meetings, watching

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out for those who might be inclined to stick their heads in the sand.Managers need to be prepared as regards formal communications:

• Develop your answers to tricky questions before you meet up withthe team.

• Expect some negative reactions and decide how to handle these.

• Be prepared to be open about the extent of your own knowledge.

Carey (2000) says it is necessary to have constant communication to coun-teract rumours. He advises, ‘When a company is acquired, people becomeextremely sensitive to every announcement. Managers need to constantlycommunicate to avoid the seizure that may come from over-reaction tobadly delivered news.’

In company communications, it is very important to be clear ontimescales, particularly when it comes to defining the new structure.People want to know how this merger or acquisition will affect them, andwhen. Carey says, ‘Everyone will be focused on the question “whathappens to me?” They will not hear presentations about vision orstrategic plans. They need the basic question regarding their own fate tobe answered. If this cannot be done, then the management team shouldat least publish a plan for when it will be done.’

PRODUCTIVITY LEVELS DURING TIMES OF CHANGE

A very interesting statistic I once read says that people are normally productivefor about 5–7 hours in an eight-hour business day. But any time a change ofcontrol takes place, their productivity falls to less than an hour.

Dennis Kozlowski, CEO Tyco International, quoted in Carey (2000)

In the public sector this challenge is even greater because of extendedtimescales. The National Audit Office recommends that regular commu-nications need to be clear about what has been decided and what has yetto be decided.

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Get the structure right

THE IMPORTANCE OF DECISIONS ABOUT STRUCTURE

At the time we thought it best to keep everyone happy and productive. Boththe merged companies had good production managers, so we decided to askthem to work alongside each other, to share skills and learn a bit about theother person’s way of working.

We thought this was the best idea to keep production high, and to promoteharmony and learning. However, in the end it turned out to be highly unpro-ductive. It was a huge strain for the two individuals involved in both cases. Theythought they were being set up to compete, despite protestations that this wasnot so. Both began to show signs of stress.

This structural decision (or rather indecision) also slowed the integrationprocess down as people wanted to stay loyal to their original manager. Theystudiously avoided reporting at all to the new manager from the othercompany. Joint projects ended in stalemate and integration of working stan-dards was almost impossible to achieve.

HR Director, involved in designing structure for merger

Structure is always a thorny issue for merging or acquiring companies.How do you create a structure that keeps the best of what is already there,while providing opportunities for the team to achieve the stretchingtargets that you aspire to?

Carey makes the point that it is essential to match the new companystructure to the logic of the acquisition. If for example the intention wasto fully integrate two sales teams to provide cost savings in administrationand improve sales capability, then the structure should reflect this. It istempting for senior managers to avoid conflict by appointing jointmanagers. Although this may work for the managers, it does not usuallywork for the teams. Integration becomes hard work as individuals preferto keep reporting lines as they were.

Structure work should start early. Carey advises managers to beginworking on the new structure before the deal is closed. Some companiesuse an integration team to work on this sort of planning. These people are

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in the ideal position to ask the CEO, ‘What was the intended gain of thisacquisition?’ and ‘How will this structure support our goals?’

It is important that promotion opportunities provided by merger oracquisition activity are seen as golden opportunities for communicatingthe goals and values of the new company. Feldmann and Spratt (1999)warn against ‘putting turtles on fence posts’. They emphasize theimportance of providing good role models, and encourage seniormanagers to promote only those who provide good examples of howthey want things to be. They say ‘do not compromise on selection byindulging in a quota system (two of theirs and two of ours)’. And do notbe tempted to fudge roles so that both people think they have got thebest deal. This will only result in arguments and friction further downthe line.

In public sector mergers a decision-making vacuum should be avoidedby making it clear who is responsible for each phase, even if officers arenot finally in position.

Tackle the cultural issues

Issues of cultural incompatibility haveoften been cited as problem areas whenimplementing a merger or acquisition.Merging a US and a European companycan be complicated because manage-ment styles are very different. Forinstance US companies are known to bemore aggressive with cost cutting, whileEuropean companies may take a longer

view. Reward strategy and degree of centralization are also areas of differ-ence. Jan Leschly, CEO of SmithKline Beecham, says in ‘Lessons for masteracquirers’ (in Carey, 2000), ‘The British and American philosophies are sofar apart on those subjects they’re almost impossible to reconcile.’

David Komansky, CEO of Merrill Lynch, made over 18 acquisitionsbetween 1996 and 2001. In the same HBR article (Carey, 2000), he says:

It’s totally futile to impose a U.S.-centric culture on a global organization. Wethink of our business as a broad road within the bounds of our strategy andour principles of doing business. We don’t expect them to march down thewhite line, and, frankly, we don’t care too much if they are on the left-hand

side of the road or the right-hand side of the road. You need to adapt to localways of doing things.

The amount of cultural integration required depends on the reason forthe merger or acquisition. If core processes are to be combined foreconomies of scale, then integration is important and needs to be givenmanagement time and attention. However, if the company acquires aportfolio of diverse businesses it is possible that culture integration willonly be necessary at the senior management level.

The best way to integrate cultures is to get people working togetheron solving business problems and achieving results that could not havebeen achieved before the merger or acquisition. In ‘Making the dealreal’ (Ashkenas, Demonaco and Francis, 1998), the authors have distilledtheir acquisition experiences at GE into four steps intended to bridgecultural gaps:

• Welcome and meet early with the new acquisition management team.Create a 100-day plan with their help.

• Communicate and keep the process going. Pay attention to audience,timing, mode and message. This does not just mean bulletins, butvideos, memos, town meetings and visits from management.

• Address cultural issues head-on by running a focused, facilitated‘cultural workout’ workshop with the new acquisition managementteam. This is grounded on analysis of cultural issues and focused oncosts, brands, customers and technology.

• Cascade the integration process through, giving others access to acultural workout.

Roffey Park research (Devine, 1999) confirms the need to tackle culturalissues. This research shows that culture clashes are the main source ofmerger failure and can cost as much as 25–30 per cent in lost performance.They identify some of the signs of a culture clash:

• people talk in terms of ‘them and us’;

• people glorify the past, talking of the ‘good old days’;

• newcomers are vilified;

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• there is obvious conflict – arguments, refusal to share information,forming coalitions;

• one party in the merger is portrayed as ‘stronger ’ and the other as‘weaker ’.

Therefore an examination of existing cultures is normally useful if there iseven a small possibility that cultural issues will get in the way of themerger or acquisition being successful. This is a good exercise to carry outin workshop format with the teams themselves at all levels. The best timeto look at cultural issues is when teams are forming right at the start of theintegration. It breaks the ice for people and allows them to find out a bitabout each other ’s history and company culture.

TACKLING THE CULTURAL ISSUES

The managers from company A described their culture as:

• fairly formal;

• courteous and caring;

• high standards;

• lots of team work;

• clear roles.

Company B added:

• precise;

• good reputation.

The managers from company B described their culture as:

• highly informal;

• a bit disorganized;

• relationships are important;

• customer focused;

• fast and fun.

Company A added:

• flexible roles;

• lack of hierarchy.

New culture – what did they need:

• role clarity;

• adaptability;

• high standards;

• customer focus;

• responsiveness;

• enjoyment;

• team work.

What might be the difficult areas:

• Balancing clarity of roles with adaptability – culture clash?

• Achieving high standards without getting too formal.

• Being responsive while keeping to high standards.

• Working as one team, rather than two teams.

Action plan:

1. Define flexible roles for all management team. Must be half page long.

2. Highlight areas where standards need to be reviewed.

3. Audit customer responsiveness and set targets.

4. Tackle each of the above by creating small task force with membersfrom both companies.

Output from a management team meeting focusing on building anew culture

Cultural differences can be looked at using a simple cultural model such asthe one offered in Riding the Waves of Culture: Understanding cultural diversityin business by Fons Trompenaars and Charles Hampden-Turner (1997). SeeFigure 6.1 for our representation of the various scales. People from eachmerger partner mark themselves on these scales and openly compare scores.In the workshop it is useful to ask the team to predict what kind of difficul-ties they might have as they start to work together, and to make an actionplan to address these. We have run several such workshops, and in these westrongly encourage people to try to work together to define the new culture.This can be challenging work, especially if the acquisition or merger isperceived as hostile, but necessary work if any sort of integration is desired.

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Roffey Park’s advice appears below:

• Identify the key tactics used by team members to adhere to their owncultures.

• Identify cultural ‘hot-spots’, highly obvious differences in workingpractices that generate tension and conflict.

• Using a cultural model, get team members to explore the traits of theircultures, ask them what was good or bad about their former cultures.

• Get your people to identify cultural values of meanings that areimportant to them and that they wish to preserve.

• Challenge team members to identify a cluster of values that everyonecan commit to and use as a foundation for working together.

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Cultural dimensions

Rule versusrelationships

UniversalistFocus on rules

ParticularistFocus on

relationships

The group versusthe individual

IndividualismMore use of ‘I’

CommunitarianismMore use of ‘We’

The range offeelings expressed

NeutralDo not revealthoughts andfeelings

AffectiveReveal thoughts

and feelings

The range ofinvolvement

SpecificDirect

DiffuseIndirect

How status isaccorded

AchievementorientedUse titles onlywhen relevant totask

Ascription orientedExtensive use of

titles

Figure 6.1 Trompenaars and Hampden-Turner's cultural dimensionsSource: Trompenaars and Hampden-Turner (1997)

Keep customers on board

Customers feel the effects first… They don’t care about your internal prob-lems, and they most certainly aren’t going to pay you to fix them.

(Feldmann and Spratt, 1999)

‘It’s very easy to be so focused on the deal that customers are forgotten.Early plans for who will control customer relationships after the mergeror acquisition are essential,’ says Carey (2000). Devine (1999) adds weightto this by commenting:

Mergers are often highly charged and unpredictable experiences. It is all tooeasy to take your eye off the ball and to forget the very reason for your exis-tence. Ensure that your team concentrates on work deliverables so thateveryone remembers that there is a world outside and that it is still ascompetitive and pressurized as ever. Help everyone to realize that yourcompetitors will be on the lookout for opportunities to exploit any weak-nesses arising from the merger. You might find that in the face of an externalthreat, cultural differences shrink in importance.

Some of our experiences as consultants contradict the idea that increasedfocus on the customer can help a team to forget cultural differences. Theopposite effect can happen, where teams and individuals from the twooriginal merging companies use customer focus to further accentuatecultural difficulties:

• sales people fight over customers and territory;

• managers blame each other rather than help each other whenaccounts are lost;

• people from company A apologize to customers for the ‘shortcom-ings’ of people from company B rather than back them up.

This lesson accentuates the need to tackle cultural issues early, as well asto define clear groundrules for working with customers as one team.

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HOW TO KEEP CUSTOMERS ON BOARD

One of our first actions was to embark on a series of customer visits thatinvolved a senior sales person from both the merging companies. This allowedus to learn how to work together, and fast! It reassured customers and allowedus to deliver a clear message:

• we were now one company;

• there would be a single point of contact going forward;

• the merger was amicable and well managed.

Sales Manager from merged retail company

AVOIDING THE SEVEN DEADLY SINS

Feldmann and Spratt (1999) identify seven deadly sins in implementing amerger or acquisition. Their book goes on to describe in detail how toensure that you avoid these problems.

• Sin 1: Obsessive list making. Don’t make lists of everything thatneeds to be done – it is exhausting and demoralizing. Instead, use the80:20 rule. Focus on the 20 per cent of tasks that add the most value.

• Sin 2: Content-free communications. Don’t send out communica-tions that contain only hype and promotion. Employees, customers,suppliers and shareholders all have real questions, so answer them.

• Sin 3: Creating a planning circus. Use targeted task forces, ratherthan a hierarchy of slow-paced committees.

• Sin 4: Barnyard behaviour. Unless roles and relationships are clari-fied, feathers will fly in an attempt to establish pecking order. Simplylabelling the hierarchy will not sort this one out.

• Sin 5: Preaching vision and values. If you want cultural change, youhave to work at it. It will not happen through proclamation.

• Sin 6: Putting turtles on fence posts. Ensure that the role modelsyou select for promotion provide good examples of how you wantthings to be. Do not compromise on selection by indulging in a quotasystem (two of theirs and two of ours).

• Sin 7: Rewarding the wrong behaviours. Sort out compensation andlink it to the right behaviours.

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Use a clear overall process

The pitfalls associated with planning and successfully executing a mergeror acquisition imply that it is important to have an overarching process towork to. GE’s Pathfinder Model is summarized in Table 6.2. It acts as auseful checklist for those involved in acquisition work (more in Ashkenas,Demonaco and Francis, 1998). This model, derived through internaldiscussion and review, forms the basis for GE’s acquisitions programme.

Table 6.2 Adapted version of GE’s Pathfinder Model

Preacquisition • Assess cultural strengths and potential barriers to integration.• Appoint integration manager.• Rate key managers of core units.• Develop strategy for communicating intentions and progress.

Foundation • Induct new executives into acquiring company ’s core building processes.

• Jointly work on short and long-term business plans with new executives.

• Visibly involve senior people.• Allocate the right resources and appoint the right people.

Rapid • Speed up integration by running cultural workshops and Integration doing intensive joint process mapping.

• Conduct process audits.• Pay attention to and learn from feedback as you go along.• Exchange managers for short-term learning opportunities.

Assimilation • Keep on learning and developing shared tools, language, processes.

• Continue longer-term management exchanges.• Make use of training and development facilities to keep the

learning going.• Audit the integration process

Source: Ashkenas, Demonaco and Francis (1998)

USE A CLEAR PHASED PROCESS

It’s easy to get sucked into mindless list generation. There is an extraordinaryamount of stuff to be done when you merge with another company. Thetrouble is that list making is very tiring, and the lists have to be numbered andmonitored, which takes time and effort. We found that it was much simpler todevelop a phased process than to list everything that needed to be done. Wethen created a timeline with obvious milestones such as ‘structure chart deliv-ered’, or ‘terms and conditions harmonized’. This helps people to keep ontrack without creating a circus of action planning and reporting.

Organization development manager talking about the merger of two management consultancies

The National Audit Office recommends specialist programme manage-ment help to ensure continued business as usual, and to tackle HR,finance and particularly pensions issues.

APPLYING THE CHANGE THEORY: GUIDELINES FOR LEADERS

Which elements of the theory discussed in earlier chapters can be used toinform those leading merger and acquisition activity? We make links withideas about individual, team and organizational change to help leaders tochannel their activities throughout this turbulent process. In addition, werefer to the previously mentioned research into successful mergers andacquisitions by Roffey Park Institute (Devine, 1999) which offers someuseful guidelines for organizational leaders.

Managing the individuals

Mergers and acquisitions bring uncertainty, and uncertainty in turn bringsanxiety. The question on every person’s mind is, ‘What happens to me inthis?’ Once this question is answered satisfactorily, each individual can thenbegin to address the important challenges ahead. Until that time, there willbe anxiety. Some people will be more anxious than others depending on

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their personal style, personal history and proximity to the proposed changes.And if people do not like the look of the future, there will be a reaction.

The job of the leader in a merger or acquisition situation is firstly to ensurethat the team know things will not be the same any more. Second, he or sheneeds to ensure people understand what will change, what will stay thesame, and when all this will happen. Third, the leader needs to provide theright environment for people to try out new ways of doing things.

Schein (see Chapter 1) claims that healthy individual change happenswhen there is a good balance between anxiety about the future andanxiety about trying out new ways of working. The first anxiety must begreater than the second, but the first must not be too high, otherwisethere will be paralysis or chaos.

In a merger or acquisition situation there is very little safety. People areanxious about their futures as well as uncertain about what new behavioursare required. This means the leader has to create psychological safety by:

• painting pictures of the future (visioning);

• acting as a strong role model of desired behaviours;

• being consistent about systems and structures.

But not by:

• avoiding the truth;

• saying that nothing will change;

• hiding from the team;

• putting off the delivery of bad news.

Chapter 1 addressed individual change by first introducing four schoolsof thought:

• behavioural;

• cognitive;

• psychodynamic;

• humanistic.

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The behavioural model is useful as a reminder that reward strategies forman important part of the merger and acquisition process and must beaddressed reasonably early. The cognitive model is based on the premisethat our thinking affects our behaviour. This means that goal setting androle modelling too are important.

However, the psychodynamic approach provides the most usefulmodel to explain the process of individual change during the variousstages of a merger or acquisition. In Table 6.3 we use the Kubler-Rossmodel from Chapter 1 to illustrate individual experiences of change andeffective management interventions during this process of change.

Managing the teamEndings and beginnings are important features of mergers and acquisi-tions, and these are most usefully addressed at the team level. The ideasof William Bridges (Chapter 3) provide a useful template for managementactivity during ending, the neutral zone and the new beginnings thatoccur during a merger or acquisition.

Managing endings

The endings are about saying goodbye to the old way of things. Thismight be specific ways of working, a familiar building, team mates, a highlevel of autonomy or some well-loved traditions. In the current era ofbelt-tightening and cost-cutting, there might be quite a lot of losses forpeople, similar to the effects of a restructuring exercise. (See Chapter 1 formore tips on handling redundancies.) Here is some advice for howmanagers can manage the ending phase (or how to get them to let go):

• Acknowledge that the old company is ending, or the old ways ofdoing things are ending.

• Give people time to grieve for the loss of familiar people if redundan-cies are made. Publish news of their progress in newsletters.

• Do something to mark the ending: for example have a team drinktogether specifically to acknowledge the last day of trading as theold company.

• Be respectful about the past. It is tempting to denigrate the old manage-ment team or the old ways of working to make the new company lookmore attractive. This will not work. It will just create resentment.

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Table 6.3 Stages of merger or acquisition process and how to managereactions of staff

Stage Employee experience Management action

Merger or Shock. Give full and early communication of acquisition is Disbelief. reasons behind, and aims of this merger announced Relief that rumours or acquisition.

are confirmed.

Specific plans Denial – it’s not Discuss implications of the merger or are announced really happening. acquisition with individuals and team.

Mixture of Give people a timescale for clarification of excitement and the new structure and when they will know anxiety. what their role will be in the new company.Anger and blame – Acknowledge people’s needs and concerns ‘This is all about even though you cannot solve them all.greed’, ‘If we’d won Be patient with people’s concerns.the ABC contract Be clear about the future. Find out and get we wouldn’t be in back to them about the details you do not this position now.’ know yet.

Do not take their emotional outburstspersonally.

Changes start to Depression – finally Acknowledge the ending of an era.happen – letting go of two Hold a wake for the old company and new bosses, companies, and keep one or two bits of memorabilia new customers, accepting the new (photos, T-shirts).new colleagues, company. Delegate new responsibilities to your team.redundancies Acceptance. Encourage experimentation, especially with

building new relationships.Give positive feedback when people takerisks.Create new joint goals.Discuss and agree new groundrules for thenew team.Coach in new skills and behaviours.

New organization Trying new things Encourage risk taking.begins to take out. Foster communication at all levels between shape Finding new the two parties.

meaning. Create development opportunities, especially Optimism. where people can learn from new colleagues.New energy. Discuss new values and ways of working.

Reflect on experience, reviewing how muchthings have changed since the start.Celebrate successes as one group.

Managing the transition from old to new

This phase of a merger or acquisition, often known as integration, can bechaotic if it is not well managed. The ‘barnyard behaviour ’ mentionedabove combined with high anxiety about the future can lead to goodpeople leaving and stress levels reaching all-time highs. Conflicts that arenot nipped in the bud at this stage can lead to huge and permanent riftsbetween the two companies involved.

Tuckman’s model of team development is useful to explain what goes onin a new merged management team, or a newly merged sales team. We havealso added some suggestions for how to manage these phases. See Table 6.4.

Timing for this stage is also important. The integration stage shouldneither be squeezed into an impossible two-week period, nor be treatedas an open-ended process that continues unaided for years. The need tosqueeze this phase into a two-week period comes from managementdenial of the very existence of integration issues. Conversely, the need tolet things take their course over time comes from a belief that time willsolve all the issues and they cannot be hurried. Therefore they areallowed to drag on and possibly get worse, and more entrenched.

Bridges offers advice about managing the integration phase which wehave adapted to be directly useful for mergers and acquisitions:

• Explain that the integration phase will be hard work and will need(and get) attention.

• Set short-range goals and checkpoints.

• Encourage experimentation and risk taking.

• Encourage people to brainstorm with members of the new companyto find answers to both old and new problems.

Managing beginnings

It is important to recognize when the timing is right to celebrate a newbeginning. Managers need to be careful not to declare victory too soon.Here are some ideas for this phase:

• Be really clear about the purpose of the merger or acquisition, andkeep coming back to this as your bedrock.

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• Paint a vision of the future for you and your team, describing anattractive future for those listening. (ROCE or ROI just doesn’t do itfor most people!)

• Act as a role model by integrating well at your own level, and beingseen to be doing so.

• Do something specific to celebrate a new beginning.

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Table 6.4 How to manage the development of a merged team

Stage Team activity Advice for leaders

Forming • Confusion Be very clear about roles and • Uncertainty responsibilities in the new company.• Assessing situation Talk about where people have come • Testing ground rules from in terms of the structure, • Feeling out others process and culture in their • Defining goals previous situation.• Getting acquainted Compare notes.• Establishing rules Define key customers for the team

and begin to agree new groundrulesfor how the team will work together.

Storming • Disagreement over Make time for team to discuss priorities important issues.

• Struggle for leadership Be patient.• Tension Be clear on direction and purpose • Hostility of the team.• Clique formation Nip conflict between cultures and

people in the bud by talking tothose involved.

Norming • Consensus Develop decision-making process.• Leadership accepted Maintain flexibility by reviewing • Trust established goals and process.• Standards set• New stable roles• Cooperation

Performing • Successful performance Delegate more.• Flexible task roles Stretch people.• Openness Encourage innovation.• Helpfulness

Managing yourself

There are many challenges ahead for managers as they enter a merger oracquisition. Managers may be uncertain about their own position, whileattempting to reassure others about theirs. They may even be consideringtheir options outside the organization while encouraging others to waitand see how things turn out.

Other difficulties include the overwhelming needs of team membersfor clarity, reassurance and management time. Managers find them-selves repeating information again and again, and become frustratedwith their team’s inability to ‘move on’. A glance at the Kubler-Rosscurves pictured in Figure 6.2 will reveal that this problem comes frommanagers and their teams being out of ‘sync’ in terms of their emotionalreactions. While the manager is accepting the situation and trying outnew ideas, the team is going through shock, denial, anger and blame.This is quite a stark mismatch!

Devine (1999) offers a checklist for line managers:

• Get involved. Try to get in on the action and away from business asusual. Show you are capable of dealing with change.

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��

Figure 6.2 Change curve comparisons

• Get informed. Find out who is going up or down, especially amongyour sponsors or mentors. Have a ‘replacement’ boss you can turn toif your current one leaves.

• Get to know people. Network hard, get to know the people in theother company. Do not think of them as ‘the enemy ’.

• Deal with your feelings. Openly recognize feelings of anxiety andfrustration. Form a support network and discuss these feelings withcolleagues.

• Actively manage your career. Think carefully before moving func-tion/role at the time of a merger. You are remembered for your currentjob, whatever your past experience. Do not necessarily accept the firstrole that is offered to you. Decide what you would like to do, prepareyour CV and work towards it – everything is up for grabs!

• Identify success criteria. Often performance criteria have changedor become unclear. Re-benchmark yourself by talking to peopleinvolved in the merger. Get informal feedback from subordinates,peers and bosses.

• Be positive. Be philosophical and objective about what is under yourcontrol. Do not beat yourself up – you can’t win ‘em all.

Handling difficult appointment and exit decisions

Mergers and acquisitions often involve a restructuring process, which inturn involves managers in making difficult appointment and exit deci-sions. These decisions need to be fair, transparent, justified, swift andcarried out with attention to people’s dignity.

In one company that we know of, top management decided to revealthe newly merged company ’s structure chart in a formal town hallmeeting of all staff. Those who did not appear on the chart had to maketheir own conclusions. You can imagine the resentment and lack of trustthat this foolish and undignified process generated.

Devine advises:

• New appointments need to be seen to be fair. Try to ensure that selec-tion criteria are objective, transparent and widely understood.

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• Stick to company policy and processes. Do not take short-cuts as theyare likely to backfire on you.

• Do not dither. This will cause resentment.

• Treat employees at every level with dignity.

Managing the organization

It is important to select and agree a change process that matches the chal-lenges posed by the specific merger and acquisition. If the most importantchallenge is to achieve cost-cutting goals, then project management tech-niques can be applied and the changes made swiftly. This may mean theuse of a task force to make recommendations, and the agreement of alinear process for delivering the cost-cutting goals. However, if the mostimportant challenges are integration issues or cultural issues, then theideas of both Bridges and Senge are relevant. Attention must be paid tomanaging endings, transitions and beginnings for specific teams involvedin significant processes. Other teams may remain untouched.

We have used the Kotter model, introduced in Chapter 3, to illustratethe steps from initial news of the deal to full integration. This model isuseful because it combines a range of different assumptions aboutchange, so tackles the widest range of possible challenges.

1. Establish a sense of urgency. This is a tough balancing act for manage-ment. They must start to raise the issues that have led to the merger oracquisition without revealing the deal itself. For instance if thecompany is currently in a dwindling marketplace, then managersshould highlight the need to do something about this, without neces-sarily revealing any intentions to buy or to merge. People will be suspi-cious and resentful of a deal that does not make any sense. ‘Why arewe diversifying now? I thought the plan was to buy the competition!’

2. Form a powerful guiding coalition. Managers of both companiesneed to begin working together as soon as they can. They need tospend time together and build a bit of trust. When the deal isannounced, managers will then be able to work together at speed.

3. Create a new vision. A top-level vision for the new company must bebuilt by the new top management team. This vision will be used to

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guide the integration effort and to develop clear strategies forachieving this. The integration effort needs to be targeted in specificareas rather than be a blanket process, and clear timescales for imple-mentation must be given.

The new structure needs to be put quickly into place, a level at atime, ensuring that customers are well managed throughout. Thenew sales and customer service structure is therefore also apriority. New values and ways of working should also be discussedand identified.

4. Communicate the vision. Kotter emphasizes the need to communi-cate at least 10 times the amount you expect to have to communicate.In addition, all the research about mergers and acquisitions indicatesthat it is impossible to over-communicate. Managers need to becreative with their communication strategies, and remember to workhard at getting the two companies to build relationships at all levels.

The vision and accompanying strategies and new behaviours willneed to be communicated in a variety of different ways: formalcommunications, role modelling, recruitment decisions and promo-tion decisions. The guiding coalition should be the first to role modelnew behaviours.

5. Empower others to act on the vision. The management team nowneed to focus on removing obstacles to change such as structures thatare not working, or cultural issues, or non-integrated systems. At thisstage people are encouraged to experiment with new relationshipsand new ways of doing things.

6. Plan for and create short-term wins. Managers should look for andadvertise short-term visible improvements such as joint innovationprojects, or the day-to-day achievements of joint teams. Anythingthat demonstrates progress towards the initial aims of the merger oracquisition is newsworthy. It is important to reward people publiclyfor merger-related improvements.

7. Consolidate improvements and produce still more change. Topmanagers should make a point of promoting and rewarding thoseable to advocate and work towards the new vision. At this point it isimportant to energize the process of change with new joint projects,new resources, change agents.

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8. Institutionalize new approaches. It is vital to ensure that people seethe links between the merger or acquisition and success. If they havehad to work hard to make this initiative happen, they need to see thatit has all been worthwhile.

THE IMPORTANCE OF TRUST WHEN GOING THROUGH A MERGER

When we were acquired by ITSS we were full of trepidation. Our previousowners had stripped us of costs and then looked around for a buyer. We felt abit used. So we were in no mood to start building trust.

ITSS kept calling this deal a merger, but we were hugely cynical about that.They had bought us after all. This was a case of vertical integration where asupplier buys its customer to gain access to primary clients and grow the busi-ness. We thought they would start to take our jobs and move the company totheir own headquarters, around four hours down the motorway!

The whole thing came to a head one morning when some consultants wererunning an integration workshop for the new management team. ITSS weregetting frustrated with our hostility. We were getting angry about their constantquestioning about finances and account management and project costs.Someone from our company was brave enough to share his emotions.

The MD of ITSS, who is actually a pretty decent guy, sat down amidst us alland spoke quite calmly for about 10 minutes. He said, ‘Look guys, I will doanything to make this company a success. Anything. But I need to know whatI’m running here. I can’t take that responsibility without knowing all the facts.I really want us to make this thing a success. But I need your help.’

After that we trusted him a bit more. Then things got better and better. Thatwas four years ago. Things have improved every year since then. He kept hisword, and that was really important to everyone.

Project Leader, acquired company

SUMMARY

There are five main reasons for undertaking a merger or acquisition:

• growth;

• synergy;

• diversification;

• integration;

• deal doing.

Recent research indicates that five golden rules should be followedduring mergers and acquisitions:

• Communicate constantly.

• Get the structure right.

• Tackle the cultural issues.

• Keep customers on board.

• Use a clear overall process.

Individuals can be managed through the process using the Kubler-Rosscurve as a basis for understanding how people are likely to react to thechanges. Teams can be managed through endings, transitions and newbeginnings using the advice of Bridges. Tuckman’s forming, storming,norming, performing process also lends understanding to the sequences ofactivities that leaders of new joint teams need to take their teams through.

Managers need to manage themselves well through an integrationprocess. Roffey Park’s advice is:

• Get involved.

• Get informed.

• Get to know people.

• Deal with your feelings.

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• Actively manage your career.

• Identify success criteria.

• Be positive.

Difficult appointment and exit decisions also need to be well managedusing these principles:

• Be fair.

• Stick to the procedures.

• Do not dither.

• Remember people’s dignity.

Kotter ’s model can be used to plan a merger and acquisition process as itcombines several different assumptions about the change process, soprovides adequate flexibility for the range of different purposes of mergeror acquisition activity.

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Cultural change

If you were asked to give a new recruit some words ofencouragement on how to be successful within your orga-nization, what would you say? You might give some formaladvice about carrying your ID at all times, but you mightalso make some of the following suggestions:

Keep your head down.It’s OK to make mistakes here, as long as you don’t repeat them.The boss likes to see you working really hard at all times.We work hard but play hard. The people who get on here worklong hours but enjoy themselves in the pub afterwards.It doesn’t pay to ask too many questions.You’ll find everyone pulls together here and will want to see you as part ofthe team.

With this helpful advice, you begin to educate the person about the waythings get done around the organization. You also reveal what some ofthe required behaviours are, and thus you actively reinforce theprevailing culture.

As Schein (1990) says, culture is the ‘the pattern of basic assumptionsthat a given group has invented, discovered or developed in learning to

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cope with its problems of external adaptation and internal integration,and that have worked well enough to be considered valid and, therefore,to be taught to new members as the correct way to perceive, think, andfeel in relation to those problems.’

Culture is not just about induction programmes, it is everywhere inorganizational life. Culture is vitally important for the organizationbecause of its impact on performance. Molenaar et al (2002), quotingleading writers in the field, say:

[T]o truly understand corporate culture, its characteristics must also beunderstood.

The following is a compilation of the most prevalent cultural characteristics:

Corporate culture represents behaviours that new employees areencouraged to follow (Kotter and Heskett, 1992)It creates norms for acceptable behaviour (Hai, 1986)Corporate culture reinforces ideas and feelings that are consistentwith the corporation’s beliefs (Hampden-Turner, 1990)It influences the external relations of the corporation, as well as theinternal relations of the employees (Hai, 1986)Culture can have a powerful effect on individuals and performance(Kotter and Heskett, 1992)It affects worker motivation and goals (Hai, 1986)Behaviours such as innovation, decision making, communication,organizing, measuring success and rewarding achievement areaffected by corporate culture (Hai, 1986).

If we want to learn about how to change culture, we need to understandhow it is created. Schein (1999) suggests that there are six different waysin which culture evolves. Some of these can be influenced by leaders andsome cannot:

• a general evolution in which the organization naturally adapts to itsenvironment;

• a specific evolution of teams or sub-groups within the organization totheir different environments;

• a guided evolution resulting from cultural ‘insights’ on the part ofleaders;

• a guided evolution through encouraging teams to learn from eachother, and empowering selected hybrids from sub-cultures that arebetter adapted to current realities;

• a planned and managed culture change through creation of parallelsystems of steering committees and project-oriented task forces;

• a partial or total cultural destruction through new leadership that elim-inates the carriers of the former culture (turnarounds, bankruptcies, etc).

Schein underscores the fact that organizations will not successfullychange culture if they begin with that specific idea in mind. The startingpoint should always be the business issues that the organization faces.Additionally he suggests that you do not begin with the idea that theexisting culture is somehow totally ‘bad’. He urges leaders to alwaysbegin with the premise that an organization’s culture is a source ofstrength. Some of the cultural habits may seem dysfunctional but it ismore viable to build on the existing cultural strengths rather than to focuson changing those elements that may be considered weaknesses.

This chapter focuses on culture in the context of managing change. Wehave chosen not to discuss concepts and theories of organizational cultureas this is done so well elsewhere (see the reference list to get you started). Wehave instead decided to share our tips and guidelines on achieving culturechange. These are derived from a variety of experiences of working withinorganizations, helping teams and individuals to make significant culturalshifts. We have also selected three case studies to illustrate the range of waysin which culture change can be tackled. The structure of this chapter is:

• guidelines for achieving successful cultural change;

• case study one: aligning the organization;

• case study two: rebranding the organization;

• case study three: creating an employer brand.

We wish to introduce the concept of ‘rebranding’ as a way of exploringcultural change. Our three case studies each take a slightly differentapproach to the process of rebranding. The first concerns the challenge ofaligning the organization more closely to customer needs, the second is

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about reflecting the brand in everyday employee interactions withcustomers, and the third is about creating an employer brand to enablethe organization to attract and retain the best staff, and to engage theenergy and motivation of all employees.

Extensive academic research in the 1990s (see for instance Kohli andJaworski, 1990) has consistently found that organizations with a strongmarket focus and brand presence experience better performance, basedon measures such as sales revenue, profitability, growth rates and returnon investment. Additionally a strong market focus has a number ofrelated benefits including developing strong organizational culture,success in developing new products and services, sales force job satisfac-tion and offering a source of competitive advantage. This approach alsoaligns with our view that any culture change initiative must have soundcustomer-focused objectives at its core.

Internal rebranding is sometimes referred to as internal marketing.Greene, Walls and Schrest (1994) define internal marketing as ‘thepromoting of the firm and its product(s) or product lines to the firm’semployees’. Berry and Parasuraman’s (1991) definition is ‘internalmarketing is attracting, developing, motivating, and retaining qualifiedemployees through job-products that satisfy their needs. Internalmarketing is the philosophy of treating employees as customers.’However, although these definitions both point us in the right direction,the important end goal is to ensure that the key components of the brandare communicated to customers and the wider external audience. Thebrand must therefore be understood, believed and exemplified bycustomer-facing staff, supported by the rest of the organization.

Crosby and Johnson (2001) conclude:

The strongest brands are those that elicit emotional attachment fromcustomers. When interacting with your company, customers and prospectsmay have feelings of safety, pride, excitement, comfort, confidence, caring, ortrust. These interactions activate feelings and build strong brand commitment.

…it’s important not to overlook the effects of brand on the employees ofthe firm. Employees often have a large role to play in managing customer rela-tionships, and the brand can help guide their behaviour. In effect, the brand isa promise to customers of how they can expect to be treated by the company.To the extent employees understand the expectations being created by thebrand, and are motivated and trained to live up to those expectations, then thefirm can have a truly integrated customer relationship management strategy.

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GUIDELINES FOR ACHIEVING SUCCESSFUL CULTURAL CHANGE

Here we draw together some of the key themes arising from our experi-ence, which we hope will help you to address the issues of culture changein your own organization. Specific themes are reflected in the threechosen case studies, and we pick these out in the separate introductionsto each one later in the chapter.

Always link to organizational vision, mission and objectives

Culture change as an isolated objective is meaningless. Organizationsshould only involve themselves in culture change if the current culturedoes not adequately support the achievement of strategic objectives. Startfrom the business strategy to determine what organization capability orcore competencies need to be developed. Ensure that there is a clearvision and a real need to change. People need to be convinced by acompelling vision rather than compelled in a coercive way. They need tosee the overwhelming logic of the proposed changes. The more peopleare drawn towards the vision the better.

Create a sense of urgency and continually reinforce the needto change

The introduction of a foreign element into the organizational system is agood way of making change happen (see Satir ’s model in Chapter 1). Thiscan come from an external or internal source. Whatever it is, it needs tohave the force to kick-start the culture change process. And there need tobe plans and processes in place which keep the momentum going.

Attend to stakeholder issues

When you want culture to change you have to put yourself into theshoes of the stakeholders. Address the issues of the people who need tochange by involving them as much as possible. Change brought in acrass or unthoughtful way will rebound on management. Whetherchange is being proposed for positive or negative reasons the organiza-tion’s future success is dependent on engaging staff to enter into the

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new way of doing things. How will the proposed changes benefit stake-holders? Will customers, partners, staff and suppliers really feel a posi-tive difference? If some parties are going to lose out, how will youhandle this?

Remember that the how is as important as the what

Culture is about the way you do things around the organization. So ifyour organization has a set of core values, and of course it does explicitlyor implicitly, then you need to be managing the cultural change in linewith these values. If you say one thing but do another then you might aswell give up now. For instance, a stated value of ‘integrity ’ is ratherhollow if senior managers do not keep their promises, or fail to explainwhy the plan has changed.

Build on the old, and step into the new

If you want to shift the organization from one way of doing things to anew way of doing things then you will need to see and do things from avariety of perspectives. Any current culture, like any person, will havepositive and negative features. You will need to retain and build on thecurrent strengths and ensure that you do not throw the baby out with thebathwater. You will also need to start right now in modelling aspects ofthe new culture – if you want a coaching culture then start coaching; ifyou want people to be empowered then start empowering! Now is alsothe opportunity to step outside of the bubble that you’re in. No one everchanged a culture by simply drawing up plans and listing requiredbehaviours, so now is the time to be creative, do things in different waysand learn from people outside of the system.

Generate enabling mechanisms

It is important to generate enabling mechanisms such as reward systemsand planning and performance management systems that support theobjectives and preferred behaviours of the new culture. For example, thismeans ensuring that teams have clear objectives that are closely alignedto organizational objectives.

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Act as role models

Managers need to act as role models. They will need to model the newvalues but also support individuals and teams through a period ofupheaval. This can be done through using some of the strategies outlinedin Chapters 1 and 2, such as working with teams through the stages offorming and storming, and working with individuals as they adjust to thenew ways of doing things.

Create a community of focused and flexible leaders

On the one hand many people want clear, confident and focused lead-ership during periods of change; on the other hand people also wantleaders who will reflect upon what is happening ‘on the ground’ andadjust their plans accordingly. Leadership of cultural change requiresclarity of end vision together with the ability to manage and cope withemergent issues. All six of Goleman’s leadership styles might be calledfor during a period of cultural change (see Chapter 4). However, itwould be a mistake to believe that any one individual could carry thisoff by him- or herself. Chapter 4 also describes a number of ways thatleadership can be dispersed throughout the organization to makechange happen.

Insist on collective ownership of the changes

One common trap is to make the HR department the owners of culturalchange, while the CEO and the senior management team own thechanges in business strategy. This type of functional decomposition of achange initiative is doomed to failure. This generally leads to seniormanagers becoming detached from the cultural issues, and thusneglecting their role modelling responsibilities. Employee cynicism grows(quite rightly!), and this can become a very powerful force for resistingchange. This division of labour also leads to HR people being lumberedwith programmes and initiatives that look like unnecessary overheads tothe local line leaders, which HR people end up having to ‘push’ and ‘sell’.This can be a very disheartening outcome, especially when the initialideas are often entirely sound.

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CASE STUDY ONE: ALIGNING THE ORGANIZATION

This case study sets out our analysis and recommendations for an organi-zation facing major strategic and cultural change. Some of these recom-mendations were taken up, and some withered on the vine, but theprocess of analysing and recommending is thought-provoking in itselfand we felt worthy of inclusion here.

Summary of key points arising from the case study

• Even if employees sense the need to change, and want to change, thisis not always enough. In this case study, people were asking for a clearsense of direction. A clear vision is often required to catalyse action,especially if it translates well into specific tasks.

• The greater the depth and breadth of people involved in diagnosingthe current state, developing a vision of where the organizationneeds to be heading, and generating solutions to bridge the gap, thenthe more chance the organization has of gaining sufficientmomentum for change. In this case study, many people wereengaged in the analysis, which led to increased interest and energyin making things happen.

• The greater the clarity of focus (towards the end user) the greater thechance one has of aligning people, processes, systems and structuresto this end. Business-as-usual and change initiatives have to be dove-tailed. It is no use if there are 101 initiatives that are not joined up andworking with one another.

• Processes and standards must support the desired behaviours. Anorganization cannot strive for a quality service, for instance, if theculture does not support people doing quality things. It is of littlevalue if the customer services assistant is exceedingly pleasant but notempowered to take decisions when the customer needs a decision.

• Managers and staff need to be supported through the transitionprocess with the necessary coaching and training. For the organizationto become more focused, efficient and effective people have to bedoing something different. Speedier rubbish collection will notimpress the public if a trail of litter is left after each collection. Not only

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do these changes have to be communicated clearly, they also have tobe followed by the necessary skills development and induction.

• Organizations do not change by themselves – not at the speed that isnormally required in this world of ever-increasing demands. Themomentum is generated first by leadership and then by followership.Leaders at all levels within the organization have to have clarity ofpurpose, the relevant leadership skills and knowledge to deploy andto see themselves as leading from the middle, with the organizationand its stakeholders all around them. Top team alignment is alsocrucial in times of change.

Case study description

A large local authority was not functioning as efficiently or as effectivelyas it wanted. It was not being fully responsive to the needs of its citizensor its various communities of interest. We conducted an organizationalanalysis of the city council to find out what was helping the councilachieve its stated outcomes and what was getting in the way of this. Theanalysis consisted of interviews with directors and strategic managers,and focus groups with middle managers and front-line staff. Leadingpoliticians of all political persuasions were interviewed. A number of keystakeholders such as citizens’ panels, partnerships and the trade unionswere also involved. Our report highlighted six interrelated areas in whichthe council needed to significantly improve its overall effectiveness andthereby reduce internal and external pressure.

The commitment, talent and effort of all those we met were impressive.Many people from front-line workers to the most senior politicians andofficers were enthusiastic about the city and what the council mightcontribute to its life and development. There were clearly many verygood services being offered to the city. However, at the same time therewas a strong feeling at all levels of untapped potential. The council’s ener-gies were being dissipated through not having a true focus.

The emerging themes are outlined below and illustrated in Figure 7.1

Continually increasing customer and citizen focus

The passion to deliver the best possible service to both external andinternal customers, colleagues and partners was variable, with many

parts of the organization moving forward, but at an uneven pace. Thevarious self-inspection and external inspection processes were promptingthe council to streamline systems and procedures for service delivery.However there were many instances cited where ‘customer care’ just wasnot part of the mindset and where systems, policies and proceduresconspired to hinder the achievement in this area.

The interface between front-line services and the centre requiredparticular attention, specifically on how best to commission the providers.Service level agreements, for example, were not fully used, and othermechanisms needed to be installed to ensure there was both a psycholog-ical and a written commitment to achieve excellent service delivery acrossdirectorates and to the end user.

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A visible and congruentleadership and

management style

Continually increasingcustomer and citizen

focus

Extending the council’scapacity for community

and partnershipworking

Clarity and impact ofcore values and

direction setting onservice delivery

More effective ways ofworking

Moving to a moreconsistent performance

and enabling culture

Figure 7.1 Six key points from case study one

Clarity and impact of core values and direction setting on service delivery

Everyone had accepted the council’s core values, but that was perhapsbecause they were commonsensical and there was nothing in them thatanyone could contest. However there was scope for them to be revisited,made more specifically demanding and directed towards action in orderto realize their potential. There were too many values, and these wereneither meaningfully translated into ways of working nor explicitly linkedto preferred outcomes or any performance management system. They hadbeen launched with a fanfare some time before, and no investment hadbeen put into their continued dissemination and implementation.

Everyone in the council had a mix of agendas to work to: variouscorporate policy priorities, service delivery priorities, inter-agencyworking and development initiatives. Greater clarity was neededthroughout the council about what outcomes were being sought and howthey could come together at every level. All managers and service headsfelt the tension of multiple demands and needed an effective process forbalancing these demands and setting personal and team targets.

The corporate policy priorities had a tremendously varied degree ofownership, due partly to the lack of clarity around what they actuallymeant, and also to a suspicion whether the political leadership and corpo-rate managerial leadership were really committed to driving themthrough. They did not translate easily into a vision for a better city thatemployees could rally behind, and therefore the result was confusion anda growing cynicism, rather than commitment.

There was little evidence that people were rewarded or recognized formoving the corporate agenda on, and the lack of ongoing budget provi-sion for these corporate initiatives also indicated a hesitancy when it cameto putting money where the mouth was.

A visible and congruent leadership and management style

At all levels, but notably at middle and front line, there were requests forclearer, bolder and consistent leadership. This was seen as particularlybeing the challenge for political leaders and senior officers in managingthe council’s myriad conflicting demands.

Clarity of vision and articulation of the council’s true direction and theway it was to be achieved were needed to minimize confusion and focuspeople’s minds and resources.

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Clearer, bolder and consistent leadership needed to include:

• a consistent and congruent set of priorities;

• processes for managing conflicts of priority and pressure whichinevitably occur within complex organizations;

• a demonstrable commitment and accountability for driving thepriorities through;

• a set of values embodied throughout the leadership, and used as areference point for decision making;

• minimization, at the very least, of cross-party destructive tensions.

Corporate leadership was most needed for tackling conflicts betweenfront-line services and the centre. It was also needed for harmonizingcorporate policy and the service/functional agenda, and for improvingthe way change was managed across the organization.

Good management of change was lacking. This was seen as particularlynecessary with regards to the major modernizing agenda facing thecouncil. Management needed to start to communicate these changes sothat staff felt engaged in the co-creation of their futures, and so that thefeeling of initiative overload, where change is endured rather thanembraced, was reduced.

It was also noticeable that the roles of different management teams andgroups were not always clear. The senior management team and theservice heads needed to begin to take a more strategic role, at least part ofthe time.

Moving to a more consistent performance and enabling culture

There was wide recognition that the council was improving its abilityto manage performance, but many wished to see greater consistencyand general improvement. This meant a need to establish realistictargets for everyone across all their work, and to review progress regu-larly against these, ensuring that any changes to plan were discussedand incorporated.

The organization was already moving towards a performance manage-ment and competency based framework. Some areas were beginning to

experiment with a development process that linked to service plans, teamplans and individual plans. This was successfully helping people toclarify key outcomes and contributions from individuals and teams, andthis approach promoted greater ownership of the service and thecouncil’s agenda.

For the organization to embrace performance management more fully,it needed to begin to address a number of cultural issues that werehindering progress:

• the lack of direction and multiple priorities;

• the overwhelming feeling of organizational complexity;

• the uncertainty of what the city council actually stood for;

• the lack of understanding (in both senses of the word) between theconstituent parts of the organization;

• the ‘political’ nature of many of the transactions and relationships;

• the tendency towards a blame culture where valuing, appreciatingand recognizing the contribution of others was kept to a minimum;

• the ‘closedness’ of the culture (inability to look outside for new ideas);

• the lack of focus on developing people.

More effective ways of working

There were many ways to improve council working, from making meet-ings more productive and less time-consuming, through to masteringthe complexities of matrix management and having effective informa-tion management systems. With the complexity of the council’s task,with demands coming from all directions at all levels, there needed tobe a clear (or as clear as possible) way of working a matrix structure tocope with the specialist, cross-cutting and geographical dimensions ofservice delivery.

There was a real need to accelerate the business planning process, toensure a performance management system was delivered in a consistentway across the organization and to reduce conflict at the myriad ofboundaries within the organization.

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Extending the council’s capacity for community and partnership working

Increasingly the role for all staff required greater community engagementand partnership working. Although this was demanding both on work-load and skills it also offered greater learning, and interestingly for somewas preferable to internal working.

Most managers when prompted could cite examples of good partnershipworking that had been developed over the previous few years. This wasone of a number of areas that the organization could be justifiably proud of.The challenge was for people to have the confidence to communicate thisto all the stakeholders and be able to applaud and celebrate success.

The competencies in this new area of effective partnership were realnuggets of success. These competencies needed to be transferred not onlyto other areas of partnership working but also to where different parts ofthe council could work more effectively with each other.

CASE STUDY TWO: REBRANDING THE ORGANIZATION

This case study describes one organization’s journey as it worked towardsreinvigorating its brand. The process chosen and the choices made alongthe way make interesting reading.

Summary of key points arising from case study

• It is important to create a sense of urgency and momentum when amajor cultural change is required. In this case study, the seniormanagement team made a strong start, and put in the effort to keep

things going. This required many people to beinvolved and energized, and for the number ofpeople involved to keep growing.

• Commitment to culture change cannot be devel-oped by e-mail, or by memo. It has to be doneface to face and in real time. Cultural change isachieved through action rather than words, sopeople need to see their managers doing it aswell as talking about it. In this case study therewas a lot of face-to-face straight talking.

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• Breaking the mould is hard work! It involves planning and thinkingand role modelling, plus developing and implementing supportingprocesses and policies.

• New teams provide new opportunities. Bridges (see Chapter 4)describes the neutral zone as a time of tremendous creative opportuni-ties. Similarly we have noticed that new senior management teams suchas the one featured in this case study are more likely to be able to changean organizational culture because they themselves are changing.

• Supporting individuals is not soft! The hard work involved in facingthe real issues one to one with people pays off. It builds trust andensures understanding. But it takes courage, especially when changeinvolves the communication of unwelcome and painful news. Evenwhen change appears to offer hope for a brighter and better future,some may not see it that way.

Case study description

The case study concerns a financial services organization that undertooka strategic review and decided that it needed to reinvigorate the brand.With the previous case study we focused on gaining internal alignment tothe organizational service. This case study takes a different perspective.The key focus of this rebranding exercise was the external marketing ofthe products and services on offer, and the way that customer-facing staffrepresented the brand. This is best illustrated by Wasmer and Bruner ’sresearch (1991) which maps the relationship flows between the customer,the organization and the customer service provider (see Figure 7.2). Theysaw the major constituents of their brand as:

• marketing communications;

• products on offer;

• speed of service;

• quality of service.

As a result of the strategic review the organization decided that the key toits competitive advantage was the way in which its customer-facing

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employees transacted with customers and potential customers. Theywere referring to not just the usual types of customer service behavioursuch as greeting, courtesy and complaint handling but also the ways thatthe brand itself was being portrayed. The customer does not just receivecommunication from the organization in terms of its marketing and itsgoods. It also receives information via the customer service providers.

To focus more clearly on its target audience, the organizationsegmented its potential customer market into four quadrants based ontheir interest in financial services and their level of self-knowledge offinancial needs and potential solutions. One quadrant of the market wasgenerally knowledgeable and sophisticated. Another quadrant had a highinterest in the financial area of their lives but relatively little knowledge.The third quadrant had a reasonable knowledge base but this was notaccompanied by any great level of interest. The final quadrant had littleinterest and little knowledge (see Figure 7.3).

This segmentation generated a number of questions:

• What type of advice was best suited to each quadrant?

• Did the organization want to deliver that sort of advice?

��

Figure 7.2 Map of relationship flows between the customer, theorganization and the customer service provider

Source: Wasmer and Bruner (1991)

• What was the organizational capability to deliver that advice (profitably)?

• Could the organization be developed to bridge any gaps?

The areas that showed most promise were those potential customers whoeither were interested in investing in their financial future but neededhelp in negotiating their way through the financial maze, or did not havethe interest but wanted someone to do it for them, and do it well. Thesewere the ‘Show it to me!’ and ‘Do it for me!’ customers.

Although those in the High–High quadrant were generally high networth individuals, the people who fell into that category wanted a highlevel of service but were also more liable to shift their savings and invest-ments from one financial institution to another fairly frequently. TheLow–Low quadrant likewise required a high level of support but did notnecessarily have the available funds to warrant that level of investmentfrom the organization.

Once the primary focus for business development opportunities hadbeen established, the next stage was to decide what sorts of things neededto happen for customer needs to be satisfied. This included outlining the

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High

Interest inthe detail of their

finances

Low

Show it to me! Prove it to me!

Not interested! Do it for me!

Low Knowledge of financial products High

Figure 7.3 Segmentation of financial services customers

behaviours and attitudes that customer-facing staff (and those back-officestaff supporting them) needed to exhibit. Key areas included the ability togenerate interest, to establish credibility, to have clarity of communicationand to be proactive to customer needs.

The reorientation of the company to this particular strategy includedthe generation of a new set of company values. These values were not justa list of slogans but were translated into behavioural statements. Thesestatements defined the preferred way of operating in the business andindeed also became part of the recruitment process.

The values were not only ‘nice-to-have’ or ‘motherhood and apple pie’,but were designed to align people within the organization to the companystrategy and the preferred behaviours. So for example a value of ‘treatpeople well’ was translated into making people feel they are your numberone priority, and treating all customers and each other with respect. Thevalue of ‘say it as it is’ was translated into talking to customers andcolleagues in a straightforward manner. These behaviours could be veri-fied by observation or customer feedback. They could also be learnt.

Of course to get to the stage where front-line staff behaved in accor-dance with company strategy required other enabling actions, whichwere drawn from best practice and appropriate models of individual,team and organizational change.

Getting started

The whole change started with a comprehensive strategy review and thegeneration of a programme plan with specific projects covering areassuch as brand development, systems development, business lead genera-tion and defining the customer experience. This was kick-started by thesenior management team with some input from relevant stakeholders.However, initially it was a ‘top-down’ process which drew a lot from themachine metaphor. Using Kotter ’s terminology a sense of urgency wascreated (‘with the market as it is we cannot carry on as we have beendoing’) and an overarching vision developed.

The next layer of managers below the senior management team wereenlisted to form part of the guiding collation. A change managementteam was formed, tasked with managing the transition from both a taskand people perspective, with sponsorship from and direct reporting lineinto the senior management team. Quite soon however the changespicked up their own momentum.

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Gaining commitment

It became apparent that not everyone was dissatisfied with the statusquo. People were a little unclear about the desirability of some of thechanges, and some of the more impractical aspects of the proposedchanges were accentuated. The senior management team by now hadextended the members of the guiding coalition to involve a critical massof 85 ‘strategy leaders’. It was their task to reinforce the need to change,and to develop a clarity of vision that could be translated into tangibleobjectives and behaviours throughout the organization.

This translation process occurred over several months, and became aniterative process with all staff. Conversations were had, which set outwhat the managers wanted to see but involved staff at the front linetalking through the practicalities. This process raised some points aboutthe original thinking which needed amending, and enabled staff to get amuch better idea of what was required of them.

Breaking the mould

The transition from the old to the new was effectively dealt with by thegood use of programme management, led by the senior managementteam, and supported by a specially constituted change managementteam. Feedback loops to and from key stakeholders including staff werean integrated part of the process.

The generation of a set of values which were translated intobehavioural imperatives, coupled with values workshops with all staff,set a benchmark for the organizational culture. The values helped tominimize organizational politics by encouraging ‘straight talk’. This wasimpressively role modelled by the senior management team and thechange management team, who were open and honest with both goodnews and bad.

A key aspect of the new way of doing things was the openness to ideaswherever they came from and the development of an enabling and empow-ering culture. Creativity, risk taking and learning were encouraged throughthe co-option of diagonal slices of staff onto change initiative workinggroups and by scheduled reviews throughout the transition period.

Self-esteem and performance can drop during periods of change. In asense this is unavoidable – a natural and normal reaction to changeaffecting individuals (see Chapter 1). Key interventions here included

demonstrable listening to staff concerns and many examples of staffissues being dealt with in a way that satisfied them but did not compro-mise the general business direction. In addition objective third-partyconsultants were used as additional support for individuals and groupsof individuals who were most affected by the changes. Line managerswere prepared with full communication of the changes to pass on, andopen access was given to more senior managers to tap into their knowl-edge and experience. Greater emphasis was put on coaching through theline, which quickly enabled managers to tackle performance issuesarising from the change.

Building new teams

The realignment of the organization as a result of the new strategy hada number of knock-on effects on different teams. The senior team wasa newly configured team at the beginning of the strategy reviewprocess, and acquired a new sales director part-way through theprocess. An important component of the time its members spenttogether was attending to their team development process. The devel-opment process was focused on the tasks in hand – strategy review andstrategy implementation – but on a regular basis members took thetime out to look at where they were as a team, and how they wereperforming and interrelating.

The generation of the values was both a real and a symbolic act for thesenior management team. Having generated the values, they translatedthem into actions for themselves. They offered this to the rest of the orga-nization as a guideline, but wanted different parts of the organization todiscover what the values meant for them personally as a part of a team.This, together with the senior management team role modelling thevalues, was seen as a crucial part of the process.

The realignment within the organization meant that other teams andgroups throughout the organization were affected to a greater or lesserdegree. For example, the increased focus on savings, investments andmortgages led to a division of labour and separate reporting lines for staffwithin the branch network. In addition the centralized contact centre wasrequired to develop greater links and better lines of communication withthe national advisor sales force. Both these examples necessitated abreaking down of old groupings and the development of a new set ofteams and consequent relationships.

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Supporting individuals

People processes formed a large part of the change plan. This included acommunication strategy that was in line with the new values of openness,honesty and straight talk. Processes were put in place to ensure that indi-viduals displaced had clarity around their situation and guidelines as tohow things would progress. Selection to new posts was made using anequitable process, and the new reward scheme was aligned to the newstrategy and values.

Outplacement was provided for those leaving the organization andcounselling provided for those who needed to talk their situation throughin a confidential setting. Coaching and mentoring were provided formore senior managers who had to take up new roles and needed to makesense of the changes and make their own adjustments within themselves.

CASE STUDY THREE: CREATING AN EMPLOYER BRAND

Summary of key points arising from case study

• Start from the business strategy. An employer brand only has meaningwhen it is presented in the context of an overarching company strategy.

• Lead change from within the business to enhance success. In the casestudy, the trap of HR owning the culture change was studiouslyavoided. This enhanced the acceptability of the new brand.

• Do not over-plan the change process – stay flexible. Things changeas organizations move through a change process. This case studyillustrates how to plan phase by phase, ensuring that feedback isincorporated into future plans.

• Be creative – do things in new ways. Culture change can only beachieved by doing things differently. In this case, the organizationincorporated some radically new ways of doing things by using theprinciple of marketing to engage employees in the desired changes.

• Build on the current cultural strengths rather than attack currenthabits or try to break things down. The employer brand was derivedfrom conversations with a wide cross-section of employees, so therewas a ‘rightness’ about the brand values, which impressed people.

Case study description

This third case study illustrates the challenges and opportunities offeredby creating an employer brand. The organization in this case study is ahighly successful and dynamic global spirits and wine business which hasgrown steadily through merger and acquisition over the last 10 years. Thesteady progress of industry consolidation worldwide led this business toconsider its future as either an acquiring or an acquired company. Thiscontemplation led to a desire to strengthen various aspects of the business,resulting in three interrelated aims:

• to be fit and ready to take opportunities as they arise, whether theycome from industry consolidation, acquisition or new ventures;

• to achieve quality growth by:– generating volume and share growth on specific existing key brands;– encouraging innovation and launching new products;– integrating newly acquired brands and businesses;

• to enable the above to happen smoothly by implementing simple andflexible systems and processes such as those delivered by SAP.

In order to encourage full engagement and involvement in the newstrategy, the organization decided to launch an employer brand whichchallenged all business units to get full commitment of all employees, sothat each person could become part of a unified winning team, connectingwith consumers and taking the business to new levels of growth. The topteam wanted everyone to be engaged in the action, committed to the goaland confident of their part in achieving it. Everyone was expected to takean active role individually, and work with others as part of the team.

One of the significant pieces of data that informed this employer brandstrategy was the following quote from the Collins and Porras survey, Builtto Last (1994): ‘Companies with strong positive core vision and core valueshave outperformed the general stock market by a factor of 12 since 1925.’

The employer brand

The employer brand arose from the existing culture. It was worked on byboth internal and external people through eliciting current views of thecompany ethos, and gathering aspirations of current employees.

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The concept of the brand wheel was used to define the brand. This isencapsulated in Figure 7.4. The brand wheel idea, developed by BatesNorth America, is used to define the functional and emotional compo-nents of a brand. Bates North America has developed an impressive repu-tation for reinvigorating brands. The brand wheel is based on variousconcepts that go into creating a brand such as essence, values and person-ality. The brand essence is heart or spirit of the brand. The brand valuesare about how the brand makes a person feel and what it says about themif they become associated with the brand. The brand personality is a wayof talking about the brand as if it were a person, to get to the emotionalcontent of the brand itself.

Out of the brand wheel came a concise definition of the six key brandvalues together with their associated behaviours. See box.

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Workingenvironment

Performance withpassion

Proactive

Appraisal,Development &

Recruitment systemsHigh performance

teams

Delivery of ADvision & strategies

Single globalpeople strategy

Accountable

Open &honest

Sharing &supportive

Committed todeliver

Dynamic

Passionate

Courageous

Celebration

UnityLearning

Integrity

Diversity

Quality ofpeople

Reward &recognition

Quality of socialinteraction

Job design & careerdevelopment

Growing

Proud

Motivated

Valued

Important

Successful

Winning

Determinationto succeed

How itmakes us

feel

Facts/Icons (End) product

What itsays

about us

Personality

Core values

Physical benefits

Essence

Figure 7.4 Brand wheel for employer brand

THE SIX EMPLOYER BRAND VALUES

Value: integrity

Behaviours:

• Expressing views and opinions in an open, honest and constructive way.

• Consistently delivering on their promises and commitments.

• Taking accountability for decisions and actions.

Value: unity

Behaviours:

• Contributing enthusiastically to team goals, sharing and aligning ownobjectives with team(s).

• Supporting and encouraging players on their own team and other teams.

• Building personal success on team success and contributing to otherteams’ success.

Value: diversity

Behaviours:

• Treating diverse views, cultures and communities with respect.

• Learning from the variety of different cultures, countries, functions andteams within the organization.

• Acknowledging different approaches and seeking win–win solutions.

Value: performance with passion

Behaviours:

• Setting and exceeding stretching targets, individually and in teams.

• Demonstrating high levels of pace, energy and commitment inachieving goals.

• Finding new opportunities to improve their game and being courageousby trying them.

Value: celebration

Behaviours:

• Sharing success, recognizing and rewarding achievement of otherplayers.

• Encouraging the celebration of success and building a ‘success leadsto more success’ culture.

• Having a can-do mentality and encouraging others to do the same.

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Value: learning

Behaviours:

• Being proactive in professional and personal development.

• Sharing learning and supporting the development of other players.

• Going outside the ‘comfort-zone’, challenging the status quo, andlearning from mistakes.

The process

The organization devised a three-stage process to move from this defini-tion of six core values to a position of full involvement with the newstrategy. The three stages were awareness, adoption and advocacy (seeFigure 7.5), with only the first stage planned in detail. The second andthird stages were give a broad brush plan, but awaited the results of thefirst stage to enable sensible planning.

The awareness stage involved three main activities:

• A video was circulated to all managers, which identified the values inan exciting way.

• Senior managers were asked to introduce the values at any businessmeetings they were already running within a six-month period (specialmeetings were not held, and HR people did not run the process alone).

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AwarenessUnderstanding the values,understanding the reasonsfor change and hearing the

commitment of the topteam.

AdoptionUsing behaviours that

demonstrate the values,rewarding those whodemonstrate values,

hearing of success stories.

AdvocacyBeing a champion of thevalues and behaviours.Recommending them toothers. Part of the way

things are done round here.

Figure 7.5 Financial service quadrants

• The six values were integrated into the performance review process.They became key performance measures for each individual.

The Adoption stage is going on at the time of writing, and was precededby a questionnaire which tested the success of the awareness stage.Adoption in this context is about implementation, so this stage of theprocess is very practical and involves lots of ‘hands-on’ activities. A branddirector was appointed at the end of the awareness stage to look after andpromote the employer brand, and interestingly, this person has amarketing rather than an HR background. Planned activities so farinclude a newsletter circulating stories of success and the creation of awebsite on the company intranet that allows exchange of views and offersteam exercises and thought-provoking resources to help people to get togrips with the values. Employer brand items and gifts such as mugs,sweatshirts and hats will also be available for those who want to promotethe brand locally, or wish to have themed celebrations.

Advocacy is already appearing in pockets around the organization.Various managers have been selected as brand champions, but this processis seen as emergent rather than one that needs to be closely managed.

The planning team also used the Beckhard change formula to guidetheir actions (see Chapter 3). This meant having a clear vision, explainingthe need for change and devising some first steps.

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IT-based process change

IT has become a significant part of everyperson’s working life. According to USeconomic analysis figures, companies arenow spending an average of 30 per cent oftheir capital expenditures on informationtechnology compared with 5 per cent inthe 1960s. It is viewed as a critical resource.

However, despite the sophistication ofthe IT equipment available and the rangeof IT tools and techniques that have been devised and in many casesheavily promoted, organizations are still failing to gain the business valuethey hope for when they embark on IT-based change. It seems that whilethe promise of IT is high, the reality of what we actually experience isdisappointing. It is as if the capacity of IT to deliver great things has over-taken our ability to use it effectively within our organizations.

Data gathered by Wharton Management School in 1996 reinforces thisgap between expectation and reality. The research indicates that although72 per cent of company executives asked say that it is critical for their orga-nization to use high-tech tools such as IT to be competitive, only 17 percent of respondents say that the benefits of these tools are being realized.

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So what goes wrong in the process of realizing the benefits? Why doorganizations have trouble with IT-based change? This chapter looks atthe particular difficulties of achieving successful IT-based change andoffers advice on how to overcome particular obstacles associated with thistype of endeavour. The topics addressed are:

• strategy and IT;

• the role of IT management;

• the need for IT change managers;

• achieving process change;

• changing the information culture;

• new rules for a new age.

The potential gains of successfully implementing IT-based change aremany and varied. Organizations are attracted by the idea that they willgain the capability to do a range of highly desirable things. Some of thepotential gains concern innovation and development:

• to achieve flexible responsive production of customized goods;

• to segment the marketplace in new ways through analysing informa-tion, and then create new products for those segments;

• to serve customers in new ways by creating access via the internet;

• to create new forms of partnership and new types of organization.

But many of the potential gains concern achieving efficiencies to:

• reduce the need for agents and intermediaries by providing employeeor customer self-service facilities over the internet or intranet;

• achieve sophisticated functionality at reasonable cost (for instance byintroducing standard packages such as ERP);

• allow globalization of operations;

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• enable choices to be made about how the company is structured whileretaining the necessary level of central control;

• produce better information, with a greater level of detail than waspossible before, and make it available faster to allow better decisionsto be made;

• enable 24-hour working to maximize the ability to serve the globe andmake best use of resources;

• encourage greater staff involvement by making information availableto more people in the company;

• increase the opportunity for flexible working on the road or at home;

• reduce staff costs;

• increase the value of skills and knowledge by sharing information well.

Consider the growth in the use of SAP systems as an example of howcompanies are responding to the need to realize some of the potentialgains listed above. SAP is a company that provides enterprise-wide appli-cations that can satisfy most of a business’s activities. SAP global saleshave seen phenomenal growth from US$500 million in 1991 to US$2,400million in 1996. Companies are obviously impressed by the powerfulsystem, but there are many stories of the painful struggles that peoplehave to go through before they achieve optimum usage of the software.It is certainly not an easy ride to move from strategy to implementation.

IMPLEMENTING IT WORLDWIDE – WHAT’S IN IT FOR THEM?

It all started in the Head Office in the United States. We developed a strict planof action. We had a very clear timetable for the coming 18 months. A series ofconference calls with the financial directors in each region made it clear whatthe time frame was for rolling out the system, and what needed to be done inpreparation for this. However, when the moment came, they just were notready, despite continuous reassurances that it would be done in time.

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At the last minute we had to call in some consultants to work through thereadiness checklist with the various regional teams. This cost us quite a bit ofextra money that we had not budgeted for.

I don’t think I have ever met such silent resistance. Until then, the regionaloffices had been allowed to report financial information in their own way. Tothem, the requirement to use the new system seemed very intrusive, and of nopractical value. I guess we had only really seen and explained the advantagesfrom a central point of view. If I did the same process again, I would take moretime to go through the ‘What’s in it for them?’ angle.

Financial projects manager, IT company

STRATEGY AND IT

It used to be that managers could delegate IT decisions to the organization’sresident computer experts and they would simply go away and decide howto design and build a solution. But now, the decisions being made can affectthe whole business in terms of service and product possibilities, smoothrunning of day-to-day operations and opportunities for sharing informa-tion. Is it sensible to leave these decisions up to technical experts who do notalways have a full understanding of the organization’s vision and purpose?Companies can and frequently do end up with a range of incompatiblesystems that may never achieve an optimum configuration. This can takeyears to sort out. Or even worse, a significant component system may beunable to fulfil management’s long-term plans for organizational change,which may necessitate being able to segment data in different ways.

But there is a problem with senior management getting closer to the ITdecision-making process. Davenport (1994) says, ‘General managers…usually don’t know much about computers. They may like the idea ofusing information technology strategically… But they seldom know howto translate their wishes into specific IT investments.’ How can this situa-tion be managed?

IT strategic grid

First, it is important to decide what sort of contribution IT makes to theorganization’s strategy. This enables the senior management team to

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gauge how much and what sort of attention the development andrunning of IT systems should be given by themselves and by others.

To make this decision it is necessary to look at two factors: strategicimpact of application development and strategic impact of existingsystems. For some organizations, the development of new innovative ITsystems has a significant strategic impact; for others, they are morefocused on installing off-the-shelf packages to enhance some aspect ofinternal performance. Similarly, some organizations are 100 per centdependent on IT to maintain operational performance, such as manufac-turing organizations. For others, it might take quite a period of time beforea disruption in IT services would create a significant performance dip.

The grid in Figure 8.1 is useful for assessing the organization’s currentIT strategic position and thus deciding how much senior managementattention needs to be spent on IT issues, and how IT should be managed.It is worth noting that the organization may change its position on thegrid over a number of years.

‘Support’ organizations may spend a lot of money on IT, but they are nottotally dependent on IT systems for operational success day to day, minuteto minute. Neither do they gain strategic advantage from innovative appli-cation developments. A doctor ’s surgery would qualify here. In this case,senior management can be quite distant from the IT planning process.

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Figure 8.1 IT strategic gridSource: adapted from Cash et al (1992)

Strategic Highimpact of Factory Strategicexisting systems(operation dependence) Low

Support Turnaround

Low High

Strategic impact of innovative applications development portfolio(strategic value)

‘Factory ’ organizations are completely dependent on the smoothrunning of their IT systems. For instance, a manufacturing unit mightgrind to a halt if the IT systems were to fail. However, with this type oforganization, innovative applications developments, although important,are not crucial to the organization’s ability to be competitive, except whenits performance starts to lag behind competitors, and a move to the‘strategic’ quadrant occurs.

‘Turnaround’ organizations are those in which innovative applica-tions developments are crucial to the firm’s strategic success, but theday-to-day running of IT systems is not so critical. This might forexample be an organization developing e-learning packages. The otherclassic examples are DHL, UPS and Fedex, who all offered customers theability to go online and check the status of packages that were beingdispatched. This gave them tremendous strategic advantage. In this caseIT planning needs substantial effort, and needs to be linked closely toorganizational strategy.

‘Strategic’ organizations such as banks and insurance companies arethose in which innovative applications development brings significantcompetitive advantage and day-to-day processes are highly dependenton the smooth running of IT systems. In these types of organization, thereis a very tight link between business strategy and IT strategy, and thehead of IT normally sits on the board of directors.

Developing guiding principles

How do senior managers ensure that IT invest-ment decisions are in line with the organization’slong-term strategy? The answer may be todevelop a set of guiding principles which governIT investment decisions.

The ‘principles’ approach to IT is advocated byDavenport. He recommends that a task force isset up comprising from 5 to 10 senior managers,including a senior information systems person,together with a small group of IS managers. This

group should begin to devise a set of guiding principles that link strategyto IT investment decisions. The senior managers act as sponsors later inthe process, endorsing the principles devised by the group.

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The IS managers create the initial set of principles which convey thebasic attitudes of the company towards technology, the overall directionthe business is taking and the use to be made of existing technologies.These principles should be good for two or three years, or until there is amajor shift in strategy. They should cover infrastructure, applications, dataand organization. Examples of such principles are given by Davenport:

On infrastructure: We are committed to a single vendor environment.

On applications: IS will provide applications that support cross-functionalintegration of business processes.

On data: Data created or obtained within the company belongs to the corpo-ration – not to any particular function, unit, or individual. It is available to anyuser in the company who can demonstrate a need for it.

On organization: The user-sponsor of a systems project will be responsible forthe business success of the system.

Once this amount of time and effort is spent aligning the thinkingbetween senior business managers and IT managers, the strategic coursefor IT progress is set, and decision making becomes much easier.

Enterprise architectures

The term ‘enterprise architecture’ is becoming widely used whentalking about IT strategy. It means building an organizing logic for busi-ness processes and IT infrastructure, so that the alignment between thebusiness and IT is more visible, more dynamic and more focused oncreating value.

THE ROLE OF IT MANAGEMENT

IT management skills are critical to an organization’s ability to incorporatethe technologies that are ‘out there’ and use them to best advantage.However, IT staff are often left out of the core decision-making processesand treated as implementers rather than strategists. The solution, webelieve, is to ensure that IT management skills are present not only withIT departments, but all over the organization (see box).

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Sambamurthy and Zmud (in Sauer and Yetton, 1997) say:

In our experience the most valued IT management skills tend to requirelengthy development periods as they are heavily dependent on local – forexample organization-specific – knowledge. We have also found that not allfirms are equally endowed with the most valuable IT management skills.Furthermore, in order to be effectively applied, a firm’s IT management skillsmust be intricately woven into the complex milieu of an organization’s struc-tures, roles, processes, culture, and the many relationships among a firm’sbusiness and IT managers.

In today’s organizations the responsibility for managing IT is widelydispersed. It no longer sits solely with the IT director, but is shared amonggroup-level IT people, business-level IT people, business line management,vendors, partners, consultants and contractors. This web of interconnectedindividuals somehow needs to sustain the organization’s ability to inno-vate, plan, design, develop, implement, integrate and maintain IT systems.

So what are the unique skills and knowledge areas required by an orga-nization collectively to ensure that IT is used to improve businessprocesses, enable changes in organizational structure, add value to itsknowledge base and create or support the development of new productsand services? Sambamurthy and Zmud carried out a four-year researchprogramme in the early 1990s, out of which emerged seven categories ofIT management competencies:

• Business deployment. The key competences in this area are theability to examine, visualize and communicate the value offered byemerging IT. This needs to be coupled with the use of multidisci-plinary teams, with a good shared understanding of IT, to rapidlyimplement innovative IT solutions.

• External networks. This area of competence refers to the need for theorganization to develop close partnerships with external parties toincrease their awareness of emerging IT.

• Line technology leadership. Users such as line managers and seniormanagers need to participate actively in championing IT initiatives.This area of competence concerns the ability to take technical leader-ship, which line managers may delegate rather too quickly to ITpeople through lack of understanding of the technology.

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• Process adaptiveness. This competence refers to the ability of allemployees to relate to IT and the way it can transform businessprocesses. It is also about the organization’s track record in restruc-turing its processes, and the existence of an environment whereemployees can discover and explore the functionality of IT systems.This means anything from the existence of a help desk, to onlinetutorials, to devoting time to training. For instance Deloitte andTouche has an innovation centre where employees can experimentwith new technologies such as web services to decide whether or notthey could be useful.

• IT planning. This competence concerns the ability of managerswithin the organization to link strategic plans with IT plans, and toplan and execute individual projects.

• IT infrastructure. This competence is about the appropriateness andflexibility of the underlying infrastructure which allows innovative ITpractices to emerge and to be capitalized upon.

• Data centre utility. This competence concerns the ability of thosewithin the organization to build, maintain and secure fundamentalinformation processing services.

We would add one competence to this list, as many organizations havecompletely outsourced IT operations and development, just leavingthemselves with project managers and business analysts:

• Managing outsourced services. This concerns the ability to evaluatepotential service options, manage the transition to outsourced ITservices and manage service levels and service evaluation.

Sambamurthy and Zmud asked 230 senior IT executives to assess thelevels of these competencies in their own organizations and to rate theirorganization’s success in deploying IT successfully. This research revealeda strong link between the level of these competencies and the organiza-tion’s level of success with deploying IT in support of its business strategyand work processes. The organizations in the group of respondents char-acterized by the highest level of IT management competency were alsothose demonstrating the highest success rate in deploying IT.

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We offer the following three-stage process for moving towards betterIT management.

Step one

Bring together a task force including senior management, line manage-ment and IT people. Start a discussion about how IT strategy will link toorganizational strategy over the next five years. Select the IT managementcompetencies that you think will be most important.

Step two

Conduct an audit of the key IT management competencies, involving asmany people as possible. Use internal (good development for them) orexternal (better access to benchmarking data) consultants for this process.Feed back the results and identify hot spots where competence is low, butimportance is high.

Step three

Plan how to raise the level of the most significant competences, allocatingresources, responsibility and defining a specific timescale.

IT MANAGEMENT COMPETENCIES

• Business deployment:

– examination of the potential business value of new, emerging IT;

– utilization of multidisciplinary teams throughout the organization;

– effective working relationships among line managers and IT staff;

– technology transfer, where appropriate, of successful IT applications,platforms and services;

– adequacy of IT-related knowledge of line managers throughout theorganization;

– visualizing the value of IT investments throughout the organization;

– appropriateness of IT policies;

– appropriateness of IT sourcing decisions;

– effectiveness of IT measurement systems.

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• External networks:

– existence of electronic links with the organization’s customers;

– existence of electronic links with the organization’s suppliers;

– collaborative alliances with external partners (vendors, systems inte-grators, competitors) to develop IT-based products and processes.

• Line technology leadership:

– line managers’ ownership of IT projects within their domains ofbusiness responsibility;

– propensity of employees throughout the organization to serve as‘project champions’.

• Process adaptiveness:

– propensity of employees throughout the organization to learn aboutand subsequently explore the functionality of installed IT tools andapplications;

– restructuring of business processes, where appropriate, throughoutthe organization;

– visualizing organizational activities throughout the organization.

• IT planning

– integration of business strategic planning and IT strategic planning;

– clarity of vision regarding how IT contributes to business value;

– effectiveness of IT planning throughout the organization;

– effectiveness of project management practices.

• IT infrastructure

– restructuring of IT work processes, where appropriate;

– appropriateness of data architecture;

– appropriateness of network architecture;

– knowledge of and adequacy of the organization’s IT skill base;

– consistency of object (data, process, rules) definitions;

– effectiveness of software development practices.

• Data centre utility:

– appropriateness of processor architecture;

– adequacy of quality assurance and security controls.

Source: Sambamurthy and Zmud in Sauer and Yetton (1997)Reprinted by permission of John Wiley and Sons, Inc

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THE NEED FOR IT CHANGE MANAGERS

The days of the highly specialized in-housetechnical IT expert or ‘geek’ are probablynumbered. Many IT solutions are off-the-shelf, and the teams of analysts and devel-opers which used to occupy in-house ITdepartments are shrinking, or beingoutsourced, or simply not required. IT peoplewith change management skills are needednow more than ever. Those IT people whocan understand technology, be aware of whatis ‘out there’ and what it can do for organiza-

tions, plus grasp how to create the changes desired by the organization arehighly valuable.

IT courses and literature both tend to focus on the acquisition of ITskills and knowledge, or on the importance of good project manage-ment. The goal of IT work has traditionally been to deliver a piece offinished software to timescale and to budget, according to the specifica-tion. Much emphasis is made on getting the specification right, gettingthe right skills in place and controlling changes along the way. SeeFigure 8.2, which illustrates a typical IT roll-out process. There isprecious little reference to stakeholder management or business userinvolvement, although it may be implicit.

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Goal: Establishproject infrastructure.Define, prioritize andgain consensus onrequirements,components, andvision

Phase one

Assessment ofhere and now,vision buildingand planning

Goal: Specifyrequirements fordeveloping servicesthat enable thevision

Phase two

Analysis anddesign of futureprocesses andtechnologies

Goal: Establish asystem testedsolution in adevelopmentenvironment. Makesystem ready forroll-out

Phase three

Build solutions

Goal: Test andimplementtechnologies andprocesses in realuser environment

Phase four

Test and roll outsolutions

Figure 8.2 Typical IT roll-out process

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The emergence of rapid development techniques allows for real-timeupdating of software and flexible scoping of a project, but this approachinvolves a new way of specifying and managing development of ITsystems which can be hard to establish and keep going.

IT people tend not to learn about change management. They learn tosee their job as ending when the system is delivered. This is beginning tochange in more forward-looking organizations, but is still an issue inmany IT departments, and in many software development companiesand consultancies too. IT people need to improve their skills in influ-encing and managing change, as well as their understanding of howorganizational change works, and the nature of motivation and resistancein organizational systems.

The first aspect of the way the IT people work in organizations is therole that they tend to assume when working with business clients. Block(2000) offers a useful way of describing the three types of role that aconsultant can have when dealing with a client. This is helpful whenconsidering the ways in which IT people can choose to work with theirclients. The three types of role are:

• expert role;

• pair of hands role;

• collaborative role.

The expert roleThe consultant is the expert. The client has fully delegated the authorityto plan and implement changes to the consultant. Decisions on how toproceed are made by the consultant on the basis of his or her expertjudgement. The client elects to play an inactive role, and is responsiveonly when required by the consultant to respond. The client’s role is tojudge and evaluate after the fact. The consultant’s goal is to solve theimmediate problem.

When IT people choose this role (as they very often do) it means thatthey have the space to get on with the job in hand without interruptionor interference, but it means that they can hide behind their expertisewhen things go wrong, much to the frustration of business managers.The other problem with this approach is that the client’s commitment to

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the technical solution is often rather thin. This means that when the clientgets the end product, he or she is not always happy, having taken littleinterest until the finished item hits his or her desk.

The pair of hands roleHere the client sees the consultant as an extra pair of hands. The clientretains full control. The consultant is expected to apply specializedknowledge to implement action plans towards achievement of goalsdefined by the client.

The consultant takes a passive role and does not question the client’splans. Decisions on how to proceed are made by the client. The consul-tant may prepare recommendations for the client’s review and approval.

Collaboration is not really necessary and two-way communication islimited. The client initiates and the consultant responds. The client’s roleis to judge and evaluate from a close distance.

When IT people take this type of role with their clients, problems occurbecause the manager may not have selected the best solution, and theconsultant did not feel that he or she could question what he or she wastold to do.

The collaborative roleIn this case problem solving is a joint undertaking. Consultants working inthis mode apply their special skills to help clients solve problems; they don’tsolve problems for the client. The consultant and client work to becomeinterdependent. They share responsibility 50/50 for action planning, imple-mentation and results. Control issues become matters for discussion andnegotiation. Disagreement is expected and seen as a source of new ideas.

The consultant’s goal is to solve problems so that they stay solved. Nexttime the client will have the skills to solve the problem.

In this mode, the relationship between consultant and client is creative,productive and responsibility is shared. This is the most appropriate rolefor IT people to take with clients in today ’s complex organizations.However, it demands that IT people acquire skills beyond the technical.Some clients will see this type of relationship as slow, and may interpretcollaboration as some form of obstruction. They will want to gain accessto the quick results that the ‘experts’ used to give them, which will leadthem to the problems highlighted above with the expert role.

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What skills and knowledge might be required to enhance an ITperson’s ability to work collaboratively with business managers? Theintended outcome is to increase the possibility of implemented IT systemsresulting in the intended behaviour change. We suggest that IT peopleinvolved in large-scale change initiatives need to acquire the followingskills and knowledge if they are to become better agents of change:

• Knowledge:– How does organizational change happen?– What motivates people and how can that motivation be activated?– Where does resistance to change come from, and how can it be

handled?– What change processes and what leadership styles are there to

choose from, and what are the effects of each?– Wide understanding of different business processes.– Good understanding of organizational culture and its impact on

change.

• Skills:– Coaching managers to solve change issues.– Facilitating multidisciplinary team workshops.– Influencing those outside your direct control.– Client and stakeholder management (saying no as much as you

say yes)!!– Collaborative process mapping.– Ability to speak the client’s language (using their terminology).

If you are an IT person reading this, then your irritation level may nowhave reached an all-time high! You may be thinking, ‘I am already doingall this!’ We congratulate you, and offer our additional thoughts on therole of HR people in IT-based change. HR people suffer this syndrome inreverse. While they might focus on all the people-related aspects ofdesired changes, they often fail to grasp the nature of the technologyinvolved. Again this is changing, but slowly.

Enterprise-wide applications such as PeopleSoft are now taking hold inmany organizations, replacing many of the tasks that HR people havetraditionally called their own (promotion, recruitment, arrangement oftraining). HR people need to be ready to understand and explore thepossibilities offered by these systems so that they can think through how

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people will be affected, and orientate their internal structures and skillsaccordingly. This might mean setting up some quite different structures.Some central HR departments that we have worked with are nowproviding help desks and supporting users of IT, while offering HR policyguidance rather than taking on a full HR management role.

ACHIEVING PROCESS CHANGE

IT-based change is about process change. It involves people doing differentthings in different ways with different inputs and different outputs. Newor improved IT systems are brought in to either increase efficiency or toallow innovation to occur, not to simply automate what is already there, soprocess change almost always occurs. But how is this best achieved?

In this section we compare two different approaches to process change.These are BPR (business process re-engineering) and socio-technicaldesign. We look at the pros and cons of these two approaches, and inves-tigate how these two approaches can be combined to offer a new way ofsuccessfully improving processes using IT as a lever.

BPR

BPR is one of the best known approaches to achieving IT-based change inorganizations. It was first set out in a book by Hammer and Champy in1993, entitled Reengineering the Corporation: A manifesto for business revolu-tion, and was received with much enthusiasm from the business commu-nity, appearing to offer the answer to how to achieve radical change andmaximize effectiveness. The tenets of this approach are:

• rigorous focus on business processes that deliver value to the customer;

• radical process redesign from scratch, leading to radical transformation;

• all unnecessary process detail is eliminated;

• old processes are obliterated;

• redesign produces processes that give significant strategic improve-ments in competitive performance;

• enabled by IT.

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AN EXAMPLE OF BPR

A car leasing organization in the UK decided to completely redesign itscustomer service processes, with the goal of gaining competitive advan-tage over other car leasing companies by being much faster and muchmore responsive. It also intended to offer some self-service operations tocustomers via the internet. A task force was selected from the existingcustomer service team, and these people worked alongside a team ofspecialized BPR consultants to radically redesign the customer serviceprocesses over a period of three to four months.

The new process designs looked excellent, but problems came in theform of resistance when teams had to work on implementing processesthat were obviously going to lead to staff redundancies. The roll-out wasdone over an intensive six-month period, which was very stressful formanagers and staff alike. Customers noticed a significant dip in service,so much so that two key accounts were lost during the roll-out period.Things are better now, with new teams in place and improved processes,but if anyone was brave enough to do a cost–benefit analysis, the resultswould probably not look good.

Unfortunately the number of BPR successes where expectations have beenfully realized is said to be quite small. Advocates of BPR take some pride inthis. They claim that the potential gains of this approach are so great, it isbound to be risky. However, Sauer and Yetton (1997) say, ‘Not only is the risk[of BPR] substantial, but the stakes are unusually high. The cost of failure fora project that involves organizational transformation is likely to be muchgreater than the simple loss of investment. The time lost in undertaking aproject that fails may give competitors a lead that cannot be recovered.’

This is a mechanistic approach that spends little effort on the social ororganizational side of the process. A typical BPR approach follows thesteps seen in Figure 8.3. There might be some team work, some multi-skilling and some group problem solving; there is usually quite a strongprescriptive element to the IT solution. Also, although the impact onstructures, skills, culture and standards is thought about, it is often notacted upon until the later phases of the programme of change, as an add-on. Many believe that this approach is not the most effective way ofengaging people in defining what process improvements are needed, and

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in making them happen. Resistance may be encountered, which willwaste effort, or cause the initiative to fail.

BPR therefore offers the very attractive prospect of radically trans-forming key processes by starting from a totally blank sheet. The down-side comes during implementation, when resistance from those whohave not been involved may be encountered. Radical process improve-ments which lead to staff redundancies are difficult to manage, and teamperformance will dip during the implementation period. Staff read thesigns of a new systems implementation where redundancies will result,and are demotivated at an early stage in the lifecycle.

Socio-technical design

The principles of socio-technical design are concerned with getting abalance between:

• the strategic vision of the organization;

• the technology and the tasks needed to provide the product or service;

• the needs of the staff.

This school of thought stems from a systems view of organizations, basedin the organism metaphor (see Senge in Chapter 3), and is a much moreincremental, evolutionary approach. The approach is less widely usedthan BPR, and seems more cautious and humanistic than traditional BPR

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Develop business vision and process objectives

⇓Identify process to be redesigned

⇓Understand and measure existing process

⇓Identify IT levers

⇓Design and build prototype of new processes

Figure 8.3 A typical BPR approach Source: adapted from Davenport and Short (1990)

processes, which have a rather macho feel to them, advocating throwingeverything out and starting again.

The underlying principles of socio-technical design are identified inMumford and Beekman (1994). These principles were originally devel-oped by the Tavistock Institute of Human Relations in London in the late1960s, but still appear to hold good today:

• The principle of minimum critical specification: tell people what todo but not how to do it.

• The principle of variance control: problems must be corrected asclose to the point of origin as possible, and preferably by the groupthat caused them.

• The principle of multiskilling: give individuals a range of tasksincluding some routine and some challenging.

• The principle of boundary management: identify boundariesbetween groups or functions and ensure that these are well managedand that the people on them have the necessary information to passthe product smoothly to its next transformation stage.

• The principle of information flow: information systems should bedesigned so that information goes directly to the place where actionis to be taken, or to the source that originated it.

• The principle of design and human values: an important objective oforganizational design should be to provide a high quality of workinglife for employees, for instance to fulfil the need to feel the job leadsto a desirable future.

• The principle of incompletion: the need to recognize that design isan ongoing and iterative process.

Socio-technical design involves more forethought, planning and incre-mental change than BPR, which is faster, more risky and more exciting. Asdefined by the Tavistock Group, this process was facilitated by either aconsultant or a manager, and followed the steps below. Some of theseactivities may look a bit quaint these days. When compared with BPR, thefocus might appear rather ‘fluffy ’ as much attention is given to thepsychological needs of the workforce. See Figure 8.4.

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Socio-technical design is still alive and well in some companies, but hasbeen rather overtaken by the speed and promise of BPR. Although theincremental, developmental approach is seen to work well, it is often tooslow for many environments where big results are sought quickly,without taking people off the job to do the research and take action.

Combination approach: PROGRESS methodology

The PROGRESS methodology for process improvement is also offered byMumford and Beekman (1994), and brings together the principles ofsocio-technical design and the technology focus and efficiency emphasisof BPR (see Figure 8.5). Key to this method is the belief that the futureusers of a system must play a major role in its design. Cross-group designteams must be set up, sponsored by senior management and facilitated bya skilled facilitator to achieve their goals.

It is useful to illustrate the PROGRESS approach using a case study.

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�Initial scanning

(description of existing system – inputs, outputs, work flow, organization, environment – compiled by consultant)

Identification of unit operations(identification of the main stages of the production process)

Identification of variances(identification of weak links in the systems where it becomes difficult to achieve required standard)

Analysis of social system(handling of variances, relationship needed for optimum working of the system, extent of flexibility

between roles, pay relationships, staff psychological needs)

How workers see their roles(do roles meet psychological needs?)

The maintenance and supply systems(how do these processes affect production?)

The corporate environment(how do development plans affect the future operation of the department?)

Proposals for change(actions are suggested after discussion and feedback with all those involved. Proposals for change

must contribute both to the improvement of the production systems and to the social systems.Proposals normally involve some level of self-management by the production team)

Figure 8.4 The socio-technical design processSource: Mumford and Beekman (1994)

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County planning office case study

The county planning department was overstretched and ‘in crisis’. Planswere stacking up, and a three-month delay was the normal experience ofthose submitting plans for approval. This was starting to become unten-able, as people in the community wanted to get on with building workand could not do so without planning approval.

A consultancy firm using the PROGRESS approach was called in towork with the planning team. The planning process itself was identifiedby the team as being cumbersome and slow, but although they could seethe problems, they had never had the time to sort them out. The consul-tants planned in some intensive half-day sessions with the planning teamto map out the process and identify weak links. Although the impact ofspending time in the workshop sessions caused even more backlog tobuild up for the team, they were confident that they could reduce the

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Step one Identify the process you wish to redesign

Step two Define the mission, efficiency objectives, critical successfactors and major problems (variances)

Step three Describe the environment in which the process takes place(pressure from outside, market conditions etc)

Step four Describe the process as it is at present (often missed out inBPRI): tasks, variances, value chain, structure

Step five List the variances (weak links in the system, where standardsare hard to achieve consistently)

Step six List and rank value adding activities

Step seven Analyse the social system – who works with whom and how,required relationships, knowledge of each other’s roles

Step eight Job satisfaction analysis – good fits and bad fits

Step nine Probable or possible new developments

Step ten Future strategy of the organization

Step eleven Proposals for change – based on above information, and indiscussion with the team

Figure 8.5 The PROGRESS methodology for process improvementSource: Mumford and Beekman (1994)

planning cycle time (from arrival of the application to sending out ofapproval) by 30 per cent if they focused on it for long enough and drewout some simple agreed actions.

Various core problems were identified:

• Seating arrangements were not optimal. The department was splitbetween two buildings for historical reasons. Time was being wastedgoing to and fro, looking for people and searching for things.

• Lack of knowledge of different roles in the team was causing misun-derstanding and friction.

• One administrator was particularly overloaded with tasks that shewas finding extremely boring.

• Lack of a cataloguing system meant that time was wasted searchingfor paper-based items.

• The planning officers were often out of the office, but were not acces-sible. It was impossible to get messages to them, which was in turnholding up decision-making processes.

The following actions were agreed:

• The team was moved so that they could all sit in the same office.

• Four people were asked to learn more about each other ’s roles byspending two hours a week together on joint projects.

• The administrator shared out her ‘boring’ tasks on a weekly basis.

• A simple computer-based cataloguing system was introduced.

• Planning officers were given a shared mobile phone, which they usedto check every half-day for messages.

These simple measures resulted in a 27 per cent reduction in cycle time ofthe planning process. The department started to reduce the backlog, andlife became less stressful for everyone.

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CHANGING THE INFORMATION CULTURE

One of the difficulties with implementingnew IT systems is getting people to use themin the manner intended. There are manyhorror stories of expensive IT investmentsthat are never fully incorporated into dailyorganizational life.

Does the introduction of technology auto-matically change behaviour? Our experiencesays that this does not happen. In the worstcase the new technology reinforces the habitsand attitudes already present. (See theexample in the box.) Organizations need to domore than simply change the IT equipment and systems available if theywant to experience a radical shift in behaviour. A culture change may berequired to create the shifts in information sharing required, because theintroduction of new IT systems alone will not achieve this, suggestsDavenport (1994). He says, ‘It shouldn’t surprise anyone that humannature can throw a wrench into the best-laid IT plans, yet technocrats areconstantly caught off-guard by the “irrational” behaviour of “end-users”’.He says that what is important is how people use information, not howthey use technology.

IMPROVING THE SALES PROCESS THROUGH THE USE OF IT?

We recruited George in January. He was a dynamic salesman, brought in toboost our capacity to develop major accounts. George had used this great ITsystem in his old company, and encouraged us all to come to a presentationabout what this type of system could offer.

The proposed system would allow sales people to share information aboutcustomers and contacts. He said this would boost our capacity to plan oursales visits, and partner with each other to work more creatively with existingand potential clients. It sounded good.

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We bought the system in June. It was pretty simple to use, and everyoneseemed in favour, so there should have been no issues. After two months, onlyGeorge and two other sales people were using the system and updating it regu-larly. This was out of a team of 12 of us. People just weren’t used to sharinginformation in this way, and as we were still measured on our individual salestargets, there was no incentive to help others by revealing our contacts.

George got really frustrated, and accepted another job by the end of November.

Sales executive in electronics company

Perhaps we need to forget about technology for the moment, and look atexisting information sharing habits and develop some goals for behaviourchange. But what are the rules governing information sharing behaviour?Davenport states the information facts of life:

• Most of the information in organizations – and most of the informa-tion people really care about – is not on computers.

• Managers prefer to get information from people rather thancomputers; people add value to raw information by interpreting itand adding context.

• The more complex and detailed an information managementapproach, the less likely it is to change anyone’s behaviour.

• All information does not have to be common; an element of flexibilityand disorder is desirable.

• The more a company knows and cares about its core business area, theless likely employees will be to agree on a common definition of it.

• If information is power and money, people will not share it easily.

• The willingness of individuals to use a specified information format isdirectly proportional to how much they have participated in definingit, or trust others who did.

• To make the most of electronic communications, employees must firstlearn to communicate face to face.

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• Since people are important sources and integrators of information,any maps of information should include people.

• There is no such thing as information overload; if information is reallyuseful, our appetite for it is insatiable.

IT systems such as Lotus Notes and other forms of groupware are oftenreadily taken up by employees because of the range of ways of sharinginformation offered. However, people need to have time to explore andlearn about the possibilities of these systems so that they can make bestuse of them. E-mail is now taken for granted, but also has downsides suchas ‘non-information overload’ rather than information overload. Non-relevant e-mails take time to scan, process and delete. It is almost too easyto share information via e-mail, and people will do it for their ownreasons (such as covering their backs, making themselves look good,bringing network power into play and making others look bad) ratherthan for the benefit of the recipient.

IT systems are expensive to implement. Therefore, it would be benefi-cial if executives could start to see the difference between deciding toimplement an IT system, and deciding to change the company ’s infor-mation-sharing habits. Experience shows us that the first will certainlynot guarantee the second, and the second often requires a culturechange which requires energy, commitment, sponsorship and cleardirection (see Chapter 8).

NEW RULES FOR A NEW AGE

As we were writing this chapter, we noticed an interesting article in theHarvard Business Review entitled ‘IT doesn’t matter ’ (Carr, 2003). Thewriter suggested that IT is an infrastructure technology, rather than aleading edge one. This means that it is no longer a scarce resource thatcan give an organization an important competitive edge. It is now readilyavailable at less cost, but companies are still investing.

For the last 25 years companies have been investing in IT systems to thepoint where they are now firmly built into the infrastructure ofcommerce. Compare this with the progress of the railway, or the elec-tricity generator. At certain points during this progression there have

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been moments when companies have gained a competitive advantagefrom being the first to implement a particular technology; however this isnow starting to level off, and so should investment plans.

The three new rules for IT management offered by Carr give someguidelines for those ready to review their IT investment strategy:

• Spend less. Carr says that companies with the biggest IT investmentsrarely post the best financial results. The focus should now be onensuring that you do not put your company at a cost disadvantage,because the competitive gains will be minimal.

• Follow, don’t lead. The longer you wait to buy IT systems, the more youwill get for your money. Carr says that it is unwise to be on the cuttingedge, with the possibility that software or hardware is unproven.

• Focus on vulnerabilities, not opportunities. Companies need to paymore attention to security and network vulnerabilities, as well assystems reliability and minimizing downtime. IT spend should becarefully controlled, and resources managed in an economic way.

SUMMARY AND CONCLUSIONS

It is difficult to align organizational strategy with IT strategy, but unlessthis is done the two strategies can drift apart, causing the organizationmajor problems, especially if strategy changes, or enterprise-wideapproaches are sought. Organizations need to assess where they are onthe strategic grid (factory, strategic, support, turnaround) to decide howclosely linked these strategies need to be, and to decide how and whatsort of senior management attention IT deserves.

Strategy and IT decision making can become dangerously decoupledthrough lack of communication and understanding between businessmanagers and IT managers. IT systems begin to drift away from theiroriginal purpose, and may actually begin to limit the company ’s possibil-ities for information sharing and therefore damage its future. In this caseit may be beneficial to generate a list of ‘guiding principles’ to enable cleardecision making by all managers.

IT management needs to be taken more seriously. IT managers areoften left out of the decision-making loop and excluded from the core

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decision-making process in an organization. They become mere ‘imple-menters’ of other people’s solutions. IT management skills need to bepresent not only within IT departments, but all over the organization.

IT people need to learn more about organizational change processes. ITpeople have been traditionally uninterested in anything except tech-nology, which has led to a division between designing the IT system (IT’sresponsibility) and realizing the benefits by getting people to use it well(business managers’ responsibility). This is changing, but not fast enough.IT people now need to shift their competency from being technicalexperts, to being specialists with change management skills.

Human-oriented processes for implementing IT systems work betterthan processes that have a purely technical focus, and incremental processchange has a better record of success than radical process change.Excitement about ‘radical’ process change has led to a belief that onlyradical changes bring radical results. BPR (business process re-engi-neering) has not brought all the hoped-for benefits, because of its lack offocus on people and the inherently risky nature of radical process transfor-mation. It is highly probable that incremental, more human-oriented solu-tions such as those based on socio-technical design actually work better.

If a change in information-sharing habits is required, this meansaddressing the change as you would a cultural change. Problems comewhen senior managers and IT people believe that technology will automat-ically change behaviour. Often the reverse happens: the new technologyreinforces the habits and attitudes already present. A culture change maybe required to create the shifts in information sharing required, because theintroduction of new IT systems alone will not achieve this.

Chief executives have started to over-value the power of IT, beyond thestrategic gains it can really offer. IT is not now a scarce resource, but a factof life. Some say that IT’s importance has diminished, and that organiza-tions need to approach IT investment and management in a verydifferent way, allowing others to experiment with new systems beforedeciding to buy, and only investing where there is vulnerability.

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Part Three

Emerging inquiries

You can tell whether a man is clever by his answers. You can tell whether a man is wise by his questions.

Naguib Mahfouz (Nobel Prize Winner)

Although this book has the subtitle ‘A complete guide to the models, toolsand techniques of organizational change’, that is, of course, not the case.However, we have endeavoured to research and write about whatacademics and practitioners have discovered about the world of organi-zational change. We have added our own experience and insight into theequation as well.

Since the first edition was published we have been pursuing a numberof our own inquiries into the nature of change, and we include two ofthese perspectives in Part Three. In Chapter 9 we look at how you mightmanage change which is complex rather than simple, and some of thetools and techniques which can assist. We conclude, in Chapter 10, byasking the question ‘Is there one right way of managing change?’Hopefully by now, you will recognize that there isn’t. However, we canunderstand how change fails and some of the key questions which youneed to ask as you enter the world of change management.

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Complex change

INTRODUCTION

Since the first edition of this book, some interesting new ideas have reallystarted to take hold in the world of organizational development. Ideas onunderstanding organizations using complexity science and the notion ofemergence rather than managed change are now being grasped andworked with by leaders and consultants alike. It is as though we areappreciating anew the possibility that not everything can be planned andcontrolled, and that even having a strong vision only gets you so far.Sometimes change happens in non-linear and chaotic ways, neitherbottom-up nor top-down, and whether you believe in fate, or the stars, orthe fundamentals of biology, or in the sheer randomness of life, one manor woman may really feel quite small in the face of it.

In Chapter 3 on Organizational Change, we discussed the metaphor offlux and transformation and briefly explored the assumptions thatunderpin this view of organizations. The flux and transformationmetaphor could equally well be referred to as the complexity metaphor.Here, we explore this metaphor a bit further.

This chapter looks at a range of different approaches to understandingand dealing with complex organizational change. The key headings are:

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• when is change complex?

• understanding complexity science;

• tools that support complex change processes;

• the role of leaders in complex change.

WHEN IS CHANGE COMPLEX?

It is easy to say when change is not complex. Installing a new phonesystem, or implementing a ready-made IT system, or organizing an officemove are all the types of change activity that benefit from a well-planned,controlled approach. Any change which has a high ‘technical’ element toit lends itself to more linear methods. Although the above changes maybe complicated, they do tend to happen more easily if the details can beorganized efficiently.

Restructuring programmes, cultural change initiatives, outsourcing,mergers, acquisitions and strategic-led change, especially when a largenumber of people are involved, can all be seen as complex change. Theseare changes that involve so many individuals, layers of activity, areas offocus and so many factors that cannot be pre-thought out that there willbe a need for people to struggle and argue and work their way throughto an unpredictable outcome.

The advantages of understanding the concept of complexity are many.Managers in today’s organizations are often trained to think in purelyanalytical, rational ways. We are taught to see things independently ratherthan inter-dependently. Current mainstream management thinking isgenerally based on a mixture of cognitive psychology – which focuses onmotivational goals and behaviour – together with scientific methodsdesigned to map out and organize tasks, such as process engineering orproject management. These disciplines do not leave much space for thepossibility of complexity; the possibility that a contained ‘muddle’ maywell sort itself out given the right conditions.

When managers begin to appreciate how complex processes work, theycan release themselves from too much over-managing, and begin to thinkabout the different needs they should be fulfilling as leaders whoencourage healthy, creative change to emerge.

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UNDERSTANDING HOW COMPLEXITY SCIENCE APPLIESTO ORGANIZATIONAL CHANGE

Complexity science has been drawn from the scientific world, andapplied to organizations in an attempt to understand and explain thebehaviour of large systems. There is no formal definition of whatcomplexity science means in an organizational context, nor indeed how itis best applied to organizations.

In this discipline, large systems are often referred to as complex adaptivesystems. Complex adaptive systems are made up of multiple intercon-nected elements, and have the capacity to change and learn from experi-ence. Complexity science is a collection of theories which seek to explainhow these systems work. This branch of science is eclectic and draws itsideas from many other areas of science, for example the fields of neurologyand microbiology. Examples of such large complex systems are communi-ties, the stock market, the human body’s immune system and the brain.

One of the most intriguing features of complex adaptive systems tothose who study them in the context of human social organization, istheir capacity to produce coherence, continuity and transformation in theabsence of any external blueprint or nominated designer. The control of acomplex adaptive system is highly dispersed and decentralized, and thewhole system’s behaviour appears to arise from competition and cooper-ation among the local agents in the system, coupled with sensitivity toamplifying or dampening feedback. Even if a major part of the system isout of action, the system continues to function. A good example of this inthe field of biology is the human brain.

At the Santa Fe Institute in New Mexico, where scientists have studiedthe behaviour of computer-simulated complex networks for some time,the following six characteristics of a complex system were identified:

• there is no central control;

• there is an inherent underlying structure within the system;

• there is feedback in the system;

• there is nonlinearity; things do not happen in a cause and effect manner;

• emergence is an outcome of the system. This happens withoutplanned intent;

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• the system is non-reducible. This means that you cannot understandthe system’s behaviour by looking at one part. It is necessary toinstead look at a representative slice of all of the parts.

Eric Dent of George Washington University (1999) proposed that ourwhole world view is beginning to shift from a rational world view to anemerging one. It is as if our ‘technical’ rational reactions to political orsocial situations are not working any more. For example, the risingdemand for catalytic converters for cars represents our increased concernfor the environment. However, the effects in parts of Africa where the plat-inum to produce these converters is mined are very negative. People arebeing moved out of their homelands, health and safety is not being care-fully attended to, and workers are losing their lives through avoidableaccidents due to the commercial drive for production. Our approach isn’tholistic; it’s partial. And we are worried about it. Dent says we have to shiftour thinking if we are to be successful. He produced a helpful chart thatillustrates the shifts required. The highlights are shown in table 9.1.

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Table 9.1 World view descriptors

Traditional world view Emerging world view

Reductionism HolismLinear causality Mutual causalityObjective reality Perspectival realityObserver outside the observation Observer in the observation‘Survival of the fittest’ Adaptive self-organizationFocus on discrete entities Focus on relationships between entitiesLinear relationships Non-linear relationships– marginal increases – critical mass thresholdsEither/or thinking Polarity thinkingFocus on directives Focus on feedbackNewtonian physics perspectives Quantum physics perspectives– influence occurs as direct result – influence occurs through iterative,

of force exerted from one person non-linear feedbackto another

– the world is predictable – the world is novelFocus on pace Focus on patternsFocus on results or outcomes Focus on ongoing behaviour

Dent (1999) sees the list on the right as an extension of the list on theleft, rather than replacing it.

Capra (1982) explains why we now need to see the world in differentways:

Modern science has come to realize that all scientific theories are approxi-mations to the true nature of reality, and that each theory is valid for acertain range of phenomena. Beyond this range it no longer gives a satisfac-tory description of nature, and new theories have to be found to replace theold one, or rather to extend it by improving the approximation.

Systemic views of organizations, such as the concept of the learning orga-nization promoted by Senge (1993) owe much to the influence ofcomplexity science. The four basic assumptions that Konigswieser andHillebrand (2005) identify in their book about systemic consultancyprovide a useful translation of the principles of complexity for use inorganizational work:

• Organizations do not function like trivial machines. They do notsimply work at the push of a button and can therefore neither becontrolled directly nor completely understood.

• They constantly reproduce themselves through communication, arein a state of permanent change and continually create new orderstructures in the form of retained stories, recorded successes andagreed perception, patterns and expectations.

• This ‘self-image’ gains intensity in the sense constructs and views ofthe world projected as models from inside the system to the environ-ment. Internal order structures, sense constructs and images of theworld create security and stability within the organization, yet at thesame time obstruct its ability to react to changes in a dynamic, rapidlychanging environment.

• Organizations can learn from their environment not only in timeof crisis and pressure, but also proactively by assuming an activeand creative role in reshaping themselves and their respectiveenvironments.

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There are some important principles and ideas that are embedded withincomplexity science, that are useful for managers and consultants who aretackling organizational change issues:

• self-organization and emergence;

• rules of interaction;

• attractors;

• power relations;

• forms of communicating;

• polarities and the management of paradox;

• feedback.

Each of these is described and explained below, together with its signifi-cance for organizational change.

Self-organization and emergence

The principle of self-organization is central tocomplexity science. The belief behind this principleis that we live in a universe that seeks organization.Patterns and structures emerge that are not plannedor pre-designed. Old structures disappear and newones come into being. Change is happening all thetime. Individuals within a system who aren’tcapable of change may eventually disappear.

In the biological sciences there are some goodexamples of self-organization working extremelyefficiently. Bacteria, for example, operate as a global super-organism, ableto swap genes and ‘understand’ and absorb each others’ learning. Nosingle bacterium has the knowledge of the whole, or understands howeverything works. The bacteria, instead of being all-knowing, are superbat learning from each other, very quickly and efficiently. This is whybacteria that are resistant to antibiotics develop so quickly. In this type ofsystem model the world knows how to create itself, as individuals we aresimply partners in the process, not the ones responsible for it.

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Patricia Shaw (2002) explains the parameters surrounding self-organi-zation by referring to an experiment performed by scientists at the SantaFe Institute. The scientists modelled a large complex system using a largenumber of digital agents. Their experiments illustrated that low connec-tivity, low diversity and sluggish interaction between agents tended toresult in stable, frozen or ‘stuck’ patterns of interaction. Conversely, highconnectivity, high diversity and intensive interaction between agentsresults in disorder with no visible patterns arising. However, when theparameters were at certain critical values, the behaviour produced orderand disorder at the same time. Langton (1992) has dubbed thephenomenon of complex networks interacting in such conditions asbeing ‘at the edge of chaos’, as the patterns produced were neither whollyrandom nor wholly repetitive. We can transfer this idea to the domain ofhuman interaction, but must wonder then who controls the parameters,if anyone does.

In economics, the market economy is said to be a self-organizingprocess. Some economists say that central economic planning, ie whatwill be produced by whom and how profits will be distributed, disturbsthe efficiency of self-organizing markets. Others say that the propensityof individuals to pursue self-interest can be so damaging that govern-ments must intervene and control the economy via taxation. The latter isan argument for a more controlled approach.

In human social interaction, techniques such as open space, futuresearch (see later in this chapter), production cells and self-managed teamsall use the principle of self-organization.

Rules of interaction

Complex adaptive systems self-organize and evolve over time usingsimple local rules which result in global complex behaviour. However, thesystem works without the rules of a central authority governingbehaviour. Local rules are changed as experience accumulates. In ahuman system, these might be limits on activity or altered social norms.In human social systems these rules are not necessarily explicit andpeople are not always aware of them. Local rules exist in peoples’ heads.

Change occurs when either the local rules change, or the pattern ofconnectedness changes across the global system. Stacey (2001) arguesthat this happens in the absence of an external blueprint. If we transfer

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this thinking to large complex organizations, this means that the tradi-tional role of directors and senior managers, who together may aspireto directly influence local behaviour, is unlikely to have the desiredeffect, and may end up stifling creative and healthy change. It maybethat the essential cultural paradigm of the organization needs to shiftfrom within.

Attractors

Systems in chaos appear to fallunder the influence of different‘attractors’. Lorenz (in Gleick,1987), the mathematician andmeteorologist, showed howcomplex systems can combineorder and disorder, and flipfrom one patterned state toanother as random, non-linear events trigger a sudden move from beingunder the influence of one attractor to that of another. See Figure 9.1 to seehow this might look in an organizational setting.

To understand this at a conceptual level, imagine sitting in a homeoffice. At the desk in front of you there are papers, Post-its, pens, a laptopcomputer, photos of your family, a list of the things you have to do today.Outside the window you can clearly see trees blowing in the wind, asquirrel reaching for nuts on the bird table, the sun shining great stripesof light through the bushes onto the grass. In this scenario, you arecaught between two attractors. As one comes into focus, the other fadesaway. So it appears to be in complex systems; these attractors ultimatelydefine the way the system’s behaviour will unfold. In organizational lifeit is not possible to dictate what the attractors will be as these emergenaturally, but it is possible to try to understand the attractors that otherpeople in organizations are influenced by (eg their professions, tradeunions, a set of habits) and to try to create an attractor that offers truevalue for people.

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Power relations

Power is an inescapable influence in organizational life. Within complexsystems, power differences can be described as novel and interesting,creating diversity and therefore giving rise to possible change. Whenthinking about organizations as complex responsive processes of relating,it is possible to see power and communications as very similar entities.Both have the effect of either constraining or enabling people in theirrelationships with each other.

Power in organizations generally arises through patterned talking,and that patterned talking leads us to define who is ‘in’ and who is ‘out’.For instance, if measurement and control is ‘in’, then those who areskilled in talking about this way of operating will be ‘in’, while thosewho are more interested in emergence and chaos will be ‘out’, and willhave to find a way of representing their ideas and suggestions in thedominant language, hard though that may be. If they do not do this,they will begin to feel excluded. This in turn may lead to competitionand rivalry. Stacey comments

The consequent feelings of inclusion and exclusion then have significanteffects on the further evolution of joint cooperation, tending to disrupt itthrough competition and rivalry… Organizational change is a shift in patternsof inclusion and exclusion. It is in this process that organizational identity

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What are the forcesthat keep theorganization in itscurrent patter?Structures? Rules?Habits?

What are the characteristics andrules of the newattractor going tobe?How can we remainopen to emergentself-organization?

How can smallchanges work togenerate largeeffects?

Figure 9.1 How attractors work in organizations Source: adapted from Morgan (1998)

emerges, that is, the purposes and inspirations for carrying on being togetherare continually reproduced and potentially transformed, causing themselves.

Stacey, 2001

Forms of communicating

In complex systems, communication occurs between near neighbours. Itis short-range. The effects of an agent’s actions are fed back andresponded to through local interactions. These effects can be amplifyingor dampening. In organizational life therefore, the more important inter-actions are the day-to-day things that happen in an individual’s neck ofthe woods. Grand statements and visions may be made by senior people,but it’s the local version of that which really influences behaviour. Howdoes the local boss respond? What sense are we making of this locally?

Polarities and the management of paradox

Systems that are moving from one dominant attractor toanother experience struggles with paradox. As a systembegins to fundamentally change, ‘bifurcation’ or ‘choicepoints’ present themselves which can have a draining effecton existing energy for change.

For instance, imagine that an organization is trying to create moreheadroom for middle managers to take part in decision making. The oldway of operating involved being given a non-negotiable annual target,and putting a great deal of energy into making it work. The new waymeans more discussion and more engagement. However, old patterns ofperformance management and career progression rely on a reputationfor ‘toughness’ and high personal achievement. So the polarity between‘toughness’ and ‘cooperation’ starts to be an important one. This is whereleaders who manage paradox well can be most useful. What elements ofboth toughness and cooperation are useful in the new order?

The necessity for either/or thinking is one of the great myths of Westernculture. This occurs when two seeming opposites in any situation areseen as one ‘good’, one ‘bad’. For instance, cooperation is ‘good’ andtoughness ‘bad’. This can easily lead to the assumption that ‘I am right,and you are all wrong’. Either/or thinking demands that for something tobe the ‘right answer ’, there must be no contradictions. Combining optionsor blurring the boundaries is seen as illogical and muddled.

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Once the seeming opposites are seen as a continuum, the polarizationsets in. For instance, one director that we work with sees ‘team working’as the polar opposite of ‘independent working’. This creates stagnation inhis thinking. However, when the continuum is translated into a graph,the possibility that both of these may coexist, or that both contain both‘good’ and ‘bad’ elements begins to be visible. See Figure 9.2.

Polarities are sets of opposites which cannot function well independently.The two sides of a polarity are interdependent, so one side cannot be‘right’ or the ‘solution’ at the expense of the other. It seems that many ofthe current challenges within organizations are about managing polari-ties or paradoxes, rather than solving problems. So for example, the argu-ment about whether top-down or bottom-up change works best impliesthat one is right, and one is wrong. If these are seen as polarities that needto co-exist and both have their good points and bad points, it is possibleto reframe the issues that might bring organizational stagnancy bycreating positive new realities.

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Either/or thinking

Polarity thinking

Team working= good

Team

work

ing

Independentworking = bad

Independent working

Figure 9.2 Moving from ‘either/or ’ thinking to embrace‘polarity’ thinking

Feedback

One of the characteristics of a complex system is that feedback exists withinit. The non-linear nature of change within a complex system means thatlinear cause and effect analyses do not work. Mutual causality is aboutunderstanding how change evolves through looping interactions which canbe modelled as positive and negative feedback loops. By doing this type ofanalysis, it is possible to see where clusters of positive feedback loops createvicious circles, and where very small changes can lead to very significantoutcomes. In organizations, delayed feedback or counter-responses may de-stabilize the system by eliciting exaggerated responses or behaviours.

Stacey (2002) refers to the interaction between agents in a complex systemas ‘gesture and response’. Within systems that are richly enough connected,and have enough difference within them, this self-organized interaction ofboth gesture and response will produce both coherence and novelty.

STOP AND THINK!Q 9.1 Think of an organization you know well. Taking Dent’s theory of

shifting from traditional to emerging world views (Table 9.1),discuss with a colleague how a shift in world view might changewhat happens in this organization.

Q 9.2 How would a greater belief in self-organization change youractions as a manager, coach or OD practitioner?

Q 9.3 Consider the paradoxes that exist in your own life as it shifts andchanges, or those that exist in an organization you know that isgoing through a change process. How can these be managed well?

TOOLS THAT SUPPORT COMPLEX CHANGE

Storytelling

Storytelling is a type of sense making, which helpsus to shape our understanding of the complexgoings-on in the world. People tell stories to sharewisdom with each other, entertain each other, influ-ence each other and help each other make sense ofthe world. Stories can be created collectively in the

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moment, or carefully crafted by individuals before they are told. Theiressential logic is temporal. They generally move from the past to thepresent, and tend to open up possibilities for the future. So, paradoxically,stories are distinct ways of making sense of the past and showing how thepast leads to the future, which in turn affects the present. Hearing a storymay change how we view our current options, and the way we makesense of what has already happened.

There’s a difference between telling a story and giving an example. Astory has a plot, and characters and emotional and sensory detail. In astory you can examine both sides of an argument; a manager can tell astory in which a proposed change is simultaneously awful and exciting.This is more engaging and more real than an announcement which says‘The change is coming. Stop moaning and get on with it.’ A story can alsohelp someone to walk in your shoes, to see things from your point ofview. It can help others to see things they are not currently seeing.

Leaders can use storytelling to work with their teams to make sense oftheir own past, present and future, or to convey to their teams how theyare making sense of it all. It is a way of communicating without over-simplifying. Instead of being used to convince others of a particularcourse of action, a story can be used to awaken sleeping wisdom and tolead to good conversations about what to do next.

Shaw (2002) says of the practice of collective storytelling:

The kind of storytelling I am alluding to is not that of completed tales butnarrative-in-the-making. Rather than stating aims, objective, outcomes, rolesas abstract generalities, people use a narrative mode. The starting point isoften ‘the story so far’. Someone recounts and at the same time accounts foror justifies the way they make sense of events and their own participation…As others associate and ‘fill in’ an increasingly complex patterned sense-making is co-created. This is an absorbing process because a person’s iden-tity in this situation is evolving at the same time. We are not ‘just talking’. Weare acting together to shape ourselves and our world.

Dialogue

Dialogue is a central tool for those interested in dealing withcomplexity. Dialogue is different from other forms of communicationsuch as debate or discussion, or ordinary conversation. William Isaacs,who founded the MIT Dialogue Project, has been influential in bringing

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these ideas and practices into organizational settings. This way oftalking pays particular attention to the meaning that unfolds whenpeople communicate collectively.

Isaacs sees dialogue as not merely about talking, but about takingaction, and at its very best it includes meaning making and the expressionof feelings and leads towards powerful action. Dialogue is about thinkingtogether rather than thinking alone, and demands that we both let go ofour own positional views and begin to face and hear about other people’sexperiences and realities.

Isaacs talks about ‘choice points’ in a conversation. A key choice pointin a conversation which involves some deliberation is whether to eitherdefend your own view or position, or suspend it and therefore listenwithout resistance. Defending usually leads to either productive analyt-ical dialectic or unproductive verbal brawling. Suspending is more likelyto lead to an exploration of the deeper questions, a new framing of keyissues and the possibility of reaching collective, refreshing new insights.

Whole system work

Increasingly, organizations and public bodies are seeing the need to bringwhole systems together to tackle complex and messy issues with multiplestakeholders. Patricia Shaw (2002) talks about these sorts of events:

Carefully designed and facilitator-led large group events are an increasinglypopular example of ‘intervention’ into the ongoing processes of organizing.These are intensive interactive conferences intended to stimulate new formsof action to address ambitious change in complex situations. Participants areinvited to identify issues and create self-managing small groups to generateproposals for future work. The result is a public plan of action.

Open space technology

Harrison Owen, the originator of open space technology, says that hisideas are probably as old as homo sapiens, it is just that modern-daywisdom has obscured our instincts and intuition about how gatherings ofpeople can self-organize to find what is exciting and energizing, and thenmakes things happen. Owen’s ideas emerged when he began to noticethat at a regular international symposium that he used to attend, whichused the traditional formal presentation of papers plus orchestrated panel

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discussions, that the real excitement and energy used to burst out in thecoffee breaks. He wondered if it were possible to make the symposiumone big coffee break.

An open space session is typically a large gathering that is clearlyfocused around one topic, has no set agenda, no organizing committeeand a small band of facilitators. The agenda is discovered by partici-pants who wish to pursue topics posting these on a noticeboard, seeingwho signs up and then running these various conversations simultane-ously. People can move from one conversation to another, and a recordof each discussion with issues ranked and next steps identified for thecritical issues is given to every participant. It seems that open spacerepresents Owen’s belief that the one thing we spend our time doingso much of – organizing and seeking control – is not only unavailablebut unnecessary.

When is it appropriate? It works well when there is a very pressingissue that needs to be sorted out yesterday, when there is a great deal ofcomplexity, when there is conflict and when there is a lot of diversity inthe people who need to get together to solve the issue.

There are four Principles and one Law of open space sessions. The fourPrinciples are:

1. Whoever comes are the right people – people demonstrate that theycare by showing up;

2. Whatever happens is the only thing that could have – this helpspeople to focus on the here and now, not what could have been, orshould have been;

3. Whenever it starts is the right time – creativity is not dictated bythe clock;

4. Whenever it’s over, it’s over – don’t waste time! When the conversa-tion is finished, move on.

The one Law is called ‘the law of two feet’, whichmeans when you are no longer listening orcontributing, move on to somewhere more to yourliking. This is not just about pleasing yourself, butabout taking responsibility for your own learningrather than sulking or blaming others for not

making things more stimulating. Owen says that the Principles and Law

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are not really what makes open space work, it’s just that these statementsfree people up to do what they would do naturally, given a chance.

Future search

Future search is a way of conferencing that is underpinned by researchby Weisbord et al (1992) into the conditions under which diverse groupsseemed to be able to cooperate. Previous work by North American andAustralian social scientists was also highly influential. Future searchinvolves many people getting together for a large planning meeting,and is based on principles that enable diverse groups to get togetherand cooperate, be very task-focused, and quickly translate their energiesinto action.

These principles are:

• get the ‘whole system’ in the room – inviting a cross-section of allparties who care about the issue;

• explore the ‘whole elephant’ before acting on a part – get everyonetalking about the same big picture;

• put common ground and future focus at the centre, and treat conflictsas information, rather than items to be ‘sorted’;

• encourage self-management and responsibility taking for action byparticipants.

The conditions for success are:

• encourage full attendance – discourage part-timers;

• meet under healthy conditions – with food and snacks, and adequatebreaks;

• work across three days (sleep twice) – things need time to be absorbed;

• ask for voluntary public commitments to next steps before peopleleave.

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World Café

World Café is a conversational process whichenables groups of people to talk together, exploreand find their creativity about an issue that matters.This is not about problem solving or managedaction. This simple but innovative method wasdeveloped by founders Juanita Brown and DavidIsaacs in 1995.

The World Café Community Foundation can befound at www.theworldcafe.com and is an excellentsource of information. The following box summa-rizes their approach to this technique.

The method starts by setting the context: what is the topic, who needs tobe invited, how long do we need, and what is the best outcome we canhope for? A hospitable space needs to be chosen and prepared withrefreshments and comfort, rather than cold impersonality. A café ambianceis then created, with small tables with table cloths – perhaps the type thatcan be written on – candles, and flowers, with markers ready for writing.

Compelling questions are then posed to the groups. Sometimes onlyone question is used, and sometimes there are deeper levels of inquiry.Facilitators need to find questions that are relevant to the concerns ofgroup members and that provoke interest and energy. Questions thatreveal assumptions, enable people to reflect more deeply, seek what isuseful and open up new possibilities are all effective. Questions thatfocus on definitions, or the truth or what went wrong seem less effective.

Turn-taking in the discussion is important to ensure everyone cancontribute, as is the connection of diverse perspectives. People are encour-aged to record their emerging discussion visually on the tablecloth using thepens, and then move to other tables to add to their emerging pictures. Oneperson remains at the original table to summarize what has been discussed,and new arrivals begin by sharing the threads of their previous table discus-sion. New possibilities begin to open up, and the conversation deepens.

At the end of the conversations, tables are invited to distil the parts ofthe discussion that have been most meaningful for them and share it withthe rest of the tables. In response, other tables may be invited to say whatwas surprising or new in what they have heard, and share only on thatline of inquiry. All this is often captured on flipcharts by the facilitator.

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The final stage involves a short reflective meditation by the group, andthen answers to the following questions are invited:

• What is emerging here?

• If the whole group could speak, what would it say?

• Did we notice any patterns, and if so, what might they indicate?

• What deeper knowledge or understanding are we now holding?

Ideas used by permission from The World Café Community Foundationat www.theworldcafe.com

THE ROLE OF LEADERS IN COMPLEX CHANGE

In Chapter 4 we talked about the leaders who operate using the assump-tions of the flux and transformation metaphor as ‘facilitators of emergentchange’. This gives us a good starting point for thinking about the role ofa leader in complex change. We also said that three main tasks of this typeof leader were to get the governing principles right, enable the rightamount of connectivity and amplify important issues, but that this set ofthree tasks merely scratches the surface. What more can be said aboutthese leaders who facilitate emergent change?

Harrison Owen (1997), pioneer of open space technology, andpassionate believer in self-organization, says that the job of leaders isabout ‘liberating the human spirit to achieve its potential’. He points outthat the illusion of control and organization is where many leaders wastea lot of time and energy.

It seems that leaders need to look beyond the confines of structure andorganization if they are to truly facilitate emergence. Wheatley (1999)quotes a rather lovely verse that captures the struggle many experiencewhen we try to grasp the realities of a complex world:

She who wants to have right without wrong, Order without disorder, Does not understand the principlesOf heaven and earth. She does not know how things hang together.

Chang Tzu, fourth century B.C.

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Wheatley urges leaders to lead through vision, values and ethics. This doesnot mean crafting a single vision which shines so brightly that it has its ownpower, but co-creating a vision that permeates the organization andharnesses the organization’s own self-organizing power. However, thedifficulty for many leaders is that vision and value seem ‘a bit soft’ whencompared to traditional forms of authority, and they may feel powerlessand somehow naked without the familiar controlling mechanisms.

Wheatley also emphasizes the importance of developing a new rela-tionship with information so that it is embraced for all its vibrant, livingqualities. She notices an unhelpful habit in leaders. Rather than lookingfor small differences in the information we receive, often leaders seekcertainty and notice only the big trends and large gaps. They may valuequick, surface decisions over wiser, deeper ones. She says that leadersneed to see information as nourishment rather than power, and keep theflow well stocked.

Wheatley goes on to say that in this world of chaos and complexity weappear to need leaders rather than bosses; people who assist theiremployees in embodying organizational values and carry a strong senseof purpose. Policies and procedures curtail creativity and end up failingto control as effectively as a strong sense of purpose and some clear,hard rules.

Scharmer (2000) is a great believer in self-organization too, but he alsosees a more spiritual dimension to organizational or community endeav-ours. As we sense and intuit together, something sacred happens, and outof the space between us something new emerges.

Scharmer refers to leadership as ‘sensing and actualizing emergingfutures’. He identifies two important methods of learning that are bothimportant for sustained organizational success. The first is to reflect onthe past in a way that loosens our traditional views of what’s happened.The second is to begin to sense and embody the emergent future, as itappears out of the mist between us, instead of re-enacting past patterns.He talks about the processes of both ‘letting go’ and ‘letting come’,which leaders need to understand as the root of generative learning.This process is not about being polite, or getting involved in conflictualdebate or dialectic. It involves true generative and reflective dialogue.

Scharmer sees the leader ’s role as creating the conditions that allowothers to ‘shift the place from which their system operates’. There is asacred quality to Scharmer ’s work which takes us far beyond the focus

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on ordinary conversation that sits at the root of complex responsiveprocess theory.

Presence is another important quality that those writing about thecomplex view of change encourage in leaders. Facilitators of emergenceneed to embody presence if they are to be truly tuned into the complexi-ties of organizational life. This means being less preoccupied by the worldof objectives and performance indicators, and more open to the subtlecomplexities of the world as they unfold in front of them; more present inthe ‘here and now’ moment.

Senge et al (2005) talk about presence as having an even deeper qualitysuch as ‘grace’, or what the Buddhists call ‘cessation’. This definition ofpresence has a spiritual quality to it. They say that presence occurs whenthere is a quieting of the mind, and the normal boundaries between selfand the world begin to melt away. For leaders this means being able to letgo, surrender control and open themselves to the wider needs of theworld. The authors of Presence: Exploring profound change in people, organi-zations and society each provide a sentence on what this notion of presencemeans to each of them:

Jaworski: ‘A profound opening of the heart, carried into action.’ Scharmer: ‘Waking up together… by using the Self as a vehicle for

bringing forth new worlds.’Flowers: ‘It’s the point where the fire of creation burns and enters the

world through us.’Senge: ‘We have no idea of our capacity to create the world anew.’

STOP AND THINK!Q. 9.4 How could you use open space technology or World Café to

good effect in your organization or local community?

Q. 9.5 Imagine yourself in a leadership role in your organization. Maybeyou are in one already. What is your area’s core purpose? Whatis the whole organization’s core purpose? This needs to reflectsome value that is being created in the world. What are the fewsimple principles that apply to work in your area? (Once you havethese, it will form the foundation for your leadership.)

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SUMMARY AND CONCLUSIONS

New thinking on how complexity science can be applied to organiza-tional problems is developing fast, and becoming more widely knownand understood.

Small, simple or highly convergent change initiatives such as tech-nology roll-outs are less complex, and less emergent, and therefore lesslikely to benefit from being seen through a complexity lens.

‘Complex adaptive systems’ is the name given to large systems bycomplexity scientists. These systems are self-organizing, have no externalblueprint, and yet they still have the capacity to produce coherence,continuity and transformation.

Dent (1999) suggests that our whole world view is beginning to shiftfrom the rational world view to the emerging one. This is in tune withmuch thinking about our ability to see the world as complex and emer-gent, rather than linear, rational and controllable.

The important elements of complexity science that relate to organiza-tional work are: self-organization and emergence, rules of interaction,attractors, power relations, forms of communicating, polarities and themanagement of paradox and the role of feedback.

Systems thinking and complexity science have very different roots, andlead to very different assumptions about how change works.

Storytelling, dialogue, whole systems work, open space technology,future search and World Café are all tools that support complex change.

Leaders have a different role in complex change from the traditionalorganizing or controlling roles of managers. The new role may be referredto as ‘facilitator of emergent change’. This means leading through vision,values and ethics. It also means creating generative and reflectivedialogue, and being present to the ‘here and now’.

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The right way to managechange?

INTRODUCTION

In this book we have identified key methods for managing change at anindividual, team and organizational level. By looking at the different wayswe can lead and manage change we have been relatively explicit that thereis not necessarily one right way of doing this. Managing change dependsupon – to take just a few parameters – the context of the change, the typeof change needed, the prevailing culture, the individuals involved andtheir personalities, the teams involved and their configurations.

However, this is a question that keeps popping up in our conversationswith clients, and particularly those involved in training people to managechange. Is there one right way? And if not, can’t we still just give a fewsimple guidelines? Perhaps this quest for the truth about change is just avery human search for the kind of certainty that does not exist. It’stempting to provide an elixir; we could seduce you with a false certainty,but we wouldn’t believe it ourselves. All we can say is, sometimes thestruggle to know is more important than the knowing itself.

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In this chapter we consider more deeply the question of how changereally works, and if there is one right way to lead it. Firstly we look at theresearch about failure rates and success factors of change initiatives. Thenwe examine the different ways that organizations get ready for change.We go on to share some of our explorations about leading change, andfinally to examine how organizations can evaluate change and what theylearn from their successes and failures.

This is tackled under the following headings:

• what the research says.

• different approaches to getting ready for change;

• leading change;

• how do we know whether it’s working or not?

WHAT THE RESEARCH SAYS

When change goes wrong

Managing organizations at any time canbe problematic, particularly throughtimes of change. Much of the evidence

in the change management field shows that overly planned change has ahigh failure rate.

Despite some individual successes… change remains difficult to pull off, andfew companies manage the process as well as they would like. Most of theirinitiatives – installing new technology, downsizing, restructuring, or trying tochange corporate culture – have had low success rates. The brutal fact is thatabout 70 per cent of all change initiatives fail.

Beer and Nohria (2000) Harvard Business Review, May-June, 133–141

Three out of four mergers and acquisitions fail to achieve their financial andstrategic objectives.

Marks and Mirvis (2001) Academy of Management Executive, 15, 80–94

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Miller (2002) summarized the findings of a number of inquiries into thechange process:

Only three out of four change initiatives give the return on investment thatleadership forecast… most independent research shows change failure ratesrunning at about 70 per cent. In other words, only about three out of everyten initiatives give return on investment that leadership forecast… seven outof ten change efforts that are critical to organizational success fail to achievetheir intended results.

Independent IT research firm Gartner Group (2000) reports that for majornew corporate systems implementations:

28 per cent are abandoned before completion;

46 per cent are behind schedule or over budget;

80 per cent are not used in the way they were intended to be or notused at all six months after installation.

In terms of the emotional fallout that change can produce, a recentMcKinsey ’s survey (2006) suggested that only 6 per cent of changemanagement projects were completely successful and 32 per cent‘mostly ’ successful; the range of negative emotions were as follows: 44per cent of people were anxious, 22 per cent confused, 23 per cent frus-trated and 24 per cent fatigued. And that was for the successful projects.Figures for the unsuccessful projects were even higher.

A Computer Weekly Project/Programme Management Survey (2003)looked at over 1,000 IT projects across the UK and accessed their successand failure rates. The survey was led by Chris Sauer and ChristineCuthbertson of Oxford University ’s Templeton College, and sponsoredby change management consultancy the French Thornton Partnership.

They found that:

16 per cent of IT projects examined in the survey met all their targetsof budget, time and scope;

55 per cent of projects were completed on time with an average ofoverrun of 23 per cent;

41 per cent were completed on or within budget with an averageoverrun of 18 per cent;

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54 per cent of projects failed to deliver on the planned-for functionalitywith an average shortfall of 7 per cent of original specification;

9 per cent of projects were abandoned.

Prosci Research (2007) found that 20 per cent of change managementprojects exceeded objectives and 40 per cent met their objectives, leaving40 per cent only partially or failing to meet objectives; 56 per cent ofprojects were behind schedule which included 17 per cent far behindtheir schedule. Almost 25 per cent were slightly over budget, with nearly10 per cent well over budget. What they also found, however, was a clearlink between excellent change management practices and meeting ofobjectives, timescales and budgets.

When change goes right

Hiatt and Creasey (2003) of the Change Management Learning Centerhighlighted findings from three Prosci Research studies (www.prosci.com).These studies looked at change management in more than 400 companiesworldwide and found that the greatest contributors to success were:

1. effective sponsorship from senior management in terms of activevisible support, ongoing support throughout the life of the initiative,acting as role models for the change, communicating and beingambassadors for change;

2. buy-in from front-line managers and employees which got thechange moving and kept momentum going;

3. continuous and targeted communication throughout the project.This would be tailored in depth and breadth to the different inter-ested communities;

4. an experienced credible team who maintained good internal workingrelations and also networked into the organization;

5. a well-planned and organized approach which is suited to the typeof change being managed.

One of the most striking conclusions to draw is that employees need tohear about change from two people – the most senior person involved

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in the change and also their line manager. The senior manager is bestsuited to communicating business messages around the change,whereas an employee’s line manager is best suited to communicatingmore personal messages. This ties in with the notion that the overar-ching vision and strategic direction once communicated needs to betranslated into a local context.

A more recent study from Prosci (2007) highlighted the need for a struc-tured change management approach: frequent and open communica-tions, dedicated resources for change and employee participation.

Change Tracking (2008) have looked at change in more than 180 orga-nizations worldwide and surveyed over 100,000 individuals. The factorsmost important to high performance change (that is, improving businessperformance and meeting project objectives) were identified and aresummarized below:

• turbulence (conditions such as the magnitude, pace and risks of change):– risks and roadblocks;– changes taking place;

• resources:– training and capability;– systems and processes;– project support;

• aligned direction:– vision and direction;– communication;

• engagement:– change leadership (the level of commitment and support provided

by leaders);– involvement (the level to which people are involved in planning

and implementing change);

• team leadership:– management skills;– feeling valued;– accountability (clear performance objectives and people held

accountable for achieving outcomes);

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• emotional energy:

– passion and drive (positive feelings);– disturbance (negative feelings such as fears and frustration).

Interestingly, these factors do not all carry the same weighting: factorssuch as the need for communication, training and accountability werefound to have a relatively low impact on improving overall businessperformance, whereas change leadership, systems and processes, passionand drive, and to a lesser degree involvement and vision and direction,were seen as far more important. Mitigating roadblocks and minimizingdisturbance during the change process were also seen as critical.

As we highlighted in Chapters 3 and 6, Kotter (1995) looked at over 100different organizations going through change and picked out eight keyaspects of the change process which could either lead to a failed initiativeor, if got right, to transformation.

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Table 10.1 Why transformation efforts fail

Reason for failure Possible antidotes

Not enough Establish a sense of urgency by:sense of urgency examining market and competitive realities;or pressure for identifying and discussing crises, potential crises or major change opportunities;

ensuring that the current level of dissatisfaction or future threat issufficient to kick-start the change and maintain momentum.

Failing to create Form a powerful guiding coalition by:a sufficiently assembling a group with enough power to lead the change effort; powerful encouraging the group to work together as a team;support base ensuring that key stakeholders are engaged and the change team

has the necessary sponsorship, power and authority.

Not developing Create a vision by:a clear vision creating a vision clear enough to help direct the change effort;

developing strategies for achieving that vision;having a clear understanding of what you want to achieve from thechange and for it to be lofty, strategic and motivational.

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Under- Communicate the vision by:communicating using every vehicle possible to communicate the new vision and the vision strategies;

teaching new behaviours by the example of the guiding coalition;ensuring people are informed and hopefully engaged with thechange by having a shared understanding of and commitment tothe direction of the change.

Permitting Empower others to act on the vision by:obstacles to block demonstrably tackling obstacles to change;the new vision encouraging risk taking and non-traditional ideas, activities and

actions;ensuring that those people who are needed to make the changehappen have the necessary resources, mandates and enablingmechanisms to achieve their goals.

Failing to create Plan for and create short-term wins by:short-term wins planning for visible performance improvements;

recognizing and rewarding employees involved in the improvements;creating improvements which show that progress is clearly beingmade towards the ultimate goals through the achievement ofsmaller goals along the way and thus demonstrating success andmaintaining momentum.

Not aligning Consolidate improvements and produce still more change by:structures, changing systems, structures and policies that don’t fit the vision;systems, policies reinvigorating the process with new projects and themes;and skills hiring, promoting and developing employees who can implement

the vision;building on improvements in the organization as and when theyoccur and continuing to move forward with change.

Neglecting to Institutionalize new approaches by:anchor changes articulating the connections between the new behaviours and firmly in the corporate success;corporate culture developing the means to ensure leadership development and

succession;setting up the systems to capture and share knowledge;ensuring all changes are embedded in the organization and that theorganization is fully aligned.

Source: adapted from Kotter (1995)

Conclusions

What conclusions can be drawn from this pool of research data? Control andstructure comes up again and again. The need for excellent plans, goodsystems and processes and a clear vision are all repeating themes. Our reflec-tion is that an optimal amount of structure is beneficial to change, whereastoo much creates organization sclerosis, or ‘stuckness’. It’s not as easy assaying ‘be brilliantly organized and you will succeed’. Energy, passion andcontinuous communication are all seen as essentials. But as we review thisinformation, we notice that energy, passion and communication are the stuffof life itself. Organizations that lack these things, and have to legislate forthem, or coerce people into giving them, are probably in trouble at the core.Maybe it’s the jointly held sense of purpose that gives an organization its life.

DIFFERENT APPROACHES TO GETTING READY FOR CHANGE

How do organizations get ready for change? In Readinessfor Organizational Change (2007) Aremenakis et al suggestthat the degree to which employees are prepared forchange is influenced by the degree to which they areconvinced that ‘a change is necessary… the change couldbe implemented… the change would be organizationallybeneficial… the organizational leaders were committed to

the change… and the change would be personally beneficial.’Todnem (2007) found that there is indeed a correlation between the level

of change readiness and the successful management of change. His researchadded an additional communication strategy – the implicit communicationthat management are also in the same situation as the rest of the staff andshould benefit (and suffer) from the effects of change in the same way,whether it be provision of facilities or sharing in the rewards of change. Thelack of change readiness is an indicator of unsuccessful change manage-ment; other contributory factors are lack of communication, changemanagement experience, support mechanisms and resources. As we sawearlier, staff want and need ongoing communications around current andfuture changes. They see ongoing change management and ongoing readi-ness for change as more important than the notion of ongoing change:

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100 per cent of participants highlighted it as essential for any organization tobuild and support an organizational culture and structure that facilitatecontinuous management of change and a high level of readiness, or ability,to implement change as and when required.

Todnem (2007)

Interestingly, Todnem also looked at whether people subscribed to theplanned or the emergent approach to change. A majority of respondentssuggested a mixed approach which led to the view that perhaps aconscious approach to building change readiness as part of the organiza-tional culture would lead to a greater probability of success, whether it beplanned or emergent.

Roberto and Levesque (2005) suggest you need to plan for change longbefore the change is going to take place:

… the seed of effective change must be planted by embedding proceduraland behavioural changes in an organization long before the initiative islaunched… [T]o achieve effective institutionalization, core process andenabling conditions must be embedded into the organization well before thechange initiative is rolled out… [T]o embed change in an organization,managers have to create the conditions that enable employees to takeownership of the new procedures and systems and integrate and apply thekey principles of the initiative to the way day-to-day work is done.

They suggest the four ‘antecedent processes’ of chartering, learning,mobilizing and realigning, which contribute towards this enabling envi-ronment in which change can then occur (see Table 10.2).

Pfeifer and Schmitt (2005) suggested that change success is oftenthwarted by a lack of readiness:

…the management barrier reflects the problem that the focus of manage-ment activities is dealing with daily business, not discussing new strategies.The vision barrier arises when visions and strategies are not communicatedto employees in a comprehensible way… strategic objectives are not brokendown by means of target definitions on the employee level, with the resultthat participation of those affected is not achieved. The resource barriermeans that resources are not purposefully deployed for the implementationof the strategy. In strategic change, the endeavour to secure acceptance ofchanges by all employees as a whole usually fails (the people barrier).

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They also saw that change agents needed to manage the balancebetween overly planned change and uncontrolled and uncontainedemergent change:

Although the implementation process has to be planned and controlled, it isimportant to understand that the planning of the implementation, and theimplementation itself, cannot be separated strictly. A change process isdynamic and this dynamic always requires adaptations in planning.

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Table 10.2 The art of making change initiatives stick

Chartering The process by which the organization defines the initiative’spurpose, its scope, and the way people will work with oneanother on the programme.• boundary setting – definition of the scope of the initiative• team design – definition of roles, responsibilities, norms and

ground rules for teamwork.

Learning How managers develop, test, and refine ideas throughexperimentation before full-scale roll-out.• discovery – data and information gathering to define goals of

the initiative and means of achieving objectives;• experimentation – testing and refinement of the initiative

prior to full-scale roll-out.

Mobilizing The use of symbolism, metaphors and compelling stories toengage hearts as well as minds in order to build commitment tothe project.• storytelling – use of stories and metaphors to create

compelling accounts about the need for the initiative and toexplain specific changes;

• symbolic action – use of symbols to reinforce credibility andlegitimacy of the core team and its message.

Realigning A series of activities aimed at re-shaping the organizationalcontext, including a redefinition of roles and reportingrelationships as well as new approaches to monitoring,measurement and compensation.• job redesign – alteration of underlying structures and

processes that support jobs;• performance management – invention of new metrics to

measure the effectiveness of the initiative and incorporation ofthe metrics into the employee performance appraisal process.

Source: Roberto and Levesque (2005)

Therefore the management should be willing and flexible to adapt even thetarget definitions, made in the earlier stage of the change process, if changedboundary conditions require this step.

Sirken, Keenan and Jackson (2005) highlighted four key factorssurrounding the preparation and general readiness of the organizationwith respect to a change initiative. Since the original research, the BostonConsulting group have used these successfully to predict outcomes inmore than 1,000 change initiatives across the globe. The four factors are:

• duration: ‘a long project that is reviewed frequently is more likely to succeedthan a short project that isn’t reviewed frequently’;

• integrity: ‘the extent to which companies can rely on teams of managers,supervisors, and staff to execute change projects successfully’. Thiscomprises the mix of knowledge, skills and experience needed ingetting changes done on time, to budget and the required quality;

• commitment: the demonstrable willingness of top management, thechange team and the recipients of change to be engaged in the change;

• effort: the effort that is required ‘over and above the usual work that thechange initiative demands of people’. This includes:– sponsors and senior management who may have multiple time

pressures and the next change initiative to concern them;– the change team itself, who may be focusing purely on the project

implementation date rather than the ‘aftershock’ of the change;– line managers, who often have the job of juggling ‘business as

usual’ as well as implementing the changes in their areas andmanaging staff through the transition;

– employees involved in implementing change, who may needadditional resources to do this, for example by a reduction innormal workload, backfilling or management recognition thatthere will be a performance dip.

Balogun and Hope Hailey (2004) approach change by asking some veryclear questions about the change itself and about what ‘levers’ need to bepulled to implement successful change.

They then go on to look at some of the different things you need toconsider when planning and managing change, what they call the designchoices (Table 10.4).

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Table 10.3 Identifying the ‘levers’ of change

Time How quickly is change needed? Is the organization in crisis or isit concerned with longer-term strategic development?

Scope What degree of change is needed? Realignment or transformation?Does the change affect the whole organization or only part of it?

Preservation What organizational assets, characteristics and practices need tobe maintained and protected during change?

Diversity Are the different staff/professional groups and divisions withinthe organization relatively homogeneous or more diverse interms of values, norms and attitudes?

Capability What is the level of organizational, managerial and personalcapability to implement change?

Capacity How much resource can the organization invest in the proposedchange in terms of cash, people and time?

Readiness How ready for change are employees within the organization? for change Are they aware of the need for change and motivated to deliver

the changes?Power Where is power vested within the organization? How much

latitude of discretion does the unit needing to change and thechange leader possess?

Source: Balogun and Hope Hailey (2004)

Table 10.4 Design choice

Change path The type of change to be undertaken in terms of the nature ofthe change and the desired end result.

Change start Where the change is initiated and developed, which could be point summarized simplistically as top-down or bottom-up, but

there are other choices.Change style The management style of the implementation, such as highly

collaborative or more directive.Change target The target of the change interventions, in terms of people’s

attitudes and values, behaviours or outputs.Change levers The range of levers and interventions to be deployed across four

sub-systems – technical, political, cultural and interpersonal.Change role Who is to take responsibility for leading and implementing the

changes.

Source: Balogun and Hope Hailey (2004)

LEADING CHANGE

Chapter 4, Leading Change, looks at how you can successfully lead andmanage change from a number of perspectives and highlights a numberof leading researchers, authors and practitioners in the field. Since thefirst edition we have become very interested in further exploration ofthe ideas set out in Chapter 4, and have begun an inquiry into the possi-bility that different leadership roles are required in different organiza-tional contexts. This goes beyond a simple ‘situational leadership’approach of looking at one-to-one relationships, examining what rolesor combinations of roles are required of leaders of change to serve theorganizational need.

We searched the literature, and combined this with our knowledge ofmany different sets of leadership competences from organizations wework with. From this process we derived a set of five leadership roleswhich cover the full set of possibilities using a clustered approach.

We invited research participants, all experienced managers orOrganization Development professionals, to use their organizationalwisdom to select the leadership roles they thought would be most effec-tive in a range of contexts. We wanted to find out if different leadershiproles, or combinations of roles, matched up to any particular contexts. Weasked participants to select the one or two leadership roles that theythought would work best in each of a range of organizational contexts.

The summary of results appears in Figure 10.1 below. It is clear fromthis information that a wide range of roles are useful, and that combina-tions of roles work well. There are some interesting patterns to noticeabout particular contexts, but the overall message is that all the roles areuseful at times.

In our book Making Sense of Leadership, we describe our research, setout the results and conclude that there are five roles to select fromwhich leaders need to use flexibly if they are to be versatile performers.Again, we concluded that there is no one right way, but there are someguidelines.

The five roles (see Figure 10.2 for a summary) are:

• The Edgy Catalyser: focuses on creating discomfort to catalyse change;

• The Visionary Motivator: focuses on engagement and buy-in to energizepeople;

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Figure 10.2 Summary of the five leadership rolesSource: Cameron and Green (2008)

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• The Measured Connector: focuses on sense of purpose and connec-tivity across the organization to help change to emerge;

• The Tenacious Implementer: focuses on projects plans, deadlines andprogress to achieve results;

• The Thoughtful Architect: focuses on frameworks, designs and complexfit between strategies and concepts to ensure that ideas provide a soundbasis for change.

HOW DO YOU KNOW WHETHER CHANGE IS WORKING?

How do you know whether the change process you areinvolved in is working or not, or whether you would bemore successful if you were leading it in different ways,with a different style or with different activities? We havebegun to notice that depending on what your prevailingparadigm is, or the way your organization’s culture works,the monitoring and evaluation of change will give differentanswers about what is working, what the issues are, andwhat needs to be done next.

We can look at evaluation in a number of ways. In a rigorously plannedapproach the outcomes will have been articulated at the outset, and it willthen be relatively easy to see the measures of success or otherwise – costreduction, increase in stakeholder value, reduced absenteeism, increasedcustomer satisfaction, increased employee satisfaction, reduced head-count, increase in quality standards, etc.

However, the world and the organization may have moved on whilethe changes were being made, and it is possible that the objectives thatseemed important at the start may be viewed differently by the end.Indeed, senior management teams, like politicians, can be very skilled atchanging the objectives for change for their own purposes.

Do these hard, preset measures of success really give us the informa-tion about progress that we need? Wheatley and Kellner-Rogers (1999)question the wisdom of solely relying on hard measurement. They high-light six observations:

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1. people and systems notice only what they consider to be important;

2. having a set methodology can get in the way of the context – ‘criticalinformation is being generated right now. Failing to notice the “now”, orstaying stuck in past assumptions, is very dangerous’;

3. what people notice will change over time – ‘looking for information onlywithin rigid categories leads to blindness, which is also dangerous’;

4. organizational boundaries are permeable – ‘new and surprising infor-mation can get in’, if allowed;

5. feedback is not an arid affair but can offer up important informationon what needs to be addressed;

6. feedback is an information flow which allows those within (andwithout) the system to better understand what needs to happen tosustain the system.

They see that there are some clear critical distinctions between feedbackand measurement (see Table 10.5).

So the approach employed can affect how we see the outcomes and howquickly and in what manner the change is seen to bear fruit. Ourapproach to change also affects how we analyse what’s going well andwhat’s going wrong, and what we do about it. Using the four changemetaphors introduced in Chapter 3, we examine here the difference in

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Table 10.5 Some important distinctions between feedback and measurement

Feedback Measurement

Context dependent One size fits all Self-determined ImposedThe system chooses what to notice Criteria are established externally Information accepted from anywhere Information in fixed categories only System creates own meaning Meaning is predetermined Newness, surprise are essential Prediction, routine are valued Focus on adaptability and growth Focus on stability and control Meaning evolves Meaning remains static System co-adapts System adapts to the measures

Source: Wheatley and Kellner-Rogers (1999)

approach to evaluating change, and what can be done if things seem tobe moving slowly or simply ‘not working’.

Machine metaphor

Using a machine metaphor when measuring change will produce a clearset of measurable outcomes which can be monitored and evaluatedthroughout the process. Many of the evaluations of change projects thatappear earlier in this chapter have been based on projects which derivefrom this metaphor. The evaluations are probably done only on projectswhere there is a clear set of measurable objectives, tight timescales and adetailed project specification of scope and functionality. As we have seen,many of these projects do not actually deliver on 100 per cent of theirobjectives. However, if we look again at the figures we might begin toenquire: is change necessarily a failure if it does not meet 100 per cent ofits original aims and objectives? And should allowance be made whenplanning that the original brief will probably need modifying to accom-modate external shifts and changes along the way?

Managing change through this metaphor necessitates a focus on ‘hard’rather than ‘soft’ aspects of the change, and the expected outcomes may bea little rigid. The presence of change management expertise and excellentplanning are likely to be the most obvious ways of getting this type ofchange initiative to work well, together with some flexibility of goals anda very experienced and confident project manager. Luck plays a big parttoo; if the project is completed before the world changes, than that’s lucky!

Political metaphor

Managing change through the political metaphor is all about satisfyingkey stakeholder groupings. Anyone who has seen how governmentswork in the legislative process, especially when there is just a slimmajority, will recognize that the final agreed piece of legislation is notnecessarily the ideal scenario but actually a compromise, a negotiatedagreement, which satisfies the majority of those who have some power.Change is a success if key stakeholders are satisfied and opinions andpolicies have been changed. The process of change is one of successfullynegotiating one’s way through the myriad stakeholder interests.

Success in this arena will be enhanced through the effective and effi-cient use of stakeholder identification, mapping and management, with

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influencing skills at a premium. The change agent needs to demonstratetheir powers of power-broking and negotiating. Failure will appear aseither stalemate or a disgruntled but powerful stakeholder who mayresort to sabotage or sulking. A real, shared sense of common purposewould very likely shift the whole political picture, if it could be achieved.

Organism metaphor

Managing change through the organism metaphor is about ensuring theeffectiveness and efficiency of information flows across the organizationand its environment. A key aspect of successful change managementwithin this paradigm is the focus on organizational learning and respon-siveness. This means ensuring that people are factored into the changes,in order to enhance the capacity and capability of the organization tomeet the external drivers for change.

Hard and fast change objectives are much more difficult within thismetaphor and so it is harder to be concrete when it comes to ongoingmonitoring of change success. Clear goals are not necessarily known atthe beginning, although a vision, direction and a set of core principlesmight well be. Sometimes these types of initiative get lost in their ownprocess – like the introduction of performance appraisal, or tacklingcustomer survey data. The point is often forgotten.

Success will be enhanced by focusing on information flows, ensuringthat there is good knowledge of the external world and developinginternal capability, capacity and competence through participation. Thechange agent needs to demonstrate the art of facilitating informationexchange and organizational learning. Some ‘hard’ targets are oftenextremely useful to sharpen this type of initiative’s performance.

Flux and transformation metaphor

Managing change through the flux and transformation metaphor is aboutcreating a well-contained space for change to occur. Collective vision anddirection, together with a strong sense of organizational values, providethe ‘stakes in the ground’ demarcating parameters for change. Feedbackmechanisms are important and not treated in an evaluative way, butmore as data to be made sense of.

Success will be helped by focusing on tensions, conflicts and energyflows. The change agent’s task is to help to contain change issues and

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create the right conditions for change. They do this by spotting thingsand pointing things out – blowing on the embers and fanning the flames.The big challenge with this way of approaching change is that there is achaotic feel to part of the process, which can lead to panic and knee-jerkreactions. Leaders need to have the confidence that results will come,stick to their sense of purpose and focus on ensuring that the vision is acollective one.

STOP AND THINK!Q 10.1 Do you consider different types of change can be managed more

effectively by adopting different approaches to change?

Q 10.2 Reflecting on your personality, in what ways might you be drawnto the different approaches?

SUMMARY AND CONCLUSIONS

Managing change is a problematic business with most research suggesting70 per cent of change efforts fail to fully meet their original brief.

Successful change appears to require excellent planning, good systemsand processes and a clear vision. Energy, passion and continuous commu-nication are all seen as essentials.

Entering the change consciously, whether it be planned or emergent,will allow you to understand the nature and context of the change, iden-tify its key dimensions and develop relevant strategies and styles.

In leading change you need to be a flexible leader (or at least, part of aflexible leadership team), and be conscious of the appropriate combina-tions of leadership roles for the particular context:

• the Edgy Catalyser;

• the Visionary Motivator;

• the Measured Connector;

• the Tenacious Implementer;

• the Thoughtful Architect.

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Evaluating change progress by focusing on measures will give differentanswers to those found when focusing on feedback.

Operating from within one of the four metaphors will determine one’sapproach and leadership style and how one evaluates the change. It willalso inform what learning comes out of the evaluation and what a leadershould do if things look like they ’re not going well.

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Conclusion

So what did we set out to do, and what did we achieve here? We wantedto write a book that allowed leaders of all persuasions to dip into the richcasket of theory on change, and to come out with their own jewels oflearning. We most of all wanted to help to create the time and space forpeople to reflect on the changes facing them in the past, now and in thefuture by making the theory accessible, asking the right questions andproviding practical glimpses of our experiences. We hope all of this willstimulate new thoughts and new connections.

Two significant messages emerge from writing this book. These areexplained below. We also want two-way communication with ourreaders, and want to make that possible through this section.

THE IMPORTANCE OF PERIPHERAL VISION

The first message we want to convey is about the importance for leadersof being awake and being aware. The notion of peripheral vision is a keyone to keep in mind. Leaders need to wake up to what is going on aroundthem. This means noticing more than the obvious, the loud or the directlyvisible. It means having an awareness of what is going on at the edges,and being observant about motion and change. Whichever assumptions

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a leader employs about the nature of change (machine, political system,organism or flux and transformation) there is a need to be extremelyobservant about what is going on in and around the organization.

We see theories and models as helpful in the process of gainingclearer peripheral vision. If leaders have a language and a frameworkfor noticing things, they begin to notice more. As a young student ofmusic, I can remember studying sonata form, which seemed onlymildly interesting as a piece of theory. However, it led to increasedenjoyment of musical shapes and I began to notice more, and listenwith a sharper ear.

How do leaders achieve peripheral vision? Well, it does take time. Butit means talking and listening to a wide cross-section of people. It meansasking good questions and maintaining open relationships. It meansmaking sure that enough time is given to leadership as well as manage-ment. And, most painfully for some, it means spending more time gath-ering information and spending less time making decisions.

FINDING THE SPACE TO REFLECT

The second message is about the importance of reflection time. Leadersbenefit greatly from taking regular, focused time to reflect on what isgoing on around them (the fruits of their peripheral vision), what ishappening right now, what the options are and where they are person-ally in all this. Their organizations benefit too because leadership action isconsidered, rather than knee-jerk.

Can this reflection be done alone in the car, or in the bath? Well, to someextent. However, it is easy to avoid anxieties by making quick decisionswhen you are alone. It is only when we are with other people we respectand trust that we really begin to consider other options and look difficul-ties in the eye.

We recommend coaching or action learning if you are serious aboutdeveloping yourself as a leader. This can range from a regular meetingwith a close colleague to a longer-term commitment to working with agroup of leaders, or it can involve a series of one-to-one sessions with aprofessional leadership coach. Happily, this is becoming more acceptablein many organizations and seen less as a sign of weakness.

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HOW TO GET IN TOUCH WITH THE AUTHORS OF THIS BOOK

Comments

We are interested in hearing from you if you have enjoyed the book or ifyou have any suggestions or ideas that would improve it. Please sendyour thoughts to us via the contact details below.

Credits

We have made strenuous efforts to get in touch with and acknowledgethose responsible for the ideas and theories contained in this book.However we realize that we may have unintentionally neglected tomention some people. If you are aware of any piece of work containedhere that has not been properly credited, please do let us know so that wecan make amends in future editions of this book.

Coaching and consultancy

If you would like any information about our coaching and consultancywork in connection with managing change and leadership development,we would be delighted to hear from you.

Esther –Website: www.cameronchange.co.ukE-mail: [email protected]

Mike –Website: www.transitionalspace.co.ukE-mail: [email protected]

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362

activist 17, 18, 19adjourning 82advocate 158affirmations 29anchoring 30–31Ashridge Management College

65attitudes 26, 27

Bandler, Richard 28Batten, D 113–14

model of change 113–14, 135

Beck, Aaron 26behaviourism 19–25Belbin, Meredith 88–90, 95

team roles 90, 217, 219belief system theory 26

Bennis, Warren 142, 143–44,173–74, 178, 179

Berkhard, R F 116–19change formula 116–19, 117,

135, 192–93, 280Bion, W R 83–84, 95Boston Consulting Group 341branding 275–88, see also

rebrandingbrand personality 277brand wheel 277Bridges, William 123–26, 127, 247,

250managing the transition

123–26, 170–73Briggs, Katherine 51Bullock, R J 113–14

model of change 113–14, 135

Index

(italics indicate figures or tables in the text)

363

Index

364

business process re-engineering(BPR) 296–98, 307

example 297risks 297typical approach 298

Carnall, Colin 126–28, 127change management model

126–28, 136change

behavioural approach 19–25,41, 59, 61, 244

cognitive approach 25–31, 41,59, 61, 244

complex 310–30critical points 39evaluating 345–50fears about 56–57Gestalt approach 47–50humanistic approach 40–50,

41, 59, 61individual 5, 9, 12–61internal world 13IT-based process 281–303leading 5, 138–86, 343–45learning and 14–19management interventions 60,

331–50organizational 5, 97–137outside world 13personality and 50–53preparing for 338–42psychodynamic approach

32–40, 41, 59, 61, 244research 332–34resistance to 57–58, 121responses to 54–60risks 200

success factors 334–37team 5, 62–96techniques for 29–31see also strategic change process

change agent 44, 58, 158, 340IT 292–96

change curve 35Change Management Learning

Centre 334Change Tracking 335–36Chartered Institute of Personnel

and Development (CIPD)188–89, 192

classical conditioning 20coaching 160, 275Collins, Tim 145–46communication 205–07, 338

‘choice points’ 323complex adaptive systems and

319mergers/acquisitions and 230–32

competenceconscious 16–17, 17unconscious 16–17, 17

complex adaptive systems312–21, 330

attractors 317–18, 318characteristics 312–13management of paradox

319–20polarities 319–20power relations 318–19rules of interaction 316–17self-organization 315–16

complex change 310–30leadership and 327–28organizational change and

312–21

Index

365

principles 315tools to support 321–27

complexity metaphor 310Conner, Daryl 156Covey, Steve 174–77, 179

habit of leaders 176–77cultural change 185, 234–38,

255–80case studies 262–68,

268–75,guidelines for 259–61

culture 255–57, 266–67information 303–05

customer care 263–64cycle of change 116

Dent, Eric 313–14, 330detachment 30dialogue 322–23diversification 225

Ellis, Albert 26emotional intelligence 50, 159,

165–66, 179Enron 229Erikson, Erik 174, 175Evans, Paul 3–4extraversion 51

Fayol, Henri 100feedback 346feedback loops 209, 321feelings 27

mergers/acquisitions 249redundancy 211–12

flux and transformation metaphor99, 104–07, 107, 134, 141, 153,310, 348–49

forming 78four-stage team alignment model

215, 220framework 2freezing 56, 111, 191Freud, Sigmund 42future search 325

Gandhi, Mahatma 148Gardener, Howard 147–48Gaughan, P A 223–24General Electric (GE) 225

Pathfinder Model foracquisitions 241

Gestalt perspective 16, 47–50cycle 48, 49–50

globalization 1, 71goals, setting 27–28, 74Goleman, Daniel 50, 159–60, 162,

163–64, 179, 261Grinder, John 28groups 63–65

definition 63difference to teams 64

Harris, R T 116–19change formula 116–19, 135,

192–93Heifetz, R 149, 178Herzberg, Frederick 24Heraclitus 13homeostasis 111, 112, 121, 128hygiene factors 24

implementer 157–58incompetence

conscious 16–17, 17unconscious 16–17, 17

individual change 12–61approaches to 14impact of mergers/acquisitions

242–44, 245impact of redundancy 209–14,

210introversion 51intuition 51Isaacs, William 322–23ISPAT 230IT-based process change 281–303

benefits realization 281–83business process re-engineering

(BPR) 296–98enterprise architectures 287guiding principles 286–87information culture 303–05PROGRESS methodology

300–02, 301role of IT management

287–291roll-out process 292SAP systems 283socio-technical design 298–300,

300strategic grid 285strategy and 284–87, 306

IT management 287–91change managers 292–96collaborative 294–96competencies 290–91consultant/expert 293–94knowledge 295pair of hands 294skills 295survey of projects 333–34

judging 51

Kanter, Rosabeth Moss 169–70,179

Keidal, Robert 66Kellner-Rogers, Myron 345–46King, Martin Luther, Jr. 146, 148Kolb, David 17–18Komansky, David 234–35Kotter, J P 114–16, 144, 151, 152,

179, 250, 251, 272eight steps model 114–16 , 135,

166, 168reasons change fails 336–37

Kubler-Ross, Elizabeth 32–34Kubler-Ross model 32–35, 34, 37,

244, 247, 253

Laurie, D 149, 178leadership 3, 202, 138–86, 265–66

adaptive 149, 178beginnings 172–73collective 73compared to management 144complex change and 327–29connective 150–51, 178dimensions 5dispersed 153–56, 178embodying a story 147–48, 178emotional competencies 163–64endings 171executive 155, 156hero CEO 154, 178inner leadership 165, 166,

167–68, 179local line 155, 156mergers/acquisitions 242–52network 155, 156organizational metaphors and

139–40, 153

Index

366

Index

367

outcomes 5outer leadership 165, 166,

167–68, 179paradoxes 4peripheral vision 351–52perseverance 169–70, 179presence 329principle-centred 174–77project planning/

implementation 203–04roles 144, 153–66, 343–45, 344,

349self-knowledge 173–74styles 142, 159–66, 261transformational 147, 178visionary 142–47, 145

learning 14–19cycle 17–18, 17definition 14, 17–18dip 15

learning organization 314Lego 4Leschly, Jan 234Lewin, Kurt 55, 56, 110–13

forcefield analysis 57, 110three step model of change 55,

110–13, 135, 191Lipman-Blumen, Jean 149–51,

178Luther-King, Martin 146, 148, 180

machine metaphor 99, 100–01,106, 134, 190–91, 192, 140, 153,347

managers 144, 248–49as role models 261IT 287–91

Mandl, Alex 229

Marconi 225Maslow, A 42–44McCaulley, Mary 87–88McKinsey seven ‘S’ model 122McGregor, Douglas 23–24Mead, Margaret 148measurement 346mergers/acquisitions 126, 222–54,

332conglomerate 224cultural issues 234–38customers and 239–40defensive 226five waves of 223golden rules 253horizontal 224, 225–26impact on individuals 242–44,

245impact on organizations

250–52impact on productivity 232impact on teams 244–47, 247lessons from research 228–242organizational structures and

233public sector 229purpose of 223–28reasons for 227–28, 253restructuring and 249–50seven deadly sins 240trust 252vertical 224, 226

MIT Dialogue Project 322model 2Morgan, Gareth 98, 99, 101–02,

104, 105, 107, 134motivation 23–24Myers, Isabel 51

Myers-Briggs Type IndicatorTM

(MBTITM) 14, 51–52, 53, 217,219

personality types 51–52teams and 86–87, 95

Nadler, David 119–22congruence model 119–22, 120,

136, 192National Audit Office 229, 232,

242needs

hierarchy of 42–44, 43neuro-linguistic programming 28Nevis, E 49–50Noer, David 209–14

four-level intervention model212

norming 81

O’ Neill, Mary Beth 156–59open space technology 323–25operant conditioning 20organisms metaphor 99, 103–04,

106, 134, 142, 153, 348organizational behaviour 256, see

also cultureorganizational change 97–137

complex change and 312–21impact of redundancy 210metaphors 97–109mergers/acquisitions 250–52models/approaches 109–33teams and 214–20see also restructuring

organizational culture 127, 250mergers/acquisitions 234–38

organizational history 54, 55

organizational metaphors 98–99combining 141flux and transformation 99,

104–07, 107, 134, 141, 153,310, 348–49

leadership and 139–40, 153organisms 99, 103–04, 106, 134,

142, 153political systems 99, 101–02,

106, 134, 140–41, 347–48organizational structure

mergers/acquisitions and 233–34types 198–99see also restructuring

organizations 152Owen, Harrison 323–24, 327

pattern breaking 30patterned talking 318Pavlov, Ivan 20PeopleSoft 295perceiving 51peripheral vision 351–52Perls, Fritz 47performing 82personality types 50–53, 61polarity thinking 320political systems metaphor 99,

101–02, 106, 134, 140–41,347–48

positive listings 29positive thinking 27pragmatist 17, 18, 19PROGRESS methodology for

process improvement300–02, 301

project management 113, 201–02project manager 70

Index

368

project sponsor 70project team 70Prosci Benchmarking Report 334punishments 21

rational analysis 313‘rebranding’ 257–58

case study 268–75redundancy 209–14reflection 352reflector 17, 18, 19reinforcement strategies 22–23

financial 22non-financial 22–23

reframing 30restructuring 187–221

communication 205–07consultation 208critical success factors 194–95design options 195–96generic approach 193learning from previous projects

201–02mergers/acquisitions 249–50monitoring/review 209process 190–209project planning/implementation

203–04, 207reasons for 189–90redundancy 209–14risk assessment 196–97, 200supporting mechanisms

207–08rewards 21Roffey Park Management Institute

cultural issues 235–36, 238mergers 231, 253–54

Rogers, Carl 44–46

Santa Fe Institute 312–13, 316Satir, Virginia 36–38, 36, 213, 259Scharmer, O 328, 329Schein, Edgar 14, 53, 55–60, 61,

243, 256self-actualization 42, 43–44self-awareness 163, 164–65,

175–76, 179self-management 163, 165Senge, P 128–32, 250, 314, 329

dispersed leadership 153–56systemic model of change

128–32, 136sensing 51Shaw, Patricia 132–33, 136, 316,

322, 323Skinner, B F 20social awareness 164social skills 164socio-technical design process

298–300, 300sponsor 156–57Stacey, Ralph 82–83, 132–33, 136,

318–19, 321stakeholders 259–60storming 80–81storytelling 321–22strategic change process 182, 183,

184, 205characteristics 185–86

strategy 5, 181IT and 284–87restructuring and 190, 193–94 ,

195–96synergy 224–25

Tavistock Institute of HumanRelations 299

Index

369

Taylor, Frederick 100team change 62–96, see also

Tuckman, Bteam dynamics 86–91team roles 75teams 3

beginnings 246–47, 250change 73, 93, 214–20conflict and 84creativity and 84–85definition 63–64dependency and 83difference to groups 64effectiveness 74–78, 77, 95endings 244, 250four-stage alignment model

215, 220impact of organizational change

on 91–96, 93–94interpersonal relationships 76inter-team relations 76leadership 82management 72–73, 93matrix 71, 93mergers/acquisitions 244–47,

247mission 74need for 65–66networked 72, 93parallel 69–70, 93processes 75–76project 70, 93roles in 88–90self-managed 69

stages of development 79types 66–73, 67–68, 96virtual 71–72, 93work 68–69, 93

technique 2Teligent 229Thatcher, Margaret 148theorist 17, 18, 19Theory X and Y 23–25thinking 51Todnem, R 338–39tool 2trust 252Tuckman, B 78–82, 95

model of team change 78,80–82, 246

Tushman, M L 119–22congruence model 119–22, 120,

136, 192

unfreezing 56, 111, 191

values 26, 251, 260, 265, 274, 328brand 277–79

visualizations 29–30

Wharton Management School281

Wheatley, M 327–28, 345, 346World Café 326–27World Café Community

Foundation 326–27world view descriptors 313Worldcom 229

Index

370

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Copyright
Table of contents
Acknowledgements
Introduction

WHO THIS BOOK IS AIMED AT
THE BASIC CONTENT OF THE BOOK
WHY EXPLORE DIFFERENT APPROACHES TO CHANGE?
OVERVIEW OF STRUCTURE
MESSAGE TO READERS

Part One The underpinning theory

1 Individual change

INTRODUCTION
LEARNING AND THE PROCESS OF CHANGE
THE BEHAVIOURAL APPROACH TO CHANGE
THE COGNITIVE APPROACH TO CHANGE
THE PSYCHODYNAMIC APPROACH TO CHANGE
THE HUMANISTIC PSYCHOLOGY APPROACH TO CHANGE
PERSONALITY AND CHANGE
MANAGING CHANGE IN SELF AND OTHERS
SUMMARY AND CONCLUSIONS

2 Team change

INTRODUCTION
WHAT IS A GROUP AND WHEN IS IT A TEAM?
WHY WE NEED TEAMS
THE TYPES OF ORGANIZATIONAL TEAMS
HOW TO IMPROVE TEAM EFFECTIVENESS
WHAT TEAM CHANGE LOOKS LIKE
THE LEADERSHIP ISSUES IN TEAM CHANGE
HOW INDIVIDUALS AFFECT TEAM DYNAMICS
HOW WELL TEAMS INITIATE AND ADAPT TO ORGANIZATIONAL CHANGE
SUMMARY AND CONCLUSIONS

3 Organizational change

HOW ORGANIZATIONS REALLY WORK
MODELS OF AND APPROACHES TO ORGANIZATIONAL CHANGE
SUMMARY AND CONCLUSIONS

4 Leading change

INTRODUCTION
VISIONARY LEADERSHIP
ROLES THAT LEADERS PLAY
LEADERSHIP STYLES AND SKILLS
DIFFERENT LEADERSHIP FOR DIFFERENT PHASES OF CHANGE
THE IMPORTANCE OF SELF-KNOWLEDGE AND INNER RESOURCES
SUMMARY AND CONCLUSIONS

Part Two The applications

5 Restructuring

REASONS FOR RESTRUCTURING
THE RESTRUCTURING PROCESS
RESTRUCTURING FROM AN INDIVIDUAL CHANGE PERSPECTIVE: THE SPECIAL CASE OF REDUNDANCY
ENABLING TEAMS TO ADDRESS ORGANIZATIONAL CHANGE
CONCLUSION

6 Mergers and acquisitions

THE PURPOSE OF MERGER AND ACQUISITION ACTIVITY
LESSONS FROM RESEARCH INTO SUCCESSFUL AND UNSUCCESSFUL MERGERS AND ACQUISITIONS
APPLYING THE CHANGE THEORY: GUIDELINES FOR LEADERS
SUMMARY

7 Cultural change

GUIDELINES FOR ACHIEVING SUCCESSFUL CULTURAL CHANGE
CASE STUDY ONE: ALIGNING THE ORGANIZATION
CASE STUDY TWO: REBRANDING THE ORGANIZATION
CASE STUDY THREE: CREATING AN EMPLOYER BRAND

8 IT-based process change

STRATEGY AND IT
THE ROLE OF IT MANAGEMENT
THE NEED FOR IT CHANGE MANAGERS
ACHIEVING PROCESS CHANGE
CHANGING THE INFORMATION CULTURE
NEW RULES FOR A NEW AGE
SUMMARY AND CONCLUSIONS

Part Three Emerging inquiries

9 Complex change

INTRODUCTION
WHEN IS CHANGE COMPLEX?
UNDERSTANDING HOW COMPLEXITY SCIENCE APPLIES TO ORGANIZATIONAL CHANGE
TOOLS THAT SUPPORT COMPLEX CHANGE
THE ROLE OF LEADERS IN COMPLEX CHANGE
SUMMARY AND CONCLUSIONS

10 The right way to manage change?

INTRODUCTION
WHAT THE RESEARCH SAYS
DIFFERENT APPROACHES TO GETTING READY FOR CHANGE
LEADING CHANGE
HOW DO YOU KNOW WHETHER CHANGE IS WORKING?
SUMMARY AND CONCLUSIONS

Conclusion

THE IMPORTANCE OF PERIPHERAL VISION
FINDING THE SPACE TO REFLECT
HOW TO GET IN TOUCH WITH THE AUTHORS OF THIS BOOK

References
Index

<< /ASCII85EncodePages false /AllowTransparency false /AutoPositionEPSFiles true /AutoRotatePages /None /Binding /Left /CalGrayProfile (None) /CalRGBProfile (sRGB IEC61966-2.1) /CalCMYKProfile (U.S. Web Coated 50SWOP51 v2) /sRGBProfile (sRGB IEC61966-2.1) /CannotEmbedFontPolicy /Error /CompatibilityLevel 1.4 /CompressObjects /Off /CompressPages true /ConvertImagesToIndexed true /PassThroughJPEGImages true /CreateJDFFile true /CreateJobTicket false /DefaultRenderingIntent /Default /DetectBlends true /DetectCurves 0.1000 /ColorConversionStrategy /LeaveColorUnchanged /DoThumbnails false /EmbedAllFonts true /EmbedOpenType false /ParseICCProfilesInComments true /EmbedJobOptions true /DSCReportingLevel 0 /EmitDSCWarnings false /EndPage -1 /ImageMemory 524288 /LockDistillerParams true /MaxSubsetPct 100 /Optimize false /OPM 1 /ParseDSCComments true /ParseDSCCommentsForDocInfo true /PreserveCopyPage true /PreserveDICMYKValues true /PreserveEPSInfo true /PreserveFlatness true /PreserveHalftoneInfo false /PreserveOPIComments false /PreserveOverprintSettings true /StartPage 1 /SubsetFonts true /TransferFunctionInfo /Preserve /UCRandBGInfo /Preserve /UsePrologue false /ColorSettingsFile (None) /AlwaysEmbed [ true /LucidaConsole /LucidaSans /LucidaSans-Demi /LucidaSans-DemiItalic /LucidaSans-Italic /LucidaSansUnicode /Mangal-Regular /PalatinoCE-Italic /PalatinoCE-Regular ] /NeverEmbed [ true ] /AntiAliasColorImages false /CropColorImages true /ColorImageMinResolution 150 /ColorImageMinResolutionPolicy /OK /DownsampleColorImages true /ColorImageDownsampleType /Bicubic /ColorImageResolution 600 /ColorImageDepth 8 /ColorImageMinDownsampleDepth 1 /ColorImageDownsampleThreshold 1.00000 /EncodeColorImages true /ColorImageFilter /FlateEncode /AutoFilterColorImages false /ColorImageAutoFilterStrategy /JPEG /ColorACSImageDict << /QFactor 0.15 /HSamples [1 1 1 1] /VSamples [1 1 1 1] >> /ColorImageDict << /QFactor 0.15 /HSamples [1 1 1 1] /VSamples [1 1 1 1] >> /JPEG2000ColorACSImageDict << /TileWidth 256 /TileHeight 256 /Quality 30 >> /JPEG2000ColorImageDict << /TileWidth 256 /TileHeight 256 /Quality 30 >> /AntiAliasGrayImages false /CropGrayImages true /GrayImageMinResolution 150 /GrayImageMinResolutionPolicy /OK /DownsampleGrayImages true /GrayImageDownsampleType /Bicubic /GrayImageResolution 600 /GrayImageDepth 8 /GrayImageMinDownsampleDepth 2 /GrayImageDownsampleThreshold 1.00000 /EncodeGrayImages true /GrayImageFilter /FlateEncode /AutoFilterGrayImages false /GrayImageAutoFilterStrategy /JPEG /GrayACSImageDict << /QFactor 0.15 /HSamples [1 1 1 1] /VSamples [1 1 1 1] >> /GrayImageDict << /QFactor 0.15 /HSamples [1 1 1 1] /VSamples [1 1 1 1] >> /JPEG2000GrayACSImageDict << /TileWidth 256 /TileHeight 256 /Quality 30 >> /JPEG2000GrayImageDict << /TileWidth 256 /TileHeight 256 /Quality 30 >> /AntiAliasMonoImages false /CropMonoImages true /MonoImageMinResolution 1200 /MonoImageMinResolutionPolicy /OK /DownsampleMonoImages false /MonoImageDownsampleType /Average /MonoImageResolution 1200 /MonoImageDepth -1 /MonoImageDownsampleThreshold 1.50000 /EncodeMonoImages true /MonoImageFilter /CCITTFaxEncode /MonoImageDict << /K -1 >> /AllowPSXObjects false /CheckCompliance [ /None ] /PDFX1aCheck false /PDFX3Check false /PDFXCompliantPDFOnly false /PDFXNoTrimBoxError true /PDFXTrimBoxToMediaBoxOffset [ 0.00000 0.00000 0.00000 0.00000 ] /PDFXSetBleedBoxToMediaBox true /PDFXBleedBoxToTrimBoxOffset [ 0.00000 0.00000 0.00000 0.00000 ] /PDFXOutputIntentProfile (None) /PDFXOutputConditionIdentifier () /PDFXOutputCondition () /PDFXRegistryName <FEFF0068007400740070003a002f002f007700770077002e0063006f006c006f0072002e006f00720067ffff> /PDFXTrapped /False /SyntheticBoldness 1.000000 /Description << /ENU (Thomson Learning Techno Task Force settings for Acrobat 6. To be used by Compositors for all Thomson Learning approved Print vendors. January 2005.) >>>> setdistillerparams<< /HWResolution [2400 2400] /PageSize [612.000 792.000]>> setpagedevice

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