Change Plan Walden WK3 Assignment

Large-scale change initiatives often collapse under the

weight of their own complexity. To bring order to the chaos,

organize the effort into three coordinated campaigns:

political, marketing, and military.

Campaigning forChanae by Larry Hirschhorn

M ANY EXECUTIVES try to change organizations.

Few succeed. And as most executives who have lived through change initiatives will

admit, fewer still want to try again. Who can blame them for their reluctance? The process is terribly painful, the logistics are enormously complex, the organization wants deeply not to change-and the success rate is abysmal. Yet most organizations must change, and change profoundly, if they're to stay alive. It's the oldest ciich^ in the book, and it's also true.

The good news is that organizational change is not as hard to pull off as people think. It's tough, but it's not im- possible, and it can be systematized. As a researcher and consultant, I've been involved in many change initiatives at scores of companies over the past 15 years, and I've come to believe that the low rate of success has more to do with execution than with fundamental conceptu- alization. Most of the failures I've witnessed occurred because the intricacies of execution overwhelmed the initiatives' sponsors. The change programs that did work

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had one thing in common: They were managed as discrete projects, not as monolithic efforts.

Successful change agents I've observed employ three distinct but linked campaigns in their initiatives. A politi- cal campaign creates a coalition strong enough to support and guide the initiative. A marketing campaign taps into employees' thoughts and feelings and also effectively communicates messages about the prospective program's theme and benefits. And finally, a military campaign deploys executives' scarce resources of attention and time as well as manages resistance.

These three interlinked campaigns are all essential to the success of a change program. Without a political campaign, an initiative risks being undermined. Without a marketing campaign, a leader will be dismissed as a social engineer out of touch vdxh employees. Without a military campaign, a program can stall even after a successful pilot project. In the following pages, I describe the three types of campaigns and suggest key elements to tum ineffective change initiatives into winning ones.

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Kick Off a Political Campaign Corporations have become so complicated and resistant to change that no leader, however powerful, can imple- ment a major change all alone. Successful executives forge coalitions to lead and sustain change initiatives just as winning politicians create coalitions that raise more funds, have more credibility with voters, and deliver more votes. Indeed, wealthy politicians who fund their own campaigns sometimes lose elections because they short- circuit the all-important process of building coalitions.

Forging Alliances. In politics, the makeup of a coali- tion's membership - who's leading, who's playing a sup- porting role, who's an active participant, and who's in the friendly audience - differs at various stages of the cam- paign. Indeed, it's common for politicians to build one coalition to win a party's nomination and another to win the election. The same holds true in business. A zealot, for example, provides better leadership when a campaign's theme has yet to take root, but a consensus builder is

better suited to lead when corpo- rate policies are being changed to accommodate new work practices.

Consider Hewlett-Packard's suc- cessful campaign between 1994 and 1998 to improve service and customize products.^ Early on, a small group of senior HP executives realized that in the IT hardware business, quality no longer differen- tiated HP from its competitors. They decided that the company needed to focus more on the individual needs of customers and less on inter- nal processes. They developed the tag

line "quality one on one" to express the idea that HP needed to apply the

competencies associated with quality to relationships with customers. However,

the executives knew that in a decentralized company like HP, such an initiative would not succeed unless a powerful political coalition backed it. They also knew that the coalition could not be built overnight. Over the course of the campaign, each of three shifts in leadership - each of three baton passes - broadened the coalition that backed new quality practices.

First, the company's standing Planning and Quality Committee convened a task force to examine how HP's philosophy about quality could be refreshed. Realizing that there might be a conflict between old-line quality professionals and managers interested in extending qual- ity to relationships v̂ nth customers, the executives behind the change initiative created a Quality Role Task Force that brought together both camps. This was the first baton pass. The two task forces fonned a coalition and asked the corporate quality office, a central department that charged divisions for its services, to commit resources and people to develop new quality tools. This was the sec- ond baton pass. From 1994 to 1996, the CQO collaborated with more than 50 HP divisions to develop methods and

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tools for increasing customer satisfaction. Individual divisions evinced differing levels of interest in the pro- cess, but eventually HP's influential InkJet Printer Group stepped forward to play a lead role in developing new practices-the third baton pass.

Could these twists and turns have been avoided? Prob- ably not. Twists and turns seem to be part of the process of building a winning coalition for change. Had the tradi- tionalists not been swept into the coalition, the operating divisions might not have volunteered to be sites where new tools could be developed. And had the hybrid task force not allowed the CQO to be its leader, the initiative might never have reached the experimentation and im- plementation phases at HP.

Shifting Structures. The political campaign also re- quires changes to the organizational structure. Sometimes, new political coalitions are established through changes to the manifest, formal structure of the corporation. In other cases, the informal networks are the best ways in. And in still other cases, executives use temporary counterstruc- tures to support their change initiatives.

The experience of global hotel chain Novotel illus- trates a successful change in formal organizational struc- ture.^ The chain, owned by the Accor Group, successfully launched a major change initiative when occupancy rates fell steeply after the Gulf War ended in 1991. Novotel's newly appointed copresidents, Philippe Brizon and Gilles P^lisson, decided that forging alliances with the general managers ofthe chain's 200 hotels would best serve their initiative. The hotel managers were the copresidents' natural allies because they had been the first to point out to top management that Novotel's business model-four- star facilities at three-star prices-was no longer bringing in customers.

First, Brizon and P l̂isson eliminated two of the five tiers in Novotel's organizational hierarchy in order to form a close coalition with the hotel managers. Then they gave the managers more control over room pricing, work practices, and the layout of public areas. Finally, Brizon and P l̂isson abolished the central quality-control department so that it could not inhibit the efforts ofthe general managers. Coalitions of this kind are often fonned when executives work to eliminate bureaucracy.

However, changing the formal structure of an orga- nization first is not always possible. Often it is necessary to work through the informal networks by discovering how people actually work together. That was the case at

Larry Hirschhorn is a principal at the Center for Applied Research, located in Philadelphia. He is the author of Jive books, including Reworking Authority: Leading and Fol- lowing in the Post-Modem Organization (MITPress, 1997), and numerous articles inctuding, with Thomas Gilmore, "The New Boundaries of the 'Boundaryless'Company" (HBR May-June 1992).

Bristol-Myers Squibb (BMS) in 1997. At the time, one of the company's top priorities was to speed the develop- ment of blockbuster drugs. Peter Ringrose, the president of the company's Pharmaceutical Research Institute, felt that researchers needed to reduce their focuses on particular sciences and therapeutic areas (like analytic chemistry or heart disease) and adopt more multidisci- plinary approaches to research. Ringrose asked HR direc- tor Elizabeth Bolgiano to help the institute's top team redesign the structure ofthe research institute with that end in mind. The team created three multidisciplinary committees to oversee the company's research efforts. A year later, nothing much had changed. When team members looked for explanations, they discovered that the new committees had not touched the way people really worked with one another. The changes in the struc- ture had, in a sense, been undermined by the lack of change in the informal organization.

The research group's work fiows were then mapped to uncover the drug development process as it actually occurred. Armed with the mappings, senior executives and scientists together identified milestones for each segment ofthe change process. Several multidisciplinary subcommittees and teams were created to own these smaller parts ofthe process as delineated by the scientists. By acknowledging how research was actually conducted, senior executives co-opted people into the political co- alition. As BMS's executives discovered, changes in the formal structure sometimes follow, rather than precede, changes in the informal organization.

The lesson from that example is that senior executives may be too quick to change structure when what is nec- essary is to change practice. Changing how people actu- ally do their work can also be accomplished by creating temporary coalitions, sometimes through counterstruc- tures. A counterstructure will initially undermine the chain of command but eventually revitalizes the organi- zation. (This is the strategy CEOs use when, for instance, they house particular functions in the office ofthe presi- dent so that the functional heads temporarily report di- rectly to them.)

Consider the case of ASDA;' the large British grocery chain now owned by Wal-Mart. In 1991, when ASDA was in financial trouble, the board of directors brought in Archie Norman and Allan Leighton to tum around the company. The two men soon realized that few, if any, ot the managers in the organization were willing to back their ideas. Instead of working through those managers, they struck a working alliance with store-level employees and, in so doing, deliberately undemiined ASDA's existing chain of command.

Norman and Leighton launched a store renewal pro- gram that allowed the two of them to take personal charge of particular stores. They redesigned their store formats, pricing patterns, and management processes.

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Norman also began showing up unannounced in stores, notebook in hand, to talk to employees on the fioor. By not honoring the store managers' traditional right to re- ceive advance notice, he increased the power of their subordinates. Norman also introduced a program called "Tell Archie," whereby em- ployees wrote in suggestions and ideas, which were forwarded to the relevant store managers for response. Norman personally re- viewed each answer, dismissing those he felt were inadequate. Thus, Norman and Leighton reduced the authority of ASDA's influential hi- erarchy by temporarily cutting it out of the loop.

Launch a Marketing Campaign Most chief executive officers know firsthand the importance of market- ing campaigns to communicate the benefits of their change initiatives. They are as adept in using the myr- iad elements of marketing-banners, events, contests, and so forth-to sell their initiatives to employees as they are in deploying those elements to "- promote products to customers. Un- fortunately, such techniques don't always deliver results. In my experience, there are three other, more important, elements that many executives ignore.

Listening In. Some ideas for change efforts are stimu- lated by thoughts that bubble up from the field rather than from the corporate center. For instance, Novotel, the European hotel chain mentioned earlier, was still enjoy- ing high profits when its occupancy rates started to drop. Its headquarters probably would not have woken up to the underlying problem if individual hotel managers hadn't pointed it out.

Listening to voices from the field is an important part of any internal marketing campaign, but that's easier said than done. Many employees don't insist on being heard in the assertive way that Novotel's managers did. Increas- ingly, therefore, executives are borrowing ethnographic methods from anthropologists to leam what people do and think. Rather than interviewing people, anthropolo- gists go into the field and observe them. They record con- versations and take note ofthe tacit elements of settings: how people dress, the care they show to their surround- ings, what rituals they use to greet one another.

Executives use techniques like these to observe how peopie go about their everyday work and to uncover latent strengths and weaknesses. Researchers at my orga- nization, the Center for Applied Research (CFAR), worked with a large U.S. insurance company that planned to launch a program to help its field-support officers and the insurance agents working for them become more effective. The aim was to identify the best work practices within individual offices and then employ them throughout the company. Using ethnographic methods, the research team listened in on both sides of the relationship, first shadowing the insurance agents for a week, then the field- support officers.

We discovered a lot of things that we wouldn't neces- sarily have found out if we'd simply interviewed employ- ees. For example, in the most effective offices, we saw managers holding informal football-like huddles, rather than formal meetings, at the beginning and end of each day. The huddles brought everybody together, alerted everyone to urgent issues, and allowed people to antici- pate concems that would likely emerge over the next week. These gatherings were practical ways for everyone

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to get together and share intelligence within the office. Had we merely interviewed the staff, we might never have leamed about the huddles because they were infor- mal. Indeed, the best work practices do not announce themselves because they are so seamlessly integrated into everyone's work habits.

Working with Lead Customers. Executives who have successfully conducted change initiatives work with lead customers-employees who step forward to try out a new practice or, as often happens, have invented one them- selves. Such people t>ften help design or modify a program, subsequently leading to a more rapid spread of a new practice. And since lead customers raise problems that other users have not yet confronted, they help pace the implementation ofthe initiative.

Take the case of a global consultancy company that CFAR worked with whose president believed that a for- ma! mentoring program would help the firm retain MBA recruits. When the HR-sponsored mentoring program was presented to the heads of the local offices, it was roundly rejected; "Don't really need it." "Won't work here." "Too formal for us." CFAR then worked with the HR team to conduct a series of pilot mentoring workshops, but only in the few offices that wanted to participate.

At the end of each session, we asked participants to write down the most useful thing they had learned. The quotes were organized by theme and sent to the next office that had shown interest in the program. Over time, comments from participants gave the program a voice, as if the mentoring workshop was a natural outgrowth of the firm's culture. Eventually, all the feedback from these lead customers was used to modify the program. TWo years and many pilots later, the mentoring program had been adopted by every office, some of which were also asking about its next phase. As the company's senior exec- utives discovered, change based on vague promises of future benefits is difficult to communicate. Effective lead- ers find users who already believe in the need for a change initiative, develop it with their help, and leam from their comments and insights.

Developing a Theme. I'm not convinced that change initiatives need a lot of marketing-style bells and whistles, but they do need a clearly articulated, high-level theme that employees at all organizational levels can respond to. Jack Welch's "Work-Out" theme - which conveyed the need to eliminate work and to build organizational muscle - is a classic example.

Effective themes are accessible but also contain a good deal of complexity. Some of the best - like GE's Work- Out-possess double meanings; indeed,they often contain or suggest a paradox. At BMS, for instance, when Peter Ringrose started the program to accelerate drug develop- ment, the top management team decided on the theme "opportunity-seeking blockbuster." According to Ringrose, the term "opportunity-seeking" would convey to scien-

tists that new chemical entities often emerge serendipi- tously. Researchers ought to be opportunistic, the tag line implied, and they should be quick to follow up ideas, hunches, and early research results from any corner of the company."Blockbuster,"on the other hand, suggested that such opportunism should seek results, or strive to achieve the company's financial targets. Thus the tag line acknowledged respect for the white spaces where discovery often takes place and simultaneously implied that the work could be done while being mindful ofthe company's financial goals.

The paradox embodied in a campaign's theme often alludes to a tension that the change initiative promises to resolve, as was the case at BMS. lt was also true at Micro- soft in 1999. when the company was tom between focus- ing on the Windows operating system as its anchor and the Internet as its future.^ Microsoft's leaders hit upon the suffix .Net, which could be applied to all its products-as in Office.Net and MSN.Net. The prefix, naming Micro- soft's proprietary products, alluded to the company's ex- clusiveness while the suffix, citing the Web's open-source framework, gave a nod to the larger world ofthe Intemet. The combination of prefix and suffix symbolized Micro- soft's hope that the company would change by bridging the gulf between the two.

Mount a Military Campaign Executives instinctively draw on the metaphor ofthe mil- itary campaign to describe not only their business strat- egy but alsi> their approach for changing an organization. The link between the military and a change initiative is an uneasy one, but the central task in both is the man- agement of resistance.

Executives believe, quite sensibly, that they will never introduce lasting changes unless they deliberately engage with and overcome resistance. Resistance, like a good enemy, can be perfectly rational; it has many sources, including people's habits, persona! relationships, political alliances, and the skepticism with which change initia- tives are viewed. My experience suggests that three mili- tary tactics can help executives overcome organizational resistance to change.

Securing Supply Lines, Just as logistics are critical to any military campaign, supply !ines are crucia! to every change initiative. But while an army marches on its be!ly, a change initiative feeds on attention. In fact, change initiatives usually fail not because of active resistance or insufficient funds but because ofa lack of attention. A study by John Darragh and Andrew Campbell found that close to 50% of al! corporate initiatives bog down simply because people stop paying attention to them.

Successful executives know that everyone's time and energy for transformation efforts are scarce, and thus they secure their supply lines before kicking off their

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campaigns. Piggybacking onto issues that have already captured people's interests often produces good resu!ts. Consider the CEO of a gas-and-light holding company that one of CFAR's teams worked with. The CEO needed to drasticaUy restructure the company's costs, but the management team was preoccupied with other projects. "Just make it go away," they told him. "We've got no cyc!es !eft for this." The CEO decided, instead, to work with some of the initiatives he had aiready started. He persuaded a dormant strategic-p!anning group to come up with a rough framework for cost restructuring. Then he iooked for other efforts a!ready under way to fiesh out the ffamework and test parts ofthe new model. He used five existing pilot projects to roll out his ideas and didn't have to create a single new one. Eor example, he roped in an HR software-imp!ementation team and a team work- ing on resource ailocation and schedu!ing for the com- pany's delivery trucks. Ultimately, the only dedicated re- source the CEO needed to assign to the program was a campaign manager to keep information flowing across the projects and to the rest ofthe company.

Indeed, it's not uncommon for a change initiative being planned to exist already as a bootleg project ted by pas- sionately committed people. Executives who build on such insurgent initiatives and the passions that feed them are able to rapidly tum resistance into cooperation, and the chances of success are far higher than if they started from scratch. For example, a 3M project to develop Thin- sulate, the best-selling insulation material, was kil!ed by Livio DeSimone, then a general manager at 3M and the recently retired CEO. Yet several scientists continued to work on it in another !ab as a skunk works project. That story had a happy ending, but insurgencies of this kind are defeated in most organizations.

Another way to gain aftention and overcome resistance is through the carefu! use of meetings. In 1997. KPMG Internationa!, under the direction of Co!in Sharman, launched a firmwide campaign to develop a set of cor- porate values.^ Senior executives needed to meet with managers at all levels to craft and clarify the proposed value statements. However, rather than scheduling specia! values-clarification meetings, the executives piggybacked onto already scheduled KPMG events and bid for time on

their agendas. That way, they avoided the meeting overload that can strangle initiatives, just as trucks

and jeeps ferrying supplies to a war front can create paralyzing traffic jams, new meet-

ings penciled into overloaded calendars can block the fiow of attention a fresh initiative needs. Moreover, linking the values work to other work min- imized the chances that the initia- tive would be seen as unrelated t o "real" business issues.

Choosing Beachheads. PiS one of the first steps in change initia- tives, executives often set up pilot projects to test new ideas or prac- tices. These projects tend to go after easy successes in order to minimize challenges in implementation. But such pilot projects rarely, if ever,tum into beachheads because they do not expose managers to the difficult dynamics they will ultimately face. A beachhead is never easy to secure; that's what makes it strategic.

The limitations of pilot projects that were focused on easy wins were evident in the 1980s, when many manufacturing companies tried to change job designs. They created greenfield sites with vastly improved labor-management rela- tions or with much more partici- pative frontline supervision. But

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people in other plants discounted those successes, saying, "The exception proves the rule." Similarly, when man- agers introduced quality of work-life programs by involv- ing frontline workers in decisions about lunchroom lay- outs and other fairly small concerns, early victories rarely led to increases in employee participation.That's because employees became cynical when managers, confronting more serious issues at subsequent stages, pulled back.

Perhaps the most spectacular failed beachhead is the Saturn division of General Motors. Saturn succeeded in producing small cars at competitive costs, but it failed as a beachhead for transforming the way GM related to its broad base of customers. Saturn's unique brand of union- management collaboration did not spread across GE; other divisions did not take up its one-price, no-haggling selling policy; and, most important, the purchase ofa Sat- urn did not lead customers to later buy up to a larger GM car. All the work that went into creating the distinctive Saturn brand interfered with GM's ability to leverage the brand for the corporation's wider benefit.

Why did the pilot fail to t u m into a true beachhead? TVyo key criteria were missing: A beachhead needs to be a free space for innovation, and it needs to be able to loop learning back into the rest of the organization. For example, when ASDA's Archie Norman and Allan Leighton started their store renewal program, they care- fully selected the initial beachheads they wanted to establish. The first store they chose to work with was a low-performing outlet-headed by a manager of average competence - that faced stiff competition from three other grocery stores. Norman and Leighton took the store manager out of the chain of command and worked closely with him to create fresh strategies. They encour- aged the manager to turn around the store by breaking some of the chain's taboos, such as by managing sales rather than the usual practice of managing expenses. Norman and Leighton eventually used everything they learned in the process to formalize a set of principles called the ASDA Way of Working, and those rules guided the successful renewal of all stores in the chain.

Creating a War Room. A war room should be more than just a metaphor in a change initiative. A dedicated space cues peopie to focus on a single issue and can help screen out many day-to-day organizational distractions. Such a setting can house shared materials, documents, charts, and maps for everyone's use. When located near a CEO's corner office, the war room also signifies the importance ofthe issue under attack.

When he was CEO of Daimler-Benz, jurgen Schrempp worked from a war room to facilitate the company's most important strategic initiatives. In Taken for a Ride: How Daimler-Benz Drove Cffwith Chrysler, Bill Vlasic and Bradley Stertz relate that "the room was wall-to-wall high tech- nology: banks of computer screens, video-conferencing equipment, a big-screen television, monitors that flashed

the latest news and stock quotes from wire services around the world. Clocks on the wall showed the time in Detroit, New York, Stuttgart, Tokyo, Bangkok, Sydney, and Johannesburg." The war room provided executives with "access to 2,000 commercial databases and every budget item and sales report in Daimler's far-flung oper- ations." In fact, Daimler-Benz's war room played a key role in helping Schrempp identify Chrysler as a potential merger target.

A war room also has a symbolic purpose. For instance, GM used its environmental-strategy war room, set up in 2001 to organize its efforts for tracking fuel efficiency, for public relations. News reporters were often invited to see the war room so they would tell the world that GM was seriously tackling the issue. Any organization determined to implement a change initiative should, I believe, create a war room.

In my experience, the most successful executives launch these three campaigns - political, marketing, and mili- tary - simultaneously rather than sequentially. Inevi- tably, though, the imperatives of one campaign over the others will stand out at some point during the life of the change initiative. When that happens, attending to that campaign becomes a priority. For instance, if you have support from top management plus the resources to advance a practice but haven't yet engendered excite- ment or commitment from employees, you'll focus on the marketing campaign-listening in to understand what your constituents are thinking and feeling and then re- fashioning your initiative so that it draws on their pas- sions. Indeed, one way to manage the three campaigns simultaneously is to ask in which campaign the current boftleneck lies. Nevertheless, the three campaigns feed on one another, and it's simplistic to think of them in isola- tion. Successful campaigns build winning coalitions, tap into people's thoughts and feelings, and deploy scarce resources at the right beachheads and at the right time. If any one of these campaigns is lacking, the change ini- tiative is bound to fail. ^

1. Robert E. Cole, "Knowledge Sharing and Autonomy in Multidivisional Cor- porations: The Center and the Periphery," unpublished manuscript. Cited with the permission ofthe author and the Haas School of Business, University of California, Berkeley.

2. Roland Calori,Charles Baden-Fuller,and Brian Hunt,"Managing Change at Novotel: Back to the Future," ion^ Range Planning, December 2(HKI, and Nov- otel case study, European Case Clearing House case no. 395-113-1.

3. Michael Beer and James B. Weber, "ASDA (A)," HBS case no. 9-498-1.X15.

4- David Bank, Breaking Windows: How Bill Gates Fumbled the Future of Micro- soft (Free Press, 2001).

5. Jan Thornbury, "KPMG: Revitalizing Culture Through Values," Business Strategy Review, Winter 1999.

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