6 Discussion "Cracking the Code of Change" Strategies for Change

HBR's 10 Must Reads on Change Management: Cracking the Code of Change

Cracking the Code of Change

by Michael Beer and Nitin Nohria

THE NEW ECONOMY HAS ushered in great business opportunities—and great turmoil. Not since the Industrial Revolution have the stakes of dealing with change been so high. Most traditional organizations have accepted, in theory at least, that they must either change or die. And even Internet companies such as eBay, Amazon.com, and America Online recognize that they need to manage the changes associated with rapid entrepreneurial growth. Despite some individual successes, however, change remains difficult to pull off, and few companies manage the process as well as they would like. Most of their initiatives—installing new technology, downsizing, restructuring, or trying to change corporate culture—have had low success rates. The brutal fact is that about 70% of all change initiatives fail.

In our experience, the reason for most of those failures is that in their rush to change their organizations, managers end up immersing themselves in an alphabet soup of initiatives. They lose focus and become mesmerized by all the advice available in print and online about why companies should change, what they should try to accomplish, and how they should do it. This proliferation of recommendations often leads to muddle when change is attempted. The result is that most change efforts exert a heavy toll, both human and economic. To improve the odds of success, and to reduce the human carnage, it is imperative that executives understand the nature and process of corporate change much better. But even that is not enough. Leaders need to crack the code of change.

For more than 40 years now, we’ve been studying the nature of corporate change. And although every business’s change initiative is unique, our research suggests there are two archetypes, or theories, of change. These archetypes are based on very different and often unconscious assumptions by senior executives—and the consultants and academics who advise them—about why and how changes should be made. Theory E is change based on economic value. Theory O is change based on organizational capability. Both are valid models; each theory of change achieves some of management’s goals, either explicitly or implicitly. But each theory also has its costs—often unexpected ones.

Theory E change strategies are the ones that make all the headlines. In this “hard” approach to change, shareholder value is the only legitimate measure of corporate success. Change usually involves heavy use of economic incentives, drastic layoffs, downsizing, and restructuring. E change strategies are more common than O change strategies among companies in the United States, where financial markets push corporate boards for rapid turnarounds. For instance, when William A. Anders was brought in as CEO of General Dynamics in 1991, his goal was to maximize economic value—how-ever painful the remedies might be. Over the next three years, Anders reduced the workforce by 71,000 people—44,000 through the divestiture of seven businesses and 27,000 through layoffs and attrition. Anders employed common E strategies.

Managers who subscribe to Theory O believe that if they were to focus exclusively on the price of their stock, they might harm their organizations. In this “soft” approach to change, the goal is to develop corporate culture and human capability through individual and organizational learning—the process of changing, obtaining feedback, reflecting, and making further changes. U.S. companies that adopt O strategies, as Hewlett-Packard did when its performance flagged in the 1980s, typically have strong, long-held, commitment-based psychological contracts with their employees.

Idea in Brief

Here’s the brutal fact: 70% of all change initiatives fail. Why? Managers flounder in an alphabet soup of change methods, drowning in conflicting advice. Change efforts exact a heavy toll—human and economic—as companies flail from one change method to another.

To effect successful change, first grasp the two basic theories of change:

1. Theory E change emphasizes economic value—as measured only by shareholder returns. This “hard” approach boosts returns through economic incentives, drastic layoffs, and restructuring. “Chainsaw Al” Dunlop’s firing 11,000 Scott Paper employees and selling several businesses—tripling shareholder value to $9 billion—is a stunning example.

2. Theory O change—a “softer” approach—focuses on developing corporate culture and human capability, patiently building trust and emotional commitment to the company through teamwork and communication.

Then, carefully and simultaneously balance these very different approaches. It’s not easy. Employees distrust leaders who alternate between nurturing and cutthroat behavior. But, done well, you’ll boost profits and productivity, and achieve sustainable competitive advantage.

Managers at these companies are likely to see the risks in breaking those contracts. Because they place a high value on employee commitment, Asian and European businesses are also more likely to adopt an O strategy to change.

Few companies subscribe to just one theory. Most companies we have studied have used a mix of both. But all too often, managers try to apply theories E and O in tandem without resolving the inherent tensions between them. This impulse to combine the strategies is directionally correct, but theories E and O are so different that it’s hard to manage them simultaneously—employees distrust leaders who alternate between nurturing and cutthroat corporate behavior. Our research suggests, however, that there is a way to resolve the tension so that businesses can satisfy their shareholders while building viable institutions. Companies that effectively combine hard and soft approaches to change can reap big payoffs in profitability and productivity. Those companies are more likely to achieve a sustainable competitive advantage. They can also reduce the anxiety that grips whole societies in the face of corporate restructuring.

Idea in Practice

The UK grocery chain, ASDA, teetered on bankruptcy in 1991. Here’s how CEO Archie Norman combined change Theories E and O with spectacular results: a culture of trust and openness—and an eightfold increase in shareholder value.

In this article, we will explore how one company successfully resolved the tensions between E and O strategies. But before we do that, we need to look at just how different the two theories are.

A Tale of Two Theories

To understand how sharply theories E and O differ, we can compare them along several key dimensions of corporate change: goals, leadership, focus, process, reward system, and use of consultants. (For a side-by-side comparison, see the table “Comparing theories of change.”) We’ll look at two companies in similar businesses that adopted almost pure forms of each archetype. Scott Paper successfully used Theory E to enhance shareholder value, while Champion International used Theory O to achieve a complete cultural transformation that increased its productivity and employee commitment. But as we will soon observe, both paper producers also discovered the limitations of sticking with only one theory of change. Let’s compare the two companies’ initiatives.

Goals

When Al Dunlap assumed leadership of Scott Paper in May 1994, he immediately fired 11,000 employees and sold off several businesses. His determination to restructure the beleaguered company was almost monomaniacal. As he said in one of his speeches: “Shareholders are the number one constituency. Show me an annual report that lists six or seven constituencies, and I’ll show you a mismanaged company.” From a shareholder’s perspective, the results of Dunlap’s actions were stunning. In just 20 months, he managed to triple shareholder returns as Scott Paper’s market value rose from about $3 billion in 1994 to about $9 billion by the end of 1995. The financial community applauded his efforts and hailed Scott Paper’s approach to change as a model for improving shareholder returns.

Champion’s reform effort couldn’t have been more different. CEO Andrew Sigler acknowledged that enhanced economic value was an appropriate target for management, but he believed that goal would be best achieved by transforming the behaviors of management, unions, and workers alike. In 1981, Sigler and other managers launched a long-term effort to restructure corporate culture around a new vision called the Champion Way, a set of values and principles designed to build up the competencies of the workforce. By improving the organization’s capabilities in areas such as teamwork and communication, Sigler believed he could best increase employee productivity and thereby improve the bottom line.

Leadership

Leaders who subscribe to Theory E manage change the old-fashioned way: from the top down. They set goals with little involvement from their management teams and certainly without input from lower levels or unions. Dunlap was clearly the commander in chief at Scott Paper. The executives who survived his purges, for example, had to agree with his philosophy that shareholder value was now the company’s primary objective. Nothing made clear Dunlap’s leadership style better than the nickname he gloried in: “Chainsaw Al.”

By contrast, participation (a Theory O trait) was the hallmark of change at Champion. Every effort was made to get all its employees emotionally committed to improving the company’s performance. Teams drafted value statements, and even the industry’s unions were brought into the dialogue. Employees were encouraged to identify and solve problems themselves. Change at Champion sprouted from the bottom up.

Focus

In E-type change, leaders typically focus immediately on streamlining the “hardware” of the organization—the structures and systems. These are the elements that can most easily be changed from the top down, yielding swift financial results. For instance, Dunlap quickly decided to outsource many of Scott Paper’s corporate functions—benefits and payroll administration, almost all of its management information systems, some of its technology research, medical services, telemarketing, and security functions. An executive manager of a global merger explained the E rationale: “I have a [profit] goal of $176 million this year, and there’s no time to involve others or develop organizational capability.”

By contrast, Theory O’s initial focus is on building up the “software” of an organization—the culture, behavior, and attitudes of employees. Throughout a decade of reforms, no employees were laid off at Champion. Rather, managers and employees were encouraged to collectively reexamine their work practices and behaviors with a goal of increasing productivity and quality. Managers were replaced if they did not conform to the new philosophy, but the overall firing freeze helped to create a culture of trust and commitment. Structural change followed once the culture changed. Indeed, by the mid-1990s, Champion had completely reorganized all its corporate functions. Once a hierarchical, functionally organized company, Champion adopted a matrix structure that empowered employee teams to focus more on customers.

Comparing theories of change

Our research has shown that all corporate transformations can be compared along the six dimensions shown here. The table outlines the differences between the E and O archetypes and illustrates what an integrated approach might look like.

Process

Theory E is predicated on the view that no battle can be won without a clear, comprehensive, common plan of action that encourages internal coordination and inspires confidence among customers, suppliers, and investors. The plan lets leaders quickly motivate and mobilize their businesses; it compels them to take tough, decisive actions they presumably haven’t taken in the past. The changes at Scott Paper unfolded like a military battle plan. Managers were instructed to achieve specific targets by specific dates. If they didn’t adhere to Dunlap’s tightly choreographed marching orders, they risked being fired.

Meanwhile, the changes at Champion were more evolutionary and emergent than planned and programmatic. When the company’s decade-long reform began in 1981, there was no master blueprint. The idea was that innovative work processes, values, and culture changes in one plant would be adapted and used by other plants on their way through the corporate system. No single person, not even Sigler, was seen as the driver of change. Instead, local leaders took responsibility. Top management simply encouraged experimentation from the ground up, spread new ideas to other workers, and transferred managers of innovative units to lagging ones.

Reward System

The rewards for managers in E-type change programs are primarily financial. Employee compensation, for example, is linked with financial incentives, mainly stock options. Dunlap’s own compensation package—which ultimately netted him more than $100 million—was tightly linked to shareholders’ interests. Proponents of this system argue that financial incentives guarantee that employees’ interests match stockholders’ interests. Financial rewards also help top executives feel compensated for a difficult job—one in which they are often reviled by their onetime colleagues and the larger community.

The O-style compensation systems at Champion reinforced the goals of culture change, but they didn’t drive those goals. A skills-based pay system and a corporatewide gains-sharing plan were installed to draw union workers and management into a community of purpose. Financial incentives were used only as a supplement to those systems and not to push particular reforms. While Champion did offer a companywide bonus to achieve business goals in two separate years, this came late in the change process and played a minor role in actually fulfilling those goals.

Use of Consultants

Theory E change strategies often rely heavily on external consultants. A SWAT team of Ivy League–educated MBAs, armed with an arsenal of state-of-the-art ideas, is brought in to find new ways to look at the business and manage it. The consultants can help CEOs get a fix on urgent issues and priorities. They also offer much-needed political and psychological support for CEOs who are under fire from financial markets. At Scott Paper, Dunlap engaged consultants to identify many of the painful cost-savings initiatives that he subsequently implemented.

Theory O change programs rely far less on consultants. The handful of consultants who were introduced at Champion helped managers and workers make their own business analyses and craft their own solutions. And while the consultants had their own ideas, they did not recommend any corporate program, dictate any solutions, or whip anyone into line. They simply led a process of discovery and learning that was intended to change the corporate culture in a way that could not be foreseen at the outset.

In their purest forms, both change theories clearly have their limitations. CEOs who must make difficult E-style choices understandably distance themselves from their employees to ease their own pain and guilt. Once removed from their people, these CEOs begin to see their employees as part of the problem. As time goes on, these leaders become less and less inclined to adopt O-style change strategies. They fail to invest in building the company’s human resources, which inevitably hollows out the company and saps its capacity for sustained performance. At Scott Paper, for example, Dunlap trebled shareholder returns but failed to build the capabilities needed for sustained competitive advantage—commitment, coordination, communication, and creativity. In 1995, Dunlap sold Scott Paper to its longtime competitor Kimberly-Clark.

CEOs who embrace Theory O find that their loyalty and commitment to their employees can prevent them from making tough decisions. The temptation is to postpone the bitter medicine in the hopes that rising productivity will improve the business situation. But productivity gains aren’t enough when fundamental structural change is required. That reality is underscored by today’s global financial system, which makes corporate performance instantly transparent to large institutional shareholders whose fund managers are under enormous pressure to show good results. Consider Champion. By 1997, it had become one of the leaders in its industry based on most performance measures. Still, newly instated CEO Richard Olsen was forced to admit a tough reality: Champion shareholders had not seen a significant increase in the economic value of the company in more than a decade. Indeed, when Champion was sold recently to Finland-based UPM-Kymmene, it was acquired for a mere 1.5 times its original share value.

Managing the Contradictions

Clearly, if the objective is to build a company that can adapt, survive, and prosper over the years, Theory E strategies must somehow be combined with Theory O strategies. But unless they’re carefully handled, melding E and O is likely to bring the worst of both theories and the benefits of neither. Indeed, the corporate changes we’ve studied that arbitrarily and haphazardly mixed E and O techniques proved destabilizing to the organizations in which they were imposed. Managers in those companies would certainly have been better off to pick either pure E or pure O strategies—with all their costs. At least one set of stakeholders would have benefited.

The obvious way to combine E and O is to sequence them. Some companies, notably General Electric, have done this quite successfully. At GE, CEO Jack Welch began his sequenced change by imposing an E-type restructuring. He demanded that all GE businesses be first or second in their industries. Any unit that failed that test would be fixed, sold off, or closed. Welch followed that up with a massive downsizing of the GE bureaucracy. Between 1981 and 1985, total employment at the corporation dropped from 412,000 to 299,000. Sixty percent of the corporate staff, mostly in planning and finance, was laid off. In this phase, GE people began to call Welch “Neutron Jack,” after the fabled bomb that was designed to destroy people but leave buildings intact. Once he had wrung out the redundancies, however, Welch adopted an O strategy. In 1985, he started a series of organizational initiatives to change GE culture. He declared that the company had to become “boundaryless,” and unit leaders across the corporation had to submit to being challenged by their subordinates in open forum. Feedback and open communication eventually eroded the hierarchy. Soon Welch applied the new order to GE’s global businesses.

Unfortunately for companies like Champion, sequenced change is far easier if you begin, as Welch did, with Theory E. Indeed, it is highly unlikely that E would successfully follow O because of the sense of betrayal that would involve. It is hard to imagine how a draconian program of layoffs and downsizing can leave intact the psychological contract and culture a company has so patiently built up over the years. But whatever the order, one sure problem with sequencing is that it can take a very long time; at GE it has taken almost two decades. A sequenced change may also require two CEOs, carefully chosen for their contrasting styles and philosophies, which may create its own set of problems. Most turnaround managers don’t survive restructuring—partly because of their own inflexibility and partly because they can’t live down the distrust that their ruthlessness has earned them. In most cases, even the best-intentioned effort to rebuild trust and commitment rarely overcomes a bloody past. Welch is the exception that proves the rule.

So what should you do? How can you achieve rapid improvements in economic value while simultaneously developing an open, trusting corporate culture? Paradoxical as those goals may appear, our research shows that it is possible to apply theories E and O together. It requires great will, skill—and wisdom. But precisely because it is more difficult than mere sequencing, the simultaneous use of O and E strategies is more likely to be a source of sustainable competitive advantage.

One company that exemplifies the reconciliation of the hard and soft approaches is ASDA, the UK grocery chain that CEO Archie Norman took over in December 1991, when the retailer was nearly bankrupt. Norman laid off employees, flattened the organization, and sold off losing businesses—acts that usually spawn distrust among employees and distance executives from their people. Yet during Norman’s eight-year tenure as CEO, ASDA also became famous for its atmosphere of trust and openness. It has been described by executives at Wal-Mart—itself famous for its corporate culture—as being “more like Wal-Mart than we are.” Let’s look at how ASDA resolved the conflicts of E and O along the six main dimensions of change.

Explicitly confront the tension between E and O goals

With his opening speech to ASDA’s executive team—none of whom he had met—Norman indicated clearly that he intended to apply both E and O strategies in his change effort. It is doubtful that any of his listeners fully understood him at the time, but it was important that he had no conflicts about recognizing the paradox between the two strategies for change. He said as much in his maiden speech: “Our number one objective is to secure value for our shareholders and secure the trading future of the business. I am not coming in with any magical solutions. I intend to spend the next few weeks listening and forming ideas for our precise direction. . . . We need a culture built around common ideas and goals that include listening, learning, and speed of response, from the stores upwards. [But] there will be management reorganization. My objective is to establish a clear focus on the stores, shorten lines of communication, and build one team.” If there is a contradiction between building a high-involvement organization and restructuring to enhance shareholder value, Norman embraced it.

Set direction from the top and engage people below

From day one, Norman set strategy without expecting any participation from below. He said ASDA would adopt an everyday-low-pricing strategy, and Norman unilaterally determined that change would begin by having two experimental store formats up and running within six months. He decided to shift power from the headquarters to the stores, declaring: “I want everyone to be close to the stores. We must love the stores to death; that is our business.” But even from the start, there was an O quality to Norman’s leadership style. As he put it in his first speech: “First, I am forthright, and I like to argue. Second, I want to discuss issues as colleagues. I am looking for your advice and your disagreement.” Norman encouraged dialogue with employees and customers through colleague and customer circles. He set up a “Tell Archie” program so that people could voice their concerns and ideas.

Making way for opposite leadership styles was also an essential ingredient to Norman’s—and ASDA’s—success. This was most clear in Norman’s willingness to hire Allan Leighton shortly after he took over. Leighton eventually became deputy chief executive. Norman and Leighton shared the same E and O values, but they had completely different personalities and styles. Norman, cool and reserved, impressed people with the power of his mind—his intelligence and business acumen. Leighton, who is warmer and more people oriented, worked on employees’ emotions with the power of his personality. As one employee told us, “People respect Archie, but they love Allan.” Norman was the first to credit Leighton with having helped to create emotional commitment to the new ASDA. While it might be possible for a single individual to embrace opposite leadership styles, accepting an equal partner with a very different personality makes it easier to capitalize on those styles. Leighton certainly helped Norman reach out to the organization. Together they held quarterly meetings with store managers to hear their ideas, and they supplemented those meetings with impromptu talks.

Focus simultaneously on the hard and soft sides of the organization

Norman’s immediate actions followed both the E goal of increasing economic value and the O goal of transforming culture. On the E side, Norman focused on structure. He removed layers of hierarchy at the top of the organization, fired the financial officer who had been part of ASDA’s disastrous policies, and decreed a wage freeze for everyone—management and workers alike. But from the start, the O strategy was an equal part of Norman’s plan. He bought time for all this change by warning the markets that financial recovery would take three years. Norman later said that he spent 75% of his early months at ASDA as the company’s human resource director, making the organization less hierarchical, more egalitarian, and more transparent. Both Norman and Leighton were keenly aware that they had to win hearts and minds. As Norman put it to workers: “We need to make ASDA a great place for everyone to work.”

Plan for spontaneity

Training programs, total-quality programs, and top-driven culture change programs played little part in ASDA’s transformation. From the start, the ASDA change effort was set up to encourage experimentation and evolution. To promote learning, for example, ASDA set up an experimental store that was later expanded to three stores. It was declared a risk-free zone, meaning there would be no penalties for failure. A cross-functional task force “renewed,” or redesigned, ASDA’s entire retail proposition, its organization, and its managerial structure. Store managers were encouraged to experiment with store layout, employee roles, ranges of products offered, and so on. The experiments produced significant innovations in all aspects of store operations. ASDA’s managers learned, for example, that they couldn’t renew a store unless that store’s management team was ready for new ideas. This led to an innovation called the Driving Test, which assessed whether store managers’ skills in leading the change process were aligned with the intended changes. The test perfectly illustrates how E and O can come together: it bubbled up O-style from the bottom of the company, yet it bound managers in an E-type contract. Managers who failed the test were replaced.

Let incentives reinforce change, not drive it

Any synthesis of E and O must recognize that compensation is a double-edged sword. Money can focus and motivate managers, but it can also hamper teamwork, commitment, and learning. The way to resolve this dilemma is to apply Theory E incentives in an O way. Employees’ high involvement is encouraged to develop their commitment to change, and variable pay is used to reward that commitment. ASDA’s senior executives were compensated with stock options that were tied to the company’s value. These helped attract key executives to ASDA. Unlike most E-strategy companies, however, ASDA had a stock-ownership plan for all employees. In addition, store-level employees got variable pay based on both corporate performance and their stores’ records. In the end, compensation represented a fair exchange of value between the company and its individual employees. But Norman believed that compensation had not played a major role in motivating change at the company.

Use consultants as expert resources who empower employees

Consultants can provide specialized knowledge and technical skills that the company doesn’t have, particularly in the early stages of organizational change. Management’s task is figuring out how to use those resources without abdicating leadership of the change effort. ASDA followed the middle ground between Theory E and Theory O. It made limited use of four consulting firms in the early stages of its transformation. The consulting firms always worked alongside management and supported its leadership of change. However, their engagement was intentionally cut short by Norman to prevent ASDA and its managers from becoming dependent on the consultants. For example, an expert in store organization was hired to support the task force assigned to renew ASDA’s first few experimental stores, but later stores were renewed without his involvement.

By embracing the paradox inherent in simultaneously employing E and O change theories, Norman and Leighton transformed ASDA to the advantage of its shareholders and employees. The organization went through personnel changes, unit sell-offs, and hierarchical upheaval. Yet these potentially destructive actions did not prevent ASDA’s employees from committing to change and the new corporate culture because Norman and Leighton had won employees’ trust by constantly listening, debating, and being willing to learn. Candid about their intentions from the outset, they balanced the tension between the two change theories.

By 1999, the company had multiplied shareholder value eightfold. The organizational capabilities built by Norman and Leighton also gave ASDA the sustainable competitive advantage that Dunlap had been unable to build at Scott Paper and that Sigler had been unable to build at Champion. While Dunlap was forced to sell a demoralized and ineffective organization to Kimberly-Clark, and while a languishing Champion was sold to UPM-Kymmene, Norman and Leighton in June 1999 found a friendly and culturally compatible suitor in Wal-Mart, which was willing to pay a substantial premium for the organizational capabilities that ASDA had so painstakingly developed.

Change Theories in the New Economy

HISTORICALLY, THE STUDY of change has been restricted to mature, large companies that needed to reverse their competitive declines. But the arguments we have advanced in this article also apply to entrepreneurial companies that need to manage rapid growth. Here, too, we believe that the most successful strategy for change will be one that combines theories E and O.

Just as there are two ways of changing, so there are two kinds of entrepreneurs. One group subscribes to an ideology akin to Theory E. Their primary goal is to prepare for a cash-out, such as an IPO or an acquisition by an established player. Maximizing market value before the cash-out is their sole and abiding purpose. These entrepreneurs emphasize shaping the firm’s strategy, structure, and systems to build a quick, strong market presence. Mercurial leaders who drive the company using a strong top-down style are typically at the helm of such companies. They lure others to join them using high-powered incentives such as stock options. The goal is to get rich quick.

Other entrepreneurs, however, are driven by an ideology more akin to Theory O—the building of an institution. Accumulating wealth is important, but it is secondary to creating a company that is based on a deeply held set of values and that has a strong culture. These entrepreneurs are likely to subscribe to an egalitarian style that invites everyone’s participation. They look to attract others who share their passion about the cause—though they certainly provide generous stock options as well. The goal in this case is to make a difference, not just to make money.

Many people fault entrepreneurs who are driven by a Theory E view of the world. But we can think of other entrepreneurs who have destroyed businesses because they were overly wrapped up in the Theory O pursuit of a higher ideal and didn’t pay attention to the pragmatics of the market. Steve Jobs’s venture, Next, comes to mind. Both types of entrepreneurs have to find some way of tapping the qualities of theories E and O, just as large companies do.

In the end, the integration of theories E and O created major change—and major payoffs—for ASDA. Such payoffs are possible for other organizations that want to develop a sustained advantage in today’s economy. But that advantage can come only from a constant willingness and ability to develop organizations for the long term combined with a constant monitoring of shareholder value—E dancing with O, in an unending minuet.

Originally published in May 2000. Reprint R00301

The Heart of Change: Step 5. Empower Action

Step 5

Empower Action

In highly successful change efforts, when people begin to understand and act on a change vision, you remove barriers in their paths. You take away the tattered sails and give them better ones. You take a wind in their faces and create a wind at their backs. You take away a pessimistic skipper and give the crew an optimistic boss.

The word empowerment comes with so much baggage, you might be tempted to abandon it. We won’t. As we use the term, empowerment is not about giving people new authority and new responsibilities and then walking away. It is all about removing barriers.

Removing the “Boss” Barrier

Often the single biggest obstacle is a boss—an immediate manager or someone higher in the hierarchy, a first-line supervisor or an executive vice president. Subordinates see the vision and want to help, but are effectively shut down. The supervisor’s words, actions, or even subtle vibrations say “This change is stupid.” The underlings, not being fools, either give up or spend an inordinate amount of time trying to maneuver around the barrier.

The “boss barrier” is typically handled in one of three ways. We ignore the issue, we send the obstacle to a short training course, or (rarely) we try to fire, demote, or transfer the person. None of these are great solutions, the first for obvious reasons, the second because it usually has little effect, and the third because, if not handled well, fear will escalate and become a disempowering force itself.

In cases of highly successful change, people begin by confronting the issue. In order to be fair, they explain the situation to the individual creating the problem. When explaining fails, as it often does, they try more creative solutions.

Retooling the Boss

From Tim Wallace

There was one superintendent in our company, Joe, who was considered so “old school” that people had warned me he would never change his ways. He had been with the company for over twenty years and he was very proud of our products. Whenever a customer would want a change in the product or how we made it, this man would get bent out of shape. He felt we were giving people a great product and that they were too picky. When someone would suggest something, he would respond in one of two ways: We tried it and it didn’t work, or we thought about it and decided not to try it. It seemed to me he was basically a good man, a talented man, and a man with a lot of valuable experience who was stuck in an old paradigm. He just couldn’t see anything from the customer’s point of view.

Once, it became so tense that one of our best customers said that we needed to replace Joe. I didn’t like the idea of terminating an employee who probably thought he was protecting the company. So I thought about it and then said to the customer, “Let’s do something different which might help both of us.”

We asked them if Joe could go to work for their company for six months at our expense. He would work at a different place and have a different boss. To help make this happen, we agreed to keep paying his salary. We further said that after six months we would bring him back into our company as a customer representative, inspecting our products specifically for that customer. This would be a different job than he had before, but an important job. The idea was to convert the guy from being an obstacle for others into someone who would actively help us.

Joe’s boss thought the plan wouldn’t work—may have even thought it was nuts—but he agreed to go along with it. Joe was at first also very reluctant to accept the idea. “I have my own job to do and I don’t want to do something else.” I told him we really needed his expertise so that he could tell us what was going on when our tankers arrived at the customer’s facility. But he was a real hard rock. He didn’t want any part of this plan. So we had his boss tell him that he couldn’t have his existing job anymore, that he could take our offer or leave.

Off he went into a different world. His new job was to be a quality inspector at the customer’s plant. I don’t know how difficult it was on him at first, but he had to change to survive. He had to learn a new job, a new company, and how to look at our products from that customer’s point of view. If he didn’t, he failed.

Well, he didn’t want to fail, so he tried to do the new job. And when he started really looking, he found that an old product of ours, which he thought was very good, didn’t meet the customer’s needs. He found that they bought this product because they didn’t have an alternative and switching would be costly. He found that another product, which he also thought was very high-quality, was not seen by the customer that way because of how they needed to use it. And he found that our delivery on another product created additional problems.

So then he came back  to us saying “This is no good. You don’t understand that by doing this, you are hurting the customer. We’ve got to change or we risk losing their business.”

Joe ended up being the best inspector the customer had ever had. They loved him. When he came back to us he was a new man. The “old school” barrier, the change resistor, became one of our best managers.

I suppose there are many people that you can’t do much with, or people that you can’t afford the expense of doing much with. But I think you need to be very careful when you hear people saying that so-and-so is hopeless. It might be true, or it might not.

Our jobs determine a large part of what we see each and every day. The experience of changing a job can be powerful. False pride and a feeling that all’s well can be blown away. For a fragile and very insecure person, without lots of support, fear could escalate and the person could be immobilized. But for many people, the experience can be life changing—from being stuck in the past to leaping into the future. For the organization the experience can be most helpful—in this case, a disempowering manager became one who empowers.

For those on top, the entire middle management will occasionally seem like a barrier. They’re “the rock in the middle.” Senior management wants to get on with the change (sometimes an overstatement) and so do many employees, but the rock is in the way. The big question is: Why is the disempowering rock such a rock? Listen to the answers so often given: “They’re tied to the past.” “They can’t learn a new style.” “They are protecting their jobs.” Well, yes, but these answers are pessimistic and condescending. Look deeper, and more often than not, you’ll find a different or more fundamental reason for the existence of the rock. The reason: Steps 1 through 4 did not successfully address middle management, or the steps were not undertaken at all. So without the presence of sufficient urgency, sufficient faith in the people leading change, or in the change vision, what would you do, especially if most of your peers felt the same? Wouldn’t you join the Rock Club?

Retooling the Boss

SEEING

With a new temporary job working as a parts inspector for a customer, a man is confronted with the quality problems his group has been creating. He sees the problems hour after hour, day after day.

FEELING

Pushed into the job, the man is at first mad and perhaps scared. After a few days in his new position, he is surprised and shocked by what he finds.

CHANGING

He starts trying to identify and solve the quality problems. He sees the results and sees how the customer reacts. The positive reaction and results reduce anger and fear and induce more positive feelings in him. He tries harder to solve the problems, sees the results, and a useful see-feel-change cycle develops. When he returns to his regular employer, his behavior is significantly different. He no longer makes it difficult or impossible for his people to help the change effort. Just the opposite—he becomes an empowering change leader.

Removing the “System” Barrier

A second, very common source of disempowerment is the formal set of arrangements we often call the system. A decade or two ago, this would have mostly been overwhelming bureaucracy—layers in the hierarchy, rules, and procedures—which ties the hands of employees who want to help make a vision a reality. Generic bureaucracy is still an issue, especially in the public sector, but today the performance evaluation and rewards part of the system is often the stickiest problem.

Evaluation and rewards can disempower when they are at odds with the direction of needed change. The new vision and strategies say x, but the bureaucracy not only does little to identify and reward x, it helps block what is needed. “We want you to boldly leap into the future” is the communication, yet the system says “Boldly leap into the future and you will receive ten cents if you succeed and a hammer on the head if you fail.” Conversely, evaluation and rewards can empower people by identifying and compensating behavior that is required by the vision.

The Worldwide Competition

From Louise Berringer

We wanted to make big advances, real breakthroughs, not 20 percent but 50 percent better. We knew this was possible, but we also knew that, because of our history, most employees wouldn’t agree. They’d say “We have had trouble doing 10 percent.” We needed to show them that this was possible, to help them see that they were capable of greater achievements. That’s how the worldwide competition was invented.

We decided that if we wanted dramatic improvements we should have a dramatic recognition program, something very different than what we had been doing. This worldwide competition we created allows team entrants from any part of our operation, in any country. Once the team registers, they start working on their “improvement idea” and are judged against other teams at the local level. The winners move to the next stage and are compared to other teams at the regional level. Then they move on to a global competition.

The finals are always hosted somewhere special, not here at headquarters in Frankfurt. This year we did Bali. We were in a large conference room for a day and a half in a really nice hotel. There were ten teams from around the world. The judging was done by some of our top management along with representatives from a few of our customers. The overall attendance for the event was about a hundred people.

Each team had to do their presentation in English. That’s one of the rules. For some of these people it’s really hard. They don’t speak a lot of English and it might have been the first time they have ever traveled outside their country. We once had a team from India who had never even been outside their own village.

They each have twenty minutes. We are very strict about that. If a team goes over the twenty-minute slot, we sound a hooter and they have to stop. That way we can keep the presentations to a manageable amount of time, and the people in the audience can give their full attention to each one.

The teams this year were very innovative with how they used the twenty minutes. One group had a panel with characters from their home country and they made their presentation into a quiz show. The “host” would ask the questions. “Can one of the panel please tell me the name of the tool that reduced our cycle time by 50 percent?” Then the buzzers would go off and lights would be flashing and someone would answer. They were all dressed up, pretending to be panelists with their name tags hanging on the front of the podium. That might sound ridiculous, but it was a great way to present what they had done. Another team pretended they were in a normal meeting back at their home base, sitting around a table discussing the issue and coming up with the solution to the problem. As they talked about their solution the rest of the audience learned what they had done. Many teams brought samples of their product with them—anything from the tiniest CD player to a large electronic piano—just to show what they were talking about.

We gave all of the teams the afternoon to have fun. Then we all came together again in the evening for the final presentations and some serious celebration. We had local dancers, stalls with things people could buy, a sit-down dinner outside in the hotel’s gardens with traditional island food. I think everyone was wearing a grass skirt over their regular clothes! It built up to the end. The music started playing. I think it was “We Are the Champions.” The runners-up were announced. Each of them received a certificate. All the other teams clapped like mad! And then we announced the winners. “Simply the Best” was playing at full volume as they came up on stage.

The Spanish team’s project was judged to be the very best from a terrific group of entries. A trophy was presented to the team leader, and each of the six members received a medal. They were standing there in shirts made up of their national colors and all of these big guys were crying. It was incredibly moving.

We’ve been doing it for three years. The first year we had 300 teams with an average of seven people on each. About 2,000 people were involved. Last year we had 875 teams. We have just closed off registration for this year with 1,400 teams entered (representing about 9,000 people).

It is amazing what these groups have achieved and are achieving, and the influence they are having on nearly everyone in the company. We have concrete results from the teams in the competition. We have communication about the 50 percent breakthroughs and the effect they are having on the business. And not only that, but we see others in the organization who in the past would never have taken up an issue, now rising to the challenge. In some cases they violate a lot of the standard procedures we have in the company. They break the rules. We see people who work in manufacturing or production start developing new products. This is quite far removed from what they should be doing, but they see a fault, they see a way to make it better, and they get on and do it regardless of past practices or organization charts. People feel empowered to do this.

When we think of evaluation and rewards, most of us think of money. In this day and age, few people believe they have more cash than they need. Many, many households struggle, even with two incomes. Thus, when there are no economic rewards for transformation, you can have a barrier that can be very powerful. But the addition of bonuses and raises does not necessarily motivate a change in behavior, nor does it necessarily convince people that the downside of failure will go unpunished by the system.

In “Worldwide Competition,” we have a different sort of evaluation and reward. Evaluation is not done by a single boss or by some set of impersonal measures. Proof of performance is not supplied only by reports. Rewards are not cash in the pocket. Instead, once again, we have carefully staged dramas. There is the country-level drama, then one at the regional level, and the biggest one at the global level. Each is full of memorable sights—the city, the elaborate ceremony, the costumes, the visual and emotional presentations. The awards ceremony takes this all over the top. The dramas touch the feelings deeply, then become vivid stories that are told and retold to others not in attendance at the events. And the moral of the stories, at least in an organization not overwhelmed with cynics, is pretty clear: The company wants you to leap, will cheer when you leap, and cares deeply when you leap. As the stories are told and retold, they can hit a chord and behavior really changes.

Competitions can be cheap manipulations designed to avoid paying for performance. But people are not stupid. They can spot a cheap manipulation. Then cynicism and anger grow and grow. Sincerity is crucial and, in many ways, quite easy for a committed guiding team who believe in a vision.

Removing Barriers in the Mind

In “Worldwide Competition,” we also see one of the greatest disempowering barriers of all: the mind. After years of stability, incremental change, or failed attempts at change, people can internalize a deep belief that they are not capable of achieving a leap. They may not say out loud “I can’t do it,” but at some level they feel it, even when it is not true.

We’ve all seen this. “No,” thinks the sixty-year-old. “I’ll never be able to learn to use the computer.” Yet there is nothing about his or her IQ, manual skills, or ability to hold information in memory that blocks action. The problem is, as we say, “all in the head,” that is, psychological and irrational.

A good rule of thumb: Never underestimate the power of the mind to disempower. Another rule: Never underestimate the power of clever people to help others see the possibilities, to help them generate a feeling of faith, and to change behavior.

I Survived, So You Can Too

From Greg Hughes and Dalene McCann

I remember back in the early days, when we had just finished forming teams throughout the organization. We had created twenty-one of them in total—not a small task in itself—in order to look at how to improve service across our different departments. Well, whenever you form teams, especially many of them, there is all this turmoil. There is uncertainty about what is going on, uncertainty about the size of the task facing everyone, uncertainty about the overall direction. This discomfort started to coalesce into doubt that the vision could really be achieved. Maybe it was too grand, too much at once, not the right thing for our particular department, etc.

Ron, getting wind of this growing doubt and anxiety, hauls all 200 of us into a meeting. He pulls out chart after chart after chart of the process changes they made at Lexmark, his former employer. Changes to how they dealt with their customers. Changes to how they provided internal services such as HR. He went on and on. Pretty soon what we were undertaking started to look pretty easy compared to what they had done.

Then he hit us with the videos. At Lexmark, they had filmed the order-taking process before and after the change. Before, people were basically glorified message takers. Afterward, they were customer relationship managers. They had the tools and skills to provide product promises and delivery commitments right on the phone. They could deal with service problems themselves, directly. Both the level of service provided and the service providers themselves had been transformed. They also filmed people talking about their hopes and vision for the future before the change and then their exuberance actually living the vision in the new organization.

We watched and people believed. Ron’s previous experience, demonstrated so concretely, was a jolt of new energy. By the end of the meeting, people were buzzing again. “If Lexmark could cut the time it takes to finalize a contract from a month to three days, maybe we can do the same with the time it takes us to issue hunting permits or fishing permits or whatever other permits that currently take us two months to issue. It’s not too far-fetched. Ron did it, Lexmark did it; why can’t we do it?”

That was the beginning. A rocky start, but hey, we’re sailing now, right? Well, not quite. I was sitting in on a meeting with the warehouse people and this raging debate breaks out that looks destined to end in an all-out, knock ‘em dead brawl. The team was kind of segregated between old and new. There were employees who had been with the organization about two years and there was another group that had been with the organization about thirty years. They were like oil and water. The young guys had totally bought into the vision. They were saying that we need to tear down everything we are doing today and build a greenfield site. We need to clean-sheet everything. We need to close down warehouses. Change is great; let’s go. Now on the other side of the table are sitting our thirty-year veterans who were integral in building what these young folks were proposing to tear down, and they were saying, “The hell you will.” Tempers were rising fast and it was getting ugly.

The young consultant who was on the team and trying to manage this meeting went high-tailing it out of the room and did what was probably the smartest move of his career. He got Ron. So Ron enters the room and the furor subsides slightly. And he says, “We are going to change the process fundamentally”—and all the young guys are nodding—“but we’re not going to close twenty-two district warehouses. We’re not going to fire 6,000 people. We’re going to find another way.” Now this had been said before, but the old guard weren’t feeling like this was possible. Ron says, “At Lexmark, through our reengineering effort, we were able to reduce our working capital. We were able to reduce the amount of inventory we kept. But we didn’t close the warehouse; we reduced the cost of carrying the inventory. For example, we got our auto parts supplier to deliver the parts on demand so we didn’t have to keep our own store of them. We freed up a lot of space in our warehouses, but we didn’t go and close them all. We didn’t fire a bunch of people, but we did save a good deal of money. You can do the same types of things here.” That kind of calmed them down. But there was nothing I could have said that would have helped. I hadn’t been through it before. He had. The number of times he saved us, I can only guess.

I think you need to understand that you are not first, that others have survived these changes. It gives you more confidence. Even after you have agreed with the overall idea, it helps you get past the little voices in your head that get in the way. It gets you beyond “Yeah, but this can’t possibly work” or “This will only work if I die in the process.” Seeing someone else’s survival makes you feel stronger.

I suppose if you have gone through successful change of some magnitude, you will have people who know what is possible and have self-confidence. This was not our case. External resources brought us hope, experience, and the utter conviction that we could make a difference. Whether by design or pure chance, outsiders were interspersed throughout the organization, maybe creating some resentment at first but overcoming that with all they added. Not just Ron. Aldona Valicenti came from Amoco. Patrice Carroll was a newcomer to our part of the organization. These people, in addition to the outside consultants, helped add something important. Again and again when things seemed to be descending into chaos and the brink of collapse, they added stability. They reassured us and kept us on course. They were our rock of Gibraltar—our prophets of things to come. Each of the newcomers brought with them a wealth of experience and reassurances that change of this magnitude had happened before and succeeded. Their perspective was really critical.

Without conviction that you can make change happen, you will not act, even if you see the vision. Your feelings will hold you back.

At one level, this story offers a simple, yet powerful tactic. If your people do not have experience with significant successful change, make sure you find credible sources and have them constantly available. Some consultants make a living from this. Of course, there is the risk that if you do it poorly, the newcomers will be squashed by the culture, and the consultants will be ignored. But that need not happen.

Credible sources can help in a number of ways. They can present data. “We have found in seven cases in the past four years that $235,000 was saved, on average, and the firms without change experience saved nearly as much as the others.” Done well, this can help. Solid logic can also help. “The method by which we saved the money is based on the theory that. . . .” But look at the core of what happened in “I Survived.” You had “turmoil,” “anxiety,” “discomfort,” “rage,” and “tempers.” You had “feelings” that the changes were not possible. People dealt successfully with these emotions by telling many vivid stories and playing many videos about actual events. The key content was rather simple: “This is possible; you won’t die in the process; the end result can be very important.” And what happened? The negative feelings shrunk, and the positives grew. “We watched and we believed.” We received “a jolt of new energy.” The disempowering mind barriers were reduced, and they moved on with the changes.

Removing Information Barriers

Information is a source of power, and a lack of information disempowers. That was a part of the problem in “Retooling” (a lack of information on customer needs), “Worldwide Competition” (information on how 50 percent improvements are possible), and “I Survived” (information on successful change efforts).

One of the most powerful forms of information is feedback on our own actions. We are often remarkably unaware of how we spend our time, how we interact with others, and how we physically move about. When we do get feedback, it comes from another person, often sounding and feeling subjective, biased, or like a precursor to sanctions. So we end up with little valid information, or information that seems suspect. In either case, we have more difficulty achieving a vision. It need not be that way.

Making Movies on the Factory Floor

From Rick Simmons

For years, senior management came and “inspected things” at the plant. The plant manager only received instructions about what needed to be improved. “Fix that. This is no good. Don’t do that.” It was never anything positive, just what we needed to fix. Well, on one of these visits, Tim, our division executive, said that because of our new change effort, there would be no more plant inspections. He said we had to “empower” the workforce. That’s how we were going to really get better. It couldn’t be done by senior management because they didn’t have the time or the information.

We tried to work it out. But it was like “ready, fire, aim” in the worst sense. It was chaos. Empowerment meant involvement, so we instituted employee improvement meetings, and for six months we had meeting after meeting. But people really didn’t know what to do. After a while, the meetings started to deteriorate into bitching sessions. “We can’t get the right inventory numbers because the reports are always one month behind, so what’s the use of these reports? They’re just no good.” “Why are we always having breakdowns in our welding equipment? If we had more equipment we wouldn’t have this problem.” “If corporate would just provide more direction, we wouldn’t be mired in this mess.” “Do you realize how much time we are putting into these meetings?” Fewer people turned up to the team meetings, and the ones who came started saying, “What’s the point, it’s not going to make any difference anyway.” The meetings became really unpleasant to attend. We finally realized that they were doing no good, so we decided to try something completely different. But our overall empowerment goal remained unchanged.

We took two of the teams who we knew were fairly open to trying new things, and we started to film them at work. They agreed with this—it wasn’t anything sneaky. It just seemed like a better way of understanding how we currently operated. Tim had provided us with a handheld camcorder and video equipment, but until that point the teams hadn’t done anything with them.

We started off by just following how one product was manufactured. It was a really lengthy process. We captured on film everything from the guy grabbing the raw material off a shelf to the last person taking the finished product off the line and preparing to ship it. There were pictures of Tyron setting up the tanker skin for welding, Claude doing the actual welding, and then Sam pressure testing the strength of the welds. There was some awkwardness and jokes at first. “I hear the camera adds twenty pounds.” For a while people were more careful and unnatural about what they were doing than usual. But after we filmed someone doing the same activities several times, they tended to go about their tasks oblivious to our presence. It probably took us about a day of filming to get one stage of production really nailed down. The outcome was amazing.

When we sat down and watched the tape, you could see that people were having to walk literally miles around the plant to get this one piece of equipment finished. When we brought in the team that we had filmed and they viewed the tape, the ideas started flowing automatically. They talked about how we could reorganize where the machines were so that we could cut down how far people had to walk. They looked at themselves on tape and saw that they were having to go to a store cupboard every time they needed a new tool to use. Just watching the tape, you would hear people saying to themselves, “Now why don’t I just have a rack with all the tools I need next to me?” “Look at how many times I’m bending over to pick up the ratchet wrench to tighten a bolt.” “Maybe if we had someone sort out the repair equipment and materials we use to complete a machine repair, we could pick the stuff up at the loading dock rather than coming to the supply room and pick it up ourselves. If we did this, I bet we could do the job faster.”

The teams started to rethink options that would make the work easier and safer. One of the team members even hand whittled out of wood two sets of our machinery. He then arranged them to show how the machines had been set up before and then how they had been reorganized to reduce walking time. It really gave us a three-dimensional picture of the change. This helped us explain the concept to other teams and to customers who were brought to the plant by Tim and the sales people. Nobody asked this guy to create these models of the plant. He just thought it would help.

All of the improvements that people came up with had to be evaluated through a typical business case exercise before the OK was given, so people couldn’t just do anything they wanted. But the filming became a very important tool for the workforce. It helped to spawn good ideas that they could put forward.

The videos themselves have continued to be used. We have kept them as a historical archive of the types of changes we have put in place. After the first round of filming, we started to make the videos more professional. We now have literally hundreds of taped examples of how we used to do a certain part of the job and then what we did to improve it. We keep track of the cost savings or safety and quality improvements this has brought about. We now show new employees and visitors these tapes. That helps us get people on board and helps us improve our relationships with customers. And you definitely get a sense of the pride the teams have when they present their improvements.

We also refashioned the site meeting room so that more people could fit into it to watch the tapes and discuss ideas for improvement. That meeting room has become a bit of a showpiece and a focal point for people to get together. All the tapes documenting the changes that the plant has been through are stored in there. And it started with a camcorder that cost less than 1 percent of some of the machines in the plant.

Their first attempt to empower the workforce failed, and failed in a very common way: Employees were given more decision-making power; they were put in meetings in order to exercise that power; but they were given few guidelines, and few tools for eliminating real barriers. The mess that follows is predictable.

In their second attempt, they used a camera to help empower a work group with feedback. The movies surprised people, so they paid attention. They saw, for the first time, aspects of their actions of which they were unaware. And so the possibilities for making their work lives better jumped out, creating for many an excitement and a we-can-do-better optimism. Those feelings led to more useful changes, including the carving of the wooden models. The models then became another visual mechanism to help alter still more behavior. When the changes worked well, people saw this, pride blossomed, and the virtuous cycle continued.

Not Doing Everything at Once

People successfully empower others when they understand the idea. They empower because they correctly see what the key obstacles are and what is keeping them in place. They empower by mustering courage and self-confidence within themselves.

People act cowardly, or at least seem to, for many reasons. Perhaps most of all, they hold back because the obstacles blocking action can seem gargantuan. They have a boss problem, an entire middle management problem, a reward system problem, an information system problem, a mind problem, and more. All these challenges can seem overwhelming because, in total, they are overwhelming.

You don’t have to be crushed, no matter how complex the situation. There is a solution, and it’s simple: Don’t try to do everything at once.

Harold and Lidia

From Jeff Collins

We have two people in our San Francisco office, Harold and Lidia, who sat down with me last year (I’m in corporate HR) to look at barriers in their department to a big new-product development concept they have. We had flip chart paper all over the walls. Many of the problems, like the corporate compensation system, were totally out of their control. So we crossed those off. From the rest, they chose two issues to work on. The first related to engineering team leaders, people in their own department, who brutally beat on new ideas. The second was a lack of any formal process for capturing new-product brainstorms.

They hauled ten people from the department off-site (the group has about twenty or thirty people in total). At the meeting, they talked about what they were collectively doing to stomp on new ideas and they agreed to help each other stop this. They didn’t try to work on their bosses; they focused on themselves. They also outlined a mechanism that could allow people to speak up more and offer product ideas. It isn’t much more sophisticated than a suggestion box system. But it’s a system.

When they returned from their meeting, the ten of them continued to work on the two issues. Changing their own style was a challenge, especially for four members of the group. Some of those not at the meeting reacted with suspicion or total disinterest in the suggestion system. Nevertheless, over the following two or three months, ten new ideas were generated, one of which was very promising. So they were off and running.

I think this simple story is so important because of what they didn’t do. They didn’t choose fifteen issues to work on. I don’t know if I were in their place that I wouldn’t have done fifteen. They played it much more pragmatically, and more focused. So far, that has worked extremely well. They are creating a radically different new-product development process out on the West Coast, and all indications are that it will soon give birth to a big product prototype. Given our track record over the last decade, that’s a big deal for us.

Step 5

Empower Action

Deal effectively with obstacles that block action, especially disempowering bosses, lack of information, the wrong performance measurement and reward systems, and lack of self-confidence.

What Works

• Finding individuals with change experience who can bolster people’s self-confidence with we-won-you-can-too anecdotes

• Recognition and reward systems that inspire, promote optimism, and build self-confidence

• Feedback that can help people make better vision-related decisions

• “Retooling” disempowering managers by giving them new jobs that clearly show the need for change.

What Does Not Work

• Ignoring bosses who seriously disempower their subordinates

• Solving the boss problem by taking away their power (making them mad and scared) and giving it to their subordinates

• Trying to remove all the barriers at once

• Giving in to your own pessimism and fears

Stories to Remember

• Retooling the Boss

• The Worldwide Competition

• I Survived, So You Can Too

• Making Movies on the Factory Floor

• Harold and Lidia