Organization Development

By Steven H. Cady, Robert “Jake” Jacobs, Ron Koller, and John Spalding

“Myths, lore, and legends are unique concepts that are told through story—some stories are true; others are fictional (Morgan, 2010). One thing they each share in common is usefulness. They each are helpful to us humans in solving problems, creating opportunities, and generally living a better life. Each is helpful in different ways. So, which of these best represent the story of the Change Formula?”

The Change Formula Myth, Legend, or Lore?

Introduction

There is an interesting yet little known story about a model in the field of Orga- nization Development. Referred to as the Change Formula, it is one of the most practical, widely recognized tool developed in the last 50 years. The formula describes the conditions, that when met, will move an individual, group, or whole system in a direction of their choosing. What is the formula? We share several iterations of it a bit later in this article. First we take you through a review of how history shapes various models, theories, methods, tools, and approaches. Then, we provide an account of the history that shaped the for- mula. From there, we define and describe the formula with examples of how it can help you as an OD practitioner.

Myths, lore, and legends are unique concepts that are told through story— some stories are true; others are fictional (Morgan, 2010). One thing they each share in common is usefulness. They each are helpful to us humans in solving problems, creating opportunities, and generally living a better life. Each is helpful in different ways. So, which of these best represent the story of the Change Formula?

The formula is not a myth, as myths tell sacred stories about origins and pow- ers beyond our human control. It is not folklore, as lore tells a fictional story where the plot is timeless and contains elements of fantasy. The Change Formula is more of a legend. Legends are historical, telling a story from our past that is comprised of actual events of heroic proportions. Some

might argue, that’s a bit grandiose; it’s just a formula.

We propose that it is much more than that; particularly, when we tracked down and pieced together the events and people involved in its creation. In researching the model and looking at its relevance, we found differences in the stories of how the formula was originally created, who was involved, iterations in its development, variations in the number of the equa- tion’s elements, and differences in mean- ing. While some of this formula’s history and description was documented, much appears to have been passed on in meet- ings, conversations, and through blogs and websites. Through all of our searching, we could find not one source that provided a complete story of the formula’s creation and evolution.

Three Generations

Our field is changing quickly. Thought leaders and founders are retiring and some are passing away. They served our world through some of the most daunting challenges of the 20th Century. Today, new fields and professions, like old wine with a new label are appearing (e.g., Change Management). It is incumbent upon us to encourage these new fields to connect with the history of Organization Development, in order to help our world build collec- tive intelligence. In short, reinventing the methodological wheel appears to be upon us as we approach a renaissance in Orga- nization Development. Our intention in sharing the story of the Change Formula is

32 OD PRACTITIONER Vol. 46 No. 3 2014

to take a positivist approach while building on the shoulders of those who came before us; honoring their work and intellectual contribution in a way that offers continuity for our field as it moves through the 21st Century. The formula has evolved through three generations of development.

A Formula is Born: Understanding Change

It was in the early 1960s when Raymond M. Hainer, a chemist who had worked on the Manhattan Project (Behrendt, 1955), was the head of Research and Develop- ment at Arthur D. Little (ADL). Not only did Hainer want to unlock the mysteries of the physical sciences, but also of the social sciences, namely organizational behavior. He directed David Gleicher (pronounced g-like-her), Barry Stein, and a few other scientists to take up the chal- lenge. Hainer hired Sherman Kingsbury to be the group’s leader (B. Stein, personal communication, 2014).

Created on a Chalk Board

As a Boston based group, the scientists from ADL, sought out the best organiza- tional minds they could, most of which lived and worked in fairly close proxim- ity. The exception was OD legend Herb Shepard from Case Western Reserve, where he created the first PhD program in OD. In fact, ADL hired the program’s first four graduates in the 1960s, which illustrates ADL’s emphasis on the OD scholar practitioner perspective. Shepard was the intellectual godfather of the ADL group, working as a consultant. ADL also hired a few local organizational professors as consultants. The short list of consultants included Warren Bennis, Dick Beckhard, and Ed Schein from MIT, Ken Benne from Boston University, and Chris Argyris from Yale. This founding group worked on what became known as Organiza- tional Behavior at ADL (B. Stein, personal communication, 2014).

One day, as the group was meeting, David Gleicher walked up to the black- board to share his observations about the behavioral problem-solving work they were doing in organizations. He then wrote

C=(ABD)>X on the blackboard. To Glei- cher, it was nothing special, just a com- mon sense way of thinking about the work that the group was doing. To the group, however, the formula became the go-to framework, especially for difficult prob- lems that required an incredible amount of energy to resolve (B. Stein, personal communication, 2014).

The Change Formula’s First Publication

The earliest known publication of the model was in the Sloan Management Review (Beckhard, 1975). The original publication (Beckhard) included an attri- bution to David Gleicher by stating, “in determining readiness for change, there is a formula developed by David Gleicher of Arthur D. Little that is helpful” (p. 45). In this publication, the equation went from being called an equation to a formula and was printed as:

C = (ABD) > X, where

C = Change, A = Level of dissatisfaction with the

status quo, B = Clear or understood desired state, D = Practical first steps toward a

desired state, and X = “Cost” of changing

The next time the formula was published was by Beckhard and Harris (1977) with attribution to Gleicher on pages 25-27. It was a copy of Beckhard’s (1975) previous publication. A decade later, confusion arose after the publication of the second edi- tion of Organization Transitions because Beckhard and Harris (1987) presented the Change Formula with no attribution to or mention of Gleicher. “A useful formula for thinking about the resistance process” (p. 98) appeared with slight revisions to B and D; where B = Desirability of the proposed change or end state, and D = Practicality of the change (minimal risk and disruption).

Second Generation: Large-Group Events

In the 1980s, change was viewed as a mys- terious, theoretical, and complex subject. Kathie Dannemiller’s original intent in

creating the second generation of the for- mula was to demystify change and provide a guide for individuals, groups, and whole organizations in creating their preferred futures. She wanted something simple enough to speak to the average employee. This is the thinking that inspired and drove Dannemiller to create the second genera- tion of the formula (J. Jacobs, personal communication, 2014).

A Culture of Collaborative Experimentation

Kathie Dannemiller of Dannemiller Tyson Associates (DTA) was studying and work- ing at the University of Michigan under Ron Lippitt, who began his early work with Kurt Lewin examining patterns of leadership styles on aggressive behavior in social climates, e.g., autocratic, democratic, and laissez-faire (Lewin, Lippitt, & White, 1939). Dannemiller was one of the first members of the National Training Labora- tories (NTL); and, it was through the NTL experimentation and collaborative culture that several core organizational behavior theories and models were born. She was a pioneer in using these theories and models to facilitate rapid change employing large group meetings.

During that time, Dannemiller was introduced to the first generation formula by reading the Beckhard and Harris (1977) book Organizational Transitions. As the 1980s unfolded, she began experimenting with the formula and its application as a foundation for large group methods at Ford Motor Company with Nancy Badore (Hel- gesen, 1990). The second edition of the Beckhard and Harris (1987) book provided the formula, without a mention of Glei- cher. Later, Dannemiller began attributing the Change Formula to both Beckhard and Gleicher when Beckhard told her Gleicher was a student of his and had created it with him while they were working together (R. Koller, personal communication, 2014).

Making the Formula Accessible

With a passion for usability and common sense, Dannemiller considered the formula from Beckhard’s book helpful, but not accessible enough for the general public.

33The Change Formula: Myth, Legend, or Lore?

She thought Gleicher’s formula was bril- liant, but looked and sounded too theoreti- cal. She wanted people to feel smart rather than not enough or inadequate. Her experi- ence that people could not easily relate to Gleicher’s formula drove her to revise it. Dannemiller set out to preserve and honor the integrity of Gleicher’s formula while making it more usable and, therefore, more accessible to the world (J. Jacobs, personal communication, 2014).

Dannemiller distilled the essence of the formula in a descriptive, rather than prescriptive fashion. She had an egalitar- ian spirit and wanted this knowledge to be just as useful to everyone, from those working on the front-lines as it could be to the CEO and top leadership team (J. Jacobs, personal communication, 2014). Dannemi- ller and Jacobs (1992) first published the more common version of the formula in 1992. Paula Griffin (Wheatley et al., 2003) described the sequence of events as Gleicher starting it, Beckhard and Harris promoting it, and Dannemiller helping it take off when she made it easier to remem- ber and use.

To make the formula more accessible, she used a mnemonic device in the revi-

sion. By mnemonic device, she changed Gleicher’s first element, A, to a D because D stands for dissatisfaction. As a result, the formula garnered higher face value as people felt validated when it was presented to them. Dannemiller (Dannemiller Tyson Associates, 1990) re-framed the Change Formula as the product of dissatisfaction with the current state of affairs (D), an ennobling vision of what we yearn to be,

i.e., what is possible (V), and concrete first steps to take in the short term that are nec- essary in order to reach the vision (F). The product of these must be greater than the resistance to change (R) in order to bring about real change.

D x V x F > R

To bring about a palpable paradigm shift in a large group, she (Dannemiller Tyson Associates, 1990) proposed that partici- pants work on real organizational issues:

Start with building a common data- base about:

» how we all see the past (dissatis- faction) and why we need to change,

» a positive picture of the future we all prefer (vision), and

» actions we can all agree are worthwhile in order to begin to change (first steps) (p. 8)

The first thing to note about the first gen- eration Change Formula is that it includes a multiplier effect. In the second genera- tion of the formula, Dannemiller and her colleagues suggested that each of the three

elements needed to be shared collectively and significantly for change to occur. Depending on the organization and current realities one or more of the elements of the formula may have needed more attention. The goal was to create a solid and shared understanding in a critical mass of the organization around each factor.

The multiplier effect sets the stage for two helpful conversations when applying

the formula to understanding a situation or designing a participative intervention. Both rely on the multiplicative nature of the formula. First, if any one element is low it leads to the product of the entire equation on the left side being low, making it unlikely to impossible that change will occur, since most people resist change at least to some extent. This conversa- tion focuses on interventions designed to increase D, V, or F, while decreasing R.

Second, if any of the elements are missing (i.e., zero), the resulting product will be zero. Therefore, D x V x F = 0, which is not greater than resistance (R). This conversation is starker and addresses the issue of leaving out one of the ele- ments, all together. For example, a leader- ship team might believe that they have created a compelling vision (V), yet left the strategic planning session without clear first steps (F); hence, the CEOs finds that vision is ineffective and the strategic plan is collecting dust.

A Case Example: World Cafe in South Africa

An information technology service center located in a sparsely populated city with few economic development opportunities faced a daunting challenge. The center’s most important task was to keep their main customer’s computers up and running. If an incident occurred that interrupted ser- vice, the number of incident free days was reset to zero. The number of days between resets was alarmingly low.

As a result, the client was unsatisfied, so unsatisfied that the contract was in jeop- ardy of being discontinued. That meant over 120 employees could lose their jobs. Management decided to launch a program titled 80 Days Around the World in which they put up large banners, and held a braai (i.e., a cookout) announcing a mandated target of 80 incident free days. The pro- gram fell flat. Employees did not under- stand nor see the need for such a target, and five months later, nothing improved and attitudes worsened. The average num- ber of incident free days was 8.94, with a low of zero and a high of 24 days. Per- plexed, management decided to relaunch

The first thing to note about the first generation Change Formula is that it includes a multiplier effect. In the second generation of the formula, Dannemiller and her colleagues suggested that each of the three elements needed to be shared collectively and significantly for change to occur. Depending on the organization and current realities one or more of the elements of the formula may have needed more attention. The goal was to create a solid and shared understanding in a critical mass of the organization around each factor.

OD PRACTITIONER Vol. 46 No. 3 201434

the program with bigger banners, t-shirts, fliers, and another braai.

In response, consultants to the company offered a different approach; one where Whole System Collaborative Change (WSCC), also referred to as large- group methods, would facilitate dialogue with employees based on the Change Formula (notice the S in Figure 1, which will be explained in the third generation discussion). Hesitantly, the director of the service center along with upper manage- ment agreed to a two hour session with all employees, leaving a small number of employees to manage operations (90 out of 120 participated). Facing the imminent loss of their client, they were out of options.

As mentioned, DVF can be the main focus for events, in which the collaborative methods are used with an “interdependent group of bodies forming a unified whole interacting under the influence of related forces” (Cady & Fleshman, 2012, p. 6). The methods use dialogue where the entire system is engaged in “creating itself anew,” shifting from imposing the change to collaboratively “crafting a transformation of the system by the system” (p. 6). Of the WSCC methods available, World Cafe was chosen as the intervention for this session (Holman, Devane, & Cady, 2007).

During the session, the employees formed into small groups to discuss the questions formulated around the formula. They first discussed the D question, rotat- ing three times to tables with different participants. Next, they discussed the V

and then the F and S (together) in similar fashion, for a total of nine rotations (see Figure 1 ). Towards the end of the two hours, the manager was moved by the quality of the dialogue and solutions being identified.

He was so inspired that he formed a team of volunteers from the participants in the room to prioritize and coordinate the implementation. The organization saw results immediately. Attitude improved and, as shown in Figure 2, performance exceeded the expectations (Oelofse & Cady, 2012). The higher performance continued

beyond the 81-day mark shown in the study to more than 120 days and counting (Cady & Oelofse, 2014).

Third Generation: Longer-term Change Initiatives

Large-group methods were widely used in the 1990s. By 2001, management con- sultants found that clients became “more price sensitive and more inclined to seek out discounts” (Economist, 2002, para. 7). Large group events were viewed as easy cost cutting targets. The Change Formula was still being utilized; yet, interestingly, the use was more informal. Not much, if any, peer reviewed examination nor publication was offered. During the 2000s, the formula underwent two more changes that focused on WSCC, reflecting a move toward longer-term processes influenced by strength-based interventions.

Re-defining the D: A Strength-Based Approach

The D in the Change Formula has also been described as data and desire (Cady, Hine, Spalding, & Meenach, 2011), emphasizing the importance of connect- ing data to dissatisfaction and a resulting

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Figure 1. The Change Formula Applied to Questions in World Cafe

35The Change Formula: Myth, Legend, or Lore?

desire for change. Dissatisfaction does not necessarily mean unhappiness, as there are plenty of people who are satisfied being miserable. This shifts the focus toward positive psychology and the possibility that a desire (D) for change can be rooted in a strength-based conversation (Pascale, Sternin, & Sternin, 2010). As a result, a person can be happy and desire more or something different as a result of what is possible.

It allows for people to look outside the organization at events, developments,

and trends in the environment; asking such questions as, what is happening with competition, innovation, and best practices, both those inside and outside your industry? It also allows one to look at what is working in comparison with what is not working in the organization. What is underlying success in some efforts and why are others falling short? During a large group event, a consultant unfamil- iar with the WSCC processes said, “I’ve never seen a system talking to itself before” (S. Cady, personal communi - cation, 2014).

Adding the S: Sustaining Change Over Time

Concurrent with the tough economic times of the 2000s, leaders were asking the question, how do we sustain the hope, enthusiasm, and energy after a large-group event is over? As a result, firms utilizing WSCC methods moved beyond punctu- ated one-time events to using the formula as a guide in weaving a series of events

and other interventions into longer-term change programs, represented by change road maps.

This focus on a road map for change compliments the first steps (F) by ensur- ing that they are realistic and achievable. The intention is for people in the system to have confidence that their actions will put them on the right path to achieving the collective vision. Desire (D) with no vision (V) or first steps (F) leads to a feeling of hopelessness and withdrawal of time and energy the next time they are invited to do

so. Following the paradigm shift witnessed in the punctuated events, there was a polarity of both support and accountability. People needed the knowledge, skills, and abilities to fulfill commitments they made during the event and they also wanted to be held accountable for making good on these agreements.

This led to conversations and debate among practitioners and scholars utilizing WSCC methods (Jacobs & McKeown, 1997; Cady & Dannemiller, 2000; Cady, 2008). Jacobs and McKeown (1997) proposed an additional variable beyond D, V, and F to reflect the shift in focus from events to change initiatives. They proposed C as Capability to change. This additional element opened the door to including the creation of systems, processes, structures, personal and team development, and other leverage points that would sustain the changes that large group events initi- ated. Around that time, Cady was working closely with Dannemiller. During that time, they would have long debates about design- ing change road maps (S. Cady, personal

communication, 2014). Dannemiller would argue it was not possible to design an accu- rate road map because they always changed (Cady & Dannemiller, 1999).

Barbara Bunker would often say, “the best plans are meant to be deviated from” (S. Cady, personal communication, 2007). Inspired by her words, Cady proposed a similar iteration of the formula in that he saw the need for sustainability (S). One of the issues plaguing change efforts of all types is ensuring gains are made over time. Cady’s depiction of the formula is:

D x V x F x S > R

“Teflon change” is all too familiar for many members of organizations, be they front line workers or CEOs. A common anecdotal complaint is that solid progress occurs for six months, even a year, before a slippery slope leads back to business as usual. There is a polarity, an ongoing oscil- lation between today’s reality and tomor- row’s possibilities. Robert Fritz (1989) described this as the creative tension that results in both believable and inspiring pictures of the future.

Sustaining the work following an event is particularly important, especially when there are a series of events engag- ing a widely dispersed organization. As a result, current WSCC practice is comprised of punctuated events scheduled a year or more into the future, ensuring that both accountability and support are built into the change work as part of change initia- tive. With the growth of project manage- ment (e.g., the PMBOK, ADKAR) over the past decade came increased focus on long-term initiatives and program man- agement. Creating sustainability can take many forms though we propose that the most significant contribution of adding the S to the Change Formula is the addition of change road maps to an organization’s efforts. Change road maps guide decisions and actions, anywhere from a year through to three or more years.

A Case Example: Road Map for Rapid Growth

An international apparel retailer needed to rapidly expand its operations in Europe

By 2001, management consultants found that clients became “more price sensitive and more inclined to seek out discounts” . . . Large group events were viewed as easy cost cutting targets. The Change Formula was still being utilized; yet, interestingly, the use was more informal. Not much, if any, peer reviewed examination nor publication was offered. During the 2000s, the formula underwent two more changes that focused on WSCC, reflecting a move toward longer-term processes influenced by strength-based interventions.

OD PRACTITIONER Vol. 46 No. 3 201436

to gain market share, enlarge its footprint, and gain efficiencies from this increased size. Changes required ranged from accelerating implementation of a Grow- Fast strategy to a redesigned structure and expanded leadership roles throughout the company. The long-standing feuds between merchandising and buying had to be replaced by a partnership-based rela- tionship. A new FlowFast process to speed goods from manufacturing to market was also on the change agenda along with the launch of a European learning center to support ongoing development of all employees. Taken together this list of initia- tives was a tall order. The need to accom- plish it rapidly only added to the degree of difficulty.

Senior leaders and a team represent- ing a microcosm of the organization planned the entire Real Time Strategic Change effort. The road map for this effort extended over 18 months (see Figure 3). The different streams of work are illustrated by the different colors on the chart. The elements of the Change Formula are on the left side of the road map. The larger icons mean that the corresponding stream of work primarily addressed these elements. The smaller icons are elements that were also addressed by a stream of work, but only secondarily.

The first two of four large group meetings focused on the D in the Change Formula. They raised awareness and understanding of why the new GrowFast strategy was needed, what it was, and changes that would be required to make it work. The third meeting combined the work of translating the vision (V) from a compelling picture of possibilities into specific actions with timelines, account- abilities, and measures of success (F). The fourth large group gathering led to a number of actions and initiatives aimed at sustaining gains made during the first three sessions (S). Participants in this meeting learned about a FlowFast manage- ment system that would embed better ways of doing business into daily work routines and practices. Ongoing planning and implementation work in each of the main areas of the business supplemented these large group meetings.

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37The Change Formula: Myth, Legend, or Lore?

This same DVFS mantra was rep- licated within each of these streams of work, similar to the macro application of the formula to the overall road map. Successful new store openings in the UK and Germany, and a new country opening in Poland paved the way for the European Operations to be rewarded with additional funding from corporate to support the growth strategy. They achieved growth and implementation milestones ahead of schedule including the journey from identifying the need for a European learn- ing center to its successful launch within six months.

The Future and Concluding Remarks

So, there you have it. We intentionally focused on the left-hand side of the equa- tion and did not delve into resistance. The type of resistance reflected in the change formula does not represent every single type. That exploration will be left for future writing because contemporary researchers, especially positive organizational scholars, have identified an important part of resis- tance most often called positive deviance (Pascale, Sternin, & Sternin, 2010; Spre- itzer & Sonenshein, 2003) that was outside the scope of this article.

It is important to emphasize that for the Change Formula, the key message is everyone’s truth is truth. Everyone from the CEO down to the front line employees need to have a place within each variable DVFS or the model will not work. For example, if the top leaders do not acknowl- edge bottom-up problems publicly, it is not a true D. People tend to be in touch with their own perceptions while understanding little, or even caring about anyone else’s.

Leaders and other organizational members alike have a firm grip on their own individual assumptions, experiences, and beliefs. To paraphrase Ackoff (1981), a pioneer in the field of Systems Thinking, everyone’s world view is horribly distorted by being their own. Good work on the Change Formula means both being curious about what others can contribute to the col- lective understanding of each element and advocating for the value you add from your own point of view.

In closing, our intent was to provide an accurate picture of the organizational change model known as the Change Equa- tion, The Formula for Change, and the Change Formula. With the help of Barry Stein, documentation now exists to clarify the formula’s beginnings. Next, we docu- mented iterations and some contributions over time. If you do not see your version of the Change Formula, fear not. We are not done writing; contact us, as we are eager to learn different forms and applications

of the formula. Whether you are a scholar, practitioner, or both, using the formula, we encourage you to join us and continue building on the shoulders of those who have come before us.

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It is important to emphasize that for the Change Formula, the key message is everyone’s truth is truth. Everyone from the CEO down to the front line employees need to have a place within each variable DVFS or the model will not work. For example, if the top leaders do not acknowledge bottom-up problems publicly, it is not a true D. People are most often in touch with their own perceptions while understanding little, or even caring about anyone else’s.

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Steven H. Cady, PhD, serves on the Graduate Faculty at Bowling Green State University. He is the Director of the Institute for Organizational Effectiveness and served as Director of the Master of Organization Development Pro- gram. He has also been the Chief Editor for the Organization Development Journal and co-author of The Change Handbook. He is the founder of www. NEXUS4change.org–building a community of communities for Whole System Collaborative Change. He can be reached at [email protected].

Robert “Jake” Jacobs, MSOD, is a consultant working with a broad base of collaborators around the world. He specializes in helping people and organizations claim the futures they deserve. Jacobs recently joined forces with Barry Johnson and Leslie DePol to form Polarity Partnerships. He is the President of Global Consulting Services. He is the author of Real Time Strate- gic Change: How to Involve an Entire Organization in Fast and Far Reaching Change, and co-author of You Don’t Have To Do It Alone. He can be reached at [email protected].

Ron Koller, MM, is a doctoral student at Capella University and a partner with Fenwick Koller Associates, a firm specializing in union-management success. He was mentored by, partnered with, and co-authored with Kathie Danne miller. Koller’s specialty is assessing change recipient responses to strategic organizational change. He is co-author of Whole-Scale Change: Unleashing the Magic in Organizations. He can be reached on his blog at www.ChangeManagementSuccess.com or at [email protected].

John Spalding, MOD, is passionate about change and uses his experience to help organizations innovate leading edge ideas as a practicing Organization Development consultant. Spalding obtained his master’s degree in Organiza- tion Development from Bowling Green State University and participated in the Dannemiller/Loup – Whole Systems Practicum in 2003. He has experience consulting, designing, and organizing logistics for a variety of large-scale change initiatives. He has taught at Owens Community College and is cur- rently the editorial coordinator for the first interactive CourseBook on the Principles of Management (McGraw-Hill). He can be reached at spalding@ sgendeavors.com.

39The Change Formula: Myth, Legend, or Lore?

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