Business case study

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\Draft: 3/18/10 WC = 4166 PART ONE KNOWING WHAT TO DO

Rube Goldberg – A comically involved, complicated invention laboriously contrived to perform a simple operation

—Webster’s New World Dictionary As I write this, I am looking at a Rube Goldberg drawing showing how to keep a shop window clean. It involves a man tripping on a banana peel, causing a rake to move upward, propelling a horseshoe onto a rope and the “invention” is just getting started. It reminds me of a lot of the plans for organizational change I’ve seen: cobbled together bits and pieces from a variety of sources. Too many steps, too much left to chance, and way too convoluted. There is a better way. There are many good strategies for planning and implementing change, but you need to know what to look for. The following four chapters will give you a way to begin to look at what it takes to lead change. What to avoid. And what you can do to build your personal capacity to apply what you know.

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3/18/10 WC = 3964

2. The Stages of a Successful Change and What Disrupts It

You philosophers are lucky men. You write on paper and paper is patient. Unfortunately, empress that I am, I write on the susceptible skins of living beings.

—Catherine the Great Managers at Ajax Paper (a fictitious name), knowing they had to improve quality and productivity in order to survive, decided to initiate an improvement process that relied on high worker involvement. The unions rebelled and closed the facility for six months. Twenty miles away, a competitor, Beta Products, faced a similar challenge but took a radically different approach. Corporate headquarters would agree to fund capital improvements only if plant management and the six unions would agree to cooperate with each other. Ajax failed to anticipate the importance of support and the power of resistance. Given their history, there was no reason to believe that the unions would accept a unilateral decision that affected their members in such dramatic ways. Senior management at Beta knew better. They understood that unless they got agreement from all, the chance of success was small. In this chapter, I cover the Cycle of Change.1

It describes how the need for change begins to take shape and how energy begins to build so that we take action which leads to successful completion of the change. I think you’ll find the cycle to be a good resource as you think about how you want to approach the next change you lead. You’ll also recognize what can happen when you are at one point on this cycle and the people who must support you are somewhere else. I’ll use the Ajax/Beta case as we walk through the Cycle of Change.

[A head] THE CYCLE OF CHANGE

If we understand that change often follows this cycle, it is easier to predict what’s needed at any point in the life of a project. Once we know where we are in the cycle, we begin to see options. Ajax Paper failed to grasp the natural movement of the cycle, whereas Beta embraced it.

The Cycle of Change can help us see

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• there is a natural order in the life of a change • what disrupts that natural movement • that nothing lasts forever • the potential consequences of various strategies

By understanding the Cycle of Change, you’ll begin to see what options make the most sense for leading a change from beginning to end.

GRAPHIC DESIGNER: I DON’T WANT TO USE THIS POWERPOINT SLIDE, BUT I WOULD LIKE VERSIONS OF THE CYCLE TO APPEAR THROUGHOUT THE BOOK. THE ORIGINAL VERSION OF THE BOOK HAD A HURRICANE IN THE CENTER. I’D PREFER THAT WE KEEP THE CYCLE SIMPLER THIS TIME. THANKS. AND DO NOT INCLUDE “MAURER & ASSOCIATES” THAT APPEARS AT THE BOTTOM OF THE PP SLIDE. AT THE BOTTOM OF THE FIRST USE OF THE CYCLE INCLUDE THE TEXT “This chart is adapted with permission from the Cycle of Experience developed at the Gestalt Institute of Cleveland.” - RICK

Maurer & Associates

Cycle of Change In the Dark

See the Challenge

Get StartedRoll Out

Results

Time to Move On

[B head] In the Dark There is very little information about the need for change as the cycle begins. But as bits of information come to our awareness, we begin to see a picture emerge. Perhaps this is information that had been in front of us all along, but something happens that jolts us into seeing the implications of the data. Or perhaps, new information comes in — sales figures, your competitor’s flashy new product that is getting a lot of attention, a new threat faces the security of your country, or changing demographics in your community that will require new and different services. However you get this information is inconsequential. What is important is that you move from darkness to light.

Comment [FDC1]: Is there a way that the beginning of the cycle could be indicated more clearly within the graphic?

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In the case of the paper plants, there may have been some reports of quality problems and machines needing too much maintenance attention. When senior management in both companies realized there was a problem, most of their respective staffs were in the dark and unaware of the problem.

[B head] See the Challenge This is an “aha” moment when someone recognizes that there is a problem or an opportunity that must be addressed now. At Ajax Paper’s corporate headquarters, senior executives saw the challenge and immediately moved to action, leaving plant management and workers behind. At Beta, senior management opened the books so that everyone could see the challenge facing them. Seeing the Challenge is the most critical stage of the cycle. Once most people who have a stake in the organization’s success see the challenge, it becomes possible to begin to get people aligned to move around the cycle together. Organizational consultant Kathie Dannemiller spoke about the shift that occurs when everyone recognizes the importance of a situation.2

When this shift does occur, people’s views of what’s real are transformed. The shift is not just intellectual, it is visceral. Stakeholders begin to see the world from others’ points of view. The shift is a realization that you are in this together. You see and feel the need for action collectively.

This point is the most important point in the life of a change, but sadly, it is also the most overlooked. Chapter 6, “How to Make a Compelling Case for Change,” addresses why this occurs and what to do about it. By the way, 100 percent of the people don’t have to See the Challenge in order for an organization to act on the need for change. That might be nice, but it’s not likely to happen. However, it is important that a critical mass see the challenge before you move forward. The question of who are those people and how many of them do you need to see the challenge is something that only you can answer.

[B head] Get Started Once we See the Challenge (or opportunity) energy builds—we want to get busy and do something. Ajax’s initial action was unilateral: they wanted to Get Started. Senior management saw a problem and dictated a new program. They did not bother to heighten awareness among staff. At Beta, senior leadership decided to try to bring others out of the dark so that they felt the challenge too. They addressed the question, Can management and the six unions find a way to work together to save the plant? These conversations could take place only after most individuals saw just how dire the situation was for the plant. Once that occurred, they could move into typical getting started activities like

Comment [H2]: I added the word does

Comment [H3]: I added this pp

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identifying the goals, making plans, setting benchmarks and so forth. Had Beta tried to inflict a plan on people who were still In the Dark, they likely would have had the same problems that Ajax faced.

[B head] Roll Out During this stage, the idea is implemented. For example, an announcement is made: on January 2 we are going to go live with the new software.

At Ajax, they announced the plan and tried to Roll Out the change quickly. They failed. At Beta, management and the six unions signed an agreement that they all would agree to cooperate with each other to develop plans to bring the plant back to health. Without this, Roll Out would have only been empty words. Roll Out is sometimes confused with victory. On January 2 you go live and assume that’s that. Roll Out is nothing more than flipping the switch and saying you’ve begun. That’s an important point in the life of any change, but that’s not the end of the work. You need to see the benefit from all this effort.

[B head] Results At this stage, the idea becomes part of the way you do business. Ajax never got close to this stage; Beta was working toward it. Once Beta achieves the goals of improved production and quality, the change itself is over and it’s now the new status quo that needs to be managed. If the change were a fairy tale, this stage would end with “and they all lived happily ever after.” But life moves on.

[B head] Time to Move On Nothing lasts forever. Even the best plans eventually run their course. Beta may find their agreement with the unions strained as they try to introduce new technology or as foreign competition demands severe cost cutting. If that occurs, they need to realize that actions that worked so beautifully this year may need to be revised or discarded as conditions change. The transition from Results to Time to Move On is important. Often we hang onto an old idea far too long. It's not that the idea is bad; it is simply time for something else. When I wrote the first edition of Beyond the Wall of Resistance in 1995, I included the following story.

IBM, once the dominant force in the computer industry, faced hard times in the early ’90s. Many observers blame this on the company's inability to shift from mainframe to personal computers. According to Mark Stahlman, writing in the Wall Street Journal, IBM did respond to the shift in the market but failed to realize that it would take a new way of approaching the work. They failed to leave Results and move again to the beginning of the cycle. "For a while, it looked as if

Comment [H4]: I changed Acme to Ajax

Comment [H5]: I changed cooperation to cooperate

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IBM might be back in the lead. Through a unique combination of events, IBM hit upon the correct new idea": building alliances with others that could provide R&D and partnering with distributors instead of selling only through the company sales force. "But IBM sacrificed this lead by suffocating its infant PC unit with a devastating return to old rules—the mainframe rules." By requiring a standardized software design, the company "killed any capacity within IBM to foster independent business models aimed at separate, unique computer industries."2

As I write this revised version in early 2010, I know that the story didn’t end there. IBM realized that they were missing a huge opportunity. They went into personal computers with gusto and created well-crafted and well-respected products. And then when that seemed like it had run its course given their goals, they sold the PC business to Lenovo. The cycle just keeps moving. The Cycle of Change ends and you move onto something new and different, or you use the cycle as a spiral with each change building on the last. (This helps you avoid the “flavor of the month” syndrome.) For example, some organizations embraced quality in the 1980s. When they recognized that quality circles and other similar tools had run their course, they didn’t abandon quality improvement, they built on the foundation they had already laid. Some moved to Six Sigma, a process for improving quality out to the sixth standard deviation. As that started to get Results, they began to realize that they could take more waste out of the system so they added in lean manufacturing processes. And on it goes. [A head] WHAT DISRUPTS FORWARD MOVEMENT Dr. Seuss was wrong. Throughout his classic children's book Green Eggs and Ham, Sam- I-Am pesters the unnamed main character until he finally relents and agrees to eat green eggs and ham.3

In real life, however, the Sam-I-Am approach doesn't work so well. It usually increases resistance to your ideas. Unfortunately, many corporate managers look to Sam-I-Am as a role model.

Change disrupts the status quo. As Arthur Jones says, “all organizations are perfectly designed to gets the results they get.”4

Any suggestion of a change disrupts the perfection of the status quo. Even if things look dysfunctional to you or you see possibilities on the horizon, that doesn’t mean that others see things that way. Unless you can make a compelling case that a change is needed, you are going to get resistance at every step along the way. It is highly unlikely that six months into a big project, people would turn to each other and say, “Wow, was I wrong. What would we do without the brilliant leadership of (fill in your name here)? We are so lucky. She saved us once again.”

TOOLKIT ICON: For quick overview of systems thinking as it relates to “all organizations perfectly designed. . .” visit

Comment [H6]: From this point on I am going to try to to capitalize Making a Compelling Case etc. unless I feel it is importnatto draw attention to its place in the cycle

Comment [H7]: I changed this to times roman italic. Ok to go back to goergia italic but I think that was just a holdover from some earlier draft

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www.tipsforleadingchange.com and search for “systems thinking” We need the voice of resistance. As hard as it may seem at the time, resistance to change can be a very good thing. There are two major reasons for this. That’s because not all ideas are good ideas. You and I will come up with amazingly idiotic ideas from time to time. We need to be open to criticism from others who see things differently. The history of business and nations is filled with examples of bad ideas that could have been stopped if someone had been willing to listen to the naysayers. I am no longer astounded when line employees, supervisors, and middle managers tell me about some change in their organization that barely has even a slim chance of succeeding. They talk convincingly about the reasons why that is so. And, I wonder, why isn’t anyone listening to these people? But, I can also see why leaders don’t want to hear bad news. Most of us hate resistance. The mere mention of the word unleashes a torrent of negative thoughts—fear, opposition, conflict, hassles, pain, annoyance, anger, suspicion. Because it is viewed so negatively, people want to get past resistance as quickly as possible. Another reason that people (including us) resist change is that we have a reaction to the mere thought of this change. In other words, we might agree with idea itself, but our fear is so strong that our actions work against the change. So, why’s that a good thing, I hear you ask. Because resistance is energy that could be used to support the change, but right now its tied up in reacting against it. Knowing what resistance is allows you to find ways to turn resistance into support. Much more about this in the next chapter. In the words of so many articles on the subject, people want to overcome resistance. This view is wrong. It will get you into serious trouble. Attempts to overcome resistance usually makes matters worse. Here are just a few examples that I have seen:

• A merger that never quite merged because little was done to listen to the concerns and ideas of those whose lives were going to be changed. The merger was completed on paper, but the new organization never saw a benefit from the new alliance.

• A new product that died even before it was born because the advocates tried to force its development before other departments had agreed to its merit.

• A construction project that went way over budget because the various groups could not find ways to resolve their differences.

• A quality improvement process that was never fully implemented because no one sought the support of the middle managers, who remained cynical about corporate leadership's commitment to the endeavor.

• A large bank that annually spent hundreds of thousands of dollars for strategic plans that were never implemented because no one, except senior management and the consultants, cared about what was inside the handsomely bound tomes.

Comment [H8]: New sentence

Comment [H9]: The wording seems clunky I as read what I wrote in this sentence. If you agree can you do your magic, otherwise we’ll leave it be

Comment [H10]: This is a new pp

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Just a quick scan of the business press yields more examples. There is no shortage of failures attributable to poorly handled resistance. Take the case of the Washington, D.C. football stadium. In the summer of 1992, Jack Kent Cooke, the owner of the D.C. football team, and Virginia Governor Douglas Wilder held a surprise press conference. They announced to a stunned audience that they were moving the team from the District of Columbia to Virginia. They showed precisely where the stadium would be located. They explained how the subway system would add a stop to handle game-day traffic. They showed a model of the proposed stadium. They seemed joyous and excited in their presentation. If someone had handed them shovels they probably would have started digging the foundation. Almost immediately, resistance began to develop. The people of Alexandria had other plans for the site. The subway authority didn't want to commit precious funds for a stop that would be used only eight times a year. The citizens of the state did not want to float a bond issue to support the project. Cooke and Wilder reacted like many people in power: they ignored the resistance and forged ahead. Although nothing can be reduced to a single cause, I believe this was a major factor in the failure of their plans. As they pushed their idea, resistance increased in direct proportion to their actions, and within six months the project was dead.5

So instead of the arrow moving around the cycle as they had hoped, the arrow turned inward and that’s where resistance resides. The more they pushed their plan, the more the resistance got embedded even deeper.

Maurer & Associates

In the Dark

See the Challenge

Get Started

Roll Out

Results

Time to Move On

Resistance

Cycle of Change

Examining this case in terms of the cycle, we can see that Cooke and Wilder were far out ahead of the people of Virginia. They were ready to call in bulldozers. They expected, I am sure, that people would get on board and rapidly move around the cycle to join in

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support of this idea. It didn't happen. The harder Cooke and Wilder pushed, the more opposition they got. I find it amazing that Cooke and Wilder didn’t seem to learn from this experience and went on to try to build the stadium in Bowie, Maryland. That failed as well. The third location Largo, Maryland proved to be the charm and the team now plays there. But think of all the development costs that went into trying to get it built in the other locations. Shortly after the Northern Virginia stadium failure, the Walt Disney Corporation tried to buy land to build a theme park near Manassas National Battlefield located some thirty miles from the proposed site of the football stadium. Disney failed, in large part, because of the resistance tactics people learned fighting the football stadium. Here’s the danger. Once we get an idea in our heads, it takes on a life of its own. By the time we announce our idea to others, we’ve hired consultants, ordered the books, and cleared calendars for planning meetings. People rightly say, “What?” They don’t see the urgency, consequently they see no need for a grand plan. Our brilliant idea could die before it ever gets started. [A head] THE FOUR STAGES OF CHANGE When my phone rings for advice or consulting help, the request most often falls into one of the following four stages.

Maurer & Associates

In the Dark

See the Challenge

Get Started

Roll Out

Results

Time to Move On

Making a Case

for Change

Make a Compelling Case for Change This is the most important—and the most overlooked—point in the life of a change. It is the point where a critical mass of those who have a stake in your organization’s success say, “We’ve got to do something differently.” They feel this need to change in their bellies. Chapter 6, “How to Make a Compelling Case for Change,” explores this stage.

Comment [H11]: I moved this pp down two pp so that the cook and wilder story didn’t get interrupted see what you think

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Maurer & Associates

See the Challenge

Get StartedRoll Out

Results

Time to Move On

In the Dark

Getting Started

Get Started on the Right Foot If you’ve ever looked at an article on project management, it probably covered the important items that occur in this stage. The one addition to that vast body of work on project planning that often gets overlooked is the question of who do you involve and how to you get them engaged? Chapter 7, “How to Get Started on the Right Foot,” examines the work to be done during this stage.

Maurer & Associates

See the Challenge

Get StartedRoll Out

Results

Time to Move On

In the Dark

Keeping Change Alive

Keep the Change Alive This is the second most overlooked point in the life of a change. When all of the hoopla has died down, the work of this stage is to make sure details are attended to in order to get the new system working correctly—things like testing, monitoring closely, and getting the bugs out of the system. The point of Keep the Change Alive is to get Results. So, this stage occurs in two parts: get the new system up and running, and make sure all this effort turns into real Results. Chapter 8, “How to Keep Change Alive,” covers what to do during this stage.

Maurer & Associates

In the Dark

See the Challenge

Get Started

Roll Out

Results

Time to Move On

Getting Back on Track

Get Back on Track This stage is often avoidable if you do the other three stages well. But sometimes even the best laid plans derail. During this stage you need to find out why things are going so wrong so that you can keep the project on schedule, within budget, and meet your

Comment [H12]: I took out get Started

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intended goals. Chapter 9, “How to Get Back on Track,” covers what to do if you find your project getting off course. Each stage of the cycle has in it the seeds of its own destruction. For example, Roll Out won't last forever. It will inevitably lead to Results or failure. Results will either lead to renewal or an ending. And on it goes. GRAPHICS: THIS STAGE NEDS TO BE TITLED “TIME TO MOVE ON” THE SHADED AREA (OR BLOCKED OFF QUARTER) NEEDS TO BE THE UPPER LEFT SECTION OF THE CYCLE. THIS IS THE ONLY SECTION THAT HAS NOT BEEN COVERED SO FAR. PLEASE CALL IF I AM NOT CLEAR ABOUT HOW I WANT THIS GRAPHIC TO LOOK. RICK 703 525-7074 THANKS

Maurer & Associates

See the Challenge

Get StartedRoll Out

Results

Time to Move On

In the Dark

Keeping Change Alive

Time to Move On I found that this fifth stage that can easily morph into In the Dark quickly, and that’s not a bad thing. I don’t cover that stage with much depth in this book. For more on what that stage looks like and what to do about it, I urge you to read Managing Transitions by William Bridges. Although his work looks at the full spectrum of the change process, he describes this limbo stage that I call Time to Move On better than anyone else I’ve seen. He writes, “Before you can begin something new, you have to end what used to be. Before you can learn a new way of doing things, you have to unlearn the old way. Before you can become a different kind of person, you must let go of your old identity. So beginnings depend on endings. The problem is, people don’t like endings.”6

TOOLKIT ICON: For Podcast and article on Gleicher’s Change Formula visit www.tipsforleadingchange.com and search for “change formula”. It is a good resource for explaining the human side of change. [A head] CREATING CONDITIONS FOR CHANGE I have seen agendas for meetings that look like this one:

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GRAPHICS DESIGNER: CAN YOU PUT THIS AGENDA IN A BOX OR PERHAPS SOMETHING THAT LOOKS LIKE A FLIP CHART PAGE? Meeting to Plan the New Global Services Process

Introductions 9:00 to 9:15 Make a Case 9:15 to 10 Introduce the Plan 10 a.m. to Noon Working Lunch Noon to 1 Teams Begin to Develop Plans 1 to 5 Adjourn

The agenda looks neat, tidy, and orderly on paper. Unfortunately, people don’t see the light, get on board, roll up their sleeves and get to work according to a predictable time table. It just doesn’t work that way. People only move from In the Dark to Get Started once they See the Challenge for themselves. That may take moments or months. You can enhance their ability to See the challenge by providing sound information in ways that help them understand the risks (or opportunities) you are facing. But, you can’t predict when they will see what you see. (Chapter 6 will help you learn how to make a case so that people do see the situation with the same urgency you do.) Imagine that this agenda is for a meeting that you are running. You make a case, people nod, applaud, and ask appropriate questions. At the stroke of ten they seem to get it. You think, this meeting is going really well. But, here’s the problem. Your audience can fool you and look like they are on board even when they don’t know what you’re talking about. Admit it, you’ve learned how to fake it in meetings that you attend as well. You’ve learned how to act interested. And while you are saying, “Great job, Mary,” you’re thinking “what’s she smoking this time?” That insipid show of support will come back to Mary. No one will take on leadership assignments willingly. Arnold Beisser says, “. . . change occurs when one becomes what he is, not when he tries to become what he is not. Change does not take place through a coercive attempt by the individual or by another person to change him, but it does take place if one takes the time and effort to be what he is—to be fully invested in his current positions. By rejecting the role of change agent, we make meaningful and orderly change possible.”7

He calls this the Paradoxical Theory of Change. The paradox is that you can’t make change happen, you can only create the conditions that allow it to occur. TOOLKIT ICON: For short Podcast on Paradoxical Theory of Change visit www.tipsforleadingchange.com and search for “paradoxical theory”

Comment [H13]: I added a few words to this sentence “that” and “as well”

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The four chapters in part two cover the four stages in depth. Each of those chapters ends with a way to make sure you have done the work needed at that stage before moving on. [A head] BRIDGING THE GAP All of the chapters through Chapter 9 include a Bridging the Gap section. In these sections I offer some suggestions on things you can do today to bridge the gap between knowing how to lead change and actually doing it. Here is my suggestion with regard to the Cycle of Change. Get the Cycle of Change in your bones. Learn to see the cycle in action. Develop the ability to use it as a tool to plan, monitor, or self-correct situations where two or more people must be in agreement in order for smooth movement from In the Dark through to seeing Results to occur. DESIGNER: INSERT THE FOLLOWING SIDEBAR AND INTERVIEW ANYWHERE IN THIS CHAPTER. INTERVIEWS ANDSIDEBARDS SHOULD NOT APPEAR AT THE END OF THE CHAPTERS. Sometimes we need to hear the resistance in order to know that our plans are doomed to failure. In The March of Folly, Barbara Tuchman describes many situations in which leaders failed to read obvious warning signs. In 1685, for instance, Louis XIV rescinded the Edict of Nantes that had provided safety for the Protestant Huguenots, thus opening the door to their persecution. The country praised this action. Even at Louis XIV's death, this was cited as one of his most praiseworthy acts. In what may have been the only dissent, the Dauphin, the king's chief advisor, warned the king that revoking the edict might cause mass emigrations and harm to commerce. The king didn't listen, but to his credit, he didn't behead his advisor either. The results were devastating. Thousands of skilled workers fled the country, depopulating many regions. Other European nations welcomed the Huguenots with open arms and enticing tax incentives. A Protestant coalition against France was strengthened in Europe. In France, the Protestants who remained redoubled their faith, causing an even wider split between them and the Catholic church. The revocation raised questions about investing monarchs with absolute power. (Three generations later the monarchy was overthrown in the French Revolution.) In all the examples Tuchman notes, the warnings were not only clear but repeated. It's our failure to listen over an extended period that gets us into trouble.8

DESIGNER ADD SOMEWHERE IN CHAPTER – INTERVIEW WITH JEFFREY PFEFFER TO COME (I HOPE)

Comment [H14]: I capitalized the C, I think that’s correct. If not, zap it

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1I adapted the Cycle of Change with permission from the Cycle of Experience created at the Gestalt Institute of Cleveland to describe a natural process for change. 2 Rick Maurer, Beyond the Wall of Resistance (Austin, Tex.: Bard Press, 1996), 121–123. 3 Theodor Seuss Geisel (“Dr. Seuss”), Green Eggs and Ham (New York: Beginner Books, 1960). 4 David P. Hanna, quoting Arthur Jones in Designing Organizations for High Performance (Reading, Mass.: Addison Wesley, 1988), 36. 5 Cook and Wilder from Maurer, Beyond the Wall of Resistance. 34-35 6 William Bridges, Managing Transitions (Philadelphia, Pa.: Da Capo Press, 2009), 3. 7 Arnold Beisser, “The Paradoxical Theory of Change.” Originally published in Joen Fagan and Irma Lee Shepherd’s Gestalt Therapy Now (Palo Alto, Calif., 1970). Currently available online: <http://www.gestalt.org/arnie.htm>. 8Barbara Tuchman, The March of Folly (New York: Ballantine Books, 1990), 6.