Creating A Guiding Coalition

Week 7 Discussion

"Creating A Guiding Coalition"

Please respond to one (1) of the following:

• Read the article titled “Leading Change in Libraries: A Case Study”. Reflect on your academic career thus far. The decision to continue your formal education was a change that you implemented in your personal life. Whom did you place on your list as a guiding coalition and why? (Note: You do not have to list individual names. Substitute names for titles or positions are advised.)

• It is important to build a guiding coalition for your change. Review the article titled “Creating Cultural Change in a 115-Year-Old R&D Organization”. How did the organization create a guiding coalition? Think about the change you are developing in your extended project. How will you create a guiding coalition? Who will you need to engage to ensure the change is successful? Why is it important for you to make them a part of your guiding coalition?

FEATURE ARTICLE

Creating Cultural Change in a 115-Year-Old R&D Organization Over a five-year period, Timken R&D worked to improve the speed and quality o f its decisions and its alignment with the business.

Leslie Christensen

O V E R V IE W : This case study highlights the practical steps a 115-year-old company's R&D organization executed to change its culture—a change that was critical in order for the R&D group to improve both speed of decision making and alignment with its business units with regard to project selection and prioritization. The scope of the cultural changes extended beyond traditional product design and development. The case study describes the communication methods the R&D organization used to change others' perceptions of it from a corporate overhead that delivered little value to a resource necessary for the profitable growth of the enterprise.

K E Y W O R D S : Cultural change, R&D alignment, R&D strategy

For almost 100 years, the Timken Company's R&D organi­ zation focused on one product category: tapered roller bearings. In 1898, Henry Timken patented a tapered roller-bearing assembly that revolutionized freight-wagon axles. A century later, over 90 percent of the company's sales continued to be generated by various embodiments of tapered roller-bearing technology. Needless to say, the Timken R&D organization was comfortable working in that space; not surprisingly, the R&D group had developed a cul­ ture based on deeply entrenched norms and assumptions— a culture that was increasingly misaligned with the needs of the business.

In 2001, Timken decided to expand its product offerings in an effort to serve changing markets. Initially the ex­ panded product offering was achieved through acquisitions, which had minimal impact on R&D, but over time, it be­ came clear that innovation was required across the full breadth of the product portfolio. Traditional competitors were no longer the only competitive threat, and past ap­ proaches to innovation were no longer sufficient.

Leslie Christensen is currently the manager o f upstream marketing at the Timken Company. Throughout her career, she has led innovations ranging from creating a new function within a division to im plementing new pricing structures. Her experience spans technology roadmapping, innovation portfolio management, marketing, market research, pricing, project man­ agement, application design, and database design. She holds degrees in applied mathematics/computer science and business administration from Kent State University. [email protected]

DOI: 10.5437/08956308X5803316

Over a five-year period, guided by a desire to deliver rel­ evant technologies to the company's business units, R&D leadership set a course to improve the visibility of its efforts and facilitate meaningful portfolio management discussions with business unit leaders. Building support for radical in­ novation projects and increasing alignment with business units required two efforts: a process to identify and priori­ tize new ideas and a process to execute those ideas from concepts through commercial applications. The existing gate process was expanded to become the Concept to Com­ mercialization process. The concept part of the model related to upstream, long-term technology projects; commercializa­ tion was the focus of near-term new-product development. The concept portfolio was fed by revamping the existing technology roadmapping process.

During the transition of the concept portfolio, behavioral changes in project governance and deliverables were coupled with attitudinal changes around the value and focus of front- end R&D efforts. Accepted norms regarding roadmapping were challenged, which resulted in changes in R&D m an ­ agers' responsibilities. As a result of these efforts, the vision to deliver relevant technologies through improved visibility and meaningful discussions about the concept portfolio was achieved.

T h e N e e d f o r C h a n g e The roots of Timken's R&D culture can be traced back to the 1970s, when the R&D organization was physically separated from company headquarters, allowing it to develop its own

30 | Research-Technology Management • May—June 2015

culture, isolated from that of the business. By 2009, the Timken R&D organization could be described as having a consensus culture. A single informal dissent could kill an idea or keep one alive. Technical project reviews relied on infor­ mal decision making that was not consistently documented.

Worse, R&D was perceived as having goals that were disconnected from the needs of the company's business units. An "us" and "them" attitude prevailed, with busi­ ness unit leaders complaining that, for instance, "They [R&D] only work on science projects." Business unit lead­ ers, who influenced R&D funding, perceived that R&D was advocating new technologies that were not aligned with their needs. This perception was not entirely unfounded, but it was the result of an executive mandate from the early 2000s, when the R&D organization was charged with developing breakthrough products, under the assum p­ tion that business unit managers would accommodate any new products that emerged from R&D. As a result, R&D developed some technically sound, novel, fully functional prototypes—only to discover that they lacked commer­ cial viability or were not aligned with any business unit's strategy.

In turn, the R&D team perceived that the businesses viewed it as an order-taker and felt it was being directed to develop solutions without a clear understanding of the un­ derlying problems and priorities. This impression was rein­ forced by the company's innovation process, which was fed by a collection of technology roadmaps created by multiple business unit teams using multiple formats. These tended to focus on near-term new-product initiatives provided by the business units; a single roadmap could include over 120 tac­ tics across a dozen vectors (Figure 1). Other roadmaps were

simple lists of high-level bullet points, such as "reduce costs," with no additional guidance offered.

All of these maps were intended to feed both short- and long-term R&D pipelines, but they typically were filed away shortly after they were created, and then forgotten. It be­ came rare for new R&D development initiatives to meet the short-term financial criteria business units had established to move a project forward, and the existing stage-and-gate pro­ cess became known among R&D personnel as "Kill-Gate." R&D, and especially long-term conceptual projects, stalled. Because R&D decision making was informal and often u n ­ documented, it seemed to business-unit leaders that projects never advanced or were continually being rescoped to escape business alignment constraints.

In 2010, a new R&D management team was charged with improving innovation output and establishing a more col­ laborative culture with the business units. The team realized that first, R&D needed a clearer governance procedure to drive decision making and either move projects forward or kill them, and second, both R&D and the business units needed a clear grasp of how they were aligned and how R&D could serve the needs of the business. An initial step in that direction was the deployment of a governed stage-and-gate process called Concept to Commercialization. The process had two parts linked by a business adoption step. Business adoption was where a completed concept project, such as de­ veloping a new material, would feed into a commercializa­ tion project, such as developing a new product line. This process represented the first visible tie between the work output of R&D and the needs of business units.

Initial deployment efforts focused on existing near-term commercialization projects in order to expedite new prod­

uct launches. As a result, in 2011, a dedicated team of program managers com­ pleted a record number of existing commercialization projects predating the Con­ cept to Commercialization process. That success with short-term commercializa­ tion projects spurred ques­ tions about how similar success could be achieved in the longer-term concept projects. These questions led R&D management to ask, "How can the process of transitioning newly devel­ oped technologies into new product development be im­ proved?" Thus, the goal of strengthening the formal bridge between new tech­ nology development and new product development was proposed.

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Creating Cultural Change in a 115-Year-Old R&D Organization May—June 2015 | 31

The Concept to Commercialization process would be the framework to deliver relevant technologies to the business, but the concept portion of this process needed to be seen as relevant beyond R&D. Since discussions about long-horizon projects typically took a back seat to daily operations, R&D leadership needed to build a case for why the concept portfo­ lio was important to a growing business. Such a task would require a vision that others would support and that would generate a sense of urgency.

F ra m e w o rk fo r C hange The journey toward cultural change at Timken can be under­ stood through the lens of Kotter's (1996) eight steps of orga­ nizational change:

1. Establish a sense of urgency. This requires making clear that the current state is so unacceptable that change is worth the risk.

2. Create a guiding coalition. Recruit a core team of advocates to support and guide the change journey.

3. Develop a vision and strategy. The guiding coalition devel­ ops a vision and strategy around a goal common to all in the organization.

4. Communicate the change vision. The vision and goal must be shared throughout the organization in order to build support for change and for the change strategy.

5. Empower broad-based action. Leaders empower a broader base of people to execute the strategy, removing obsta­ cles, such as existing policies, that impede change.

6. Generate short-term wins. Tangible short-term results build support for the vision and bring more parts of the orga­ nization on board.

7. Consolidate gains and produce more change. With a few short-term wins, support strengthens, enabling addi­ tional change.

8. Anchor new approaches in the culture. In this final, critical step, the changes become part of the organization's new normal. Activities that had been new to the organization become integrated into its regular processes and no lon­ ger require the oversight of the guiding coalition.

Over a period of 15 years, Rotter studied dozens of organi­ zations' attempts at major change. He found that culture and culture change had a major impact on the success of a change effort. Contrary to the accepted wisdom that organi­ zational change should begin with culture change, Kotter found that successful efforts ended with a new culture shaped by the change.

While the Timken leadership did not intentionally refer­ ence Kotter at the start of the transformation, one team member had undergone formal training in the approach, which influenced the execution.

Establish a Sense of Urgency

"Establishing a sense of urgency is crucial to gaining needed cooperation." (Kotter 1996, p. 36)

The R&D leadership at Timken established the need for change through a comprehensive analysis of the concept portfolio, performed by associates who had no prior attach­ ment to the projects or process. Unfamiliarity with R&D and its jargon posed some initial challenges, but the exercise con­ firmed what some suspected—the concept portfolio lacked sufficient rigor and clear decision-making processes. More substantial were the findings related to the portfolio's perfor­ mance: more than 50 percent of the open projects were in their later stages. A simple plot of the value of the concept portfolio's projects against their anticipated year of comple­ tion revealed that R&D's value to the business was projected to decline significantly in the near future (Figure 2).

The realization that the fuzzy front end of the Concept- to-Commercialization process was short on fundamental re­ search ideas to support corporate objectives for organic growth awoke R&D leadership to the danger th at the company would suffer from what Tushman and O'Reilly (2002) call the "tyranny of success"—the inability to balance innovation with organizational effectiveness. This fear en­ gendered a sense of urgency to drive significant changes. Substantial new technology initiatives that led to longer- term yields were needed, and more important, the businesses needed to have a clear understanding of the value of these higher-risk, higher-reward efforts. In an effort to gain sup­ port for change, R&D leadership shared their realization and concerns with executive leadership, who gave the R&D lead­ ership team a directive to reverse the situation.

Create a Guiding Coalition

"A strong guiding coalition is always needed—one with the right composition, level of trust, and shared objective." (Kotter 1996, p. 52)

With the need for change firmly established, a dedicated R&D process team was created to enhance the innovation process, manage the concept portfolio, and work with subject m atter experts to update the technology roadmaps and the roadmap creation process. The R&D process team quickly recognized that new portfolio performance track­ ing metrics were also needed to indicate and communicate success.

At the time the R&D process team was formed, R&D's scope included product development; as a result, the team

2012 2013 2014 2015

FIGURE 2. Projected valuation o f R&D c o n ce p t p ro je c t p o rtfo lio , 2012-2015

3 2 | Research-Technology Management Creating Cultural Change in a 115-Year-Old R&D Organization

was composed entirely of associates assigned to the R&D or­ ganization. In spite of this apparent homogeneity, however, the team was diverse in terms of experience. Two members were relatively new at Timken and had no engineering expe­ rience. Two others had long tenures and engineering back­ grounds but had also held positions outside of the R&D organization. In addition, motivated by the need for fresh perspectives, R&D leadership departed from past norms by assigning associates with no engineering experience to key roles on the team. For example, the team member assigned to spend 80 percent of her time on technology roadmapping had a technical marketing background. Within the tradi­ tional Timken culture it was thought that "everyone in the company has an engineering degree," which was mostly true—from sales to marketing to executive leadership. So while assigning a person with marketing experience to lead a roadmapping activity would seem commonplace in many contexts, for Timken, and especially for R&D, it represented a changed mindset.

At this stage in the change process, the concept portfolio's front-end innovation projects were conceived and executed entirely within the walls of the R&D organization. Therefore, there was no significant reaction to the formation of the team from outside R&D. Throughout the remaining steps, the R&D process team led the design of new processes, commu­ nicated the vision across the enterprise, acted as a sounding board for concerns, and negotiated to overcome obstacles that were internal and external to R&D.

Develop a Vision and Strategy

"Vision refers to a picture of the future with some im­ plicit or explicit commentary on why people should strive to create that change." (Kotter 1996, p. 68)

Developing the vision and strategy to drive change required stepping back to analyze where and how R&D could best support the needs of the enterprise. An outside consultant was enlisted to guide R&D leadership in developing and ar­ ticulating its change strategy. Because the enterprise had grown through acquisitions, the vision encompassed both the legacy core products and the broader scope of new products.

The strategy defined a number of innovation domains, such as "support core business" and "develop new technolo­ gies." By echoing the goals of the business units, these inno­ vation domains demonstrated an authentic common interest with the business units and established a tone of partnership. Cross-referencing active concept projects to the innovation domains demonstrated that the business units' perception of an R&D focus on "misaligned science projects" was unsup­ ported, further reinforcing the cooperative tone.

The growth strategy was developed in two forms: a de­ tailed seven-page brief for executives and a condensed Pow­ erPoint presentation for R&D associates. The brief noted, "The aim of any strategy is to build a commitment to a pat­ tern of behavior that will allow an organization to compete effectively and win in the marketplace." The core value of

D e v e lo p in g t h e v is io n a n d s t r a t e g y t o

d r iv e c h a n g e r e q u ir e d s t e p p in g b a c k t o

a n a ly z e w h e r e a n d h o w R & D c o u ld b e s t

s u p p o r t t h e n e e d s o f t h e e n t e r p r is e .

innovation remained, but the breadth of innovation efforts was expanded to encompass power transmission products, replacing the earlier, narrower focus on bearings. Two efforts were highlighted—the Concept to Commercialization pro­ cess for idea execution and the technology roadmapping pro­ cess for idea generation. Furthermore, the strategy endorsed open innovation, which was a departure from past attitudes about fundamental research. The goal to have R&D better aligned with business unit strategies was considered critical to the objective of delivering relevant technologies to busi­ ness units.

Communicate the Change Vision

"That shared sense of a desirable future can help moti­ vate and coordinate the kinds of actions that create transformations." (Kotter 1996, p. 68)

Communicating the R&D strategy and vision required effort from many individuals, using various delivery methods and cadences. The CTO made a public commitment to embrace this new Concept to Commercialization culture and set ex­ pectations at a quarterly meeting at which the new strategy was introduced to all of the company's R&D associates. The introduction concluded with the CTO responding to ques­ tions from associates.

Throughout the next two years, the new R&D strategy was presented to wider audiences, including the company's executive leadership, which had given the R&D team the scope to make the needed changes but not been involved in the conceptualization and execution of the change process. In some instances, R&D leaders drew on their past non- R&D experience and used informal networking to com­ m unicate the strategy. Metrics related to business unit alignment and the concept portfolio's performance were introduced and shared to emphasize R&D's commitment to the vision.

At the tactical level, socializing the R&D vision required more personal approaches. R&D project leaders and lower- level managers were required to attend training in the new expectations regarding project charters and gate deliverables. During the sessions, which were led by an R&D process team member in conjunction with a business unit manager, par­ ticipants revised their project charters to minimize technical jargon and focus on business deliverables. For example, one project's initial charter read, "Identify the impact element abc has on material xyz's micro structure." The revised charter read, "Reduce late deliveries of raw material xyz for product

Creating Cultural Change in a 115-Year-Old R&D Organization May— June 2015 | 3 3

A by determining if eliminating element abc will reduce the need for reprocessing while maintaining current product performance." These initial meetings were early examples of R&D project leaders partnering with business unit managers to support a shared vision.

The vision was also shared and consolidated through a significant rethinking of the technology roadmapping pro­ cess and expectations for the roadmaps themselves. The R&D process team member charged with the roadmapping process collected and summarized the decentralized prod­ uct and market plans provided by over a dozen business unit managers. Afterward, face-to-face meetings were held with these managers to document their visions, including those that had not yet been fully analyzed. R&D personnel shared nascent technology ideas with the managers to en­ courage discussion of their perceived, but as yet undevel­ oped, business needs. Cialdini's (2001) concept of social proof was used to persuade business managers to focus on long-range plans by sharing intermediate or partially devel­ oped plans from one business unit manager with other managers to spur ideas. The results were maps of potential future products that extended beyond the short-term hori­ zon. The first two iterations of this process were led by the R&D process team; the final iteration was managed by the business unit managers. In this last step, R&D and business units joined to discuss long-term product and technology needs rather than near-horizon solutions, marking a signifi­ cant departure from past practices.

Empower Broad-Based Action

"The purpose of stage 5 is to empower a broad base of people to take action by removing as many barriers to the implementation of the change vision as possible at this point in the process." (Kotter 1996, p. 102)

After the vision was communicated, some R&D associates voiced concerns about the feasibility of its execution. Issues were raised regarding current project management practices, the complexity of existing roadmaps, budget priorities, and the challenge of explaining fundamental research to those with no subject matter expertise. Culturally, many in R&D believed that projects in the long-term concept portfolio were so different from short-term commercialization projects that best practices from the commercialization portfolio could not transfer to the concept portfolio.

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c o n s o lid a t e d t h r o u g h a s ig n if ic a n t

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r o a d m a p p i n g p r o c e s s a n d e x p e c t a t io n s

f o r t h e r o a d m a p s t h e m s e lv e s .

The R&D process team responded by flexing processes imported from the commercialization process to accom­ modate the different needs of concept projects. For in ­ stance, during the project lead training, it became apparent that the existing work breakdown structure (WBS) tem ­ plate did not fit most R&D concept projects. In response, a limited num ber of WBS template variants were developed to allow project leaders to relate better to the stage-and- gate process. The tailored WBS approach was designed to be more relevant to actual concept project progressions. In addition, the one-page WBS facilitated a common under­ standing of a project's scope, status, and progress toward deliverables. Finally, allowing concept project leads to have some influence over the communication of progress helped instill a sense of ownership in and commitment to the new process.

Perhaps the most significant change to the existing R&D stage-and-gate process was the decision to introduce non- R&D gatekeepers to the concept portfolio's governance pro­ cedures. Many R&D project leads were concerned that non-R&D managers would kill projects they did not under­ stand. This concern was magnified by the belief that having an R&D project killed would have a negative impact on indi­ vidual performance appraisals. To overcome these obstacles, two actions were taken. First, a decision was made to restrict gatekeepers at the filter stage—the initial go/no-go decision gate—to R&D management (Figure 3). Second, in prepara­ tion for the transition, a series of reviews was established so that each project in the portfolio could be discussed with the new non-R&D gatekeepers. Over time, gate meetings began to focus on each project's strategic fit and anticipated value rather than technical details.

Around the same time that non-R&D gatekeepers were introduced, the executive team removed a significant hurdle for breakthrough ideas by creating a corporately funded bud­ get to finance high-risk ideas. The separate budget afforded R&D leadership the discretion to investigate potentially dis­ ruptive technologies while maintaining a balance with shorter-term business unit priorities.

New tasks related to technology roadmaps were executed as a separate work stream from the stage-and-gate process. The deliverables and the new method by which they were produced challenged many existing norms. First, R&D chal­ lenged business units to prioritize their needs rather than speculate on potential technical solutions. Ultimately multi­ ple product maps from business unit managers were recon­ ciled and reduced to a single, mutually accepted chart capturing all "critical to customer" needs (Figure 4).

The second significant departure from past practices was that R&D platform leaders were assigned and re ­ quired to formally pitch their recommended platform strategies. At the time, Timken had seven technoiogy platforms, around which projects were grouped and organized. As a result of the changes to the roadmapping process, the role of the platform m anager shifted from m anipulating a dozen or more short-term roadmaps to recommending a strategy to achieve the prioritized

3 4 | Research-Technology Management Creating Cultural Change in a 115-Year-Old R&D Organization

Filter Feasibility

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Proof of Concept

•CTO ♦Technology •Marketing •Manufacturing •Engineering •Quality

Concept Confirmation

•CTO •Technology •Marketing •Manufacturing •Engineering •Quality

FIGURE 3. C o n ce p t evaluation phase o f C o n ce p t to C om m ercialization process

needs of the business units. All platform leaders used the same polar chart template to present their strategies (Figure 5); how ever, each was given freedom to sub­ categorize his platform for better organization. This free­ dom allowed each platform owner to explicitly capture his subject m atter expertise while simplifying project classification. Platform proposal presentations were con­ ducted in off-site meetings to sharpen focus and m ini­ mize distractions.

willingness to publicly change its tactical course after input from business unit managers demonstrated its commitment to a fruitful partnership. This gesture was repaid in kind w hen an existing modeling project was presented to the expanded set of gatekeepers (including non-R&D gate­ keepers). The non-R&D gate­ keepers not only agreed with R&D's valuation of the proj­ ect, but they also insisted that the project receive a higher priority to accelerate its value to the enterprise.

While it may seem coun­ terintuitive, killing projects was considered a "short-term win" in the journey towards delivering relevant technolo­

gies to the business units. The early gate decisions made un­ der expanded governance helped to change past beliefs that R&D was isolated from other functions, building business unit confidence in the change.

Consolidate Gains and Produce More Change

"Whenever you let up before the job is done, critical momentum can be lost and regression may follow." (Kotter 1996, p. 133)

•CTO •Technology •Marketing •Manufacturing •Engineering •Quality

Generate Short-Term Wins

"Most of the rest of us expect to see convincing evidence that all the effort is paying off." (Kotter 1996, p. 119)

Early on in the change process, a few active concept projects were publicly killed in gate meetings. One, an R&D-initiated project, had excellent projected value but failed the technical proof-of-concept stage. Two others, also R&D-initiated, had acceptable proof-of-concept results but were not viewed as an appropriate strategic fit by the business units. R&D's

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FIGURE 4. Prioritized "critica l to c u sto m e r" attribu tes, a g gre gate d across business units

After the majority of the R&D process changes had been im­ plemented, they were shared across the enterprise to help invigorate the new processes. The platform polar charts be­ gan to be referenced regularly during quarterly R&D plat­ form reviews—breaking the old paradigm of roadmaps only being referenced once a year. The polar charts, coupled with indications of how a project supported a business unit's stra­ tegic direction, became mandatory in platform reviews and gate meetings.

Once the changes to R&D strategy, the institution of the Concept-to-Commercialization process, and the streamlining of the technology roadmapping system were stable, a binder was created to document the process and its deliverables. At first, a limited number of binders were shared by R&D lead­ ership with executive leadership; ultimately, the positive feedback from executive leadership led to other function leaders outside R&D requesting documentation of the pro­ cess and its results.

Anchor New Approaches in the Culture

"Culture change is not something you manipulate eas­ ily." (Kotter 1996, p. 156)

An important step in the improved R&D process came when the new system was communicated externally. In a press

Creating Cultural Change in a 115-Year-Old R&D Organization May— June 2015 | 35

release published on June 11, 2014, Rich Kyle, CEO of the Timken Company, announced that "the company is commit­ ting $60 million to its DeltaX Initiative, a multi-year invest­ ment designed to dramatically improve the company's concept-to-commercialization efforts" (Timken 2014). The public reference to the internal term "Concept to Commer­ cialization" was evidence that the R&D changes had become part of the company's culture.

The Benefits o f C hange Ultimately, culture is a mix of beliefs and the behaviors driven by those beliefs. Overall, the work described in this paper has produced a notable change in both behav­ iors and beliefs driving the innovation process at Timken (Table 1).

T h r o u g h o u t t h e p ro c e s s , m o d i f ie d

b e h a v io r s le d t o c h a n g e d a t t i t u d e s a n d

b e lie f s .

To capture the culture change more clearly, the R&D lead­ ership team surveyed associates and business units in 2013. The Corporate Executive Board's (2013) Anatomy of a World Class R&D Organization instrument was used for this pur­ pose. The survey asked 90 R&D associates and 60 business unit associates to respond to a series of statements about the R&D organization's culture and performance. The statement "We (R&D) stress-test our business' growth assumptions at multiple stages of strategy development to validate long­ term goals" was used to measure perceptions of both the importance and achievement of strategic alignment. On a five-point scale, the differences between R&D and business unit responses were 0.2 and -0.1 for importance and per­ formance respectively. These results demonstrate that R&D and the business units were in agreement regarding strate­ gic alignment to validate long-term goals. The old percep­ tion that R&D was not aligned with the businesses had clearly changed.

Throughout the process, modified behaviors led to changed attitudes and beliefs. Creating transparency in the concept portfolio was an initial step towards better col­ laboration with the business units. Replacing complex, short-term-focused roadmaps with a single prioritized list of needs gave R&D managers the opportunity to explain the relevance of longer-range ideas. R&D planning is now more

3 6 | Research-Technology Management Creating Cultural Change in a 115-Year-Old R&D Organization

TA B LE 1 . P r e -/p o s t-c h a n g e b e lie fs and b eh a v io rs

P re -C h a n g e P o s t-C h an g e

Behaviors

O n ly R & D d ir e c t o r s w e r e in c lu d e d in p r o je c t r e v ie w s . B u s in e s s u n its a re in c lu d e d in g a t e d e c is io n s .

M u l t i p l e R & D a n d b u s in e s s u n it r o a d m a p s w e r e o f t e n ig n o r e d a f t e r p la n n in g s e a s o n .

T e c h n o lo g y p la t f o r m s t r a t e g ie s a re r e f e r e n c e d o n a r e g u la r b a s is .

R & D a g e n d a d e t e r m i n e d b y m u l t i p l e , l e n g t h y lis ts o f b u s in e s s u n i t r e q u e s ts .

A g e n d a is g u id e d b y p r i o r it iz e d lis t o f " c r it ic a l t o c u s t o m e r " b u s in e s s n e e d s .

R & D w a s r e l u c t a n t t o p it c h lo n g e r - t e r m o r h ig h - r is k / r e w a r d id e a s . P la tfo r m s tr a te g y b u y - in a llo w s R & D t o b u ild v is io n w it h b o t h in t e r m e d ia t e a n d lo n g - t e r m d e liv e r a b le s .

Beliefs

R & D p r o je c t s c a n n o t h a v e c o m m e r c ia lly r e le v a n t d e liv e r a b le s a t o u t s e t .

R & D p r o j e c t c h a r te r s u s e b u s in e s s t e r m s a n d h a v e s t a t e d fin a l d e liv e r a b le s .

R & D s h o u ld p r o p o s e a n d ju s t i f y p r o je c ts . B u s in e s s u n its a s s is t w it h b u s in e s s j u s t if ic a t io n f o r p r o je c t s .

R & D t a k e s a lo n g t im e . A g i l e p r o je c t s w it h f o r e c a s t e d d e c is io n m ile s t o n e s a n d f r e q u e n t s ta tu s u p d a t e s s p e e d d e v e lo p m e n t .

Y o u c a n n o t m e a s u r e R & D . M o n t h ly R & D s c o r e c a r d is p r o v id e d t o e x e c u tiv e le a d e r s h ip .

A s s o c ia t io n w it h k ille d p r o je c t s w ill a f f e c t p e r f o r m a n c e r e v ie w s . E m p h a s is is o n le a r n in g f a s t o v e r e n s u r in g s u c c e s s .

R & D is n o t a lig n e d w it h b u s in e s s u n its . B u s in e s s u n it n e e d s f e e d in t o t e c h n o lo g y p la t f o r m s t r a te g ie s .

streamlined, integrating business-unit needs with R&D ca­ pabilities. Gaining consensus on an enterprisewide R&D business plan is now achieved with far fewer iterations be­ cause the starting point is derived from the business units' collective high-level priorities.

In 2011, R&D was expected to reconcile five separate business plans, which included 14 sub-plans, totaling more than 30 separate lists of business manager-suggested techni­ cal solutions. If an R&D manager aligned his priorities to a single plan, he was perceived by the other businesses as mis­ aligned. As a result, R&D business planning typically required numerous iterations to gain enterprisewide consensus. By contrast, the most recent planning cycle began with a list of existing long-range technology strategies, built from the rec­ onciled, prioritized list of technology needs. The list of tactics associated with each platform polar chart was shared with the business units. Subsequently, each business unit leader reviewed the list; the reviews produced minimal changes.

R&D's increase in external communications has chal­ lenged past perceptions that all concept portfolio ideas need to originate from R&D, as well as the notion that these con­ cepts would be too technical to state in business terms. Al­ lowing variants of project management deliverables helped change these perceptions by making concept projects

2010 2011 2012 2013 F IG U R E 6 . C o n c e p t p o r t f o l i o d e c is io n s , 2 0 1 0 - 2 0 1 3

measurable. Concept portfolio metrics, in turn, fed discus­ sions about the resources and priorities that affect speed of delivery. Improved governance resulted in a new norm, dic­ tating that decisions should be formally recorded and acted upon. Lone dissensions are acknowledged, but are no lon­ ger sufficient to continue work on ideas that are not com­ mercially viable or to kill ideas that have strong value propositions. As a result, the number of project decisions has increased markedly (Figure 6), as has the number of projects completed (Figure 7).

Business units are now involved early in the concept pro­ cess. Once a project is past the filter stage, it cannot pass the feasibility stage without a business unit identifying a sponsor from its own ranks. When projects are killed—rather than simply being put on hold, as was common practice in the past—there are no negative repercussions for the idea's origi­ nator or owner. Managers of killed projects are quickly moved to new assignments, so that killed projects do not af­ fect career progression. Business sponsors are expected to as­ sist with refining the project charter and value proposition.

The implementation of new collaboration mechanisms between R&D and business units on a working level has also improved the speed of project completion. Scope creep is avoided because the charter and WBS clarify the final

2010 2011 2012 2013 □ Killed ■ Finished

F IG U R E 7 . C o n c e p t p o r t f o l i o p r o j e c t c o m p le t io n s , 2 0 1 0 - 2 0 1 3

C r e a tin g C u ltu ra l C h a n g e in a 1 1 5 -Y e a r-O ld R & D O rg a n iz a tio n M a y— J u n e 2 0 1 5 | 3 7

project deliverables. In some cases, open innovation is uti­ lized to expedite timelines.

Transitioning portfolio governance from technical re­ views to a decision-focused gate process has improved valu­ ations of R&D ideas, as well. And, because 75 percent of gatekeepers in a project's later stages are from outside R&D, the valuations, which are jointly developed, are accepted without question. The culmination of these changes is broad agreement that the concept portfolio is relevant to the business units.

L e s s o n s L e a r n e d

At Timken, change was not without its bumps. The lessons the Timken R&D organization learned along its journey can be sorted into four buckets.

1. Stay the course. Cultural change is iterative, not linear. Some major work may end up being temporary. For ex­ ample, the R&D process committee spent a full year im­ plementing a software system to manage the concept project portfolio that was ultimately abandoned. While it was a mistake to rely too much on software—an error that, as Cooper (2008) notes, is not uncommon—the ex­ ercise did have value, as unresolved issues were forced to the surface. These issues included developing a common language with business units, clarifying performance metrics, establishing baselines for performance expecta­ tions, and defining roles and responsibilities within the process more clearly.

2. Dedicate resources. One of the reasons Timken was able to stay the course was because a small team was dedi­ cated to implementing change. Core members of this team had little or no tenure with the R&D organiza­ tion, which helped them to be objective. Since daily business needs would often take priority, R&D led the changes to both the gate process and roadmapping. The centralized R&D organization shared its work dur­ ing all stages with the decentralized business unit managers. Some members of the dedicated R&D pro­ cess team had m arketing backgrounds, which helped facilitate interactions and translation betw een R&D and the business units.

3. Transparency is critical. As Isaken and colleagues (2001) point out, both the external environment and internal operations have an impact on the climate within an or­ ganization. At Timken, external interactions, such as those with the non-R&D gatekeepers, were critical to the culture change. The development of a consolidated prioritized needs chart required external interactions. Actions such as sharing project charters and providing regular updates on process changes fostered a change in attitudes about the R&D organization. Inviting non-R&D representatives into the gate process required extra work, but this effort was ultimately rewarded with meaningful discussions that allowed R&D's priorities to be more closely aligned with business needs.

4. Little things matter. The success of strategic initiatives such as creating positive culture change often depends on the execution of the details. For example, R&D project leads historically had renamed projects as new findings clari­ fied their scope and direction. This practice resulted in the perception that projects were either never finished or were rescoped so they could be relaunched without busi­ ness unit buy-in. A change as simple as locking in a proj­ ect name helped reverse these negative perceptions.

C o n c lu s io n s

Over the course of five years, a regular cadence of new be­ haviors changed cultural norms at Timken. These new be­ haviors continued even after a major corporate restructuring that put new players in key roles. The changes are now in­ grained in the culture. Although the experience of Timken is inevitably unique to its particular context, the constructs and approaches that drove its process are generally applicable to other organizations and cultural visions.

While Timken R&D stayed the course, it is important to stress that the transformation did not begin with a detailed project plan and was not considered a project. Rather, R&D leadership had an overarching vision and a series of short­ term next steps. As short-term changes proved successful, the R&D process team suggested next steps toward the vision.

The Timken R&D organization's case is proof that an es­ tablished company can change its R&D culture. Further­ more, R&D can lead process transformation that extends beyond product design and development. The biggest pay­ off is that the R&D organization has changed other units' perception of it; once seen by many as a corporate overhead delivering little value, R&D is now understood as a critical resource for the profitable growth of the enterprise.

R e f e r e n c e s CEB Research & Development Leadership Council (CEB).

2013. Anatomy of a World-Class R&D Organization. CEB Research & Technology Executive Council. http://www. executiveboard.com/exbd/corporate-benchmarking/research- and-development/index.page

Cialdini, R. B. 2001. Harnessing the science of persuasion. Harvard Business Review 79(9): 72-79.

Cooper, R. G. 2008. The Stage-Gate idea-to-Iaunch process— Update, what's new and nextgen systems. Journal of Produc­ tion Innovation Management 25(3): 213-2 32.

Isaken, S. G., Lauer, I<. J., Ekvall, G., and Britz, A. 2001. Perceptions of the best and worst climates for creativity: Preliminary validation evidence for the Situational Outlook Questionnaire. Creativity Research Journal 13(2): 171-184.

Hotter, J. P. 1996. Leading Change. Boston, MA: Harvard Busi­ ness School Press.

Timken Company. 2014. Timken announces major investment to accelerate product development and line expansion. Press release, June 11. http://news.timken.com/index.php?s= 12504&item=136859

Tushman, M., and O'Reilly III, C. A. 2002. Winning Through In­ novation: A Practical Guide to Leading Organizational Change and Renewal. Boston, MA: Harvard Business School Press.

3 8 | Research-Technology Management Creating Cultural Change in a 115-Year-Old R&D Organization

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Leading change in libraries:

a case study

Catherine B. Soehner

Background

In September 2012, the J. Willard Marriott Library at the University of Utah was at a pivotal point

in its evolution. The Associate Dean (AD) for Library IT left for a new position as dean of a

library at another institution. As a result, we, the Library Administration, had an opportunity to

review our current IT personnel, services, and equipment, which led to the recognition of current

inefficiencies in our organizational structure. For example, over the years we placed IT

personnel in two different organizational departments. One department was labeled “Library

IT,” which focused on enterprise services such as the library catalog, website, and digital library.

The other department was titled “Computing and Media Services” (CMS), which focused on

internal desktop support for library employees and desktop support for four different student

computing labs throughout the campus. “Library IT” personnel reported to the AD for Library IT,

which was now vacant, and “CMS” personnel reported to the AD for Research and Learning

Services.

As can be expected, duplicate processes and services emerged. For example, each

department had separate processes and servers for backing up valuable library data. Both

departments began to develop a different version of a mobile view of the Library website without

knowing it. While an associate dean with IT experience supervised the Library IT department

the CMS department was supervised by an associate dean with little understanding of IT

systems and potential alternatives. This lack of IT knowledge meant there was limited high

level, critical review of decisions made regarding the implementation of desktop support

services.

As we discussed the future, it was agreed that a focus on digitizing, archiving, and providing

access to unique and rare collections would be a significant objective for the library; and that

this would be the main way to demonstrate the Library’s significance, contributions, and impact

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on the research and teaching activities of the University and beyond. It was clear that

redirecting the efforts of our IT personnel would be needed to accomplish this goal as no new

staffing would be forthcoming. This moved us to begin the process of organizational change

that would bring the two IT departments – Library IT and CMS – together.

Implementation

After reviewing articles on organizational change (Burke, Lake, and Paine 2008; Geyer 2002;

Kinlaw 1989; Hawks 2013; Helphand 1997; Lubans 2009; Williamson 2008) and consulting with

a number of campus experts in this area, one article seemed most useful for the Library’s

needs: John P. Kotter, “Leading organizational change: Why transformational efforts fail”

(2007). We attempted to follow the paradigm for organizational change outlined in Kotter’s

article. In it, he discusses eight stages of change, the first three of which are: establish a sense

of urgency; form a powerful guiding coalition; and create a vision (2007, 1). According to Kotter,

getting these first three stages implemented properly will lead to the successful implementation

of the rest of the stages and a successful change process overall (2007, 1).

Stage 1: Establish a Sense of Urgency

To begin working on this first stage, we invited all library employees to participate in two open

feedback sessions to talk about what was working well in the current IT organizational structure

and what was not. Next, we held small group sessions with employees in the Library IT

department. We also arranged small group sessions with employees in the CMS department

and then with employees within Research and Learning Services and Special Collections. We

compiled a list of all comments into a SWOT analysis – Strengths, Weaknesses, Opportunities,

and Threats (SWOT Analysis, 2014).

The SWOT analysis was the basis of Kotter’s first stage, to establish a sense of urgency. In

order to provide this sense of urgency, we focused on the following weaknesses and threats:

difficulty working across organizational lines, lack of transparency regarding current IT projects,

lack of prioritization of IT projects leading to some projects making progress as the result of the

passion of one programmer, and a duplication of efforts between the two IT units. We also

focused on one of our main strengths as a leader in the state of Utah in digital collections and

identified opportunities to increase digitization efforts of our own rare materials along with

improving digital preservation efforts.

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This combination of weaknesses and threats that could hold us back from using our strengths to

achieve new opportunities established the sense of urgency needed to make the changes to

combine the Library IT and CMS departments. Using the voices of library staff as the basis of

this analysis was especially helpful in meeting this initial stage of organizational change,

establish a sense of urgency (Kotter 2007, 1).

Stage 2: Form a Powerful Guiding Coalition

The second stage of change as described by Kotter was to form a powerful guiding coalition. It

was during this stage that we made our greatest strides toward change and our most significant

missteps.

At this point, we invited a known change leader on campus to help map out the necessary steps

to implement the merger of the Library IT and CMS departments. We decided that the powerful

guiding coalition would consist of the AD for Research and Learning Services, the Interim AD for

Library IT, and the campus change leader. To get started, the change leader recommended

that we request a report from each of the Library IT and CMS departments describing their

current work. The purpose of these reports was to obtain a baseline understanding of the

current work completed by these departments, their vision for the future, and possible changes

they could support, including a merger of the two departments.

In addition to the many thoughtful and insightful comments these reports contained, one of the

departments made a consensus statement that read, “The general feeling is that Senior

Administration is not listening to the concerns of those on the front lines.” Considering the

number of group meetings that took place and the careful collection of feedback from those

meetings, this statement seemed incongruent. Therefore, we invited another expert in change

management, this time a library employee, to meet with this department without anyone from

Library Administration present to obtain clarification regarding this inconsistency.

This meeting resulted in a better understanding between the department and the AD to whom

they reported. Additionally, someone in the group observed that not enough people from the IT

departments were included in the change process. This was an accurate statement considering

the composition of the original guiding coalition and a change in the merger process was made:

A task force of IT managers was created to play a pivotal role in assisting us with the merger.

This task force consisted of an equal number of managers from both the Library IT and CMS

departments. We called this new group “IT Managers” and they became the powerful guiding

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coalition, thus accomplishing Kotter’s second stage in a way that was more inclusive of the

people directly involved in the change.

Stage 3: Create a Vision

During the first meeting of the IT Managers a self-assessment tool used in a previous library

reorganization was presented and the group was asked to adjust this tool to reflect IT tasks and

skills. When eventually distributed the self assessment tool would ask IT personnel to indicate

their strengths, weakness, and list the top five areas in which they would like to work. During

this first meeting of the IT Managers, an amazing change took place. They began a discussion

of norms and values of a newly merged IT department, which was the beginning of a shared

vision, Kotter’s third stage.

Observations

The process used to merge the two departments resulted in four observations.

First Observation

As stated above, many people have written about implementing change. For this organizational

change, we followed Kotter’s model with some modifications. Chief among these was dealing

with persistent resistance to change, which Kotter does not address in his article. It was

sometimes necessary to have very frank and candid conversations with individuals who were

persistent in their resistance to moving forward.

One example of this was our response to a person who continued to bring up concerns about

the ability of his staff to address the workload assigned. Throughout the process of the

reorganization, we took into account this person’s perspective and we made significant changes

to the process and the draft organizational chart to address his specific concerns. For example,

the first draft organizational chart moved four people from his unit into other IT units. When he

voiced concerns about this being too many people leaving his unit considering the workload, we

returned two people to their original unit. Additionally, we created agreements throughout the

new IT Services department for this person to request assistance from others during the busiest

times for his unit.

After the third conversation of concerns expressed and compromises reached, this person

continued to resist the change. At this point, we acknowledged the concerns, reflected on the

compromises made, recognized that there were still areas of disagreement, and then brought

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the conversation to a close by indicating that the changes would move forward with an invitation

for assessment after six months. Though Kotter’s model was very helpful, he does not describe

how to deal with those who remain resistant to the proposed change. Obtaining skills to have

difficult conversations is a necessary component to finalizing a change, especially when there

are individuals who remain resistant (Soehner 2013).

Second Observation

A second observation was that some managers were not ready to act as leaders during this

process. Kotter states, “A paralyzed senior management often comes from having too many

managers and not enough leaders. Management’s mandate is to minimize risk and to keep the

current system operating. Change, by definition, requires creating a new system, which in turn

always demands leadership” (2007, 1). The IT Managers brought together managers from both

departments and we asked them to take on a leadership role. All members of IT Managers

attended a two-hour leadership seminar to introduce them to this new role of leadership. The

seminar emphasized how to communicate to others about the change in a positive manner,

even if the managers themselves disagreed with the new direction.

Later in the process, it was clear that we should have provided more of this kind of training and

that a 2-hour seminar was not enough to turn some individuals who were dedicated managers

into true leaders. For example, a couple of managers insisted that members of their staff would

quit if we continued with the merger of the two departments. We responded by suggesting that

quitting a job was a personal decision and, while we would miss anyone who left, the merger

would continue. Others benefitted a great deal from the seminar and their leadership skills were

obvious throughout the rest of the process.

Third Observation

The third, and most surprising, observation was that some IT employees did not believe Library

Administration listened to them during the change process leading to the merger. As stated

previously, considering the number of group meetings that took place and the careful collection

of feedback from those meetings, this statement seemed incongruent with reality. The

disconnect between their belief of not being heard and the fact that we made efforts to listen to

them led us to speculate that the IT employees were confusing “being listened to” with “being

agreed with.” In other words, did some IT employees believe that if Library Administration did

not agree with them, Library Administration was not listening to them? From our point of view,

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we had heard their concerns, but simply disagreed that the concerns were enough to stop the

merger. Even though Kotter does not present this situation precisely, it seems the best solution

is to continue to keep lines of communication open and a neutral party can help facilitate this

open communication.

Fourth Observation

Finally, more communication might have made the process less contentious. For example,

once we established a sense of urgency, each member of Library Administration should have

made a point of stating this sense of urgency in all meetings we attended when library staff was

present. This would have increased the number of times all library staff, including IT

employees, heard the message of urgency for change and provided additional opportunities to

discuss it. As Kotter states, “Without credible communication, and a lot of it, the hearts and

minds of the troops are never captured” (2007, 6, italics added).

Conclusion

In creating organizational change, it is important to be flexible. Following the stages of

organizational change that Kotter outlines and applying these stages to academic libraries was

very useful. While we adjusted the stages based on cultural norms of academia in general, the

stages were a helpful way to organize the process and move forward. We also adjusted

Kotter’s model as the result of strong reactions from groups or individuals. Trust between

employees and Library Administration was improved when we remained open to employees’

concerns and adjusted the process based on those concerns. Additionally, communicating to

employees the need for change, the process to be used, and the vision for the new department

was crucial in resolving concerns and encouraging employees to come into agreement with the

new direction. Finally, frank and direct communication may be necessary to bring along

employees remaining resistant to the very end. These conversations may be difficult but are

essential to the change process and are an essential competency for leadership.

Acknowledgements

Several people were instrumental in this change process including Rick Anderson, Ann Marie

Breznay, Melanie Hawks, and Teri Olsen. Their assistance in the implementation of this change

process is deeply appreciated.

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References

Burke, W. Warner, Dale G. Lake, and Jill Waymire Paine, eds. Organization change: A

comprehensive reader. Vol. 155. John Wiley & Sons, 2008.

Geyer, E. M. “IT enabled organizational change: A framework for management.” Journal

of Library Administration, 2002: 36(4), 67-81. Retrieved from

http://search.proquest.com/docview/57538615?accountid=14677

Hawks, Melanie. Coaching through change. Unpublished documents prepared for the

Marriott Library Management and Leadership Training Program. 2013.

Helphand, M. (1997). Leadership for Successful Change. Unpublished documents

prepared for a workshop with the United Way of Greater Salt Lake.

Jaguszewsk, Janice M. and Karen Williams. New roles for new times: Transforming

liaison roles in research libraries. Washington D.C.: Association of Research Libraries,

2013.

Kinlaw, Dennis C. Coaching for commitment: Managerial strategies for obtaining

superior performance. San Diego: University Associates, 1989.

Kotter, John P. “Leading change-why transformation efforts fail.” HBR Articles (2007):

1-10.

Lubans, John Jr., “The Spark Plug: A Leader’s Catalyst for Change” Library Leadership

& Management, (2009): 23(2), 88-90. Retrieved from

http://journals.tdl.org/llm/index.php/llm/article/viewFile/1771/1046.

Soehner, C. B. (2013). Be Brave: How to Have a Difficult Conversation Even if You’re

Terrified. Paper presented at the 2013 Utah Library Association Annual Conference,

Provo, UT.

“SWOT Analysis.” Wikipedia The Free Encyclopedia, 2014. Web. 5 July 2014

<http://en.wikipedia.org/wiki/SWOT_analysis>.

Williamson, V. “Relationships and engagement: The challenges and opportunities for

effective leadership and change management in a Canadian research library.” Library

Management, 2008: 29(1-2), 29-40. doi:http://dx.doi.org/10.1108/01435120810844621

Published: February 2015

Catherine Soehner ([email protected]) is the Associate Dean for Research and Learning Services at the University of Utah’s J. Willard Marriott Library.

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