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Summary
4 TheoreticalFoundationsofOrganizationsandOrganizationChange
Open-SystemTheory
CharacteristicsofOpenSystems
OrganizationChangeIsSystemic
TowardaDeeperUnderstandingofOrganizationChange
Capra’sThreeCriteriaforUnderstandingLife Pattern
Structure Process
ImplicationsforOrganizationsandOrganizationChange
5.TheNatureofOrganizationChange
RevolutionaryChange
EvolutionaryChange
RevolutionaryChange:CaseExample
DimeBancorp,Inc.
EvolutionaryChange:CaseExample
TheToolsforAssessmentandRatings
BehavioralPractices
DataSummaryoftheFirm’sPartners
Conclusion
Summary
6 LevelsofOrganizationChange:Individual,Group,andLargerSystem
ChangeinOrganizationsattheIndividualLevel
Recruitment,Selection,Replacement,andDisplacement TrainingandDevelopment
CoachingandCounseling
IndividualResponsestoOrganizationChange
Resistance
IndividualsCopingWithChange
ChangeinOrganizationsattheGroupLevel
TeamBuilding
Self-DirectedGroups
Intergroup
GroupResponsestoOrganizationChange
ChangeinOrganizationsattheLarger-SystemLevel
OrdersofChange
ChangePhases
ChangeFocus
ChangeProcesses
Interorganizational
SystemResponsestoOrganizationChange
Summary
7.OrganizationChange:ResearchandTheory ReviewsofOrganizationChangeResearch
RecentApproachestoResearchandTheory
TheShiftFrom“Normal”Science
TheOrganizationChangeResearchTheoryofPorrasandColleagues OrganizationModels OrganizationChangeTheory
CurrentThinkingonOrganizationChangeandResearch
Summary
8.ConceptualModelsforUnderstandingOrganizationChange Content:WhattoChange
Process:HowtoChange ATheoreticalFramework
Life-CycleTheory TeleologicalTheory
DialecticalTheory
EvolutionaryTheory Process:HowtoChange PracticeFrameworks
Lewin’sThreeSteps
Lewin’sThreeStepsExpanded:Schein PhasesofPlannedChange
OrganizationChangeasaTransition
Mini-TheoriesRelatedtoOrganizationChange
IndividualEmphasis GroupEmphasis
TheLarger-SystemEmphasis
Summary
TheContentandProcessofStrategicChangeinOrganizations StrategiesforEffectingChangeinHumanSystems
Empirical-RationalStrategies
Normative-ReeducativeStrategies
Power-CoerciveStrategies
Summary
9 IntegratedModelsforUnderstandingOrganizationsandforLeadingandManagingChange WhatIsanOrganizationalModel? WhyUseanOrganizationalModel?
OrganizationalModelsandOrganizationChange
Weisbord’sSix-BoxModel
TheNadler–TushmanCongruenceModel
Tichy’sTPC(Technical,Political,Cultural)Framework
AComparisonoftheThreeModels
Summary
10 TheBurke–LitwinCausalModelofOrganizationPerformanceandChange
Background
TheModel
TransformationalandTransactionalDimensions
SupportfortheModel’sValidity
TheInfluenceoftheExternalEnvironment
TheTransformationalFactors
TheTransactionalFactors
Summary
11 OrganizationalCultureChange
ExperiencingOrganizationalCulture
TheBritishAirwaysStory:ACaseofCultureChange
YouDon’tChangeCulturebyTryingtoChangetheCulture
ATheoreticalSummaryoftheBritishAirwaysStory
Summary
12 UnderstandingandWorkingWithLooselyCoupledSystems
TheCaseofChangeattheA K RiceInstitute
EnterExternalConsultant(YoursTruly)
ActionSteps
AVolunteerOrganization
ChangingDeepStructure
DealingWithResistanceandAmbivalence
GroupRelationsVersusOrganizationDevelopment
OrganizationalStructureandLooselyCoupledSystems
LooselyCoupledSystems
VoiceofCausation
VoiceofTypology
VoiceofDirectEffects
VoiceofCompensation
VoiceofOrganizationalOutcomes
Summary
13 HealthCareandGovernmentOrganizations
ImportantCharacteristicsofHealthCareandGovernmentOrganizations
ChangingHealthCareOrganizations
ChangingGovernmentOrganizations
SummaryandSomeConclusions
14.TransformationalLeadership
DoesLeadershipMatter?
OnDefiningLeadership
TowardFurtherDefinition
TheLeader–ManagerDistinction
AuthorityandLeadership
TransformationalLeadershipAccordingtoBass
CharacteristicsofExecutiveLeadership
ConceptualComplexity
BehavioralComplexity
StrategicDecisionMaking
VisionaryandInspirational
Summary
HowardGardner’sLeadingMinds
McKee aMasterStoryteller
Summary
HowardGardner’sChangingMinds
15 LeadingOrganizationChange
PhasesofOrganizationChangeandtheLeader’sRole
ThePrelaunchPhase
LeaderSelf-Examination
TheExternalEnvironment
EstablishingtheNeedforChange
ProvidingClarityofVisionandDirection
TheLaunchPhase
CommunicatingtheNeed
InitialActivities
DealingWithResistance
Postlaunch:FurtherImplementation
MultipleLeverage
TakingtheHeat
Consistency
Perseverance
RepeatingtheMessage
SustainingtheChange
UnanticipatedConsequences
Momentum
ChoosingSuccessors
LaunchingYetAgainNewInitiatives
Summary
16.OrganizationChange:SummaryandIntegration
ApplyingTheTippingPointPrinciplestoPlannedOrganizationChange
Prelaunch
TheLaunch
Postlaunch
SustainingtheChange
ChangingtheOrganization
SuccessfulProcessesofOrganizationChange
PositiveOrganizationChange
TheLookofChange
CorporateCultureintheWorkofLawlerandWorley
17.OrganizationChange:WhatWeNeedtoKnow
TheProcessofOrganizationChange
Momentum
ChaosDuringTransition
Communication
OrganizationChangeLeadership
PersonalityandCulture
PowerandPolitics
TheChangeLeader
OrganizationalStructure
Self-DirectedGroups
Centralization–Decentralization
Cells
Networks
FormalandInformalRewards
Incentives
IntrinsicRewards
TrainingandDevelopment
TrainingintheServiceofChange
ActionLearning
TeamsandTeamworkinOrganizations
OrganizationalSize
LargeandSmallSimultaneously
SilosandBoundarySpanning
SizeofOrganizationalUnits
OrganizationalPerformance
LearningPrioritiesMovingForward
ResistanceIsn’tWhatItUsedtoBe
GettingLeadershipSelectionandDevelopmentRight
Selection Development
LearningAgility
Trust
SummaryStatement
Conclusion
Appendix:AnnotatedBibliography
References
Index
AbouttheAuthor
Preface
Thebulkofwhatwaswrittenforthefirstfoureditionsofthisbookremainsthesameinthisfifthedition Fundamentalsoforganizationchangearestillfundamental Yetwecontinuetolearn,andnowweneedto considermorethanwehaveinthepastdifferencesbeyondthefundamentals.Thesuccessrateoforganization changeremainspoor littlemorethan30% thuswemuststepupourpaceforlearning Thenewchapter (13)forthisfiftheditionisanattempttodosobyconsideringinmoredepthtwootherorganizationsand lookingmorecarefullyatdifferences.Theseotherorganizationsareinthehealthcarearenaandgovernment, organizationsthataffectourdailylives Theseorganizationsarenotthesameascorporations,wheremostof learningaboutorganizationchangecomesfrom
Theoverallpurposeofthisbookremainsthesame,nevertheless thatis,toreportonandinterpretcurrent knowledgeoforganizationchange.Theknowledgecomesfromavarietyofsources,asnotednext.The interpretationcomesfrommyunderstandingasanacademicofwhattheliteratureseemstobetellingusand frommyexperienceofwellover45yearsasanorganizationchangeconsultant.WillRogersisreportedto havesaid,“AllIknowiswhatIreadinthenewspapers.”AllIknowiswhatIhavereadintheorganization literatureandwhatIbelieveIhavelearnedasaconsultanttoorganizations Botharelimited You,thereader, shouldthereforebeforewarned.WhileIhavemadeaconcertedefforttopresentmaterialfromtheliterature asobjectivelyasIcould,intheendwhatIhavewrittenisbiased,atleastintwoways:(a)myselectionsfrom theliteraturearejustthat,selective,andarenotascomprehensiveaswemightprefer,and(b)my interpretationscomefromexperience.Itshouldbenoted,however,thatinthemeantimeIhavecoediteda bookofreadingsthatcontainsmuchoftheliteraturethatundergirdsthistext.Withthisbook(Burke,Lake, &Paine,2009)ofsome52entries,you,thereader,cangototheoriginalsandmakeyourowninterpretations Inanycase,thebookservesasausefulsupplementtothisfifthedition Experiencesasanorganization consultantcontinuetoinfluencemythinkingandwriting.Forexample,inthepastfewyearsIseemtohave beendrawnmoreandmoretofocusonleadership Therearetwochaptersonleadership:Chapters14and15 MaybeIamcomingfullcircle Mydoctoraldissertationmanyyearsagowasonleadership Allowmeto describebrieflyafewexamples.
First,IcontinuetocodirectourMAprograminorganizationalpsychologyhereatTeachersCollege, ColumbiaUniversity,foracohortof24US ArmyofficersattheUS MilitaryAcademyatWestPoint On completionofthisgraduatedegreeinoneyear,mostoftheseofficers(captainsandasprinklingofmajors)will beassignedtocadetcompanies(about130students)astheregulararmy’sofficer-in-charge Theyevaluate twiceayearthecadets’militaryperformanceandalsoserveasmentors,coaches,andleadersforthesecadets TheyhaveconsiderableinfluenceonfutureofficersoftheU.S.Army.Ourfaculty,therefore,haveindirect influencethroughourclassroomteaching Thisexperiencehasbeensignificantandrewarding NodoubtI havebeeninfluencedaswell
Second,IhavebeeninvolvedforafewyearsnowwithaMidwesternstateuniversityasavisitingprofessor,but alsoasaconsultanttotheprovostanddeanofoneoftheuniversityschools.Inthiswork,wehavefocusedon
theroleoftheleaders(provostanddean)ininitiatingandmanagingchange.Asitisastate-supported university,regulationsandbudgetsaresomewhatimposed,whichinturncreatesa“tightness”inhowthe institutionoperates.Yes,itisauniversity,afterall,whichmeansthatitismorealooselycoupledsystemthan atightone.Wethereforeemphasizemission,changedirection,sharedvalues,andcooperativeactionsacross unitstoensurethateventhoughloosenessisrecognizedandinformallyrewarded,asystemconsistingof interdependentpartsisthefocus.Inworkingwiththisorganization,Iwasremindedofideasfromthe1930s expoundedbyMaryParkerFollett(ascitedinFollett,1996),anindividualwayaheadofhertime.Hernotion oftheinvisibleleaderisanexcellentcaseinpoint Shestatedthattomaximizeorganizationaleffectiveness, boththeleaderandthefollowersneedtofollowtheinvisibleleader thepurposeoftheorganization.That way,leadershipisorganizationallyfocusedandnotsodependentonthepersonaoftheleader.Iamusingthis ideaindiscussingtheleadershipofthisuniversity
Third,Ihavebeeninvolvedinleadershiptransitions,tryingtohelporganizationsdealaseffectivelyaspossible withthechangefromanoldtoanewpresidentandchiefexecutiveofficer.Thiskindoftransitionprovidesa wonderfulopportunityfororganizationchange Weneedtoknowmoreaboutmattersofleadership transitions Incidentally,quiteanumberofyearsago,MichaelMitchellwroteabriefandusefularticleforthe HarvardBusinessReviewonhowtofacilitateatransitioninleaders.
Insum,recentexperienceswithleadercoachingandconsultinghavenodoubtinfluencedchoicesand perspectivesinthisfifthedition Andasbefore,myattempthasbeentocombineandtosomedegreeintegrate theoryandresearchwithapplication.AftersettingthestageinChapters1and2,thenprovidingsome backgroundandhistoryinChapter3,Chapters4through8aremoreabouttheoryandresearch foundations oforganizationchange andtheremainingchaptersdealmorewithapplicationandpractice
Thereisoneotherchangeinthisfifthedition Towardtheendoftheappendix,youwillfindanewentryin theannotatedbibliography.Theentryisactuallyhistorical asummaryofRonChernow’sbiographyof AlexanderHamilton IconsiderHamiltontohavebeenoneofthemost ifnotthefirst significantchange leadersinAmericanhistory Heshapedwhatourgovernmenthasbecome Readitandseeifyouagree
TeachingResourcesandWebsitetoAccompanytheBook
FortheInstructor
Thepassword-protectedInstructorSiteatstudysagepubcom/burke5egivesinstructorsaccesstoafull complementofresourcestosupportandenhancetheircourses Thefollowingassetsareavailableonthe InstructorSite:
AMicrosoft®Word®testbankisavailable,containingmultiple-choice,true–false,andessayquestions foreachchapter Thetestbankprovidesyouwithadiverserangeofprewrittenoptionsaswellasthe opportunityforeditinganyquestionand/orinsertingyourownpersonalizedquestionstoeffectively assessstudents’progressandunderstanding.
Editable,chapter-specificMicrosoft®PowerPoint®slidesofferyoucompleteflexibilityineasilycreating amultimediapresentationforyourcourse Highlightessentialcontent,features,andartworkfromthe book.
Samplecoursesyllabiforsemesterandquartercoursesprovidesuggestedmodelsforusewhencreating thesyllabiforyourcourses
EXCLUSIVE!Accessisavailabletocertainfull-textSAGEjournalarticlesthathavebeencarefully selectedforeachchapter Eacharticlesupportsandexpandsontheconceptspresentedinthechapter Thisfeaturealsoprovidesquestionstofocusandguidestudentinterpretation Combinecutting-edge academicjournalscholarshipwiththetopicsinyourcourseforarobustclassroomexperience.
Carefullyselected,web-basedvideolinksfeaturerelevantinterviews,lectures,personalstories,inquiries, andothercontentforuseinindependentorclassroom-basedexplorationsofkeytopics
Acknowledgments
Ihavemanypeopletothank,andIamverypleasedtohavethisopportunitytodoso Firstandforemostis BenSchneider,whoinsistedthatIwritethisbook Throughout,hewasincrediblysupportive,patient,and persistentaboutmystayingthecourse.ThenthereweremythreeofficialreviewersforSage,beyondBen,two ofwhomhadreviewedmypreviouswork(Burke,1982) LenGoodsteinwashistrueselfandatruefriendin holdingmyfeettothefire thatis,callingmyattentiontotheneedfor(a)moreexamples,(b)betterlinkage betweentheoryandpractice,and(c)betterlogicasIwentfromAtoCandassumedtoomuchbyskippingB. CraigLundberggavemefeedbackintwocategories:(a)the“bigstuff”and(b)the“littlestuff,”ashecalledit Ipaidattentiontoall,butparticularlytothebigstuff Allthe“stuff”wasontargetandveryhelpful Thethird SagereviewerwasDavidWhetten.Aswiththeothers,itwasclearthathehadgiventhemanuscriptacareful reading First,hepointedoutamajorinconsistencyinmycoverageoftheory,whichIquicklycorrectedto alleviatemyembarrassment DavidandIshareastronginterestinandrelianceonmodels Hissuggestions alongtheselinesweremosthelpful.Also,hisurgingme,asBendid,totalkaboutfutureresearchneedsinthe finalchaptercausedmetotakeaction
AndthenthereweremyfriendsandcolleaguesatTeachersCollege,allofwhomamazedmebyactually readingtheentirefirstdraft.Iamimmenselygrateful.First,RogerMyers,nowdeceased,theconsummate psychologistwhoknewhowtowriteandwasastickleraboutthebadhabitofmakingnounsintoverbs, helpedconsiderablytoimprovemywritingofthisbook CarynBlockremindedmetimeandagaintoremind thereaderaboutpointsmadeearlierandhowtheyrelatedtowhatIwasstating.Shealsourgedmetouse examples.Idid.ArthurLevine,formerpresidentofTeachersCollegeandachangeleaderintheworldof education,broughthisexperienceandknowledgetomymanuscript Hiscritiqueandquestionswere invaluable DebraNoumairwasmyideaperson Forexample,shesuggestedthatIdeclaremyselfinthe secondchapter.My“pointsofview”sectionwastheresultofthatsuggestion.Shealsohelpedmethink throughtheorderingofthings,andshewasinvolvedinhelpingmewriteChapter12 Hercreativitywas muchappreciated VictoriaMarsickshareswithmetheexcitementofideasfromchaostheoryandthelife sciences.Ifollowedmanyofhersuggestionsforapplyingtheseideas.LeeKnefelkamp,ascholarofthefirst order,issuperbathelpingoneseehowseeminglydisparateconceptsactuallyintertwine Hersupportinmy attemptto“bringthingstogether”wasmostbeneficial
TonyPetrella,afriendandcolleagueofmanyyearswhoalsoreadthemanuscript,isatrueorganization changepractitioner WhatisuniqueaboutTonyisthatasaconsultantandpractitioner,heunderstandsand deeplyappreciatestheory Hiscommentaboutmyabilityto“pushpracticethroughthelensoftheory”was verymeaningfultome.
Finally,andmostimportantforthisfifthedition,wasouracademicprogrammanager,JohnHandal,who helpedmegetthismanuscriptontothecomputerandintoreadableform Iwasfortunatetohavehishelpand skillswithtechnologyandhisconstantlypositivecan-doattitude.Alsohelpfulinallthesematterswereour academicprogramsecretary,AmbarUrena,andassistantadministrator,LebabFallin.
Itisappropriateformetoendtheseacknowledgmentswiththerequisitecaveat.EvenwithallthehelpI received,Idointheendacknowledgethatthefinalproductissolelymyresponsibility
Publisher’sAcknowledgments
SAGEwouldliketothankthefollowingreviewers:
MichaelA Guerra,LincolnUniversity
BarbaraJ Hatcher,GeorgeMasonUniversity
PeterCharlton,AdlerUniversity
DavidJ Biemer,TexasStateUniversity
TheodoreJ Kowalski,UniversityofDayton
PeggyL.Hawkins,CreightonUniversity
LauranceGeri,TheEvergreenStateCollege
JamesA Padfield,TrumanStateUniversity
W.TadFoster,IndianaStateUniversity
BrendaC.Barnes,AllenCollege UnityPointHealth
JovanaMarkovic,BarryUniversity
OneSourcesforUnderstandingOrganizationChange
IntroductionandOverview
Organizationschangeallthetime,eachandeveryday.Thechangethatoccursinorganizationsis,forthe mostpart,unplannedandgradual Plannedorganizationchange,especiallyonalargescaleaffectingtheentire system,isunusual notexactlyaneverydayoccurrence Revolutionarychange amajoroverhaulofthe organizationresultinginamodifiedorentirelynewmission,achangeinstrategy,leadership,andculture is rareindeed Mostorganizationchangeisevolutionary Thesetwodistinctions,plannedversusunplannedand revolutionaryversusevolutionary,representcorethemesofthisbook Tobeunequivocalhereattheoutset, theemphasisismoreonplannedandrevolutionarychange.
Thereasonforthisemphasisistheclearandpresentneedforagreaterdepthofunderstandingoforganization change Thefactthatcurrentandfuturechangesintheexternalenvironmentsinwhichorganizationsfunction arenowoccurringsorapidlyrequiresthatorganizationalexecutivesconstantlymonitorandattemptto understandthenatureofthesechangesintheirrespectivemarketplacesandinthebroaderworld environment Unlikethesituationafewdecadesago,theexternalenvironmentnowchangesmuchmore rapidlythanorganizationsdo.Organizationstodayareplayingcatch-up,andcertainlytheywilldosoeven moreinthefuture.Capitalmarkets,forexample(seeChapter2),aredefinitelychangingmorerapidlythan thebusinessorganizationsthatdependonthem Moreover,businessorganizationsinparticulardonotlastas longastheyhaveinthepast.Thus,weneedtoknowmuchmorethaneverbeforeabouthowtounderstand, lead,manage,andinparticular,changeorganizations.Andthisgivesrisetothepurposeofthisbook.
Inattemptingtounderstandorganizationsingreaterdepth,anotherdistinctionisimportant Organizations arecreatedanddevelopedonanassumptionofcontinuity,tocontinuesurvivingandtolast Theexternal environment,whilecontinuously“outthere,”isnotcontinuousinthesamesensethatorganizationsare. Factorsandforcesinanorganization’sexternalenvironmentarediscontinuous,donotfitneatlytogetherina pattern,arenotinterdependent,homeostatic,linear,orhighlypredictable Forcesintheexternalenvironment cancausedestructionbutcancausecreativityaswell.Thiscontinuous–discontinuousthemealsoruns throughoutthebookandisanalogoustotheorganizationaltheoryliterature;thisbodyofbooksandarticles addressesmainlycontinuityandstabilization,notdiscontinuityandchange Althoughnotexclusively,many sourcesforhelpinwritingthisbookhadtocomefromthenontraditionalliterature.
First,asnoted,theorganizationaltheoryliteratureisaboutcontinuityandstabilization;soonemustsearch diligentlyfortheoryaboutorganizationchange Suchliteratureexists,althoughnotinabundance,andmuch ofitiscitedandreliedoninthisbook.Inadditiontousingtheoreticalreferences,Ihavealsoreliedonmodels oforganizationsthatcomefromtheorganizationchangeliterature Modelsareimportantbecausetheyhelp linktheorywithpractice Infact,modelsarecoveredin4ofthe17chaptersinthisbook
Asecondpotentialsourceforknowledgeandassistanceisthetradeliterature professionalbookswrittenby consultantsandexperiencedpractitionerssuchasPetersandWaterman(1982)withtheirbestseller,InSearch ofExcellence,and,later,CollinsandPorras(1994)withBuilttoLast Thesewritingstypicallyfocuson organizationexemplars:Thisiswhattolearnfrom,tomodel,andtofollow Theauthorsdrawconclusions
fromthesemodelorganizationsandsometimesevenderiveprinciplesabouthoworganizationsshouldbeled andmanaged PetersandWatermanhadeightsuchprinciples:forexample,“sticktoyourknitting”Collins andPorrasstressedthepowerofcultureasfacilitatingcontinuityandstabilizationovertime.Theproblem hereisthatbyusingpopular,actualorganizationcasesasthebasefromwhichtoderiveprinciples,sooneror later andtodayitissoonerratherthanlater theorganizationsstudiedandshowcasednolongerillustrate theprinciples,becausethingshavechanged.Themodelorganizationshaveperhapsfallenonbadtimes,have becomeacquired,orworse,havefiledforbankruptcy.Theprinciplesbecomepassé,arenolonger(iftheyever were)relevant,andaresoonforgotten Stickingtoone’sknittinginthisdayandagemaybetheoppositeof whattodoinbusiness.Infact,inarecentarticle,Peters(2001)“confesses”thatanumberoftheconclusions inthe1982bookwereguessesandopinionsratherthanrigorouslybasedondata.
Anotherformthattradebookstakeisfortheauthor(s)todistill“wisdom”frommanyyearsofexperienceasa consultant,ateacher,anexecutive,orsomecombinationoftheseroles Theaccumulatedwisdomisbasedon lessonslearned.Suchbooksbyexecutivesincludethefollowing:RudolphGiuliani’s(2002)Leadership,Jack Welch’s(2001)Jack:StraightFromtheGut,andLarryBossidyandRamCharan’s(2002)Execution:The DisciplineofGettingThingsDone
AhighlypopularbookonorganizationchangebyaconsultantistheonebyPeterBlock(1981)onflawless consulting Thisbookisbasedontheauthor’smanyyearsofbothinternalandexternalconsultingand providesa“guidefordevelopingthenecessaryskillsfor‘flawless’consulting”(fromthedustjacket) The authorprovides“suggestionsforfurtherreading”;otherwise,therearenoreferencestoanyresearchortheory aboutorganizationchange
Anotherexampleofthisformofbook,distillingwisdom,isJohnKotter’s(1996)LeadingChange Kotter,an academic,afrequentspeakeratconferences,andanoccasionalconsultant,drawsonhisexperiencein executiveprogramsdiscussingwithparticipants’casesoforganizationchange,andhewrotemanyofthecases himself Fromtheseexperiences,hedeclaresthatleadingchangeconsistsofaneight-stageprocess:
1 Establishingasenseofurgency
2. Creatingtheguidingcoalition
3 Developingavisionandstrategy
4 Communicatingthechangevision
5. Empoweringemployeesforbroad-basedaction
6 Generatingshort-termwins
7 Consolidatinggainsandproducingmorechange
8. Anchoringnewapproachesintheculture
Kotter(1996)providesmanyexamplesthroughouthiscoverageoftheeightstages.Hisbookhasremained popularandcanstillbeeasilyfoundatyourlocalbookstore Thebook’spopularityisdueinpartto(a) Kotter’sstatusandreputationinthefield,(b)hisabilitytodistillintoeightstagesamassofcaseexamples, and(c)thefacevalidityoftheeightstages theysoundplausibleandrelevant.
Thisformoftradebook,basedonauthorexperienceandwisdom,canbehelpfultothereaderbut neverthelessisproblematic FollowingWelch’sideasforhowtobringaboutorganizationchange,Block’s guideforhowtofacilitatechangeasaconsultant,andKotter’seightstagescanbehelpful,butrememberthat thewisdomisbasedonindividuals’experienceandknowledge.InKotter’sbook,forexample,thereareno referencesorbibliography Butitisinthetradebookcategory,afterall,andsuchthingsarenotnecessarily expected.Theabsenceofindependentverificationandvalidationthatwhattheseauthorsrecommendactually worksunderavarietyofcircumstances,however,leavesmewithsomeconcernsandskepticism.Maybeit’s justmynature AndcananyofusachievewhatJackWelchdid,evenbyfollowinghisadvice?Iseriously doubtit.
Athirdpotentialsourceis“story”booksthathaveaclearandusuallysimplemaximtoteach.Thesebookstell astory,perhapsbasedonametaphororinallegoricalform AbestsellerinthisgenreisWhoMovedMy Cheese?(Johnson,1998) AmorerecentexampleisbyourfriendJohnKotterandhiscolleagueHolger Rathgeber(2005),titledOurIcebergIsMelting.Kotternowhaspublishedworksinallthreeofmycategories organizationalscholarlyliterature,tradebooks,andstorybooks Icebergisaboutacolonyofpenguinswhose home,alargeiceberg,isslowlymelting,forcingthemtofindanewhome;inotherwords,theymustdealwith change.Thedustjacketnotesthefollowing:
Theirstoryisoneofresistancetochangeandheroicaction,confusionandinsight,seemingly intractableobstacles,andthemostclevertacticsfordealingwiththoseobstacles It’sastorythatis occurringindifferentformsallaroundustoday butthepenguinshandletheveryrealchallengesa greatdealbetterthanmostofus.
Thebookincludesattractivepicturesandindeedtellsacharmingstory Suchbooksareeasyandoftenfunto read Theauthorswantustorememberthemaxim,andastoryisafinewaytodoit Thesebooksoftensell well.Unfortunately,theytendtooversimplifythetheme(s)theyareaddressing.Regardlessofhowcharming thestorymightbe,organizationchangeisfartoocomplexforasimplestorytoteachuswhatweultimately needtoknow
Somebooksarenotaseasytocategorize Theyrepresentacombinationofcategories ThebookbyFosterand Kaplan(2001),CreativeDestruction,summarizedinChapter2andintheappendixisbothatradebookanda research-basedone Thepremiseofthisbookisthattheexternalenvironmentforcorporations,especially capitalmarkets,changesmorerapidlyandismorecomplexthaneverbefore Moreover,corporationstoday experiencewhatFosterandKaplanrefertoas“culturallock-in”;theycannotchangethemselvesrapidly enoughtoremainhigh-performingorganizations assumingtheywereinthefirstplace Theauthorsofthis bookamassedanimpressiveamountofdatatosupporttheirpremise
AnotherexampleisthebookbyPascale,Milleman,andGioja(2000),SurfingtheEdgeofChaos,citedinthis textandalsosummarizedintheappendix Thisisatradebookthatincorporatestheory Theauthorsmake theircasefororganizationchangeandthenassertthatunderstandingtheapplicabilityofchaostheoryand theoryfromlifescienceswillgreatlyfacilitatesuccessfulchange.Muchoftheirbookisdevotedtocasesfrom
corporationsaroundtheworldthatsupporttheirarguments.
YetanotherexampleofblendingmycategoriesandonethathasbeenhighlypopularisTheTippingPoint,by MalcolmGladwell(2000) Thisbookfitsthetradecategorybutisveryeffectivelygroundedinresearch, particularlyfromthesocialandbehavioralsciences.Inotherwords,Gladwelldidhishomework.TheTipping Pointisapplicabletoorganizationchange,aswewillseeinChapter16
Thesourcesforthisbookhavethereforegenerallycomefromthetypeoforganizationliteraturethatone wouldassume organizationalpsychology,organizationandmanagementtheory,andorganizationalbehavior butnotexclusively Thelifescienceshavemuchtoteachusaboutchangeandinfacthavebecomearecent trendintheorganizationliterature EventhenontrendyHarvardBusinessReviewpublishedanarticleby BonabeauandMeyer(2001)on“swarmintelligence.”Thebehaviorofants,withtheirflexibility,robustness, andself-organization(astheauthorssummarizeit),canbeappliedtocertainaspectsofrunningabusiness andresultinsignificantincreasesinefficiency TheprimarysourceforthisbookinthisdomainisTheWebof LifebyCapra(1996).
Othersourcesareliteraturefromchaostheoryandfromnonlinearcomplexsystemstheory.Foranannotated bibliographyoftheseandotherprimarysources,seetheappendix,whichnowincludesRonChernow’s biographyofAlexanderHamilton,thetruetaleofachangeleaderparexcellence
Tosetthestagefortheremainderofthisfifthedition,letusconsiderashortstoryoflaunchingan organizationchangeeffort
AShortStoryofLaunchingOrganizationChange
Throughouttheacademicyear,thepresidentofTeachersCollege,ColumbiaUniversityholdsregular meetingsofherPresident’sAdvisoryGroup,whichiscomposedofthesenioradministratorsofthecollege andthechairsofthe10academicdepartments AstheformerchairoftheDepartmentofOrganizationand Leadership,Iwasoneoftheattendees.Atoneofthemeetings,thevicepresidentforfinanceand administrationpresentedanoverviewofaplanforrefurbishingasignificantportionofthephysicalplantof thecollege thatis,areconstructionofclassrooms,faculty,andstaffoffices Thereconstructionwould requireabouttwoyears.Theneedwasobvious.MostoftheTeachersCollegebuildingswereatleastacentury old Thefacultyandstaffoccupyingtheaffectedspacewouldhavetomovetotemporaryquartersforupto twoyears AbouthalfwaythroughtheVP’spresentation,hewasinterruptedbyoneofmydepartmentchair colleagues.Thechairstatedratheremotionallythatthechangeplanbeingpresentedwas“verydangerous.”
Thisseniorfacultymemberanddepartmentchairthenelaboratedonthe“dangerous”commentbypointing outthatnotonlywouldpeople,especiallyfacultymembers,beupsetbuttheirproductivityandmoralewould plummet.Perhapsitgoeswithoutsayingthatthischair’sdepartmentwouldbeamongthosehavingtomove totemporaryoffices
Inresponding,theVPdidnotdisagreeaboutthesepossibleconsequencesofthechange;rather,hefocusedon theneedtodosomethingaboutourdatedfacilities forexample,takingadvantageofnewtechnologyaswell ascreativeandflexibleuseofspaceforourclassroomsandoffices.Afewminuteslater,anotherdepartment chair,knowingsomethingaboutmybackgroundandexpertise,askedmetocommentontheplanforchange Notdaringtogivealectureonorganizationchangetomycolleagues,Ilimitedmyremarkstotwopoints.
First,Istatedthatforthepersoninachangeleadershiprole inthiscase,ourVP itwasimportanttobeas clearaspossibleaboutthefutureandwhatitwouldtaketogettherebutinparticularnottocomeacrossas defensive,torespondtoquestionsasfactuallyaspossible,andtobepatient.Iaddedthatinmyopinionthe VPhadnotbeendefensive.Second,itwasalsoimportantforthechangeleaderstoacknowledgethatinthe shortruntherewouldindeedbefrustration,perhapsevenangerandresentment Maybeproductivitywould sufferforaperiodoftime,butwithafocusonthelongtermandwhatwouldbegainedasaresult,thewhole effortwouldbeworthwhile.Theshorthandversionofmypointwas“short-termpainforlong-termgain.”
Afterthemeeting,afewattendeesthankedmeformycomments,buttheaggravateddepartmentchairleft withoutsayingawordtoanyone
IntheshorthouroftheVP’scoverageoftheplansforchangeatthecollege,quiteanumberofprinciples regardingtheorganizationchangeprocesswereeitherexplicitlyaddressed,suchasvisionforthefuture,orat leastimplied,suchaschangingtheexternalenvironment Nextarebriefstatementsoftheseprinciples,noting wheretheyarecoveredinmoredepthinthechaptersthatfollow.
Externalenvironment.AsnotedinChapter2,wetypicallybeginanorganizationchangeeffortby consideringwhatishappeningintheorganization’sexternalenvironment Weneedtobeawareofthe evidencethattheexternalenvironmentischangingmorerapidlythaneverbefore,makingittougher
andtougherfororganizationstochangethemselvesrapidlyenoughtokeepupandstaycompetitive Institutionsofhighereducationarenoexception Beingtuitiondependent,TeachersCollegemuststay competitivebyhavingstate-of-the-artfacilitiesandsuperbfaculty.Thus,thereconstructionprojectisa responsetothisever-changing,complexenvironment.
Expressingtheneed Organizationalmembersmustseetheneedforchangetobewillingtoembraceit Coupledwiththisexpressedneedisawayforward,whatwilladdresstheneed,whatmightbethegoals. Thus,therearetwoactionsrequired,whichcanbedescribedas(a)creatingasenseofurgencyand(b) providingavisionforthefuture Chapter5providesmoredepthofcoverage
Consequences SpelledoutinChapter2istheparadoxofplannedchange.Weplanchangeinalinear fashion Step1,Step2,Step3,etc. butquicklyrealizethatthechangeitselfisnonlinear.Thereare unintendedconsequencesthatwedidn’tanticipate Moreover,thechangewillbeexperiencedasmessyif notchaotic.InthecaseofTeachersCollege,someoftheinterimfacilitiesmaynotbesatisfactoryand mayleadtoevenmorefrustrationandanger.
Resistance Whilenoteveryoneislikelytoberesistanttochange,someifnotmanywillbe,asinthecase ofourdepartmentchair’swarningusofdangersahead.Thereareindividualdifferencesregarding resistance,andallresistancesarenotthesame.SowetakeresistanceseriouslyinthistextinChapter6, andwerevisititinthefinalchapter Chapter17
Changeleaderrole Change,certainlyplannedchange,isnotlikelytooccurwithoutleadership The changeleaderneedstobetransparent,nondefensive,andpersistentyetpatient.Ourchangeleader,the VP,isofftoagoodstartbybeingclear,notdefensive,andpatient Buttherearetoughtimesahead Chapters14and15aredevotedtoleadership,withthesecondfocusingspecificallyonleadingchange Byimplication,ourshortcaseisbasedontheprincipleofanorganization’sbeinganopensysteminfluenced byitsenvironmentandcontext Thiskindofthinkingisbasedonopen-systemtheory(Chapter4) Also,the forthcomingchangeatTeachersCollegeismoreevolutionarythanrevolutionaryandshouldbemanaged accordingly(Chapter5),andthechangeismoreatthelargersystemlevelthanatthegrouporindividual level,althoughalllevelsareinvolvedtosomedegree(Chapter6) Otherchaptersnotmentionedhere Chapters1,3,7through12,and16 coverhistory,theory,research,andpractice,allinsupportofthe mainprinciplesoforganization.AndwiththeadditionofChapter13,weareaddressingtwoother organizations,namelyhealthcareandgovernment,thathavenotbeenadequatelycovered Thus,wehave muchtodiscuss,allofwhichisimportantandexciting,ofcourse Soletusproceed
TwoRethinkingOrganizationChange
Mosteffortsbyexecutives,managers,andadministratorstosignificantlychangetheorganizationstheylead donotwork By“changesignificantly,”Imeantoturntheorganizationinanotherdirection,tofundamentally modifythe“waywedothings,”tooverhaulthestructure thedesignoftheorganizationfordecisionmaking andaccountability andtoprovideorganizationalmemberswithawholenewvisionforthefuture Andin theever-increasingworldofmergersandacquisitions,75%failatthis(Burke&Biggart,1997;“HowMergers GoWrong,”2000).Tosurvive,especiallyforthelongterm,organizationsmustchangeandadapttotheir environments,buttypicalchangesconsistoffine-tuning:installinganewsystemforsalesmanagement; initiatingaprogramtoimprovethequalityofproductsorservices;orchangingthestructuretoimprove decisionmakingwithoutfirstchangingorganizationalstrategy,whichis,afterall,thebasisfordecision making
Examplesofsignificantandsuccessfulorganizationchangewillbepresentedinthisbook Theseexamples, however,areexceptional.Mostorganizationchangeisnotsignificantorsuccessful.Organizational improvementsdooccur,evenfrequently,anddowork,butlarge-scale,fundamentalorganizationchangethat worksisrare Whyisthisthecase?
Therearemanyreasons Firstandforemost,deeporganizationchange,especiallyattemptingtochangethe cultureofanorganization,isverydifficult.Second,itisoftenhardtomakeacaseforchange,particularly whentheorganizationappearstobedoingwell Nothingisbroken,sowhat’stofix?Aparadoxof organizationchangeisthatthepeakofsuccessisthetimetoworryandtoplanforandbringaboutsignificant change.
Third,ourknowledgeforhowtoplanandimplementorganizationchangeislimited Theprimarypurposeof thisbookisanattempttorectifythislimitation,atleasttosomeextent Let’sbeginwithafundamentalissue
Acceptedknowledgeoforganizationchangeisthatweplanthechangeaccordingtostepsorphases Step1is, perhaps,toinformorganizationalmembersabouttheneedforchange.Step2mightbetoimplementan initialprojectthatgraduallyexpandstoalargerprogramofchange,andsoon Buttheactualchangeitself doesnotoccuraccordingtosteps It’sanotherparadox
TheParadoxofPlannedOrganizationChange
InanAssociatedPressreleaseonJune1,2001,theFederalCommunicationsCommissionheadatthetime, MichaelPowell,referringtotheshifttodigitaltechnology,wasquotedassayingthat“itwillbemessyandit willbeconfusing,andwewillgetalotofitwrongandwe’llhavetostartover Butthat’sthecreativeprocess, that’stheevolutionaryprocess”(Srinivasan,2001,p.6A).Revolutionaryprocessmighthavebeenmore accurate;inanycase,Mr Powelldescribedthechangeprocessveryrealistically Ithoughtatthetime,This manknowswhatheistalkingabout
Asstatedpreviously,whenplanningorganizationchange,theprocessisusuallylinear thatis,Step1or Phase1,thenStep2,3,andsoon Andalthoughanattemptismadeintheimplementationofchangeto followthesestepsorphases,whatactuallyoccursisanythingbutlinear Theimplementationprocessismessy: Thingsdon’tproceedexactlyasplanned;peopledothingstheirownway,notalwaysaccordingtotheplan; somepeopleresistorevensabotagetheprocess;andsomepeoplewhowouldbepredictedtosupportorresist theplanactuallybehaveinjusttheoppositeway Inshort,unanticipatedconsequencesoccur Leadersof changeoftensaysomethinglike,“Foreverystepforwardwetake,weseemtofallbacktwosteps;something alwaysneedsfixingtogetusbackontrack.”
Providedthechangegoalsareclearandchangeleadersarewillingtostaythecourse,overtime,theprocess mayendupbeingsomewhatlinear,oratleastapatternmayemerge Butlinearityisnotwhatanyone experiencesduringtheimplementationprocessitself,inthethickofthings,whichmayfeelchaotic,with peopleintheorganizationconstantlyaskingthequestion,“Who’sinchargehere?”Figure21isasimpleway oftryingtodepictthisnonlinearprocessyetshowatthesametimethepossibilityofanemergentpattern But nopatternwillemergeunlessthereisaclearchangegoalorgoals.Theendinmind(althoughinorganization changetherearemilestonesthatarereachedbutprobablynoendstate)iswhat“pulls”orestablishesapattern Considerthefigurefurther:Welaunchedthechangeeffortwithsomenewinitiative,forexample,adifferent wayofevaluatingandrewardingperformancefrom,say,resultsonlyastheindexofperformancetoa “balancedscorecard”(Kaplan&Norton,1996) Inplanningforthechange,wewerecountingonanumberof keyexecutivestosupportit,andweassumedthatcertainotherswouldberesistant Oncetheinitiativewas launched,tooursurprise,wefoundthatsomeoftheexecutiveswhomwewerecountingonforsupport actuallyresistedthechangeandsomewhowebelievedwouldberesistantturnedouttobeadvocates Thus, wefacedaneedtoregroup,inasense,andworkhardonthosenowresistingwhowehadassumedwouldbe supportiveandatthesametimerallyaroundthosenowadvocatingthechangewhowethoughtweregoingto resist Inotherwords,weneededto“loopback”Thisoccurrence,whileunanticipated,didnotnecessarily representahugeblockorbarriertothechangeeffortoverall,andthereforetheloopisnotverylarge,but nevertheless,aloopbackwasrequiredtofixtheproblem.
Notethatthesecondloopislarger.Itmayhavebeennecessarytoinstallanewcomputersoftwareprogramto facilitatethechangetoadifferentwayoftrackingandrecordingperformanceattheindividual,workunit, businessunit,andoverallorganizationallevels Butwhatwefound,let’ssay,wasthatthesoftwarepackagedid
notworksatisfactorily Sowehadtoloopbackandfixthesoftwareproblem Itwasasignificantproblemto fix,andthereforetheloopislarger Andsoitgoes Themanagingchangeprocessasdepictedinthefigureis oneofdealingwithunanticipatedconsequencesthatoccurwhenweinterveneintheorganization’snormal wayofdoingthingswithanewway.Letusbeclear:Wemustplanchangeyetunderstandthatthingsnever turnoutquiteasweplanned It’saparadox
Howorganizationchangeoccurs,withparticularemphasisonplannedorganizationchange,istheprimary themeofthisbook.Theassumptionthatorganizationsneedtochangeisembeddedinwhathasbeenstated sofar Iwillnowexpoundonthisassumptionbymakingthecasefororganizationchange ThenIwilldeclare myselfbyexplainingmypointsofviewaboutorganizationchange Thesepointsofviewprovideanoverview ofthebook,or“comingattractions.”Morethanwhatistocome,thesepointsofviewalsorevealmybiases aboutwhatisimportant,ifnotcritical,inorganizationchange Sohereattheoutsetofourjourney,Iam declaringmyself Evenwiththesebiasesondisplay,Ihopeyouwillcontinuethejourneywithme
Figure2.1DepictionoftheNonlinearNatureofOrganizationChange
MakingtheCaseforOrganizationChange
ChangingCorporations
MyprimarysourceforthissectionisthevolumebytwoMcKinseyconsultants,FosterandKaplan(2001), CreativeDestruction,referredtoinChapter1 IncontrasttopopularbusinessbookssuchasInSearchof Excellence(Peters&Waterman,1982)andBuilttoLast(Collins&Porras,1994),FosterandKaplan,with theirdatafrommorethan1,000corporationsin15industriesovera36-yearperiod,arguethatwenoware clearlyinthe“ageofdiscontinuity,”asDrucker(1969)earlierpredicted ConsiderthefollowingpointsmadebyFosterandKaplan(2001) ThefirstForbestop100companieslistwas formedin1917.Forbespublisheditsoriginallistagainin1987.In1987,61oftheoriginal100nolonger existed Andoftheremaining39companies,only18remainedinthetop100:companiessuchasDuPont, GeneralElectric(GE),Kodak,GeneralMotors,Ford,andProcter&Gamble These18companiessurvived but,accordingtoFosterandKaplan,didnotperform.Long-termearningsreturnsbythesecompaniesfor theirinvestorsfrom1917to1987werenotexactlyoutstanding:20%lessthanfortheoverallmarket.Today, onlyGEperformsabovetheaverage
Next,FosterandKaplan(2001)refertotheStandard&Poor’s(S&P)500 Comparingthe500in1957with thosein1998,only74remainedonthelist,withamere12ofthose74outperformingtheS&Pindexitself. Moreover,“iftoday’sS&P500weremadeupofonlythosecompaniesthatwereonthelistwhenitwas formedin1957,theoverallperformanceoftheS&P500wouldhavebeenabout20%lessperyearthanit actuallyhasbeen”(p.8).Astheauthorsthenask,howcanitbethatsomanycompaniesdonotsurviveand thosethatdosurvive,withfewexceptions,performbelowaverage?
Partoftheanswerrestswiththepace-of-changephenomenonthatFosterandKaplan(2001)addressintheir openinglines.In1917,thepaceofchangewasindeedmuchslowerthanitistoday.Duringthattimeand continuingonintothe1920sand1930s,evenwiththeclimaticchangesoftheGreatDepression,theturnover rateofcompaniesintheS&Prankingsaveraged15%ayear Anewcompanymakingthelistthencould expecttoremainforabout65years.AsDrucker(1969)pointedout,inthosedayschangewasnotamajor concern Continuitywasthegoalandthewayofoperating Verticalintegrationwasthenameofthegame thatis,owningasmuchoftheproductionchainaspossible,fromrawmaterialstodistributiontothe customer.Butin1998,“theturnoverrateintheS&P500wascloseto10%,implyinganaveragelifetimeon thelistoftenyears,notsixty-five!”(Foster&Kaplan,2001,p 11) Timeshavechanged,andwearelivingin theageofdiscontinuityforcorporations,notcontinuity
ThelargeranswertoFosterandKaplan’s(2001)questionaboutcorporatesurvivalandperformancecanbe foundinacorporation’sexternalenvironment.Althoughanyorganization’sexternalenvironmentconsistsof manyfactors customers,thegeneraleconomy,changingdemographics,andchanginggovernment regulations,tonameafew oneofthemostpowerfulfactorsorforcesforbusinesses,especiallythosethatare publiclyowned,isthecapitalmarket.Capitalmarketsareinformalaggregations,nothighlyorganizedand structuredasarecorporations Capitalmarketsconsistofbuyers,sellers,andotherswhointeractforthe purposeofeconomicexchange Thesebusinesspeopleareloanofficersinbanks,investmentbankers,
