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LEADING CHANGE

Jim Clawson

Darden Graduate School of Business University of Virginia

Can People Change?

If so, how?

If so, will they?

2 (c) James G. Clawson

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Levels of Human Activity

HABITUAL?

1. Visible Behavior 2. Conscious Thought 3. VABEs

(values, assumptions, beliefs, and expectations)

The Leadership Point of View

1.

2.

3.

Do you SEE what needs to be done?

Do you UNDERSTAND ALL of the forces at play?

Do you have the COURAGE to act to make things better? (Inside-out)

4 (c) James G. Clawson

Key Leadership Initiatives

LEADER

Developing Influence Design RELATION SHIPS Committed Or Mercenary Commitment ORGANI ZATION Strategic Thinking STRATEGY LEADING CHANGE 5 (c) James G. Clawson

Leading Strategic Change

Back ground Factors Leadership Philosophy

Org’n Design Decisions Organization Culture RESULTS Efficiency Learning Employee Customer / Financials

6 (c) James G. Clawson

The Importance of Organizational Culture

“Culture eats strategy for breakfast.”

Sign hanging in the Ford Motor Company’s Organizational Change War Room “Culture isn’t just one aspect of the game—it is the game.” Louis V. Gerstner Jr., former CEO of IBM, Business Week , 2/12/07, p. 73) 7 (c) James G. Clawson

Drop Down Menus for Design Decisions

Leadership Philosophy Organizational Design Decisions Organization Culture Accounting Organizational Systems Information Finance Forecasting Sales & Marketing Human Resource etc.

8 (c) James G. Clawson

Drop Down Menus for Design Decisions Leadership Philosophy

Organizational Design Decisions Organization Culture HIRING WORK DESIGN APPRAISAL REWARDS

Reward Systems Outplacement

DEVELOP MENT

Learning Systems 9

Pfeffer’s HRM as Competitive Advantage Security Hiring Teams High Wages Training Egalitarian

(c) James G. Clawson

Share Data

Human Resources Processes (adapted from Tichy et al)

Selection

Sociali zation 10 (c) James G. Clawson

Reward Work Design Appraisal Outplacement Learning

Creativity, Diversity, Energy?

Study of New General Managers Jack Gabarro, HBS, HBR  12 in USA  12 in Europe  From within  From without  Into situations needing change  Into situations not needing change  What was the level of significant organizational change introduced?

11 (c) James G. Clawson

TAKING CHARGE

0 6 12 18 Time in Months 24 30 12 Adapted from Jack Gabarro, Dynamics of Taking Charge, HBS Press (c) James G. Clawson 36

Taking Charge

•

Taking Hold

: picking the low hanging fruit •

Immersion

: learning what else to do •

Reshaping

: major change efforts •

Consolidation

: settling in •

Refinement:

fine tuning 13

The Dynamics of Taking Charge

, Jack Gabarro, Harvard Business Review, May-June 1985 (c) James G. Clawson

1.

2.

3.

4.

Leading Strategic Change Requires . . . .

Vision (What do you see?) Understanding (Rigorous analysis) Courage (to initiate action) THE “LEADERSHIP POINT OF VIEW”

14 

Intelligence

(c) James G. Clawson

Intellectual Intelligence (IQ)

 Genetically endowed  Environmentally Encouraged  Focus of Most School Work  Processing Power  Curiosity  Discipline 15 (c) James G. Clawson

Emotional Quotient (EQ)

 Recognizing your own emotions  Managing your Emotions  Self Talk to get out of Emotional Hijackings  Paying Attention-Self Awareness Adapted from Daniel Goleman,

Emotional Intelligence

, Bantam, New York, 1995 16 (c) James G. Clawson

Social Quotient (SQ)

 Recognizing the emotions of others  Empathy  Caring  Listening  Skill in Coaching & Resolving Conflicts 17 (c) James G. Clawson

Change Quotient (CQ)

 Recognizing the need to change  Emotional comfort with change  Understanding the Change Process  Skills in Leading the Change Process 18 (c) James G. Clawson

19 You are

always

teaching.

Every encounter between a superior and a subordinate involves learning of some kind for the subordinate. (It should involve learning for the superior, too, but that is another matter.) When the boss gives an order, asks for a job to be done, reprimands, praises, conducts an appraisal interview, deals with a mistake, holds a staff meeting, works with his subordinates in solving a problem, gives a salary increase, discusses a possible promotion, or takes any other action with subordinates,

he is teaching them something

result of

every

. The attitudes, the habits, the expectations of the subordinate will be either reinforced or modified to some degree as a encounter with the boss. . .The day-by-day experience of the job is so much more powerful that it tends to overshadow what the individual may learn in other settings.

Douglas MacGregor,

The Human Side of Enterprise

pp. 199-200

20 Can you change anything in the world “out there” without changing yourself first?

Society Organization Team Self

“Ten short years.... the one thing that we have done consistently is to change .... It may seem easier for our life to remain constant, but change, really, is the only constant. We cannot stop it and we cannot escape it. We can let it destroy us or we can embrace it. We must embrace it.”

Michael Eisner

Disney 1994 Annual Report 21 (c) James G. Clawson

Change and Learning

In a world of change, learners will inherit the earth, while the learned shall find themselves perfectly suited for a world that no longer exists.

Eric Hoffer, Ordeal of Change 22 (c) James G. Clawson

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Models of Change

         (L3L 4e, Ch. 24, p. 339) Kurt Lewin Michael Beer John Kotter Tim Gallwey MIT Model Elizabeth Kubler-Ross James O. Prochaska Peter Senge Jim Clawson (c) James G. Clawson

Kurt Lewin



Unfreeze



Retrain

 24 (c) James G. Clawson

Beer’s Leading Change

Cp = Cp D M P C D x M x P > = Probability of Change = Dissatisfaction with Status Quo = Clear Model or Vision of the Future = Clear Process for Managing the Change = Cost of Making the Change C from

Leading Change

, Michael Beer, HCS 25 (c) James G. Clawson

Kotter’s 8 Errors in Leading Change  Allowing complacency  Failing to create a guiding coalition  Underestimating the power of vision  Under-communicating the vision by 10, 100, or 1000  Allowing Obstacles to block the vision  Failing to create short-term wins  Declaring victory too soon  Neglecting to anchor changes in culture 26 (c) James G. Clawson From

Leading Change

, John Kotter, HBS Press, 1996.

Kotter’s Eight Stage Process for Creating Transformation  Establish a sense of urgency  Create a guiding coalition  Develop strong vision and strategy  Over communicate the vision and strategy  Redesign to encourage broad-based action  Generate short-term wins  Consolidate gains in redesign and HR  Anchor changes in the culture Adapted from

Leading Change

, John Kotter, HBS Press, 1996 27 (c) James G. Clawson

Inner Game of Change

Self 1 (Shoulds) and Self 2 (Inner Self)  Select the right measures  Focus attention and see what happens  Listen to Self 2 Adapted from Tim Gallwey,

Inner Game of Work

28 (c) James G. Clawson

Nevis’ MIT Phases of Change 29 Complacency/ Turbulence / Resistance / Small Wins / Consolidation / New Baseline

Susan Campbell’s Stages of Change



Feeling Unsettled:

Something isn’t right.



Denial:

It’s not that bad.

 Facing the Present: I see things as they are.



Letting Go:

The past isn’t working; the future is unclear.

 Envisioning: I know what I want.

 Exploring new Options: Maybe I can do it.

 Committing to Action: I can do it.

 Integrating the Change: I am doing it.

Adapted from

From Chaos to Confidence

, Susan Campbell, Simon & Schuster, New York, 1995 30 (c) James G. Clawson

Change as Dying a Little Death Elizabeth Kuebler-Ross

Emotional Pendulum of Change Disconfirming Data DENIAL

31 (c) James G. Clawson

Denying the Message Denying One’s Ability to Do Anything

32 (c) James G. Clawson

DENIAL Denying the Messenger Denying the Relevance of the Message

Emotional Pendulum of Change Disconfirming Data DENIAL ANGER BARGAINING DESPAIR EXPERIMENTATION HOPE INTEGRATION

33 (c) James G. Clawson

Prochaska’s Spiral of Change

Stage Pre-Contemplation Contemplation Preparation Action Key Activity Unaware of the problem much less the solution I want to stop feeling/doing this.

I will do something very soon.

I am doing something about this.

Maintenance Termination Careful attention to maintaining the change and not recycling Temptation and threat have disappeared. 34 (c) James G. Clawson

Prochaska’s Spiral of Change Recycling is likely for as many as 85%.

6.

Termination 5.

MAINTENANCE 4.

ACTION 3.

Preparation 2.

Contemplation 1. Pre Contemplation

35 (c) James G. Clawson

Senge’s Model of Change

Most Change Agents Stay BELOW the Line

INTERNAL

Do Alone What do we need to do tomorrow?

FUTURE

Who do we need to partner with?

EXTERNAL

Need to collaborate What are we doing today?

36 (c) James G. Clawson Who do we partner with today?

TODAY

The Necessary Revolution , Peter Senge, 2008

Senge’s Model of Change

      Not from the top, from the bottom or middle, anywhere Organize in groups and teams not individuals Only need a few, e.g. 10 out of 8 Start people thinking, give them new insights Find stories to tell about value creation that we can’t escape Spend three years “hanging out” talking with people        Network more, meet more people who are knowledgeable Spread it slowly (like zoysia grass) Listen and hear it from your peers Success depends on the richness of your networks Create visual images for people (they stick) Be consistent Remember executives can screw it up 37 (c) James G. Clawson

Problem Leadership

LEADERSHIP ACTIVITY

Problem Solving Problem Finding Problem Creating

Questions

Old New New

Answers

New Old New Adapted from

Pathfinding

by Harold Leavitt, 1995 38 (c) James G. Clawson

CLAWSON’S GENERAL CHANGE PROCESS

L CONFIRMATION

(4e, p 344)

L L EXPERIMENT NEW DATA SEARCH FOR ALTERNATIVES L NEW BASELINE L DISCON FIRMING L L ENTHUSIASM ENGAGEMENT LEARNING L

HURT or PAIN

L L DENY DISTORT DISCOUNT IGNORE CURRENT COMFORT ZONE ENCOUNTER NEW DATA Discon firming Data BASELINE BEHAVIOR

Clawson Sequentially           Help people get out of their comfort zones (habits) Be willing to deliver disconfirming data Identify and collaborate with like-minded groups Be willing to help people through pain and denial Help people identify alternative approaches (creativity, innovation) Help people plan their experiments (active coaching) Help interpret results data from experiments (encouragement) Reward and reinforce successes (encouragement) Be relentless in reinforcement Behave consistently all the time 40 (c) James G. Clawson

Leadership Technique and Consequence

1.

Level One Techniques:

Pay, rewards, punishments, threats, coercion, intimidation

2.

Level Two Techniques:

logic, data, evidence, reason, statistics, charts, analysis

3.

Level Three Techniques:

vision, purpose, values, stories, music, symbols, strategy, TPOV

BUY-IN

1.Passion

2.Engagement

3.Agreement

4.Compliance

5.Apathy

6.Passive Resistance 7.Active Resistance 41 (c) James G. Clawson

42 What can I do to make it happen?

 Expand and sharpen your vision  Expand your skill set  You teach what you tolerate  Create win win’s for all parties  Become an ally, not an adversary  Accept and channel the other’s point of view  Change yourself, not others

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Does experience lead to wisdom?

“Most people do not accumulate a body of experience. Most people go through life under-going a series of happenings which pass through their systems undigested. Happenings become experiences when they are digested, when they are reflected on, related to general patterns, and synthesized.” Saul Alinsky, Rules for Radicals, quoted by Henry Mintzberg in “The Five Minds of a Manager” HBR 11/03

44 LEARNING FROM EXPERIENCE "To most men, experience is like the stern lights of a ship which illumine only the track it has passed.” --Samuel Taylor Coleridge "Experience is not what happens to a man, it is what a man does with what happens to him." --Aldous Huxley

45 Good is the Enemy of Great “Conversely, perpetuating mediocrity is an inherently depressing process and drains much more energy out of the pool than it puts back in. … ‘I want them to have a great experience, and to have the experience of being part of something absolutely first class.’” Running Coach, p. 208

“WE TEACH WHAT WE TOLERATE.” Marietta Frey

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There are only two parties: the establishment and the movement. Of which are you a member?

Emerson

47 Einstein/AA 

The definition of insanity is expecting different results while you continue doing the same thing.

48 You are always teaching.

Every encounter between a superior and a subordinate involves learning of some kind for the subordinate. (It should involve learning for the superior, too, but that is another matter.) When the boss gives an order, asks for a job to be done, reprimands, praises, conducts an appraisal interview, deals with a mistake, holds a staff meeting, works with his subordinates in solving a problem, gives a salary increase, discusses a possible promotion, or takes any other action with subordinates,

he is teaching them something

reinforced or modified to some degree as a result of

every

. The attitudes, the habits, the expectations of the subordinate will be either encounter with the boss. . .The day-by-day experience of the job is so much more powerful that it tends to overshadow what the individual may learn in other settings.

The Human Side of Enterprise

pp. 199-200

49 Will you (not can you) change?



Will you ever become anything more than a vessel transmitting the memes and genes of previous generations on to the next?



Will you rise above (transcend) your legacies and lead others to do the same? If

not, …

50 Importance of Learning

The only real source of competitive advantage may be the capacity to learn.

Arie de Geus, The Living Company

AN INVITATION / CHALLENGE

51 (c) James G. Clawson

52 (c) James G. Clawson

5 P’s of Leading Change PAIN AND PURPOSE FOR CHANGE PICTURE OF WHERE TO GO PLAN HOW TO GET THERE

53 (c) James G. Clawson

PART FOR EACH TO PLAY

Adapted from USAA Group

Leadership is, as you know, not a position but a job. It’s hard and exciting and good work. It’s also a serious meddling in other people’s lives. One examines leadership beginning not with techniques but rather with premises, not with tools but with beliefs, and not with systems but with understandings. This I truly believe.

Max DePree,

Leadership Jazz

, p. 7 54 (c) James G. Clawson

55 (c) James G. Clawson