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All examples of profound change initiatives are judged through the
lens of business results: Meaningful indicators of real progress include
time to market, customer loyalty, quality and long-term profitability
and growth. But people also ascribe meaning to the satisfaction of the
journey itself (Process). To feel valued by management; a trust in me
and in the team;
The authors identify 10 Distinct Challenges or forces which oppose
They are broken down into 3 categories. Under the first category: Challenges
of Initiating Change are:
- Challenge of Control over One's Time = the
challenge of finding enough time to devote to reflection and practice.
- Challenge of Inadequate Coaching, Guidance and Support
= the support needed for innovation within groups and of ultimately
developing internal resources for building capacity to change.
- Challenge of Relevance = making a case for change;
articulating an appropriate business focus and showing why new efforts
such as developing learning capabilities are relevant for business goals.
- Challenge of Leadership Clarity and Consistency =
preventing a mismatch between behaviours and espoused values especially
for those championing change.
The next three challenges fall under the category of Challenges of Sustaining
- Challenge of Fear and Anxiety = getting beyond the
feeling that this is a waste of time or that things are out of control
(deep concerns about exposure, vulnerability and inadequacy triggered
by the conflict between increasing levels of candor and openness at
low levels of trust among members of pilot groups).
- Challenge of Negative Assessment of Progress
= the lack of connection between the traditional ways of measuring success,
both metrics and time horizon and the achievement of a pilot group.
- Challenge of Isolation and Arrogance = what occurs
when the true believers in the pilot group confront the non-believers
outside the pilot group.
The final category deals with the challenges that arise when
a system is being redesigned or rethought:
- Challenge of the Prevailing Governance Structure: = the conflict of
pilot groups seeking greater autonomy and managers concerned about greater
autonomy leading to chaos and internal fragmentation.
- Challenge of Diffusion = when people can't easily transfer knowledge
across organizational boundaries making it difficult to build on each
other's success around the system
- Challenge of Strategy and Purpose = the challenge of revitalizing
and rethinking the organization's intended business focus, its
contribution to the community and its identity.
These challenges are the limits to any profound change initiative
and any of them are sufficient to thwart change.
In Track 8:04:25, the narrator tells us that:
"The organizational limiting processes represent the homeostatic
forces of industrial age organizations, the forces that naturally seek
stability and equilibrium. No progress is sustainable unless innovators
understand why the system is pushing back and how their own attitudes
and perceptions and other forces contribute to the pushback.
By exercising your attention, understanding and ultimate creativity
to the 10 challenges, you can begin to develop systemic strategies for
sustaining profound changes.
Initiators of profound change see problems as symptomatic of deeper
issues. To tackle these issues requires time for reflection, a deliberate
focus on challenging difficult undiscussable issues and an attempt to
bridge internal boundaries to help grapple with system wide issues.
Having made this investment, learning capabilities will start to develop.
In this context, learning capabilities are the skills and proficiencies
that among individuals, teams and companies consistently enhance their
ability to produce results that are truly important to them. Learning
capabilities help us to learn. In Peter Senge's The Fifth Discipline,
five disciplines are defined as being core to any learning organization.
Personal Mastery: Organizations need people who
can balance passionate aspiration with keen awareness of the world
Shared Vision: Organizations need the collective
ability to translate their purpose and vision into a coherent set
of priorities for action.
Mental models: They need the ability to conduct their
business with reflection, inquiry and well-designed communication.
Team Learning: They need the ability to hold generative
conversation, (conversations that help teams operate with consistently
Systems Thinking: They need the conceptual ability to recognize interdependencies
and understand the short versus the long-term dynamic of all change
3 Powerful Reinforcing Processes
1) Personal Results
2) Network of Committed People
3) Business Results
W. Edwards Demings said, People seek joy in their work.
If a change initiative does not involve people on a personal level
and therefore doesn't provide satisfaction and appreciation and
other personal results, then this reinforcing process is not activated
and a significant force for building momentum is lost.
A second type of result is the growth of networks of committed people
(to share ideas and insights).
Third type of result of building learning capabilities is the improvement
of business results. This usually begins with the stopping of wasteful
practices that everyone has become accustomed to.
A crisis is often what opens the possibility of initiating profound
change. In order for this to happen however, you must have the courage
to use the first crisis as an opportunity to look at deeper issues.
Otherwise, more crises will follow. A case in point is an outdoor instructor
who others felt did not have good judgment skills in the field. There
had been a couple of instances where this was demonstrated. Rather than
the person in charge exploring this deeply and developing training strategies
to improve this instructor's judgment capabilities, avoidance
was exercised instead. This instructor was later put in charge of an
activity which required a high level of ongoing judgment. This time
his failure to do so resulted in a situation that could have turned
out much worse than it did. As the Director of this program, my explorations
into this problem uncovered the past history I have spoken of above.
He was unable to see the severity of his lack of judgment in the situation.
The first thing I did was to order that he be pulled out of the field
for the duration of this course and that more training be given to him
before he is put in a leadership role of that nature again. There was
much resistance from the head of that organization based on not wanting
to make the instructor feel bad. This is why avoidance had been the
practice before. Many far deeper organizational and leadership issues
were uncovered from this situation. That is an example of dealing first
with a crisis before trying to initiate profound change initiatives.
If you do not use the first crisis as an opportunity to look at deeper
issues, more crises will follow.
4 Challenges that occur in the beginning of Profound Change
- Not enough time: Lack of a pilot groups flexibility and control
over its own development
- No help: Need for coherent, consistent, knowledgeable coaching,
guidance and support
- Not relevant: the lack of a clear compelling business case for
- Walking the talk
Not enough Time:
is the flexibility of people's time (not quantity but control).
To what point
do the people have enough control of their own time to engage?
Is there time
for learning, reflection, for thoughtfulness?
time will limit progress
As teams develop
learning capabilities and begin to work more efficiently, time become
less of a problem
but as initiatives progress, the time required usually
increases; stop wasteful practices.
Strategies for coping with not enough time:
to overcome time challenges lies in investigating the tacit assumptions
and attitudes that underlie the lack of time flexibility.
Look at the
attitudes that keep you from scheduling time for focus and concentration
time to allow for reflection, attention and inquiry-i.e. Schedule a
three-day block rather than 3
one-day block where people can focus together-eat,
sleep... and it creates a sense of community as well!
Build in daydreaming
time: large amounts of unscheduled time: for talking about impromptu
conversations-need that structured, unstructured time
tasks become obvious only when people have a chance to talk through
processes in an unstructured setting
denominator lies behind all these suggestions. Undoing the mental model
of people as
components, plugged into an industrial, mechanical
1989: take excess work out of bureaucracy and free up people's
1. Does this decision need to be approved by so many
2. Do we need to have this meeting?
3. Do we really need to keep on doing things the same
Cultural changes take twice as long as you expect. (Refer to Edgar Schein)
The Challenge of NO HELP (CD 2: Track 5 01:45)
The key problem with this challenge is that people don't want
to ask for help. This is particularly true of managers because they
don't want to communicate incompetence. The word help
takes on the meaning of helplessness. But learning capabilities means
admitting we need help. The three most important phrases we need to
become comfortable using are "I need help", "I don't
know" and "I made a mistake".
To help overcome the challenge of no help, finding a mentor or coach
is highly recommended.
Meeting this challenge includes building self-awareness, both at the
individual and group level. Identify the gap in the group's current
performance and their aspirations.
- Make more information and resources available
to pilot group members. They may fail to see how the change
initiative is connected to both their personal aspirations and the organizational
- Revisit relevance periodically. Initial goals of a change initiative
are problem oriented. Gradually team may turn to more long term or vision-oriented
1Recognition resources. Unless it's clear that learning oriented
work can lead to advancement, then informal networks will not hold together
for the long haul. Therefore, a powerful network leader should keep
pressing to have learning initiative results recognized. This is why
you need to discuss the projects with Executive Leaders as early as
possible. Needs a relationship with the immediate chain of command.
If they can't see a link between your new efforts and the business
results, then they and you will start to mistrust each other. I try
to build the kind of relationship where I can let them know of progress
in small ways. Could be vital if the learning initiative runs into trouble.
1. The Challenge of Walking The Talk
the challenge of authenticity
To what extent
to the people who are championing the change initiative walk the talk
within organizations expect their leaders to say one thing and do another
Once a learning
initiative takes off the standards start to elevate
I.e. if this
is really about honesty, if this is really about talking about tough
issues openly, how come the boss refuses to discuss the stupid decisions
he was involved in three years ago.
Underlying limit here is the fear to being vulnerable
because when we're honest, we're vulnerable.
For people to be develop personal initiative to a
transformational initiative, they need to be able to reflect openly
about their own personal values and aims. Their ability to do this
depends on trust. The reflection that matters occurs publicly. To
engage in reflective conversations that test each others attitudes
and assumptions openly, people need to feel safe. This safety is affected
to the extent that mgmt is seen as walking the talk. Change initiatives
require people to look at themselves much more than those around them.
If people at all levels don't do this as individuals then we
won't be able to develop high alignment of personal and organizational
Strategies for meeting the Challenge of Walking the Talk by fostering
Clarity and Credibility of Management's Values and Aims.
- Don't go it alone. We all have blind spots that limit our
credibility and our ability to generate safety and trust in others.
We cannot see our blind spots. Have genuine partners: inside/outside.
A thinking partner. Someone who can challenge your thinking, your
assumptions. Mainly a partner is ruthlessly compassionate, telling
you what you really need to hear but might have the most difficulty
acknowledging. Leaders without partners are dangerous to themselves,
to others and to their dreams.
- Look at your own expectations of people. Changing your assumptions
about people can lead to dramatic surprises.
- Those positions as nobody knows quite how to address the problem
areas and in doing this, the organization becomes more and more dysfunctional.
- Be easier to move people laterally and make better use of their talents.
- Engagement: was very little belief in the beginning that transformation
would last. People expected that they would have to attend a few meetings
about vision and values and that it would all pass with very little
effect on anybody or anything in the end.
- Meanwhile at the top, we communicated a vision and a set of values
and began to communicate them to our 22,000 people. We felt if we could
explain our ideas clearly enough in one-way communication, then our
success could be assured. But I don't think transformational leadership
works that way. Engagement is a process of listening TO people, not
communicating AT them. 18 mths. Into the process, it began to dawn on
the members of the leadership council that we didn't have the
basic skills of listening to the people and allow them to make an impression
on us. It took a series of deep reflective meetings to learn to listen
more effectively. As that happened, people began to trust us more. I
began to hear talk of transformational change at offshore drilling base
camps or at refineries. Didn't happen in a clean, crisp way. We
penetrated in a jagged, messy way into the organization.
- Many of the most difficult things you have to face you fear because
you have been trained to fear them in the old culture. Learning to expose
your failures is one of the most liberating parts of the old journey.
If we are not expected to be perfect, then so many new things are possible.
Then stubbing your toe is not so painful. You can stand up and say,
I stubbed my toe and now I am going to stand up and do something different.
- Is it possible that Shell will return to a paternalistically, homogenous,
centrally controlled society? It might/ But after 6 yrs. it will be
hard to put the toothpaste back in the tube. The changes have made Shell
an employer of choice.
* * *
Challenges involved in Sustaining a Learning
or Change Initiative
As the seedlings of profound change begin to take root, your difficulties
really begin. They come into contact with new features of their environment.
There are predators, rivals and other life forms within the organization
that will resist the prescence of a new entity. Now your challenge is
to maintain life over a period of not a few months but a few years. You
can't ignore the environment. Must carve out an identity for your
pilot group within it. Now your concerns move to boundaries. Internal
boundaries: the individual thoughts and feelings of members of the team.
Also broach the external boundaries of the team: dealing with organizational
culture. Can no longer keep your group from the larger scale priorities
of your company, from it's values, from it's ways of measuring
success and from it's members attitudes from you. Hence, the next
5) Challenge of Fear and Anxiety:
triggered by openness and candidness of the pilot group
6) Challenge of Assessment and Measurement:
gap between your initiative and the organization's way
of measuring results
7) Challenge of True-believers and Non-believers:
tendency to fall into an escalation of perceived threat
and siege mentality
Challenge of Fear and Anxiety (opening by Peter
People don't really know that they should be fearful. Takes a while
for people to realize that they have to go inside and get personal. When
a pilot group begins to develop the capacity for real conversation, for
exploration of deeper issues, for seeing the systemic causes of problems,
there is fear that begins to develop. Fear is not unhealthy. It is a very
healthy part of the learning process. What is important is how we deal
with the fear.
Fred Kaufman: used this analogy: It's like lowering the water level.
When you begin to lower the water level in a lake, rocks start to show
up. There were down there all along, but you didn't see them. There's
a good reason people aren't talking about real issues.
Undiscussable issues are often not dealt with or brought
to the surface. Challenge of fear and anxiety is a very real one and one
which will emerge in any group that is committed to developing learning
capabilities. The question is, are we prepared to deal with it? What happens
to us when we start to encounter the anxiety? Most of us tend to run.
A lot of CEO's and others responsible for change initiatives are
willing to deal with "outside" or external issues but not
prepared to bring it deeper on a personal level and see how our deeper
issues and assumptions affect our team, our interactions and quality of
The underlying constraint is the level of trust. People can confront a
high level of fear and anxiety if they really trust one another but trust
in this sense is a rare commodity. Chris Arygyis said, "The ultimate
measure of trust is can I put my wellbeing in the trust of another"
That is a level of trust very rare in a business environment. (Rockclimbing
metaphor or other team initiatives were that evolves over a short period
This challenge only unfolds as the waterline begins to expose
the deeper issues. At that point, the initiative can come to an abrupt
change if the change is unable to deal with this challenge.
It manifests in diverse symptoms. People express their
defensiveness in so many different ways: there is Forthright negation:
this learning stuff is a waste of time: we're not here for therapy,
we're here to serve customers. Objection to it's ambiguity
and alleged side affects: You've got to be kidding me, this stuff
is out of control, besides raising all these negative issues only demoralizes
people. [YUKO's LEAVING CREATING... HAD TO DO WITH THIS CHALLENGE
OF FEAR AND ANXIETY -- when the work got tough and the deep issues began
to emerge, she bailed/ I forced the issue be addressed rather than go
underwater again as I knew that if this were not addressed and growth
come from it, the dysfunctionality would start and never stop or at least
be harder to stop later on.] There is superficial support: this learning
stuff is very interesting. It reminds me of stuff I studied in school.
But in private, the same person says, but it has nothing to do with the
business. And there is silent. People are afraid to say anything that
goes counter to the partyline.
What you have to do at minimum to deal with this
1. Listen deeply to what is being said or not said and
how it is being said.
2. Leaders must listen to the music behind the words.
Underneath these defensive behaviors are recurring
questions that arise for us all in the context
of deep change that may not come to the surface easily.
- Are we safe?
- Are we vulnerable? People sometimes put on their corporate
mask or persona when they come into the office. Now they are being asked
to take off that mask and reveal their true reactions. Ie. To express
disagreement with the boss if they feel it in a constructive manner.
How can they be sure if they speak openly now, that it won't be
used against them later? How do they do they know they won't be
- Are we adequate? Do we measure up? People learn to succeed
by playing the game. When the game changes, people wonder if their lack
of competency will be exposed. They know they can put on a good slide
show but they are unsure whether they can collaborate or reliably produce
real time business results. If they fear they can produce under the
new rules, then they fear their career is under jeopardy.
- Can we trust ourselves? Can we trust others? Value of
treating people with respect and grace. But they know they can't
always control their temper or abusesiveness. May not trust themselves
or others fully. May think it is only time for these old ways to resurface.
Effective openness does not just happen with intent. It takes real skill.
For example, raising difficult issues without invoking defensiveness
is a highly skillful behavior. The general level of skill and capacity
for openness depends on the overall feeling of safety the pilot group
creates for itself. Psychological safety requires creating a balance
of aspiration and trepidation. Aspiration drives learning.
(i.e. build new business capabilities to serve customer needs, to shorten
time to market through increasing intelligence rather than through increasing
effort). But if people feel their well being is at stake, they may be
unwilling to go forward.
Strategies to deal with the Challenge of Fear
deal with this challenge can be gained in two ways:
1. Accelerate the development of safety and the capacity
2. Can weaken the consequences of fear and anxiety when
- Start small and build momentum. Take small fears and anxieties before
leaping off a cliff to deal with major business blunders in public for
- Avoid frontal assaults: fear can't be commanded or exhorted
away (Walker-11 yrs. old-crying: asked why are you crying? I don't
know. Then stop crying. You can't cry if you don't have
a reason or can't say.) Nor can safety be mandated. Only way to
sustain an environment of safety is to create an environment condusive
to it in which people feel gradually more mutuality and trust with one
another. It takes time and dedication to develop these which is why
in most organizations fear and anxiety are so prevalent. Set an example
of openness. Most effective use of hierarachal power is for leaders
to become role models of openness. Vulnerability is a very important
quality in leadership says Phil Carrol. If you don't have a fundamental
commitment to the truth and to telling the truth, you can't lead.
And telling the truth is so much more difficult than just not lying.
- Learn to see diversity as an asset. Acknowledge and respect the different
learning styles, views that different people will bring. Allow those
that support and those that are cynical to express their opinions. This
will increase trust in leadership and in each other.
- Use breakdowns as opportunities for learning. Unanticipated breakdowns
offer a unique opportunity for leaders to demonstrate real trust. When
people see they are not punished when a breakdown occurs, that there
is a genuine willingness to share responsibility and a genuine curiosity
to see how we can do better in the future, it sends a message of real
trust. In the Quality movement, a defect is seen as a treasure. Real
learning occurs when we can see the source of our errors.
- Do everything possible to see that participation in pilot groups
is a matter of choice and not coercion. Safety and trust are perceived
by choice. Allow people to talk about their real reservations.
Skills matter. Offer the training for people to develop the skills of
openness. May also need support to deal with those around them who don't
want them to change. (A change initiative at Digital Equipment Corp.
in 80's, a number of abrasive, withdrawn engineers became more
communicative and responsive. HR mgr began getting calls from their
spouses. Stop messing around with my husband. He keeps coming home and
asking how I'm feeling. He's being nosy. I want you to snap
him back to the way he was. (HEM: not wanting anything to change-for
our spouses to stay forever the same).
- As a mgr work to develop a common frame around vision and current
reality. Let people know that you recognize the gap where we want to
be and where we are. Take modest steps. Let people know that you know
it will take time. Much less anxiety provoking than a boss that says,
everything has got to change. Consult with them on how to judge success
and failure and how to look for signs of success. Let them know you
expect steady progress but that you know that there will be setbacks.
- Remind people that fear and anxiety are normal.
- Learning by definition means being uncertain and figuring things
out as you go along. If you feel comfortable, it probably means you
are doing it wrong.
Essay: GRAY STAMPS by Rick Ross: far reaching effects of
fear and anxiety
Have you ever been asked your opininon about something at work, only
to discover later that the decision had already been made and it was
an insincere attempt to practice participative management. The feeling
it leaves you with is anger, tricked and you put a gray stamp in your
box for that person. Gray stamps, a concept evolved from transactional
analysis are an all too common checkmark people collect from all the
petty betrayals that we bury within ourselves.
Negatively charged emotions include fury, upset, frustration. They
can't dump it on the person who provoked it and they can't
forget it.So they save up gray stamps instead. Enough gray stamps equals
a book entitling s.b. to a guilt free act of abusiveness toward someone
else. Gray stamps are negotiable. You can build them up at work and
cash them in at home at the expense of the kid, dog and spouse. Then
they too collect gray stamps. Sometimes a gray stamp is based on so
pernicious an act that it gets a name on it and is reserved for that
person only. 6 mths go by and in a meeting you let loose with a vile
comment toward that person. The person feels stabbed and everyone around
you wonders whats going on. You've just cashed in your gray stamp.
Gray stamps are not healthy for individuals but they are downright deadly
for organizations, particularly in the area of change initiatives. Can
linger for years. What can you do about it?
- Recognize it.
- Learn to talk through your gray stamps openly. Be courageous and
- Learn skills of reflection and inquiry. Without them you will drown
in a sea of gray stamps and never be able to overcome the challenge
of fear and anxiety.
Challenge of Assessment and Measurement
Better mousetrap theory: if I build a better mousetrap, the world will
be a path to my door. If what I'm doing works, everyone will be
interested in it. Countless ex's of the opposite. Art Kleiners
Book, The Age of Heretics tells story after story of successful innovations
and the people found themselves totally unwelcomed by the larger organization.
What's going on here?
Results do not speak for themselves.
- Problem of delay: Most of the most important results show up years
after the innovative practices that led to those results were innovated.
Meantime the innovators are at risk because what they've done
looks really different. Moreover those people are operating in an environment
that want results yesterday. Phil O'Brien said, "Mgrs always
want to pull up the radishes to see how they are growing". Our
whole assessment apparatus in business are not designed to include delay.
- Innovation is complex. Many things are changing and you get a lot
of different results. Some are worse.One company whose pilot group was
making all these change requests received really hard feedback simply
because they were being more open. Most are afraid of looking bad.
- Many organizations are running a metrics analysis that are simply
inappropriate and nobody is asking the questions if the metric is the
problem. (I.e. Property and liability company: we started to develop
a systems theory to leverage long term profitability in the business.
The essence of the insight came down to something very simple. The company
had simply underinvested in skilled adjustors. Claims adjusting used
to be a highly skilled job. It is poor adjusting that sets the stage
for all the litigation. Our strategy was a long term investment in building
adjustor capacity; skills, knowledge, support and pay. To reestablish
claims adjusting as a real profession. Consequences we believed was
that litigation cost and settlement costs would come down dramatically.
We believed the investment would be more than payed for in the savings
of those other costs. At end of the presentation, the VP's looked
at the Claims VP and asked, "what will that do your expense ratio.
An expense ratio is a metric of how much money is being spent on salary
and direct costs of the claims adjustors compared to total premium value.
The VP said, it will go up. The other VP looked at him and said, don't
you already have a higher expense ratio than any of our other competitors.
The meeting ended at that point. That metric ended the case. It is those
metrics that make and break careers.
It is actually impossible for local line leaders to criticize metrics
in force. This is an area where executive leadership is necessary. But
very few executives are involved in this area.
Tom: Toyota and Sconnia (Swedish car co.) took a different approach
to metrics led by the executives that made a huge difference because
it was one of the highest leverage areas where leaders could make a
Two limiting processes at work in this challenge: one within pilot
group/one within larger organization. Both involve business results
or the lack thereof.
- Time delays-from few months to few years. If these visible improvements
lie too far behind expectations, then people within the team begin to
say, we've been trying this for weeks; what do we have to show
for it. How we continue to justify the time we are showing for it. May
not have expected a miracle but the gap created by the delay has raised
their concerns. Some pilot group members will have no problem being
patient. They see tangible changes in business practices and they are
confident that results will follow. Others are less patient and begin
to Q gaps more quickly.Their negative assessment undermine the credibility
of the initiative.
- Within the larger organization: Side effects of the initiative appear
as negative results on the traditional metrics in use. People within
the team see the results as natural consequences of their efforts. I.e.
# of customer complaints might rise looking like a visible sign of crisis
but actually reflecting that complaints are gathered more accuragtely
and attended to in a more timely fashion. But for those looking from
the outside not having a big picture, these metrics appear as signs
of problems not progress. People throughout organization conclude that
things are worse.
Strategies include accepting high leverage changes in the underlying
limits of time horizons; on changes in traditional metrics; on building
the assessment capabilities of innovation teams so they can both measure
their progress and better communicate progress outside the team.
- Learn to appreciate the time delays inherent in profound change
- Don't judge the success or failure of your efforts on early
results. Developing new capabilities is a matter of practice; of new
tools and methods over a course of years. Line leaders and executives
have a great deal of leverage in managing expectations, leverage that
they don't use. Mgrs are often their own worse enemy:promising
better results than they need to thus reinforcing the expectoation of
quick fixes. Miss the leverage in helping people understand the reality
of gestation periods.
- Build a partnership with executive leaders around assessing the assessment
processes. As Ford's Quality Strategy Director Edward Baker notes
-conventional measurements present a trap that can kill change in learning
initiatives by requiring them to report their results that can hamstring
innovation. This challenge involves changing or at least
- Learn to recognize and appreciate progress as it occurs. One of the
most important tasks of teams involved in change is that they are making
progress. To help people guage their progress, establish interim short-term
targets. These might be modest. Increased openness with key suppliers
for ex/ but they will be meaningful b/c they will allow patience to
follow with long term goals.
- Make assessments and ability to assess a priority among advocates
of change. Learning to assess the consequences of significant change
initiative is a complex new territory often neglected by leaders of
those changes. This implicitly forces those who may be negative toward
those initiatives to bare responsibility for the measurement
- Raise conversations early on about the criteria that determine success
or failure. What is the appropriate amt. Of time before you see results.
How will you know if you have won or lost. Much ground to be won by
making these explicit grounds for conversation both among the pilot
team and among leaders who oversee the efforts. Managing up the hierarchy
this way can lay a frame for partnership in assessing as a project unfolds
- Link business literacy to new thinking about the numbers. A business
literacy or open book mgmt initiative can help break that habit by raising
awareness of the many types of measurements to make and how they fit
the goals of the pilot group and the whole organization.
Track 12:00:00 Thomas Johnson, Portland University
Professor, co-author of Relevance Lost
Moving Upstream: Essay by an Accountant
Companies of the early 1900's were bleeding red. Gave away vital
markets and technology, yet expected growth. Overhead costs had risen
but were allocated so they could not be seen. Activity based Costing (ABC)
distinguished costs which were more meaningful to improving production.
Costs of Machine set up, quality inspections could be spelled out and
could give producers more clarity about where costs were coming from-sources
of their expenses. Relevance Lost.
When you organize your work around quality, you don't
need to worry about costs. Cost savings came from the way companies organized
work. Mistakes were easy to identify. Workers brain power. Drawn to work
of Edward Deming. Toyotas working costs were a fraction of the US companies.
Production systems and use of workers brain power made it easy to find
errors and make improvements. Relevance Regained.
Toyota's decision making is not based on the accounting
information but on the flow of work. When Toyota opened the Georgetown
US Plant, about 300 Japanese spent one year there shadowing workers...Started
looking for the underlying assumptions behind traditional measurement
methods. I was drawn to epistemologist Gregory Bateson . Most problems
stem from the difference between the way people work and the way nature
works. Nature deals with the patterns that connect, not with quantification.
People did not quantify their world. Aristotle's days deal with
quanitfication as comparisons. Galileo Galilee gave us the concept of
measurement. Motion could be measured against the scale. From there to
Descarte, the Cartesian coordinates to Newton- separate parts... steam
engines, high rises were some of the benefits. Practice of measurement
over time leads to mechanistic thinking over time and a fragmented look
at work. Quantifying instruments has become accustomed to conscious purposes.
Nature has no ends. It builds continuously on the interplay of evolution
and biology. In work by contrast, based on measurement, the ends justify
any perversion of the means because information about the way in which
things get done and about how people get work do not show up in the measurements.
WE've got a gut sense that discovering and embodying nature's
patterns is the essence of our being and our core work as human beings.
Means are the ends in their making. Given the right means,
the ends take care of themselves. Marken Walleby went into shops to listen
to the music. He could distinguish harmony from discord. You must be able
to develop the capability to continually evaluate and improve your thinking
about assessment. How do you know you have chosen the right elements to
measure and that you have weighted them effectively. If the assumptions
you put into the measurement are false, how do come to recognize the problem.
Although nature does not quantify, nature does count. I do not recommend
not quanitifying. But when measurement becomes a tool for fragmenting
our understanding and assessing one process or one person as better than
another based on some objective scale-then it is inherently unnatural.
How are we doing? This question is never answered in
terms of quantities.
Toyota: Everyone knows by sight and sound if something
is amiss. People inform one another not through numbers but through stories.
There is standarization, but it is inherently flexible. People are always
thinking about how to reshape the work. Since people are the measurement
system, great attention is paid to treating the people very well and respecting
them. Jobs are varied to keep people alert. There are ergonomics specialists
to check stress levels. If someone reports feeling uncomfortable, that
indicates that there is something wrong with the process. Measurement
should flow with the natural flow of sensibility. As Gregory Bateson might
have put it:
Are we undoing the way that mechanization makes us to think? Are we putting
in a deeper appreciation of the way in which nature works? Quality, learning
and performance are facets of the same reality!
* * *
Challenge of Believers and Non-believers
as they proceed, more distance they are becoming from rest of workforce
and often they
are not aware of this. Increased frustration with bigger
Paradox of the
challenge of believers and non-believers is that the bigger the changes
going on in a pilot
group, the more at risk they are of these dynamics.
- Exhibiting new behaviours that are threatening to others. Using jargon
and a language others don't understand. Jargon threatens people.
S.t's been identified as cults by the outside of organization.
- Some outsiders are curious about what is going on. Those threatened
on outside are asking accusatory questions. Cause the group to become
defensive and s.t's develop a siege mentality. Becomes part of
a vicious cycle. A death spiral-explains why so many innovators find
themselves into a corner or out of the organizations. Paradoxically,
the more successful they are, the more convinced they are they have
the right answer and the more they plant the seed of defensiveness and
attack. Humility is the key!! Without adequate humility, success will
breed arrogance and this is what is potentially threatening and unattractive
to others. Favorite philosophers: Eric Hoffer The True Believer: Roots
of fanaticism: are certainty. Once we become certain, we become a zealot,
we become closed.
2 primary underlying limits lie behind this challenge:
1. Cultural flexibility within the organization
2. Reflective openness within the pilot team
* * *
Developing cultural flexibility is critical but takes
a long time.
Reflective openness represents the capacity of people to continually question
their own assumptions. Greatest safeguard against certainty and arrogance.
To what extent, no matter how successful a team is, can they continually
challenge their own thinking. To what extent can they hear from other
outsiders as possible sources for their own learning. To what extent are
they skeptical, particularly with their own set of ideas, about why things
are the way they are.
Nurturing reflective openness also represents an important strategy for
leaders who strive to balance passionate commitment to new innovations
with respect for the mainstream culture and the ways of doing things.
Not easy to find leverage.
- Become bi-cultural within your organization. Most effective local
leaders live in two worlds-within their pilot innovative culture and
within mainstream culture. Innovators need incubation. Value experience
that resides in the mainstream culture.
Must become adept at crossing the divides that exist between the two
worlds. Operate on their bosses terms when they are dealing with him/her.
Develop their awareness of when they are in which domain. I.e. Stealth
Transformation: aim was to keep transformative efforts in his facility
below the corporate radar level. When he reported up the hierarchy,
he made every attempt to measure using the same results used across
the organization. Goals aligned with organizations. Didn't talk
about the innovative areas unless someone asked about it.
- Having mentors is so valuable. Unintended misconceptions. Can help
local leaders know when outsiders are asking helpful Q's. Encourage
peers to learn from one another.
- Respect peoples inhibitions about personal change. Many pilot group
members also need to learn others people inhibitions about personal
change. Tacit messages that "You must change to" are unwelcomed.
Wonder if st is wrong with them.
We're here now. We're not at the Lake Resort. SO, don't
throw st others haven't experienced into their faces-they won't
understand and may feel threatened. If you can tell your story of your
teams efforts showing that you understand how it is seen from a variety
of perspectives,then you have gone a long way to breaking through the
challenge of believers and non-believers, while keeping your aspirations
- Deploy language consciously. Exclusion happens by using language others
don't understand. One's jargon is hard to recognize-take
them for granted. Unaware they are speaking in tongues. Developing awareness
of one's language is a powerful strategy to becoming bi-cultural.
- Ary Dehois, The Living Company: A strong sense of identity: knowledge
of who they are as a company is based on common values. Provides a stable
foundation that paradoxically makes the organization more flexible.
Edgar Shein, Essay called How to Set The Stage For Organizational
- Cannot create a new culture. Can immerse yourself in a culture, your
own or someone elses until you understand it. Then you can propose new
values or suggest doing new things and articulate new governing ideas.
These actions will set the stage for new behaviour. If people who adopt
those new behaviours think it helps them operate better, they may try
it again. And after many more tries and 5-10 yrs of experience, the
organizational culture may embody a different set of assumptions and
a different way of looking at things than before. Even then, you haven't
changed the culture. You've set the stage for the culture to evolve.
Process may seem slow and uncertain but preferably to the Al Dunlaps
wholesale strategy, which creates culture destruction amid an atmosphere
of crisis and resentment and backlash. They get rid of top level of
management and install a new set of rules. Still have not created a
new culture, only destroyed an old one.
- A culture is a pattern of basic shared assumptions that have been
learned by the members of their group. Stem from people's experience
as they do their business over and over again. Cultures resist change
as it is an attack against one's own values.
- Accurate diagnosis of your culture requires a look from 10-50 people
, ideally chosen to represent a cross-section of your organization that
relates to a problem at hand.
- Questions to help clarify your thinking as a preparatory inquiry
before you move into working with a group. Be aware that your preconceptions,
no matter how well informed may be wrong.
- What is your purpose? Why do you need to change your culture at
Try to articulate the concrete business problems that have brought
you to a cultural impasse. What will learning or openness get you?
More closely you can articulate the forces compelling you to change,
the more capable you will be at discerning the shared assumptions
that no longer seem to fit reality. So why do you want to change?
- What are the visible artifacts of your culture? Observable signals
of the organizations way of life. Simply list or name the artifacts.
Next, try to establish the reason which underlies the artifacts.
What has led the people of this organization to do things this way?
Some ex's of espoused values: We value problem-solving rather
than formal authority. We think a lot of communication is a good
thing. Or We don't think bosses should have a lot more rights
than subordinates.What are some of the espoused values of your organization.?
- Look for inconsistencies in the artifacts and the espoused values.
Your challenge is to bring to the surface the attitudes that trigger
the, "You can't be serious" knee-jerk reflexes.
The following questions may be helpful as you proceed:
- How does your culture define truth? At DEC,
truth was decided by argument. At C-Begaigi, qualifications
were how truth was defined.
- What does your culture believe about human nature?
About best way to organize time, place, authority, openness?
- Consider the bottom line issues that brought
to this inquiry in the first place? What results and new ways
of thinking do you want to create? Which characteristics of
the culture, especially cultural assumptions are likely to hinder
the change? Which characteristics are likely to help?
- In order to develop the results you want to
develop, what attitudes have to shift? How much of a change
of viewpoint would that require? From average employee? Manager?
How would their self-imageshift? How would their concept of
the place in the organization shift?
Change leaders who want to create a change initiative in their organization
tend to minimize the adjustment that is needed. They downplay it and
assume the adjustments will not be difficult. Then they get angry when
they discover that people aren't adjusting so easily. Hard for
insiders to see both their strengths and limitations. Usually teams
of insiders and outsiders work together, especially at the beginning
to get things moving. Outsider-OD professional from one part of the
organization can serve. Culture is complex, powerful, deep and stable.
If you think clearly about it and understand it's dynamics, it
can be evolved.
Challenges of Redesigning and Rethinking the Organization
Concerns fundamental issues facing all industrial age organizations
for which imaginative, courageous leadership is needed.
Challenge of Governance: Who's in Charge
of This Stuff?
Challenge of Diffusion: We keep reinventing
Challenge of Strategy and Purpose: Where are
In practice there are two kinds of organizational design:
Formal Design involves the conscious intentional
architecture of organizations: the design of guiding ideas and strategies,
established structures, policies and rules.
Emergent Design is more natural. It represents
the way people naturally reconstruct and recreate an organization
as they live in it.
*Real challenge is to make formal and emergent designs
harmonious which will help overcome the challenges of rethinking and redesign.
Material is more speculative than other challenges.
Overview by Peter Senge on the Challenge of
- Some degree of autonomy is required for innovation
- How much autonomy can a company tolerate? Dilemma of goverance is
how to strike a balance between freedom and coherence.
- What is governance? To govern is to orient or to steer. Controlling
is a second definition. Bill O'Brien says the fundamental problem
with most corporations in the US is that they are governed by inadequate
- What would it mean to begin running an organization by developing
governing principles that really matter to us?
- VISA international is largest corporation in the world-Constitution
is based on a set of governing rules. Took 2 years to hammer out a statement
of purpose and a set of guiding values. Their purpose is to be the premiere
system for the exchange of value.
Also governed by a set of values.
- Power is constantly in the hands of a small group of individuals.
Essence of a true democratic system is that you reverse it. Power lies
in the ideas.
- Pilot group as they self-determine might expect to have all kinds
of powers. However the larger organization may not support the new found
desire and expectation for autonomy of the pilot group and may come
down with restrictions. Conflict results. Both assume the other doesn't
understand. Result is less motivation and enthusiasm. Pilot group looks
less attractive to its members, esp. to potentially new members.
- Underlying limit is the organizations tolerance for independent self-governance.
How flexible are self-governance systems in allowing more decision making
authority to migrate to capable local units? How capable is the organizations
management in dealing with creative, self-confident local units. How
able and willing is the organization in assessing the capability of
the pilot groups ability to self-manage effectively?
- Another problem of governance can occur if and when a pilot group
expands the scope of its initiatives. May find itself at odds with other
groups or senior mgmt. Senior mgmt. May not be ready for pilot groups
to expand the scope of their initiative across internal boundaries especially
if they have seen other pilot groups who achieved success within their
group but cause problems for other groups.
- Consequences: little lasting change occurs if:only limited local
innovative teams succeed in developing new capabilities. Little lasting
change occurs if only courageous executives implement more flexible
goverance mechanisms. Either both must occur or the status quo is likely
to prevail. Local and executive strategies are both necessary to bring
Strategies for Pilot Group Members:
- Learn to deal with actual and potential conflicts early on can be
vital for local line leaders
- Pay attention to your boundaries and be strategic when crossing them.
Will need sponsors with authority to carry your plan to fruition.
- Don't short change your vision but recognize that part of the
task of expanding your vision is finding links into the existing governancestructure
which will mean expanding the scope of your influence rung by rung as
you build credibility and capability.
- Invite the people from the other group to a meeting or a meal and
lay open the reasons for your project to them. We have this project
in mind and they overlap with your area in these ways. Then ask them,
what is your reaction? What can and can't we do from your perspective?
Articulate a clear and compelling business case with regards to results.
Work from outside in: meeting outside market demands and competitive
- Make executive leaders priorities, part of your teams creative abilities.Develop
the ability to understand and internalize the pressures that senior
executives feel and the opportunities they perceive.
- Avoid the tendency to attribute resistance to anybody's personalty.
Look for systemic causes instead. This may mean interviewing executive
leaders about what keeps them awake at night, particularly where the
problems occur with the boundaries or connection points in the current
- Recognize the leaders concerns about balancing immediate business
quarterly perforamance with long term growth.
- Experiment with cross-functioning, cross-boundaries teams if you
can get them sponsored by the hierarchy. Can be a good mechanism to
demonstrate the value of new forms of governance.
- Avoid of creating any permanent matrix or other structure that could
- Demonstrate results first and later negotiate a transition from the
temporary cross-funcitional group to something more permanent.
- Are two power structures within the organization: the top down formal
authority of top management and the bottom up informal authority of
pilot groups where new projects and processes were being invented. Neither
form of authority can be overcome through brute opposition and neither
can be neglected. The ongoing challenge is to get the two structures
Strategies for Executives when dealing with
the challenge of redesign:
- Begin at the beginning with governing ideas. We hold these truths
to be self-evident
- A set of governing ideas that do not evoke passion, that do not inspire
imagination and excitement can never be the basis for an organization
worthy of peoples commitment. Two key governing ideas we have seen articulated
in many settings are Localness (encourages local individual decision
making) and merit (criteria for good decision making is based on what
benefits the company as a whole). Tension created by this juxtaposition
requires leaders at all levels to wrestle with tradeoffs, rather than
leaving top management to align global and local interests.
Deploy new rules and regulations judiciously. Rules change behavior says
Donella Meadows, Systems writer. Power over rules is real power. If you
want to understand the deepest malfunctions of systems, pay attention
to the rules and who has power over them. Those with power over the rules
have special responsibilities. Yet executive power to reorganize and change
governance systems is often exercised with little attention to the many
effects on many people. People who complain that all the reorganizing
within some organizations is all a power game, they may be correct. Never
underestimate the power of small changes in complex situations, if they
are the right changes.
- Everyone involved must be
prepared for an ardous journey and don't embark alone.
Real change in governance structures is connected to capacity building
and this takes time. NO less than a year and often much longer. Coming
to real consensus on purpose, principles and structures is the hardest
work you will ever do. Pointless to start out without some staunch partners.
Be prepared to receive and feel an incredible amount of emotional heat.
Shifting to a much less authoritarian governance structure can involve
a great internal shift as occurs when giving up control.
Many in positions of hierarchical authority find that they must confront
complex reactions from within the organization. Some mgrs will resist
if they will lose any control. No substitute for patience and perseverance
along with compassion for those who seem to not be on board.
- Jack Stack:The Great Game of Business and the CEO of the Springfield
Manufacturing Plant. Essay: The Community
- 1981, a group of Harvesters managers enginnered a leveraged buyout
of a troubled truck engine remanufacturing plant in Springfield, Missouri.
Called new company The Springfield Manufacturing Plant: Missouri was
a great place to live. No way we could payback our debt load unless
everyone in the company understood the fundamentals in the business
and had a stake in our financial success. Thus we greated the Great
Game of Business. Second, we put every employee into an employee stock
ownership plan, ESOP. Had no idea what we were doing. At first we wanted
to provide every staff with stock. S.b. told us no bank will loan money
to 300 people. So, we said, let's go public. But would have cost
$250,000 in filing fees and expenses. ESOP was last opportunity. By
1988, we were up to $40,000,000 in sales after diversifying and buying
an auto parts business to help carry us through recessions when people
keep their cars but need parts. Company was privately owned with 15%
of the shares owned by the staff and the rest managed by the managers.
Value of our shares were high, morale was great...Steve Shadwick,
a mgr was retiring one day –where's the money going to come
from selling back all our stocks? We ran the numbers. Turned out we'd
have to sell the company to be able to pay back all our stock options.
Did we want to sell or to turn the company over to our employees, our
kids... Ultimately decided we didn't want to sell. Why don't
we begin to build mini-companies with limited liability corporations
- A group suggested getting into a new line of business-rebuilding
and reselling the recooling systems and engines we'd been discarding.
WE invited them to create a business out of it. We gave them 22% of
the new company in return for their fulltime sweat equity and Springfield
kept a majority interest of 78%. Explicitly stated we might sell our
shares at any time. Invested 67,000 plus our expertise. The new company,
Engines Plus started with about $286,000. Grew to be worth about $2,000,000.
- Accidentally,we had worked out a perennial problem of industrial
society. There is not room in the hierarchy for all the people who have
worked long enough to be chiefs. In effect, we'd become our own
venture capitalists.We wanted to build up companies with equity ownership.
The financial aspect of ownership wasn't as important as the freedom
to make their own decisions. Did excellent jobs.
* * *
The Challenge of Diffusion: We keep on reinventing
- Symptoms are that there are no systems: nobody is worried about it:
Sherlock Holmes story: Sherlock turns to Watson: then there was the
curious incident of the barking dog. And Watson says, "What barking
dog?" There was no barking dog. I didn't hear anything.
Nobody heard anything. And Sherlock responds, "And that was what
- I don't know what we need to do in this organization to learn
from each other. Yet we keep on reinventing the wheel.
- Research on Communities of Practice- a phrase that has come to mean
the informal networks in organizations.
- No set of rules could be effective for a human community to produce
outcomes it seeks to produce. Cannot reduce knowledge to rules.
- New practices always diffuse through informal networks, not through
a list of rules. Knowledge diffuses through people helping each other
solve in solving their issues, through people coming together and trying
to produce something. Diffuses through the Communities of Practice.
- Internal community builders are a critical type of leader in organizations,
precisely because of the challenge of diffusion. They are the masters
of the nurturing and continuing enhancing communities of practice.