Chapter 15: Leading Change
YOUR LEADERSHIP CHALLENGE
After reading this chapter, you should be able to:
- Recognize the environmental forces creating a need for change in today’s organizations.
- Describe the qualities of a change leader and how leaders can serve as role models for change.
- Implement the eight-stage model of planned change.
- Use appreciative inquiry to engage people in creating change by focusing on the positive and learning from success.
- Apply techniques of enabling immersion, facilitating brainstorming, promoting lateral thinking, allowing pauses, and nurturing creative intuition to expand your own and others’ creativity and facilitate organizational innovation.
- Provide a positive emotional attractor, supportive relationships, repetition of new behaviors, participation and involvement, and after-action reviews to overcome resistance and help people change.
CHAPTER OUTLINE
464 Leadership Means Leading Change 467 A Framework for Change 469 Using Appreciative Inquiry 473 Leading Creativity for Change 481 Implementing Change
In the Lead 466 Michelle Rhee, Washington, D., Public School System
472 The Red Team 484 Jon Fairest, Sanofi Canada Leader’s Self-Insight 466 Resistance to Change 470 Are You a Change Leader? 477 Do You Have a Creative Personality? Leader’s Bookshelf 473 Switch: How to Change Things When Change Is Hard
Leadership at Work 487 Organizational Change Role Play
Leadership Development: Cases for Analysis 488 ‘‘From This Point On.. .’’ 489 Riverside Pediatric Associates
M
arvin Ellison, the current CEO of J. Penney, recently told a group of executives attending the Women’s Wear Daily Apparel and Retail CEO Summit that Penney has moved past the stage of ‘‘patching holes’’ and is in solid rebuilding mode. Leaders have been working for several years to undo the damage that resulted from a turnaround strategy that almost killed the company. It’s a cautionary tale of just how difficult change can be. When Ron Johnson, a former Apple executive known for his creativity, was hired as CEO of Penney in the fall of 2011, hopes were high that he could breathe new life into the struggling retailer. Penney needed radical change, but Johnson’s approach to implementing changes doomed them almost from the start. Early in his tenure, Johnson threw a party to celebrate his plans for the company, a move that irked both employees and customers. He also began poking fun at the company’s traditional way of doing business almost from the moment he took the job. Employees felt that the new managers Johnson brought in ridiculed them and made them feel dumb and uninteresting. Johnson refused to listen to long-established leaders, customers, or employees and even shunned suggestions made by board members. He got rid of many of Penney’s long-standing processes and systems, radically redesigned many stores, and eliminated hundreds of brands, even running an Oscars ad telling
with less separation between management and workers. They did away with all the separate uniforms for electricians, fitters, operators, foremen, and so forth; elimi- nated the time clock for hourly workers; and got rid of the separate parking lot for managers. Each change was resisted. Employees said they liked the uniforms because they were less costly and identified who they were compared to wearing different clothes every day. Workers were strongly opposed to elimination of the time clock because, they said, ‘‘We won’t be able to prove we’ve been to work, so they’ll be able to cheat us on our pay.’’ They were suspicious that doing away with the managers’ car parking was so employees couldn’t see that managers could afford a new car every year. 6 If people resist changes designed to add value to their lives, imagine what it is like trying to implement changes that significantly shift their job responsibilities, task procedures, or work interactions! Leaders should be prepared for resistance and should find ways to enable people to see the value in changes that are needed for the organization to succeed. Later in this chapter, we will talk about how leaders can overcome resistance and help people successfully change.
15-1b The Leader as Change Agent
Change does not happen easily, but good leaders can facilitate needed changes to help the organization adapt to external threats and new opportunities. For people throughout the organization to view change as positive and natural, they need lead- ers who serve as role models for change and provide the motivation and communi- cation to keep change efforts moving forward. Research has identified some key characteristics of leaders who can accomplish successful change projects: 7
They define themselves as change leaders rather than as people who want to maintain the status quo.
They demonstrate courage.
EXHIBIT 15 Forces Driving the Need for Change Leadership
Technological advances
Increasing regulation Globalization
Social media and the information revolution
Economic turbulence
Shifting social attitudes
E-business and mobile commerce
Changing market forces
Need for change
NEW LEADER ACTION MEMO Complete the questions in Leader’s Leader’s Self-Insight 15 to see if you have a natural tendency to resist change.
CHAPTER 15 LEADING CHANGE 465
- They believe in employees’ capacity to assume responsibility.
- They can assimilate and articulate values that promote adaptability.
- They recognize and learn from their own mistakes.
- They are capable of managing complexity, uncertainty, and ambiguity.
- They have vision and can describe their vision for the future in vivid terms. Michelle Rhee, former chancellor of the Washington, D., public school system, provides a good example of the characteristics of a change leader.
Resistance to Change
Instructions: Please respond to each of the following items based on how you handle day-to-day issues in your life. Think carefully in order to be as accurate as possible.
Mostly False
Mostly True
I generally consider changes in my life to be a negative thing. ______ ______
When I am told of a change of plans, I may tense up a bit. ______ ______
Once I have made plans, I am not likely to change them. ______ ______
I often change my mind. ______ ______
Whenever my life fits a stable routine, I look for ways to change it. ______ ______
I feel less stress when things go according to plan. ______ ______
I sometimes avoid making personal changes even when the change would be good for me. ______ ______
My views are very consistent over time. ______ ______
I prefer a routine day to a day full of unexpected surprises. ______ ______
If I were informed of a significant change in my work, I would tighten up. ______ ______
When someone pressures me to change something, I tend to resist it. ______ ______
Once I have come to a conclusion, I stick to it. ______ ______
Scoring and Interpretation Give yourself one point for each Mostly True answer to items 1 to 3 and 6 to 12 and for each Mostly False to items 4 and 5. Everyone feels some resistance to change, but people do differ in their tolerance for frequent change. A higher score of 8 or above on this scale means you probably prefer a predictable and routine life. Frequent or dramatic changes at work may be difficult for you, probably creating feelings of resistance, stress, and tension. If you received a score of 5 or lower, your resistance to change may be low, so you probably find surprises and changes to be somewhat stimulating.
Source: Based on Shaul Oreg, ‘‘Resistance to Change: Developing an Individual Differences Measure,’’Journal of Applied Psychology88, no. 4 [2003], pp. 680–693. Used with permission.
####### IN THE LEAD
Michelle Rhee, Washington, D., Public School System Michelle Rhee, former chancellor of Washington, D., public schools and founder of StudentsFirst, is one of the most controversial figures in U. education, but love her or hate her you can’t say she’s afraid of change. A daughter of Korean immigrants, Rhee wanted to quit halfway through her first year in Teach for America, the organization we described in Chapter 1 that sends new college graduates into some of America’s toughest schools, but her father made her go back and finish the job. That’s where she first embarked on a personal mission to change the system for America’s poorest students. Rhee noticed that students responded to teachers who pushed them hard and kept them interested.
3 a compelling picture. People need a clear vision and strategy to inspire them to believe that a better future is possible and they can achieve it through their actions. The energy for true change comes from seeing how the change can be positive for individuals and the organization. Leaders create a picture that helps people understand why the organization is undertaking the effort and how the change will help it to achieve long-term goals. It’s also important to develop a strategy for achieving the vision and let people know how they fit into the big picture. 4, communicate, communicate. Leaders tell the message not just once but over and over again. Change throws everyone into doubt and uncertainty, and people don’t listen well when they feel anxious. Another point to remember is that actions speak louder than words. Change leaders model the new behaviors needed from employees. At Siemens, Peter LoLo ̈scher mapped the amount of time the company’s top executives spent with customers and presented it at the annual leadership conference. LoLo ̈scher was number 1, having spent 50 percent of his time with customers. He told people that had to change and that the rankings would be presented each year to see if people running the businesses were honoring the new focus on customer contact. 12 5 rid of obstacles and empower people to act. Leaders give people the time, knowledge, resources, and discretion to take steps and makethe change happen. This might mean revising structures, systems, or procedures that hinder or
EXHIBIT 15 The Eight-Stage Model of Planned Organizational Change
Light a ore for change
Get the right people on board
Paint a compelling picture
Communicate the change
Remove widely obstacles and empower people to act
Achieve and celebrate quick wins
Keep it moving
Make changes stick
Sources: Based on John P. Kotter ,Leading Change[Boston: Harvard Business School Press, 1996], p. 21.
468 PART 5THE LEADER AS SOCIAL ARCHITECT
undermine the change effort. After setting a vision and broad outline for change, Bill Glavin, former CEO of OppenheimerFunds, Inc., gave histeam members leeway to move forward with their own ideas for implementingdesired changes. Glavin said his approach was to meet with direct reports regularly and to ‘‘try to keep a light hand on the tiller.’’ 13 6 and celebrate quick wins. Unless people see positive results of their efforts, energy and motivation can wane during a major change project. To keep the momentum going, leaders identify some short-term accomplishments that people can recognize and celebrate. A highly visible and successful short- term accomplishment boosts the credibility of the change process and renews everyone’s enthusiasm and commitment. 7 it moving. Don’t get stuck on short-term wins. One study suggests that nearly 50 percent of all change initiatives crumble simply from lack of attention. 14 It’s important for leaders to build on the credibility of early accomplishments and keep the change process moving forward. At this stage, they confront and change any remaining issues, structures, or systems that are getting in the way of achieving the vision. 8 ways to make the changes stick. At this stage, leaders look for ways to institutionalize the new approach, striving to integrate the new values and patterns into everyone’s work habits. At Del-Air, a Florida heating,ventilation, and air conditioning contractor, managers linked a new GPS-enabled time-tracking system with the company’s bonus system. Employees who are more efficient with their time get rewarded for it. By integrating the change with the incentive system, managers made the new time-tracking system an accepted, integral part of everyone’s daily work. 15
Stages in the change process generally overlap, but each of these stages is impor- tant for successful change to occur. When dealing with a major change effort, leaders can use the eight-stage change process to provide a strong foundation for success.
15-3 USING APPRECIATIVE INQUIRYOne of the most exciting approaches to leading change is a process known as appreciative inquiry inquiry [AI]engages individuals, teams, or the entire organization in creating change by reinforcing positive messages and focusing on learning from success. 16 Rather than looking at a situation from the viewpoint of what is wrong and who is to blame for it, AI takes a positive, affirming approach by asking, ‘‘What is possible? What do we want to achieve?’’ For example, rather than looking at a problem such as decreasing sales, AI would investigate what makes sales increase. Appropriately framing a topic—to investigate what is right rather than what is wrong—is critical to the success of AI because it gets people away from blame, defensiveness, and denial and sets a positive framework for change. As David Cooperrider, cocreator of the AI methodology, puts it, ‘‘the more you study the true, the good, the better, the possible within living human systems, the more the capacity for positive transformation.’’ 17 AI can be applied on either a large or a small scale.
15-3a Applying Appreciative Inquiry on a Large Scale AI can accelerate large-scale organizational change by positively engaging a large group of people in the change process, including leaders and employees, as well as
NEW LEADER ACTION MEMO As a leader, you can develop the personal characteristics to be a change leader. To improve the success of a major change, you can follow the eight-stage model for leading change, remembering to devote the necessary time, energy, and resources to each stage.
NEW LEADER ACTION MEMO Answer the questions in Leader’s Leader’s Self-Insight 15 to see if you have what it takes to initiate changes and follow the eight-stage model of change.
Appreciative inquiry a technique for leading change that engages individ- uals, teams, or the entire organization by reinforcing positive messages and focus- ing on learning from success
CHAPTER 15 LEADING CHANGE 469
already exists. By allowing people to express their dreams for the future, AI inspires hope and energy for change. 3. The design stage formulates action plans for transforming dreams into reality. This involves people making decisions about what the organization needs to do in order to be what it wants to be. At American Express, people identified the values that would support the kind of culture they wanted, the leadership behaviors that would instill and support the values, and the structures, systems, and processes that would keep the new cultural values alive. 4. The final stage of AI is creating a destiny by translating the ideas identified in the previous stages into concrete action steps. This involves both celebrating the best of what exists and pushing forward to realize the dream by creating specific programs, activities, and other tangibleforces that will implement the design and ensure the continuation of change begun during the AI process. For example, specific changes in training programs, performance evaluation, and reward systems were part of the destiny stage at American Express.
Using the AI methodology for a large-scale change may involve hundreds of people over a period of several days and may be conducted off-site to enable people to immerse themselves in the process of creating the future. A wide variety of organiza- tions, including businesses, school systems, churches and religious organizations, communities, government agencies, and social service organizations, have used AI for large-scale change. 19 A team at a large oil refinery in the Middle East used AI to help achieve a vision of making the refinery ‘‘the best place in the company to work.’’
EXHIBIT 15 Four Stages of Appreciative Inquiry
Discovery Identifying and appreciating