The Wisdom of Managing Change

sailing through organizational change

Consider the metaphor of leading an organizational change as sailing a yacht:

Imagine that you want to sail a yacht to a new destination. You must read the wind well so that you can trim the sails to harness its energy. If the winds are at your back, then you can put up the spinnaker and make quick progress to your destination. 

However, if the winds are blowing against the direction in which you want to travel you will need to chart and oblique course, heading toward your destination without aiming for it directly. If you try to confront the headwinds squarely, your sails will luff, and your yacht's progress will stall.

In the same way, if you want to steer an organization through a major change, you must navigate the relationships among your employees so that you can harness their energy in support of the change. If the key change agents have relationships of trust, respect, and obligation with most employees, then those relationships will help you to build momentum in support of the organizational change. However, if the opponents of your change benefit from higher quality relationships with most employees, you must steer the organizational change carefully.

These are the first two paragraphs in my dissertation. (Piderit, 1999, Navigating Relationships with Coworkers: Understanding Employees' Attitudes Toward an Organizational Change, UMI #9929921)

How do you think of leading organizational change? What metaphor do you find most provocative?

Envisioning change

Karl Weick once said that "the appropriate role for the manager may be evangelist rather than accountant."

Organizations embarking on major change need evangelists, to describe their desired future for the organization, and convert employees to the new religion.

In the class I'm teaching on the management of change in complex organizations, we keep cycling back around to the questions of vision:

• what does it take for a vision to be inspiring?
• where does the vision come from -- the leader, or the group?
• how is the vision best communicated to others?
• do visions change during implementation? how? is that good or bad?

In Todd Jick's classic article, he gives the example of how Liza Foley, the CEO of Canton Industrial, sought to inspire her employees, by saying "I can see a little sign as you enter the town: Welcome to Canton, the Mailbox Capital of the World." ("The Vision Thing", available in Managing Change.)

It's important for a vision to create a tension between where we are now, and where we want to be, says Jick. A good vision draws people into the future, raises employees' emotional stake in the company, and provides guidance about how employees and customers should relate.

Bottom-up visioning, the most radically participative approach to developing organizational vision, invites employees to work together in defining the organization's future. While the challenges of valuing all contributions even though only some can be retained are significant, and reaching consensus can be difficult, bottom-up visioning can be powerful.

The biggest benefit of a vision developed from the bottom up is that once employees adopt a shared vision, every one of them becomes an evangelist. The leader's role is no longer to push past the status quo -- it is to rein in and gently guide the energy that employees can unleash!

Fortunately, if you're still not sure how to envision change, there are millions of resources on this topic, including scholarly articles and books. If you have favorites, please recommend them by leaving a comment here.

opportunities for change being designed in Washington, DC

The surge in American optimism that accompanied President Obama's inauguration on Tuesday is undeniable. The social change being designed in Washington is bound to affect organizations -- and not just in business.

Here are some excerpts from President Obama's January 24 weekly address*:

• "That is why I have proposed an American Recovery and Reinvestment Plan to immediately jumpstart job creation as well as long-term economic growth. ... I hope to sign it into law in less than a month."
• "we’ll renovate and modernize 10,000 schools, building state-of-the-art classrooms, libraries, and labs."
•  "We’ll ... triple the number of fellowships in science to help spur the next generation of innovation."

Consider the opportunities for educational organizations if this plan becomes law. Renovating schools is not just an economic boost for the construction industry -- it's also something that will affect schoolteachers and the ways that they involve students in learning. Colleges and universities will face increased demand to educate new science teachers, and to offer meaningful continuing education for those already in the classroom.

Other aspects of the plan identify similar opportunities for other industries, such as healthcare, information technology, and communications. Managers responding to these initiatives will not only be able to offer new jobs to others -- but also to redesign those jobs, and how those people work together to achieve key goals.

I have been surprised to review the search results that lead to my blog, the Wisdom of Managing Change, and see how many involve "layoffs" or "downsizing" as search terms. There is certainly a lot of anxiety in the blogosphere about layoffs. I hope that managers making decisions about changing their organizations will consider the need to pursue opportunities like those identified in this post. As I have written before, layoffs are often short-term measures that can have unintended consequences.

* Oh, and how cool is it that the weekly presidential address has entered the 21st century? These used to be radio-only addresses, I believe. Obama now has streaming web video, plus a transcript, on the White House website.

blurring boundaries between work and life

Why would an employer offer paid sabbaticals to employees after a certain number of years of service? Why do employers offer paid family leave, for new mothers and fathers?

The simple answer is, to retain employees and save the costs that come along when an employee quits or is fired. (Federal law requires that companies provide unpaid family leave for 12 weeks, but some employers offer paid leave, which is not required by law.)

In fact, for many companies, not instituting policies that would allow employees to deal with their personal lives is a drain on the company's profitability. The cost of searching for a new salaried employee and training the new hire is often estimated at 30% of the previous employee's annual salary. This estimate does not include the lowered productivity of the company while the position is vacant, and while the new employee is getting up to speed.

Still, some companies are instituting new policies that go well beyond giving employees time off to deal with issues in their personal lives. For example, a New York Times article by Abby Ellen quotes employees who have been offered the option to bring their babies under 6 months to the office with them when they return from parental leave. (A link to the article appears at the end of this post.)

To what extent are companies offering this option to reduce costs and increase profit? I suspect that some companies are also considering their social responsibilities toward employees.

I'm sure that employees who bring babies to work help to trigger a cultural change for their employers' companies. That kind of cultural change can be tricky to manage. Some managers may resist, believing that the organization is better off if the boundary between work and personal life is clearly defined. On the other hand, younger employees may resist such firm boundaries, and seek out work environments where they can blur the boundary and integrate work and personal life more fluidly. 

Do you know of companies that are offering employees the option to blur work and personal life? In what ways? What have been the effects on the organization's culture?

Related links:

Abby Ellen's NYT article, Maternity-Leave Alternative: Bring the Baby to Work

From my blog, Telecommuting: How it has changed business life

From my blog, What do we not know about managing change?

From my blog, Can leaders drive a company through organizational change?

From my blog, Organizational culture change: can we manage it? (yes and no)

business responsibilities

This is not a political blog, but I find many of my ideas lately are sparked by what I am hearing in the Presidential campaigns, which will wrap up in six days. How businesses will meet challenges related to critical global issues, like environmental change, poverty, and health care system, is crucial for our American society and for our world. So I see business and politics as connected, and I believe our political context in the US will have a big impact on how businesses change in the next decades.

After the second Presidential debate, I wrote about ways that business might encourage more environmental responsibility among employees, and limit travel which impacts the Earth's atmosphere. I wrote about sacrifice, and how we might choose to change our behavior at both the individual and the corporate level, to work toward a shared future. Last night, as I watched Barack Obama's 30-minute campaign ad, I heard the words "responsibility" and "moral" and "conservation" and "hope" and I realized how strongly I believe that businesses must shoulder their moral responsibilities at this time.

Because businesses use so much of the US supply of energy, and many businesses engage in activities that produce pollution or other negative impacts on the Earth, I see the environment and energy use as one area where businesses must change. It is not socially responsible for business leaders to say "well, it will cost too much to upgrade our production systems, or install new teleconferencing facilities, or take other conservation actions, so our stockholders would not approve." 

Businesses have a responsibility to do more than make a short-term profit. They have stakeholders, as well as stockholders, and ethical leaders will take the long-term interests of all stakeholders into account when making business decisions. This may require making tradeoffs that limit short-term profit, but should have benefits for the company in the long term.

That's my stand. What's yours? Can you share any examples of businesses that are wrestling with these tradeoffs?

streamlining your organization

This fall, jobs are falling to the ground more quickly than leaves fall from the trees. About to be laid off (according to the WSJ): Yahoo -- 1500 workers. Xerox -- 3000 workers. National City Bank -- 4000 workers. Merck -- 7200 workers. Hewlett Packard -- almost 25,000 workers. In some cases, the market has already cut workloads, with consumer demand shrinking. For companies anticipating poor markets for their products and services, layoffs can take a big bite out of fixed costs, if they are implemented well. As I wrote in an earlier post, managers implementing downsizings must do so carefully, with a scalpel rather than a hatchet, and above all, must cut out work, and not just workers.

In other cases, though, it will be important for businesses to focus on their high-margin products and services, while controlling costs -- which does not always mean eliminating headcount. Eliminating waste in raw materials can yield big savings, as can increases in operating efficiency. Managers may also consider other creative alternatives to layoffs, such as asking for volunteers to switch to part-time, implementing one-week unpaid vacations, or moving to a 4-day workweek (with a 20% drop in pay).

Why avoid layoffs? There may be hidden costs. Morale and productivity are sure to drop among the survivors, and some of your key employees may depart when you would rather have them stay. Customers who hear of the layoffs may be concerned about the company's continued stability, or fear that the quality of what they receive will decline. When the company is ready to rehire, training new employees can be expensive.

While layoffs are sometimes necessary, they are not a surefire solution to problems with customer demand.