Research in Organizational Change and Development: Vol. 19 (Research in Organizational Change & Development)

RESEARCH IN ORGANIZATIONAL CHANGE AND DEVELOPMENT

RESEARCH IN ORGANIZATIONAL CHANGE AND DEVELOPMENT Series Editors: William A. Pasmore, Abraham B. (Rami) Shani and Richard W. Woodman Previous Volumes: Volumes 1–18:

Research in Organizational Change and Development

RESEARCH IN ORGANIZATIONAL CHANGE AND DEVELOPMENT VOLUME 19

RESEARCH IN ORGANIZATIONAL CHANGE AND DEVELOPMENT EDITED BY

ABRAHAM B. (RAMI) SHANI California Polytechnic State University, USA and Politechnico di Milano, Italy

RICHARD W. WOODMAN Texas A&M University, USA

WILLIAM A. PASMORE Teachers College, Columbia University, USA

United Kingdom – North America – Japan India – Malaysia – China

Emerald Group Publishing Limited Howard House, Wagon Lane, Bingley BD16 1WA, UK First edition 2011 Copyright r 2011 Emerald Group Publishing Limited Reprints and permission service Contact: [email protected] No part of this book may be reproduced, stored in a retrieval system, transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without either the prior written permission of the publisher or a licence permitting restricted copying issued in the UK by The Copyright Licensing Agency and in the USA by The Copyright Clearance Center. No responsibility is accepted for the accuracy of information contained in the text, illustrations or advertisements. The opinions expressed in these chapters are not necessarily those of the Editor or the publisher. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN: 978-1-78052-022-3 ISSN: 0897-3016 (Series)

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CONTENTS LIST OF CONTRIBUTORS

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PREFACE

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DEVELOPING AN EFFECTIVE ORGANIZATION: INTERVENTION METHOD, EMPIRICAL EVIDENCE, AND THEORY Michael Beer

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STRATEGIC CHANGE AND THE JAZZ MINDSET: EXPLORING PRACTICES THAT ENHANCE DYNAMIC CAPABILITIES FOR ORGANIZATIONAL IMPROVISATION Ethan S. Bernstein and Frank J. Barrett

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COMMUNICATION FOR CHANGE: TRANSACTIVE MEMORY SYSTEMS AS DYNAMIC CAPABILITIES Luis Felipe Go´mez and Dawna I. Ballard

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DEVELOPING AND SUSTAINING CHANGE CAPABILITY VIA LEARNING MECHANISMS: A LONGITUDINAL PERSPECTIVE ON TRANSFORMATION Tobias Fredberg, Flemming Norrgren and Abraham B. (Rami) Shani MAPPING MOMENTUM FLUCTUATIONS DURING ORGANIZATIONAL CHANGE: A MULTISTUDY VALIDATION Karen J. Jansen and David A. Hofmann v

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TOWARD A DYNAMIC DESCRIPTION OF THE ATTRIBUTES OF ORGANIZATIONAL CHANGE Guido Maes and Geert Van Hootegem

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REVISITING SOCIAL SPACE: RELATIONAL THINKING ABOUT ORGANIZATIONAL CHANGE Victor J. Friedman

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TIPPING THE BALANCE: OVERCOMING PERSISTENT PROBLEMS IN ORGANIZATIONAL CHANGE William A. Pasmore

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ABOUT THE CONTRIBUTORS

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LIST OF CONTRIBUTORS Dawna I. Ballard

Department of Communication Studies, University of Texas at Austin, Austin, TX, USA

Frank J. Barrett

Graduate School of Business and Public Policy, Naval Postgraduate School, Monterey, CA, USA

Michael Beer

Harvard Business School, Boston, MA, USA; TruePoint, USA

Ethan S. Bernstein

Harvard Business School, Boston, MA, USA

Tobias Fredberg

Department of Technology Management and Economics, Chalmers University of Technology, Gothenburg, Sweden; Truepoint, USA

Victor J. Friedman

Department of Sociology and Anthropology/Department of Behavioral Sciences, Max Stern College of Yezreel Valley, Yezreel Valley, Israel

Luis Felipe Go´mez

Department of Communication Studies, Texas State University, San Marcos, TX, USA

David A. Hofmann

Department of Management, University of North Carolina, Chapel Hill, NC, USA

Karen J. Jansen

Department of Organizational Behavior and Strategy, University of Virginia, Charlottesville, VA, USA vii

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LIST OF CONTRIBUTORS

Guido Maes

Center for Sociological Research, Katholieke Universiteit Leuven, Leuven, Belgium

Flemming Norrgren

Department of Technology Management and Economics, Chalmers University of Technology, Gothenburg, Sweden; TruePoint, USA

William A. Pasmore

Teachers College, Columbia University, New York, NY, USA

Abraham B. (Rami) Shani

Orfalea College of Business, California Polytechnic State University, San Luis Obispo, CA, USA; Department of Management, Economics and Industrial Engineering, Politecnico di Milano, Milan, Italy

Geert Van Hootegem

Center for Sociological Research, Katholieke Universiteit Leuven, Leuven, Belgium

PREFACE Volume 19 of Research in Organizational Change and Development includes chapters by an internationally diverse set of authors including Michael Beer, Victor J. Friedman, Luis Felipe Go´mez and Dawna I. Ballard, Ethan S. Bernstein and Frank J. Barrett, Karen J. Jansen and David A. Hofmann, Guido Maes and Geert Van Hootegem, Tobias Fredberg, Flemming Norrgren and Abraham B. (Rami) Shani, and William A. Pasmore. The ideas expressed by these authors are as diverse as their backgrounds. New methodologies are introduced, such as the strategic fitness process developed by Michael Beer and his colleagues for engaging leaders in better understanding the reactions of employees to strategic change efforts. Beer helps us to understand that leaders often operate on incomplete or incorrect information about how their admonitions to change are received because people fear speaking to power. The strategic fitness process overcomes this dynamic by creating a safe space in which handpicked members of an interview team share the results of their findings in a fishbowl that senior leaders observe. With careful facilitation, according to Beer, real breakthroughs can be achieved in aligning leaders and their followers. For some time now, we have recognized that jazz provides a powerful metaphor for organizational improvisation. Bernstein and Barrett take us beyond the obvious similarities to understand the fundamental principles that guide jazz musicians as they play. Parallels to organization change work are clear and compelling. Go´mez and Ballard discuss the importance of transactive memory systems to long-term organizational viability. Since organization environments are dynamic, choices must be made about how to allocate resources to respond to threats and opportunities. Transactive memory systems are the built-in processes that guide these decisions. Understanding how they function and what can be done to influence their operation is key to invoking and sustaining change. Along similar lines, Fredberg, Norrgren, and Shani review the results of a five-year study at Ericsson on the nature and use of learning mechanisms to support change. While it seems obvious that most change efforts involve learning, few change agents are explicit in their attempt to construct ix

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forums in and through which organizational members can reflect on their experiences, engage in joint sensemaking, and apply hypotheses to future opportunities. Fredberg, Norrgren, and Shani embellish upon the idea of parallel structures that facilitate change in this informative paper about a long-term change effort. Jansen and Hofmann illustrate how to map the flows of momentum during change efforts using two studies: one in the laboratory and another in an actual organization. By paying attention to when these shifts in momentum occur and why, we can learn much more about the obstacles to commitment during change and what is required to sustain ongoing support. Maes and Van Hootegem reviewed hundreds of studies of change to understand the different dimensions that can be used to describe change. Usually, change is described in a dichotomous fashion, for example, incremental versus transformational. After their review, Maes and Van Hootegem classify change using eight different dimensions, including control, scope, frequency, stride, time, tempo, goal, and style. Each of these eight dimensions is a continuum unto itself, and the dimensions can be combined together to lend tremendous specificity and richness to how we talk about change. Friedman digs deep into the early work of Lewin to explore his concept of social space and its implications for change efforts. Lewin wasn’t crystal clear in describing what he meant by the term ‘‘social space.’’ To clarify the concept, Friedman consults the work of authors Ernst Cassirer and Pierre Bourdieu to learn how they may have influenced Lewin’s thinking and what exactly the critical implications for change efforts could be. Finally, Pasmore notes that the current high failure rate of change efforts is a cause for alarm and that more careful attention to the causes of failures could help to tip the balance in favor of success. He explores threats to success associated with four phases of change efforts and offers potential solutions. While Research in Organizational Change and Development has been the foremost repository of theoretical ideas, in-depth discussions of the literature and new approaches to intervention and research for over 20 years, authors in this and previous volumes are asked to draw connections between their ideas and practice as well. Volume 19 demonstrates that as academics, we advance the work in our field by both looking forward and looking back. Understanding the origins of our theories and beliefs can be as important as pioneering new ideas and methodologies. As you read

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Volume 19, we ask you to consider your own contributions to our field and to contact us to suggest topics for future volumes. We will be excited to hear from you, and to learn about the new directions you propose for our profession. Abraham B. (Rami) Shani Richard W. Woodman William A. Pasmore Editors

DEVELOPING AN EFFECTIVE ORGANIZATION: INTERVENTION METHOD, EMPIRICAL EVIDENCE, AND THEORY Michael Beer ABSTRACT The field of organization development is fragmented and lacks a coherent and integrated theory and method for developing an effective organization. A 20-year action research program led to the development and evaluation of the Strategic Fitness Process (SFP) – a platform by which senior leaders, with the help of consultants, can have an honest, collective, and public conversation about their organization’s alignment with espoused strategy and values. The research has identified a syndrome of six silent barriers to effectiveness and a dynamic theory of organizational effectiveness. Empirical evidence from the 20-year study demonstrates that SFP always enables truth to speak to power safely, and in a majority of cases enables senior teams to transform silent barriers into strengths, realign their organization’s design and strategic management process with strategy and values, and in a few cases employ SFP as an ongoing learning and governance process. Implications for organization and leadership development and corporate governance are discussed.

Research in Organizational Change and Development, Volume 19, 1–54 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 0897-3016/doi:10.1108/S0897-3016(2011)0000019004

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MICHAEL BEER Science is about describing how the universe works. Engineering is about creating something that works. – Neil Armstrong, Astronaut1

‘‘We have great strategy but we cannot implement it. Can you help us become a company capable of implementing strategy?’’ This is the paraphrase of the challenge presented to me in 1990 by the CEO and Vice President of Strategy and Human Resources of Becton Dickinson (BD), a global medical technology company. This challenge led to the development of the Strategic Fitness Process (SFP) by Russell Eisenstat and me. It began with the assumption that organization change and development begins with conversations, an assumption that has since been validated by a burgeoning practice and literature on organizational discourse and its role in organizational development (Oswick, Grant, Marshak, & Cox, 2010; Marshak & Grant, 2008; Bushe & Marshak, 2009). Indeed, the problem is that conversations are not always effective. The right people are not involved to ensure engagement and commitment, the right things are not discussed, and the conversations are not open and honest (Argyris, 1985). Consequently, relevant strategic, leadership, organization design, decision rights, and cultural issues remain undiscussable and cannot be addressed. This slows or blocks change. When unintended consequences of change emerge, they too are undiscussable. Cynicism increases, commitment declines, and momentum is lost. It is these dynamics that led us to develop a structured process by which a senior team can foster what we have come to call an honest, collective, and public conversation (involving a large circle of organizational members) about organizational and leadership effectiveness (Beer, 2009; Beer & Eisenstat, 1996, 2004). It is a platform by which managers, consultants and organizational members can collaborate in an inquiry that enables them to learn jointly about the effectiveness of the organization – its alignment with espoused strategy and values. Because SFP breaks organizational silence and reveals valid data – the truth – about the organization to consultants and leaders, it may be thought of as a collaborative research method that enables insights and theory development while at the same time developing commitment to change (Shani, Morhman, Pasmore, Stymne, & Adler, 2008; Adler & Beer, 2008; Van de Van, 2007; Beer, 2001). This chapter reports insights obtained from a 20-year action research program that included formal research and participant observation at BD and in over 300 organizational units in approximately 60 other corporations in multiple industries and countries. SFP has been applied at multiple levels – top management units of global corporations, business units,

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country organizations of global firms, and operating units such as manufacturing plants, hospitals, and restaurants in a retail chain. While in most cases the organizations were for profit businesses, SFP has also been applied in not for profit organizations. Twenty years of applying the same inquiry method in a diverse set of organizations offers a unique opportunity to learn about barriers to organizational effectiveness and performance and an opportunity to collect data about the efficacy of SFP across many different organizations. This chapter will discusses:       

The action research program Theory and assumptions that informed the development of SFP The SFP An emergent theory of organizational effectiveness Empirical research findings about the efficacy of SFP Emergent theory and principles for developing an effective organization Implications for practice

An organization is effective when its leaders are able to realign organizational design, culture, and people (capabilities and commitment) with continuous changes in the competitive and social environment. The problem of organizational alignment, adaption, and learning, which SFP is intended to facilitate, has been a central concern of economists and organizational theorists. Population ecologists and economists have taken the view that all corporations go through a life cycle of birth, development, and ultimate destruction (Hannan & Freeman, 1975). The market is seen as the ultimate arbiter of effectiveness and survival. Essentially, markets ensure organizational effectiveness through the process of ‘‘creative destruction’’ (Schumpeter, 1942; Foster & Kaplan, 2001). Most organizations ultimately destruct because the configuration of management practices developed in periods of success proves difficult to change in response to environmental change (Miller, 1990a). Indeed, there is substantial evidence that business organizations have a finite life, and if they manage to survive, their creative spark does not and they underperform and then destruct. Of the original Forbes 100 companies named in 1917, 61 ceased to exist by 1987. Of the remaining 39, only 18 stayed in the top 100, and their return was 20% less than the overall market for that period. Of the companies named in the original Standard and Poor (S&P) 500 in 1957, only 74 remained in 1997 and of these, only 12 outperformed the S&P 500 during that period (Foster & Kaplan, 2001).

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These data suggest that the process of developing and sustaining effectiveness is extremely challenging. In a study by Collins of 1,435 companies between 1965 and 1995, only 11 were able to move from simply good performance to great performance, defined as the cumulative stock returns of 6.9 times returns for the general market for a period of 15 years or more, and this after a concerted effort to transform them (Collins, 2002). Since the completion of the, study the performance of approximately half of these companies has declined below the level that qualified them as great companies. The finding that CEO tenure has declined since the early 1990s from 10 years to less than 4 years further suggests that leading a company for sustained success in a rapidly changing environment is extremely difficult and is achieved by only a relatively small number of organizations. From the perspective of senior management, however, leading realignment and continuous change is essential, regardless of how difficult it may be. Robert Bauman, former CEO of SmithKlein Beecham and an experienced change leader, captured the importance of the capacity for learning and change as the key to competitive advantage when he noted: ‘‘Most important in implementing change in the near term is instilling the capacity for change in the long term. In my view the capacity for ongoing change is the ultimate source of competitive advantage’’ (Bauman, 1998). Academics have framed the challenge as an organizational learning one (Argyris & Schon, 1996; Senge, 1990). Creating adaptive organizations has been a subject of considerable academic discourse (Lawler & Worley, 2006, 2011; Tushman & O’Reilly, 2002; Beer, 2009). SFP was developed to enable senior teams to lead a process of fundamental realignment and to serve as a learning and governance process that enables continuous learning and change if recycled periodically. SFP enables leadership teams and key people to engage in a mutual learning process about strengths and barriers to achieving the organization’s strategic ad values direction. The core assumption underlying SFP is that it is the inability of organizations to confront inconvenient truths about external and internal realities that is the first-order cause of organizational decline and ultimate downfall (Miller, 1990b; Argyris, 1990a; Senge, 1990). The economic meltdown of 2008 and the scandals at companies like Enron in the decade that preceded it are the latest reminder that senior management and boards of directors do not have access to material truths known to people at lower levels (Beer, 2009). SFP’s structure and process are intended to guide leadership teams through a difficult learning and change process that most resist, fail to complete successfully, or sustain over time.

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THE ACTION RESEARCH PROGRAM As noted earlier, SFP was designed to meet the difficulties BD was experiencing in implementing its corporate and business unit strategies (Beer & Williamson, 1991). Virtually all of the company’s senior executives, including its CEO, had been strategy consultants in some of the largest and best known management consulting firms before joining the firm. As a strategy consultant 20 years earlier, BD’s CEO introduced ‘‘Strategic Profiling’’ (SP). SP was a structured processes by which senior teams, with the help of a trained facilitator, discuss and answer questions embedded in Michael Porter’s strategic framework (Porter, 1985) and develop their strategy as opposed to more traditional expert consultant models. It is therefore consistent with a broad stream of research on collaborative research and learning (Docherty & Shani, 2008). When I was approached about the strategy implementation problem in 1988, SP was institutionalized in the company – a manual existed and line managers around the company had been trained as facilitators. Thus, the stage was set conceptually for the invention of SFP, a parallel process intended to follow SP. We learned later that the cultural underpinnings for honest conversations about difficult organizational issues did not exist at BD, and the process had to be robust enough to enable these conversations. Between 1988 and 1995 Russ Eisenstat and I, in collaboration with the Vice President of Human Resources (HR) and his successor, developed SFP and piloted it in three business units. Subsequently, SFP was implemented at the corporate level, in numerous other business units, functional organizations such as quality and human resources, country organizations, and one manufacturing plant. Despite stories about painful feedback in two pilots and resultant resistance, reports of success in a business unit, led by a highly respected and highly potential general manager who became the company’s CEO in 2000, caused senior management to commit to SFP. A manual to guide and train internal resources was written, and internal HR and Strategy professionals were apprenticed to facilitate SFP. As noted earlier, from 1990 to the present, SFP has been applied in many organizational units at all levels across many industries – medical technology, high-technology firms, pharmaceuticals, manufacturing, retail, a research consortium, healthcare, privatized government agency, hotels, and leisure – and in several countries/national cultures. The findings discussed in this chapter are, therefore, generalizable across many types of organizations, though as I discuss later, there are boundary conditions that affect the extent and sustainability of change.

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As academics with scholar–practitioners orientation, our goal was not just to develop an intervention method but research it and learn about the problem of developing an aligned and effective organization. This chapter summarizes findings and conclusions drawn from several forms of inquiry described later. Given the 20-year period of time, it is important for the reader to understand that assumptions that we started with, the SFP intervention method itself, and the findings and conclusions I discuss in this chapter have evolved over time through the iterative process of intervention, research, reflection, and further action. The reader may wonder how objective the findings and conclusions reported here are, given that consultants were also researchers. The following aspects of our journey should be considered in answering this question:  We spent time reflecting on and analyzing more and less successful applications of SFP.  A large number of cases about organizations that underwent SFP were written by independent researchers. These allowed us to conduct a rigorous post hoc analysis of 12 applications of SFP discussed later.  A 20-year period of time enabled us to evaluate and revaluate what we were learning.  A good many assumptions about the active ingredients in the SFP process have changed over the years.

ASSUMPTIONS AND THEORY UNDERLYING SFP How could we help BD improve its effectiveness in executing strategy and adapting to changing circumstances? We brought to this question several assumptions, rooted in research and theory as well as my experience as an internal organization development (OD) consultant at Corning Glass Works. Acting as social engineers we crafted SFP to reflect our assumptions and used experience over time to reformulate our assumption and reengineer the process. The first assumption was that organizations are systems and that multiple factors influence effectiveness (Katz & Kahn, 1966; Beer, 1980). A corollary assumption we began with was that effective execution of strategy required organizational alignment with the strategy. That is, multiple facets of the organization, its structure, its people (attitudes, skills, and behavior), its processes and system, its management pattern, leadership, and its culture all had to be aligned with the environment the organization was operating in

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and its chosen strategy (Lawrence & Lorsch, 1967, 1969; Miles & Snow, 1978; Miller, 1986, 1987, 1990a; Labovitz, 1997). Initially, we chose the 7S framework developed by McKinsey as the analytic map senior teams could use to diagnose alignment and later developed our own model (Pascale & Athos, 1981). Consistent with contingency theory, we assumed that the configuration of the organization, its pattern of alignment, would differ depending on the business strategy (Lawrence & Lorsch, 1967; Miles & Snow, 1978; Miller, 1986). We also assumed that the problem of alignment is continuous and therefore organizational learning has to be continuous. My OD practice and research at Corning Glass Works in the late 1960s and early 1970s had demonstrated that a planned redesign process that follows these assumptions could dramatically improve effectiveness and performance (Beer, 1976). A second corollary assumption, one that has been reinforced after many applications of SFP, is that seeing the whole system – all facets of the organization and its environment – is essential for total systems change (Oshry, 2007). Managers too often make attributions of causality for problems they face to one presenting symptom – ineffective people, business conditions, or technical problems, for example – and fail to see the multiple factors in interaction. Failing to see the system prevents change in systems. It leads to the fallacy of programmatic change initiatives aimed at one facet of the organization, typically education or training, to enhance knowledge or change attitudes (Beer, Eisenstat, & Spector, 1990). These programs are often simple and easy fixes that protect managers from learning about deeper and more systemic problems including their own leadership. We designed SFP to avoid these simple fixes to complex organizational effectiveness problems. A third assumption underlying the design of SFP was that organizational silence and defensive routines prevent senior teams from learning about effectiveness problems in their organization (Argyris, 1990a; Morrison & Milliken, 2000; Finkelstein, 2003; Detert & Edmondson, 2007). Lower levels systematically avoid telling bosses the truth about problems of efficacy because they fear negative consequences and/or they believe that no change will occur (Krish-Gephart et al., 2009). They are overprotective of higherups to protect themselves emotionally and materially (Argyris, 1990a). Moreover, we assumed that by enabling truth to speak to power, all parties to the process will see the data as valid, thus reducing doubt and cynicism and their corrosive effects on trust and internal commitment (Argyris, 1970). A fourth corollary assumption underlying SFP was that in order to overcome organizational silence, a fact-based dialogue that incorporates both advocacy and inquiry about the system of management had to be

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developed (Argyris & Schon, 1996; Senge, 2006). We concluded that teaching managers dialogue skills in concurrent advocacy and inquiry (Argyris, 1990b), while essential in the long run, would take years. We had to find a way to break the silence and motivate an honest conversation that did not depend on deep changes in skills and culture. Beckhard (1976) had demonstrated that a structured process for surfacing difficult issues could work. We purposely eschewed surveys as means of data collection because they limit what is learned to known problems and do not reveal complexity and interaction between multiple facets of the system. A fifth set of assumption underlying the design of SFP is that the process consultation model is the best way to help managers cope with the challenges they face (Schein, 1999). These assumptions are:  The client does not fully understand the root causes of their problems and need help in diagnosis and action taking.  Beyond a solution to the problem, clients should be left with a capability to learn the truth about their organization, diagnose problems, and take action in the future.  Only the client knows what will work and not work in their organization. Using expert knowledge based on research as well as practical experience, the consultant can present alternatives, but it is the client who must make choices. In effect, SFP is a process by which senior teams can self-design their organizations with the help from a scholar–practitioner (Cummings & Mohrman, 1989). The challenges of this role will become apparent in the discussion that follows and have been discussed extensively in a 2009 issue of the Journal of Applied Behavioral Science (Vol. 45, No. 1). A sixth corollary assumption is that participation, consultation, and engagement by as wide a group of employees as practical enhances the quality of diagnosis, solutions, and commitment. It develops community and participant capabilities, in effect changing mutual expectations and culture (Vroom & Yetton, 1973; Macy, Schneider, Barbera, & Young, 2009). For these reasons we chose a task force of employees to research the organization. Participation, it was assumed, would also develop those involved in the process (Vroom & Jago, 1988). Seventh, we thought of SFP as collaborative research between senior management, the larger organization, and consultants (Shani, Mohrman, Pasmore, Stymne, & Adler, 2007). It is a type of engaged scholarship for studying complex social problems. It enabled us to learn with our clients about the sources of ineffectiveness and about progress on the journey to

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greater effectiveness while developing commitment to act on findings (Van de Van, 2007). Eighth, we assumed that developing an effective corporation require changes at multiple levels and units – functional units, operating units, and geographic entities, for example (Beer et al., 1990). SFP at the top is a tool for redesigning the larger organizational context and the role of the top team, but we thought of SFP as a leadership platform for developing organizational effectiveness in the corporation’s multiple subunits. Over time, we came to see it as a process for improving the quality of leadership and management throughout a company’s multiple units.

THE SFP PROCESS The design of the SFP process was based on the assumptions outlined above. It is a multilevel process that involves the senior team, a task force of approximately eight employees, one to two levels below the senior team and approximately 100 key people inside and a fewer number outside the organization (customers, suppliers, partners, and other key constituencies as appropriate). They are interviewed about organizational strengths and barriers to achieving the organization’s strategic intent. We have found that 100 interviews are sufficient to offer a comprehensive picture of the organization regardless of its size. Interviews are at the top three levels or so, given the strategic nature of the inquiry. The archetypical process has nine steps depicted in Fig. 1. As mentioned earlier, the process can and has been applied at multiple organizational levels, but always with the leader and the senior team at the center of the process. Contracting with the general manager or CEO is framed in performance and values terms. What is the performance gap he/she is trying to close? What is the strategy that the business needs to execute in order to close the performance gap? What are the values by which leaders would like to govern the organization? Having contracted for an inquiry that will uncover organizational strengths and barriers, the consultant meets with the senior team to describe the process and develop consensus to pursue SFP. Senior teams are not only told about the steps in the process but also about its underlying assumptions and the generic barriers we have found typically arise. If commitment is developed, the rest of the organization – typically the three to four layers most involved in the execution of strategic tasks – is told about plans for

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Fig. 1.

The Strategic Fitness Process.

SFP and the senior team’s plans to communicate what they heard, their diagnosis, and action plans to the whole organization. The first step in the process is a one-day senior team meeting to develop a statement of organizational direction – performance goals, strategy, and values. A two-page statement is drafted and becomes the basis of the inquiry. At that meeting the senior team commissions a task force of eight of their best people who will conduct the inquiry. These must be the best people, and ones who will be believed when they return with their feedback. The task force is prepared to conduct the inquiry in a one-day training session led by consultants. The general manager/CEO starts the day by explaining the statement of direction and asking for unvarnished feedback about barriers to execution. The task force is then trained to conduct interviews. They, not the senior team, select the people they will interview. They interview outside of their function, business, or geography. Consultants, not the task force, interview the senior team. When interviews are completed – usually in three weeks – the task force meets for a day to analyze their interviews and identify themes – strengths and barriers – and give their feedback to the senior team. As I will show below, these themes are potentially threatening because they are about the efficacy of the organization and their leadership team. Task force feedback, diagnosis by the senior team, and plans for changing the system occur in a three-day Fitness Meeting – the main catalytic SFP event. To enable truth to speak to power, a fishbowl method is employed (Fig. 2). Task force members discuss their findings and provide examples

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Fig. 2.

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The ‘‘Fishbowl’’ – Enabling Truth to Speak to Power.

from interviews, while the senior team, guided by ground rules, listens nondefensively. Diagnosis and action planning occur on the second and third day without the task force. Having developed an action plan, the senior team meets with the task force to tell them what they heard, their diagnosis, and their action plan. Task force members meet alone to discuss the quality of the action plan and its implementability. They then meet with the senior team to offer their critique of the plan. As I will show later, this is a very important step in the process. To mobilize the organization for change, a meeting with the 100 employees who were interviewed plus other key employees takes place. The senior team, ideally with participation of the task force, communicates what they heard from the task force, their diagnosis, and action plan for change. Participants are then engaged in further discussion and feedback to the senior team. The elapsed time for the process is typically six to eight weeks. Consultants – external and/or internal – play two roles. They facilitate the process, ensuring that it retains essential conditions for success and act as subject matter resources in diagnostic and change planning discussions. An appendix at the end of this chapter provides more detail about each SFP step. An SFP manual provides details about the total process from beginning to end (Eisenstat & Beer, 1998). SFP is a powerful episode. OD is a process that takes years. Senior teams are urged to meet with the task force periodically to discuss progress in the

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transformation and to institutionalize SFP as a regular learning and governance process. If they have been able to establish a helping relationship with the senior team, consultants become thought partners to the leader and senior team throughout the transformation – a period that can be as long as several years. If SFP is recycled periodically, the three-day Fitness Meeting offers a perfect opportunity to collaborate with senior team in assessing progress and discussing further interventions. Having developed internal capability to orchestrate the SFP process, the senior team of one business unit asked its consultant to come every year to participate in the three-day Fitness Meeting to hear from the task force and participate in the development of a response. Honest collective conversations about the system as a whole are powerful ways to begin the process of OD. Beyond the development fostered by participation in the process, and this can be substantial, deeper development of organizational, team, or individual capabilities is typically needed. This is something that may require further intervention and learning. A variety of learning mechanisms and interventions will have to be designed to enable this deeper learning in particular organizational domains that the senior team has targeted for change (Beer, 1980; Shani & Docherty, 2003; Docherty & Shani, 2008). A chapter in this volume by Fredberg, Norrgren, and Shani (2011) illustrates how cognitive, structural, and procedural learning mechanisms designed into SFP and following it were employed to build organizational capabilities. Our experience suggests that there is variability in how much help senior teams require to do this work. Each application of SFP has varied somewhat depending on the situation and the consultant, but the essential features of honest, collective, and public conversations intended to realign the organization with the leadership team’s espoused direction have been constant.

AN EMERGENT THEORY OF ORGANIZATIONAL EFFECTIVENESS Multiple applications of SFP offered the opportunity to analyze the content of task force findings in many different organizations. We first conducted a content analysis of what ten task forces at BD had reported to senior management and found that six barriers to effective strategy execution were consistently reported (Beer & Eisenstat, 1996). Subsequent SFPs in many different businesses in different industries confirmed the findings of the

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original analysis (Beer & Eisenstat, 2000). Analysis of a written case about an underperforming and low-commitment business unit at Corning Glass Works, written a decade and a half before the current action research program began, confirmed that the same barriers existed there and that they explained quite well underperformance and low commitment in that business (Beer, 1976). Because we were consultants who were directly involved in helping these organizations, we were able to make sense of how the barriers reported below interacted to undermine organizational effectiveness. And because we could follow-up and learn how the organization had changed as a result of SFP, we were able to learn if SFP had materially affected the barriers. This allowed us to form a dynamic theory of organizational effectiveness and development. We have called the barriers silent killers because like hypertension and cholesterol in humans the six barriers cause severe damage to an organization and are ‘‘unknown’’ to the senior team and the organization at large (Beer & Eisenstat, 2000). By unknown I mean that the barriers, though known to most key people in the organization and to senior management, they were undiscussable and therefore were not subject to action, a point also made by Marshak (2006). It is important to note that in most instances task forces reported that people in the organization – their dedication and commitment – were perceived as a strength. While these organizations had some underperforming people, the message was that the organizational context defined by the six barriers discussed below was the first-order cause of ineffectiveness, undermining the capabilities and motivation employees brought to their work. This finding echoes Deming’s findings that the system, not the people, are the cause of ineffectiveness and poor quality (Deming, 1986).

The Silent Killers: Syndrome of Barriers to Effectiveness While task forces found a variety of ways to describe what stood in the way of greater effectiveness, our content analysis identified the following six barriers: 1. Unclear strategy, values, and conflicting priorities 2. An ineffective senior team 3. A top-down or laissez faire leader

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4. Poor coordination and communication across functions, business, or geographic entities 5. Inadequate leadership development and leadership resources below the top 6. Poor vertical communication – down and up These barriers should not be surprising to anyone who has worked in organizations or consulted them. When I have presented them to management audiences, they are immediately recognized by many as present in their own organization. Considerable research has identified the six barriers as problems in organizations. For example, Hambrick has identified the pervasiveness of ineffective senior teams and their effects (Hambrick, 1998). Wageman and her associates have shown that a vast majority of senior teams they studied were perceived to be ineffective, and they cite a variety of factors (Wageman, Nunes, Burruss, & Hackman, 2008). For example, senior team members vary widely in their understanding of who is or is not on the senior team as well as the purpose and role of the senior team. Eisenhardt has shown that top team effectiveness is related to organizational performance (Eisenhardt & Schoonhoven, 1990). Others have shown that coordination and collaboration across differentiated functions and activities as well as cultural characteristics such as conflict resolution modes are critical in uncertain environments (Lawrence & Lorsch, 1967). The importance of downward communication in leading change has been widely acknowledged (Kotter, 1996). And hierarchy and defensive routines have been documented and shown to reduce voice and the capacity of honest and open–fact based problem solving (Argyris, 1985, 1990; Detert & Edmondson, 2007). OD practice has targeted some of these barriers for intervention. Team building and intergroup interventions, for example, have been standard interventions methods since the 1960s and 1970s (Beer, 1980). Our findings not only confirm previous research but also provide insights into the relationship between these six silent barriers and how they undermine organizational effectiveness. Because these barriers typically existed together in the organizations we studied, we came to see them as a syndrome of mutually reinforcing and self-sealing (Beer & Eisenstat, 2000). In all the organizations we studied, the silent killers blocked three fundamental organizational capabilities essential for organizational effectiveness. These are: 1. The capacity to develop a high-quality organizational direction – strategy, values, and vision

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2. The capacity to execute the direction 3. The capacity of the organization to learn from enacting: a. That the strategy needs modification and/or b. The organization’s design and culture require change Fig. 3 illustrates how the barriers interact to erode these three capabilities. The first three barriers, an ineffective senior team, top-down or laissez fair leadership, and unclear organizational direction and conflicting priorities, mutually reinforce each other. They prevent senior teams from developing a high-quality direction. An ineffective senior team cannot have the dialogue necessary to create a high-quality direction, and the lack of a common direction prevents the group from working together effectively. The group may be ineffective because of the leaders top-down or laissez faire style or that style may be the leader’s response to an ineffective team. He/she stops trying to work through the team. Poor execution of the senior team’s direction, according to task forces, is a function of poor coordination and the paucity of down the line leaders available to lead strategic initiatives. These barriers are a direct result of an ineffective senior team and poor downward communication. Ineffective teams are often beset by power struggles and do not share common values. Such teams find it difficult to confront changes in organization

Fig. 3.

The Dynamics of an Ineffective Organization.

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design – roles, responsibilities, relationships, and decision rights – needed to improve integration. Ineffectiveness also makes it difficult for teams to define a common set of values, making it in turn impossible to develop a collaborative culture. Similarly, ineffective senior teams do not share a common view about what constitutes good managerial performance and potential, making it impossible for them to agree on high-potential people and how to develop them. They are also reluctant to see people as a shared resource to be jointly evaluated and developed through assignments in different parts of the organization. ‘‘Our business unit leaders refuse requests for their best people and transfer their poorest performers,’’ reported a task force to a CEO and his senior team concerned about why the company was not developing managers. Poor downward communication undermines execution. If senior teams do not engage lower level people in a dialogue about strategy and values, understanding and commitment suffer. People in differentiated departments are less prone to work together to execute the strategy. It becomes easier for siloed departments to maintain different priorities. Poor upward communication – the inability for people to communicate openly to senior teams – prevents lower levels from speaking up about the six barriers, thus making them self-sealing. The senior team is prevented from learning and changing their leadership role and behavior or redesigning the organization to enable better coordination. The difficulty lower levels have speaking honestly to senior teams became clear through many applications of SFP. The first task force we worked with at BD thought they had been given a career limiting opportunity. When they completed their data collection and were preparing to give their feedback to their senior team, they were even more anxious. This level of anxiety was apparent in virtually all the organizations that were facing effectiveness problems. ‘‘Don’t shoot the messenger’’ was a common refrain that task forces communicated to senior teams before launching into their feedback. It was clear to us that had there been an honest productive dialogue between lower levels and the senior team, SFP would not have been needed. The positive changes that SFP produced, which are discussed later, illustrates the power of open upward communication in enabling realignment, though our findings suggest that this conversation must be carefully orchestrated to enable that learning. We have come to see the silent killers as common stress points in all organizations. Because leaders and their departments are held accountable for achieving differentiated goals and they strive to advance their careers,

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coordination is always a challenge. When markets quake and companies confront strategic inflection points, stress points become wide fault lines. Organization design must be reconceived on a number of dimensions and new capabilities must be developed or the organization’s performance will decline. Short of replacing the general manager/CEO these changes cannot be made, our research suggests, unless leaders and their senior teams confront the six silent barriers. If they do not, it is likely they will be replaced. The importance of honest confronting conversations to the performance of companies is supported by the research of Lawrence and Lorsch (1967). They found that in uncertain environments, confrontation of conflict, as opposed to smoothing or avoidance, characterized highperforming firms when compared with low-performing firms. The Silent Killers at Work: An Illustrative Case We have two competing strategies that are battling each other for the same resources. The resultant factions around these two strategies are tearing the organization apart. The members of the top team are operating within their own functional silos. They are like a group of fiefdoms that refuse to operate effectively for fear that they will lose power. There is a cold war going on between Research and Development (R&D) and the Custom Systems department located within manufacturing. SRSD is still not sure what kind of business it wants to be.

These quotes, taken from a report of a fitness task force at Hewlett Packard’s Santa Rosa Systems Division (SRSD), are illustrative of the ineffectiveness of this organization at the time they undertook SFP (Beer & Weber, 1997). SRSD was a business unit in Hewlett Packard’s Test and Measurement Group, a business with $8 billion in revenue. It had been created by senior management to execute a new systems strategy unfamiliar to Hewlett Packard (HP). Historically, HP had sold single-purpose frequency-measuring instruments to engineers in R&D laboratories. The new systems solutions SRSD was to develop and sell were targeted for large industrial customers in the emerging telecommunication industry – a clear departure from HP’s traditional business. After two years of operation, the division had not achieved its targeted growth rate in revenue and profits and morale and commitment was at rock bottom levels. Frustrated with the organization’s ineffectiveness, key people were leaving for other parts of HP.

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As the quotes suggest, six silent barriers were blocking SRSD’s effectiveness and performance. Poor coordination – the ‘‘cold war’’ – between R&D and Custom Systems, an application engineering group, was a major barrier. One reason was that two conflicting strategies – development of new technology platforms versus rapid delivery of mission critical systems using existing technology – were ‘‘tearing the organization apart.’’ They were leading to different priorities and causing daily conflicts about scarce engineering resources. The lack of agreement about strategy and priorities was understandable, given what the task force, and we as consultants, learned about the senior team. It rarely met as a group and when it did, administrative issues were discussed, not strategy or priorities. Scott, SRSD’s general manager, preferred to meet with individuals one on one. According to the task force and senior team members, his laissez fair style – not bringing the senior team together to confront strategic issues – was rooted in his aversion to conflict. Poor coordination was also a function of ineffective and poorly designed cross-functional business teams. Section managers from R&D appointed as their leaders were not held accountable for running a business profitably and lacked the general management experience and perspective to manage a business or lead cross-functional business team. For example, their R&D perspective caused them to focus on technology development in meetings and blinded them to the role Custom Systems, the applications engineering function, could play in identifying customer needs and potential new systems to fill those needs, not to speak of the revenue the Custom Systems group was providing SRSD while new technology platforms were still under development. Soon application engineers stopped coming to business team meetings and felt undervalued further fueling a growing ‘‘cold war’’ between the two engineering groups. That key people below the senior team knew about these issues and were extremely frustrated by them was illustrated by the emotional character of the interviews conducted by the fitness task force. SFP made the silent killers discussible and actionable. It led to dramatic changes in how SRSD was led, organized, and managed and how it restored its culture to the highcommitment culture characteristic of HP at the time. And in a relatively short period of time, the silent killers were transformed into strengths without replacement of anyone on the senior team. These changes will be discussed below as an illustration of findings from the larger action research program.

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EMPIRICAL EVIDENCE OF SFP EFFECTIVENESS Over the course of 20 years, the following forms of inquiry were employed to evaluate SFP’s effectiveness:  Harvard Business School cases were written on applications of SFP at BD and some 10 other organizations. These cases included applications at the corporate level led by the CEO and top management team, business units, country organizations, and operating units.  A post hoc study was conducted on 10 business units at BD that had applied SFP. Interviews and survey of SFP participants at multiple levels of each unit were conducted by an independent researcher. A content analysis of findings from 10 task forces was also conducted.  A post hoc study was conducted on extent of change resulting from an SFP intervention in 12 organizations. Cases were written by independent researchers. Researchers and consultants to the organizational units under study read the cases and inductively created a set of items in several categories – preconditions, change process, and change outcomes. These items were then rated by each member of the research team individually. The group then discussed their ratings and developed consensuses mean scores. By creating a mean of mean scores for 11 SFP outcome ratings, we were able to create a score for extent of change following SFP.2  Participant observation made by consultants who facilitated SFPs over a 20-year period was studied. This enabled insights into the organization and the attitudes and behaviors of participants in the process. These observations enable a deep clinical understanding of the method, its effects, and the conditions for success.  A deep clinical analysis was conducted on the application of SFP at HP SRSD over a six year period. Most of the quotes are taken from the analysis if this case. Our 20 years of research and experience has allowed us to assert with some confidence the effects of SFP generally and the circumstances that differentiate more from less successful applications. This section provides an overview of findings from all these sources of data, with particular focus on the study of 12 organizations researched most rigorously. Overall outcome score (a post hoc mean of means of 11 outcome items rated on a seven-point scale) and the extent to which six silent killers were transformed into strengths are shown in Table 1. The silent killer change score is the mean

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Table 1.

Extent of Change in 12 Organizations.

Organization            

Hewlett Packard SRSD Mattel Canada Merck Mexico Agilent, Division B Agilent, Division A Merck Brazil Whitbread Hotels Agilent, Division C Bank division Merck Argentina Medical technology company Privatized Government Agency

Extent of Changea

Change in Silent Killersb

6.91 6.00 5.90 5.50 5.20 5.00 5.00 4.36 3.50 3.33 3.09 2.55

4.67 4.67 3.83 4.23 4.33 5.00 0.33 2.33 2.17 1.90 2.67 1.33

a

Extent of change scores are a mean of twelve separate organizational outcome items rated on a seven point scale post hoc. b Mean difference of post hoc ratings of six silent killers before and after SFP.

difference between pre and post hoc silent killer ratings on a seven-point scale. As I will show, our research and experience demonstrates that SFP leads to realignment in leadership roles, attitudes and behavior, organization design, strategic management, and organization behavior in a majority of cases. Below are our major conclusions.

SFP Uniformly Enables Honest, Safe Conversations SFP enables senior teams to hear the unvarnished, sometimes threatening, truths about the quality of their strategy, leadership, and organization. There has never been a single instance where task forces have shaded the truth, though they exhibit considerable anxiety about reporting it and will try to find the most diplomatic way to do it. Nor have senior teams shut down the conversation or stopped completion of all steps in the process, despite their obvious discomfort with the findings. Based on years of experience with SFP, we conclude that the following features of the intervention, some developed as a result of early experience with the process, account for producing a constructive dialogue about threatening issues:  The senior team, working as a group, develops the statement of strategic direction that is used as the basis of the inquiry. Thus, the focus of SFP is

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performance and strategy, a focus that motivates the senior team to deal with disconfirming data. As one general manager noted, ‘‘Strategy is central to our success so anything we can learn that may prevent its execution is important to understand.’’ The senior team must select their best people for the task force and commit in advance to all steps in the process. This makes it hard for them to do anything else but accept task force findings and act on them. Senior teams understand that if they reject feedback or do not respond to it, they will lose credibility and legitimacy with their key people – the task force as well as the 100 employees who were interviewed – not to speak of the larger organization, which has been informed about the inquiry and promised feedback from senior management. While there are differences in senior team’s understanding about the implication of the process for their legitimacy, this understanding is deepened by the emotional nature of the process. One general manager noted, ‘‘we did not know what we were getting into,’’ even though he and his team had been told what to expect. Senior teams and the task force are fortified by the knowledge that a rigorous process for collecting data and analyzing it was employed and by the fact that they selected a task force of their best people, one they can, indeed must, believe. Consistent with Cameron & Powley’s (2008) observation that ‘‘negative news sells more than positive news,’’ there was a natural tendency for task forces to emphasize the negative – the barriers to effectiveness. Senior teams responded negatively to this, arguing that there were many positive things about their organization that were being ignored. They sought a more balanced view. Citing several studies that find a positive climate leads to more favorable human and organizational outcomes, Bartuneck and Woodman (in press) argue for a balance. That same logic led us to ask task forces to explicitly ask a question about strengths and report them before barriers are discussed. That balance, which incidentally is hard for task forces to maintain (they spend far less time onstrengths), has made the feedback ‘‘safer’’ for senior teams. Initially, we asked task forces to develop a PowerPoint presentation, but found that this prevented them from presenting the full richness of their findings and that it was intimidating. That led to the fishbowl (Fig. 2). Speaking as a group and as reporters, as opposed for themselves, enables honesty not otherwise possible, though anxiety is still high, particularly the first time an organization implements SFP. Ground rules prevent senior team defensiveness or the task force blaming the senior team. The ground rule ‘‘perception is fact’’ was developed after a

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general manager in the first SFP conducted at BD demonstrated defensiveness by arguing with task force findings. The ground rule that senior team cannot interrupt the task force’s report and that questions of clarification only are allowed after each theme and at the end of the report prevents defensive responses that might undermine the courage of the task force. With the exception of presenting ground rules, consultants do not play an active role during the task force feedback. The design of the structure and process is sufficient to enable truth to speak to power.

Engagement in Honest Conversations Creates a Mandate for Change Our experience in virtually all SFP applications, even those that were ultimately less successful, is that senior teams and task forces experience SFP as powerful emotionally. This is particularly true in organizations with deep performance and organizational alignment issues, and where people in the organization have lost hope that senior management will lead meaningful change. Our interviews with senior teams across many organizations find that they report the same issues that they later hear from their task force. They know the issues and almost always say that they did not hear anything new. Nevertheless, the candor and directness of the task force puts them in touch emotionally with external and particularly internal realities from which they may have distanced themselves. For the first time they learn about how people at lower levels experience working in the organization and how its dynamics are undermining effectiveness. Consider the following quotes from SRSD’s general manager and senior team member: I had known that there were some serious issues in the division that needed to be addressed. But when these problems were spelled out in detail to me and the staff by a group of employees, the situation took on a whole new light (SRSD’s general manager). I was taking a lot of notes, but all I could think of the whole time was how did it get this bad?’ The discussion between the top team and how we worked together was even more painful. The whole thing was easily the worst day of my HP career. In my room at night I was considering writing a resignation letter, until I realized that Scott (the general manager) probably would not accept it. It hit me that we were in it up to our necks now and there was no turning back(SRSD senior team member).

The ability of task forces to speak truth to power releases frustration, theirs and their colleagues at lower levels. Finally, they are able to tell the senior team what everyone in the organization has known and they assume

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the senior team does not. That the senior team is willing to expose themselves to what the task force sees as ‘‘brutal’’ feedback lifts hope that ‘‘this time’’ change will occur. And senior teams are moved to action by the experience of hearing the unvarnished truth. Consider how a senior team member in a U.K. corporation responded to unvarnished truth that was not new to him: At the time I do not recall thinking any of this was earth shattering, but what I did think it said was there was a great need to get on with the things we have to do. We were seen as a soft, slow moving organization and the task force wanted us to get on with some pace. They would like strong leadership and for us to be a bit bolder. I think what we heard also validated that it was right to [have arranged for the task force to] talk with the leadership group.

SFP Leads to a Systemic Analysis of the Organization The unstructured nature of the interviews – ‘‘does the strategic direction make sense?’’ ‘‘What are the strengths and barriers to implementing our strategic direction?’’ – allows task forces to identify a broad array of substantive issues that are perceived to undermine effectiveness. The silent killers described earlier reflect problems with the strategy or its communication (unclear strategy), leader and leadership team effectiveness, organization design (poor coordination), strategic management (conflicting priorities and resource allocation), human resource issues connected to identifying, evaluating, and developing leaders, and cultural issues with regard to openness and collaboration. This enables senior teams to develop a comprehensive diagnosis of the organization and a systemic action plan that fits the diagnosis. Hewlett Packard’s Santa Rosa Systems Division (see illustrative case above), the organization where SFP catalyzed the most dramatic changes (See Fig. 4), provides an example of what is possible. Consider the change plan the senior team formulated:  The senior team had an open discussion about its ineffectiveness and adopted a new meeting structure, norms, and ground rules for decision making.  Scott, the general manger learned that his conflict aversion was harming team effectiveness and made changes in the role he would play in leading the senior team.  A radical redesign of the organization was made from a functional form with weak team overlays to a full two-boss matrix form, despite the fact that the matrix form was counter cultural at HP and senior team members were consequently anxious about higher management’s response.

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Fig. 4.

Iteration between Advocacy and Inquiry.

 Custom Systems – SRSD’s application engineering group – and R&D were combined into one functional department to make it easier to allocate engineering resources to the highest priority projects, a major cause of the cold war.  Having come to the realization that business teams had to be led by individuals with a general management perspective and more experience than the engineering managers they had assigned to this role, senior team members decided to ‘‘double hat’’ themselves. Four took leadership of one of the four businesses in addition to their functional role.  The strategic management process – strategic planning and budgeting, business reviews, and decisions about priorities, as well as allocation of financial and human resources – was redesigned.  SFP was adopted as an annual learning and governance process and was integrated into the annual planning process. The quotes from SRSD managers below illustrate how organizational members saw the changes that occurred. Note that changes in roles, responsibilities, decision rights, accountabilities, business processes, and rules of engagement (first quote) are far faster than changes in leadership behavior

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(second quote). These take time and may require focused interventions and learning mechanisms that build capabilities, although this did not occur in SRSD and judging by SRSD’s success after SFP these were not needed: What was really important was that we really understood what the process was trying to do – that is aligning the different parts of the organization. I think that the alignment we now have after the reorganization is both accurate and necessary for us to become an effective organization. In the small systems business that we have, there is no way of getting around the matrix structure. In the past there was no clear level of top management responsibility and ownership for key decision-making y That is something that is vital for strategic success of SRSD and it is something that the matrix is able to provide (A middle level production manager 1 year after SFP). Our top team has taken some big strides in becoming more effective. Scott [GM] looks to be taking more control of the reins and becoming the kind of leader the division needs. He and his staff will sit down as a group now and talk strategy where before they would have only talked about administrative detail. But they are still not where they want to be as a team. They still seem to be having a tough time getting together and really coming to agreement over some tough and pressing issues. I think people in SRSD wanted and overnight change in the top team’s behavior. But, realistically, most good teams are not made in a day. They will have to work at it(Task force member 2 years after SFP).

The features of SFP that enable systemic change are enumerated below:  SFP requires the senior team to conduct a diagnosis – to agree on what they heard and to identify root causes – first as individuals in an overnight assignment and then as a group on the second day of the three-day Fitness Meeting.  Senior teams are provided expert resources in the form of a causal map of the territory and consultants who bring a systemic perspective and capabilities to help them work their way through a variety of issues. Consistent with process consultation principles, however, consultants frame problems and suggest alternative solutions. They do not offer recommendations. If consultants do not possess needed expertise, they help find them.

SFP Develops a Partnership and Commitment to Change The intense emotional interaction between the senior team and the task force fostered by SFP develops a partnership and commitment. Senior teams come away from the process impressed by the competence and general management perspective of their key people, and task forces develop a closer relationship with senior teams. Consider the following quotes:

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Because SFP is designed to create a dialogue about what stands in the way of business success, senior teams are moved to act by the SFP process. They become bolder (as illustrated by an earlier quote), more aggressive in planning change. That is true in virtually all cases regardless of the ultimate extent of change over time. Said differently, SFP creates commitment to think systemically and aggressively about realignment of the organization, but sustainability depends on several conditions discussed later. The following quote by a senior team member in SRSD illustrates how a partnership and commitment develops: The task force feedback really served several important roles. Not only did it function as a powerful tool to communicate difficult issues, but it also showed that the top team cared about what employees thought and that we would not institute a change process without asking for their input. Also I believe that by asking for their ‘‘unvarnished’’ opinions, the employees realized just how serious we were about improving SRSD’’s effectiveness. To Scott’s (general manager) credit, he probably took the most amount of risk initiating a process like this. He acted as the linchpin, and without his involvement, a process like this would have been spinning its wheels. (SRSD senior team member)

Commitment to change is developed in task force members as well. They are partnering with the senior team in solving strategic problems. Moreover, task forces view SFP as a once in a life time opportunity to improve the organization’s functioning and commit themselves to doing a thorough job of collecting data and feeding back the truth. The following quote from a corporate level task force member is illustrative: The whole process was very cathartic and quite energizing. Most task force members knew at least a few of the other members and we came together and clicked into a sense of openness and trust. There was nothing held back when we were together as a group. We felt we had been handed an important responsibility and we wanted to do it justice. The process and the group seemed to be very good at encapsulating the essence of what we learned rather than getting caught up in any individual’s hobbyhorse. When we met to prepare (for the feedback session) we decided we would not hold anything back in our presentation to the executives, but also that it would not be a public appraisal of individuals. We would not feedback juicy quotes about people or issues unless it really added to the discussion. We did not, however, hold back the personal stuff on David (the CEO). People really like David. He is balanced and an easy person to like, but if [people we interviewed] say [our company] does not have a clear vision, that is personal to him.

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Exposure to other departments – task force members’ interview outside their own department – develops a general management perspective. Task force members cease seeing the problem as that of another department and begin to see them as the organization’s, thus becoming committed to improving the system rather than blaming. A task force member from R&D noted that ‘‘when I started into my interviews I thought that marketing was the problem but now I think we in R&D may be the problem.’’ Our objective was to create a strong partnership between the senior team and task force members. As their best leaders in the organization such a partnership was important practically and symbolically. Steps 7 and 8 of SFP – task force members offer a critique of the senior team’s action plan and are invited to participate in revising the plan – are designed to do this (see Fig. 1 and Appendix). Until we redesigned these steps to enable task force members to meet alone and discuss their critique as a group, they did not speak their minds forcefully or not at all during this critique phase. After the redesign exchanges were more spirited, change plans became better and stronger partnership developed. For example, the CEO of a company was told that a major issue – taking out a layer of management – had not been dealt with in the action plan. The action plan was revised and partnership and commitment grew. Task force critiques can be emotionally difficult for leaders and senior teams heavily invested in their plans after hours of intensive work in the three-day Fitness Meeting. SRSD’s general manager recalled his feelings after the task force disagreed vehemently with how the senior team had grouped products into businesses. The task force’s reaction to the business groupings literally felt like it took the wind out of the sails of my team. My staff and I worked for almost a half a day on just those groupings alone and finally felt that we had come up with the best possible options. I think it would not be an exaggeration when I say that hearing the task force criticize the groupings as well as other parts of our recommendations made for one of the worst days of in my career at HP. What seemed to make matters worse was that the task force didn’t seem to be offering up any better solutions. They were just playing the part of critics. I knew that I was going to have to do something rather quickly to alter their perspective; otherwise we were never going to receive their support for the change.

Cocreating an organizational solution with the senior team can create a partnership and build commitment, as happened at SRSD. But the transition from reporters to partners in change has proven to be a difficult transition for task force members to make, but an essential one for a true partnership to develop. In response to the consultant’s question of a task

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force member about why SRSD’s task force was not offering an alternative organizational solution the general manager requested, he responded: Up until somewhere around 11:00 this morning, we were supposed to be just reporters; now we are expected to be co-change architects in this process. That is a tough transition that requires a lot of trust. There is a tremendous sense of risk in telling the boss how the company should be run, and think there is quite a few in the task force that are uncomfortable with doing that.

General managers had to find a way to validate employee partnership and build commitment by involving task force members in revising the action plan. The general manager of SRSD created three working groups composed of senior team members and task force members to develop alternatives. From this partnership a better solution to which everyone was committed developed. Task forces had to lean to interact with the senior team in solving difficult managerial problems. They had to take risks, speaking up and interacting in a less structured environment than that offered by the fishbowl. We have learned steps 7 and 8 of SFP are particularly powerful in creating partnership if managed well. Most leaders require some guidance from consultants. Partnership with and commitment from the larger circle of 100 plus interviewees begins in steps 4C of SFP (see Appendix). After completing their feedback to senior teams and leaving the Fitness Meeting, each task force member calls the people they interviewed about what happened when the unvarnished truth was delivered. They are instructed to tell them how the senior team responded to feedback (were they receptive or defensive?) not the substance of the feedback (that comes later). Because SFP is designed to prevent defensiveness and develop collaboration, task force members can report that the senior team was nondefensive and heard the truth and began a collaboration to improve the organization – a communication that reduces cynicism and builds hope and commitment. As noted by Foote and Heckscher (2006), SFP’s emphasis on partnership challenges deeply embedded cultural norms of deference to authority and independence from other departments (noncollaboration) found in hierarchical organizations. Leaders who undertake SFP set off a struggle between the old order and the new order of openness and collaboration. ‘‘The old order has a lot on its side: it is supported by established habits, reliable expectations, and a system of formal and informal rewards’’ (Foote & Heckscher, 2006, p. 498). SFP enables a ‘‘fair fight’’ between the old by surfacing old noncollaborative and performance-oriented habits and creating a platform that can be employed for ongoing open dialogue about progress.

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Leader and Leadership Teams Develop Doubts about leadership effectiveness are pervasive in organizations, which is why leadership is almost always one of the silent barriers. Consider this view inside one of the corporations that undertook SFP. There were some big question marks around the leadership, how the leadership was culpable for a lot of things that had gone wrong in the past. People talked about the Allied deal, the halving of the stock price, the big price we paid for [a company] only to sell it a few years later for much less. They also talked about how these people survived at y even though they had made those mistakes. Then they look at the annual report and see these executives still got their bonuses. How can this be the leadership to take us forward?

The fact that leaders and senior team members learn about their effectiveness provides an opportunity for individual and senior team development. We have learned that it is important to allow space for that development, provided the leader and his/her team are ready. The more senior teams develop trust and become effective the more the organizational transformation gains momentum. The data in Fig. 4 support this conclusion. Extent of change is strongly associated with extent of change in the silent killers. The general manager/CEO’s openness to learning determines the amount of personal and leadership development, not to speak of increases in their legitimacy. In the least successful applications of SFP the leaders made changes in strategy, organizational design, or the strategic management process, but failed to develop their leadership team or adapt their leadership style. Task force members also develop as leaders. A task force member in SRSD opined that ‘‘the opportunity to participate in SFP was the best management development experience he had had in 20 years in the company.’’ As noted earlier, exposure to other parts of the organization develops a general management perspective. Participation also exposes task force members to values and leadership principles embedded in the process as well as practice in listening and dialogue.

Changes in Organizational Outcomes and Performance A post hoc analysis, based on written cases by independent researchers, indicates that positive changes occurred in 8 of 12 organizations. The overall outcome score in Fig. 4 is the mean of 11 outcome dimensions

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developed inductively from the cases. Of these the following nine changed substantially: 1. Changes in how the business was organized and managed improved alignment with strategy. 2. Leaders embraced the basic principles and values underlying SFP. 3. Managers learned and developed (leader, senior team, and task force members). 4. Significant progress was made in becoming a listening and learning culture. 5. The capacity of the organization was improved to implement its strategic tasks. 6. Human outcomes such as morale, attractiveness of the organization to recruits, and retention improved. 7. Organization made significant progress in overcoming barriers to performance such as coordination and commitment. 8. The top team created the context for ongoing action learning. 9. Performance accountability was significantly strengthened. Hewlett Packard’s SRSD, the most affected of the 12 organizations, is illustrative of the changes SFP fosters. Its transformation from a functional to matrix organization dramatically improved coordination between functions around four businesses. The redefinition of the top team’s role in reviewing the businesses, setting priorities, and reallocating resources improved strategic management and accountability. And their decision to integrate SFP with their strategic management process meant that the leadership team embraced the principles and values of SFP – giving people voice and engaging them in ongoing learning and change. Without help from consultants, they also adapted the SFP process to improve coordination and collaboration with a sector sales force. SFP can create very rapid change. SRSD’s senior team fundamentally redesigned its organization in two days and enacted the changes three months after SFP was launched. The power of the truth, seeing and acting on the system as a whole, and concentrated three days of work by the senior team achieved these rapid changes. HP’s Executive Vice President of Test and Measurement saw dramatic changes in SRSD’s business performance from his position two levels above the business unit. They have done a terrific job after a year or so of struggling to figure out what the business was and how to get it going y Today I see them as one of our star divisions. In results, [SRSD has] achieved and exceeded my and Dick’s (Group Vice President to whom SRSD reported) expectations [not only] in terms of level of business and speed with which they have made progress in achieving business results, but also in the magnitude of the

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turnaround. Today SRSD represents best practices in a lot of areas y They have really turned around weakness into strengths. It’s a marvelous success. They now have the infrastructure and skills to really grow y Now they are one of the top divisions in terms of growth in profitability and return on assets, as well as customer satisfaction.

Does SFP develop organizational effectiveness, the fundamental proposition of this chapter? This proposition is supported by the transformation of silent killers into strengths in 8 of the 12 organizations in Fig. 4 as well as by our qualitative data. Does SFP impact financial performance? There is evidence that in some organizations it did as illustrated by the quote from HP’s sector head and the business unit’s financial results over a six-year period. There was no systematic difference, however, when we compared the eight most and the four least changed organizations in Fig. 4. Time frames of our analysis differed across the 12 organizations and exogenous market forces affected performance in the near term. Consider SRSD the most changed organization in the sample of 12. Revenue and profits soared after SFP and continued on that trajectory for three years but so did the telecommunication market as a whole. In year four, however, revenues and profits declined dramatically for a year during the Asian financial crisis in the late 1990s and then returned to former levels in the next year. Senior team members felt, however, that without the changes prompted by SFP they would not have been able to take advantage of favorable market conditions.

Boundary Conditions for SFP Success SFP is not magic bullet. Though SFP had a positive effect, in most application the magnitude of the effect varied as Fig. 4 and our other experiences show. What accounts for the differences between more and less successful SFP interventions? We have identified the following situational factors. In effect these are the conditions for success and the more they coexist the more likely it is SFP will result in a fundamental improvement in the organization’s alignment and effectiveness. Dissatisfaction with the Status Quo Underperformance proved to be an important motivator. When leaders saw SFP has an HR intervention, an engagement program or employee survey, as one CEO did, SFP does not create fundamental change. This has taught us to ask leaders to define performance gaps they want to close during the contracting process.

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Leader Readiness We find that new general managers – who are in their first general management job – and taking charge of a new organization – are the most ready to learn. They have the fewest well-formed assumptions about how to manage their new business and because they are new to the organization the silent barriers reported by the task force are not of their own making, removing any reason for defensiveness. The new general manager taking over a troubled business unit commented that ‘‘SFP saved him 24 months’’ in turning around the business. A CEO noted that the issues put on the table set an agenda, it told him what to work on and made it easier to move forward with commitment from the organization. Alignment of Leaders and Culture with SFP Values When the values of SFP clash with the culture of the organization, we have found leaders uncomfortable with assumptions embedded in SFP – performance, openness, and collaboration. Such leaders, we have found, do not generally turn to SFP as a preferred intervention. If they do, the path is more difficult and success variable. The leader’s openness to learn is a function of his/her assumptions, but these are also shaped by the corporation’s culture. The leadership team at SRSD embraced SFP, after initial reluctance by the general manager, because they had grown up in HP’s high-commitment culture. Note that three Agilent Technologies divisions, an HP spin off, led by former SRSD senior team members, are also among the eight most changed in Fig. 4. The least changed organization in our 12-company study – the privatized government organization – was hierarchical, bureaucratic, and led by a punishing top-down turnaround manager who we learned from the task force demeaned employees. Though senior team members and lower levels embraced SFP and were energized by it, the president and his HR executive ultimately did not. Internal Organization Development Resources Reconceptualizing and redesigning the organization and its management processes is an intellectual activity. Personal and cultural change is an emotional activity subject to resistance and regression. It demands constant attention, follow-up, feedback, and reminders. Internal OD resources can be very helpful substantively and symbolically. SRSD had such an HR manager. She reminded the senior team of commitments they had made to alter the way they worked and made decisions. She supported lower level managers in a variety of ways. And she learned how to facilitate SFP in the four years that followed the initial intervention. On the other hand the privatized

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government agency, where SFP was least successful, had a human resource executive who did not have an OD orientation or skills and was so attached to the CEO politically that she could not act as an honest broker. SFP is Recycled Not surprisingly, the most sustained change following SFP occurred when the leader decided to recycle the process periodically. Leaders who saw SFP as ongoing learning and governance process had values and predispositions aligned with SFP, to be sure, but recycling SFP created crucial opportunities to adapt solutions, deal with unintended consequences, and develop as leaders. SRSD is again an example. Second, third, and fourth iterations of SFP caused leaders and organizational members to learn and deal with a broken order fulfillment process, an ineffective project management organization and poorly functioning two-boss appraisal system needed to support the matrix. As noted in a quote above that learning extended to the development of the senior team over several years. National Culture Research evidence has shown differences in values with regard to power distance, tolerance of uncertainty and ambiguity, and predisposition to individualism versus group identity (Hofstede, 1980). Implementation of SFP in Latin America, Europe, and Japan suggests that the process, with only slight modifications, can be effective in a variety of cultures. In all cases we found that SFP was embraced by lower levels as an opportunity to have a voice in improving their organization. We have seen no SFP that derailed due to national culture. Two of three Latin American organizations in the sample of 12 companies (Fig. 4) were among the 8 most changed. However, in most successful applications outside the United States, the organization was part of a U.S. multinational (several applications in Europe excepted) and the leaders were expatriates (Merck Brazil excepted). We conclude that expatriates who bring business values and a performance orientation typically found in successful multinational corporations can probably challenge norms tied to national culture more easily than local nationals. Consultants The eight successful SFPs in Fig. 4 were led by several different consultants. In at least one case the consultant who facilitated the most successful SFP also facilitated the least successful one. One of the eight successful SFPs was facilitated by an internal HR manager who had read the manual and had no

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previous experience with SFP. We conclude that the general manager/CEO, not the consultant, is the important ingredient and that structure of SFP is robust and makes a more important contribution to success than the consultant. The exception may be in organizations with complex strategies and organizations. There consultant expertise and experience may help frame discussions and alternative solutions. SRSD is an example in which the consultants framed organization design choices and offered suggestions on several issues to the senior team that facilitated progress during the threeday Fitness Meeting.

What SFP Did Not Change SFP was designed to break organizational silence, which is brought about by the inability of people to be as open in public as they are in private. The six silent barriers that task forces were able to report openly in the context of SFP were widely discussed behind closed doors with trusted colleagues, but not with those on the senior team and particularly not with the general manager or CEO. In effect, SFP was able to bypass what Argyris (2010) calls organizational traps – the inability of people in organizations to have a conversation that really matters. Such a conversation, as Argyris has shown through decades of research, reveals normally hidden views and underlying assumptions. Participants in the conversation ask others to challenge their views and assumptions. We designed SFP to bypass organizational traps, but we had hopes that experience with SFP would develop the capacity of the organization and its people to be more open. That did not happen. Consider that task forces did not critique the senior team’s action plan openly and honestly despite the fact that they had been told about silent barriers successfully only a week earlier. It was not until we created a structure and process to facilitate an open critique – the task force met alone to discuss the plan and reported their critique as a group – that task forces were able to be open. Since that exchange became productive in resolving differences and developing commitment to the joint plan, the assumptions underlying task force critique were typically not revealed. Consider also that there has not been a change in the conflict avoidant culture of a company that has employed SFP for 20 years. In other words, despite successfully bypassing organizational traps and facilitating fundamental change in organizational effectiveness, something to be celebrated, SFP did not develop the capability of actors in the process

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to have an open dialogue. In a critique of SFP, Argyris (2010) notes that while SFP enables truth to speak to power and stimulates responsive behavior by senior teams, it does not build capability to overcome traps without the support of SFP. His critique is valid. The next step in developing SFP is to follow it with development of individual skills in open fact-based dialogue developed by Argyris and his colleagues. Having said that, will senior teams invest in developing constructive conflict capabilities? While Argyris (1990b) has successfully introduced dialogue skills in a large consulting firm led by enlightened managers, I know of no other examples. The power distance in less enlightened firms may require exactly an institutionalized mechanism like SFP.

EMERGENT THEORY OF ORGANIZATION DEVELOPMENT The finding that six silent killers appear as a syndrome of self-sealing and interconnected barriers to effectiveness suggests that a systemic intervention that targets all six barriers simultaneously is needed. That is exactly what SFP has proven to be. As shown in Fig. 4, overcoming all six barriers is strongly associated with extent of change. That is because honest, collective, and public conversations about strengths and barriers offer the opportunity for the senior team to see problems in relationship to each other – to see the system, as Barry Oshry puts it (Oshry, 2007). This in turn enables senior teams to develop a systemic change plan. And if senior teams continue to employ SFP to inquire into progress of change, they discover how progress in one facet of the organization, for example, a redesign of the organization’s structure, is being held back by slower change in another facet, such as the performance evaluation system, leader and senior team effectiveness, or a shortage of leaders and other human resource capabilities. Feedback can help the senior team continue its learning process about the organization and their leadership. Unfortunately, the field of OD, despite its espoused goal of systemic change, is still largely defined by discrete interventions. Exceptions may be large system interventions such as search conferences and whole system interventions (Weisbord, 1987; Bunker & Alban, 1991), though recent evaluation of six large group/systems interventions suggests that they did not change the system (Mohrman, personal communication, 2011). I certainly know of no evidence that these interventions surface and enable

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change in the silent killers. Using the SRSD case as an illustration, I describe below how typical one-dimensional OD interventions would have failed to create change in the silent killer syndrome in SRSD. I then go on to offer a set of intervention principles that enable senior teams to ‘‘see’’ and act on the system – all six barriers and their underlying policies and practices.

How Typical OD Intervention Fail Unlike SFP, most OD interventions target one or perhaps two of the silent barriers without explicitly surfacing and targeting other barriers for change. Nor do these interventions frame the work of change in a strategic and performance context. This undermines urgency, systemic diagnosis, and simultaneous change in essential multiple dimensions of the organization. Consider the following typical scenarios applied to the SRSD. Had strategy consultants been engaged to resolve problem of conflicting strategies reported by SRSD’s task force, they would more than likely have failed to confront the client with the ineffectiveness of SRSD’s senior team and the one on one leadership style of SRSD’s general manager, both of which were causal to the barrier of conflicting strategies and priorities reported by the task force. Senior team leaders are often happy to focus on strategy to avoid confronting leader and senior team effectiveness issues, and strategy consultants do not have the perspective, contract, or skills to bring up these issues. As a partner in charge of McKinsey’s Change Center observed, ‘‘consultants call me at the Center frustrated about client CEOs who fail to implement their recommendations.’’ They ask, ‘‘what can you do to help me with these ineffective leaders?’’ When asked if they had confronted the CEO with their assessment, they uniformly said they had not and did not know how to do it. Without senior teams confronting their effectiveness, it is questionable whether strategy recommendations would be accepted and acted on in an effective manner, given what we have learned about the mutually reinforcing nature of the silent killers. In one organization we worked with, a $2 million strategy study was locked in the Vice President of strategy’s bottom drawer and could not be discussed by the senior team due to conflicts in the team, not unlike those we found in SRSD. Moreover, even if senior teams accept strategy recommendations by consultants, they would need to confront their own leadership roles and behaviors and issues of organization design to enable execution. In the case of SRSD such redesign, as noted below, meant

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dramatic changes in organization design and complementary changes in roles, responsibilities, and decision rights. Had organization design specialists been called by SRSD’s senior team, they would have noted that integration across functional silos needed to improve to overcome the ‘‘cold war’’ between R&D and the Custom’s Systems (applications engineering) group. If they had recommended a ‘‘matrix’’ organization, the redesign SRSD’s senior team decided to adopt, that design would not have worked effectively, given the ineffectiveness of the senior team and what we know about the importance of an effective senior team in making a matrix work (Davis & Lawrence, 1977; Galbraith, 2009). SRSD’s senior team might have engaged a team development consultant to resolve tensions in the senior team and improve their efficacy. Interpersonal relationships, the general manager’s leadership style of conflict avoidance, as well as meeting frequency and structure might have been discussed and targeted for change. But, such an intervention would have been insufficient. Without also clarifying SRSD’s strategy and priorities and redesigning the organization for better coordination, team development alone would not have led to improved organizational effectiveness. Given frustration with the general manager’s leadership style by managers in the business, SRSD’s human resource manager might have suggested a coach for him. That might have led the general manager to discover his aversion to conflict, but such an intervention would not have been embedded in the strategic and organizational context SRSD’s senior team needed to examine. It would not have resulted in the changes to the strategic management process and organization design SRSD’s senior team made. Hearing complaints about the ineffectiveness of cross-functional team leaders, the senior team might have chosen to launch a leadership development program or to find coaches for business team leaders. This may have developed leadership skills of business team leaders, but without fundamental changes in organization design it is doubtful that they would have been able to make significant improvements in business team effectiveness. And, of course, without the honest, collective, and public conversation, SFP-enabled SRSD’s senior team would not have been able to learn about the silent killers and enact a change in the total system. HP, like many companies, regularly conducted employee surveys, but survey findings did not change SRSD. Senior team member and lower levels knew about all these problems but could not find a way to create an organization-wide conversation. Ultimately, the general manager and perhaps some of the

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senior team members would have been replaced, but the organization would have lost time and been no closer to realigning their organization in fundamental ways. It is interesting to note that having learned about the power of SFP in enabling learning and change, SRSD’s leaders decided that SFP was much better at giving voice to employees and enabling change than HP’s annual employee survey. Consequently, they asked HP’s corporate human resource function for an exception to this annual requirement.

Developing an Effective Organization: Emerging Normative Theory We began our action research journey with a method – the Strategic Fitness Process – not an integrated coherent theory of OD, thought the piecemeal assumptions described earlier constituted the beginning of a theory. Twenty years of applying the method and researching has deepened our understanding of what makes an organization effective and convinced us that not only the method predictably transforms silent barriers into strengths under certain conditions (see above), but it represents an integrated normative theory of OD. By deconstructing SFP we were able to derive core operating principles needed to transform silent barriers into management and organizational strengths. The Theory The development of an effective organization requires honest (the unvarnished truth about the system is revealed), collective (a critical mass of key stakeholders inside and outside the organization), and public (what is learned and actions taken is known to everyone) conversations about the alignment of the organization with the senior team’s espoused strategy and values. Plans for change that emerge must also be stress tested by lower levels and an honest conversation with the senior team must follow. This conversation must convey lower level views about the responsiveness of the action plan to feedback and its ability to implement. Regular, honest, collective, and public conversations, using the operating principles below will enable senior teams and organizational members to learn about the effectiveness of the system of leading, organizing, and managing the enterprise and enable ongoing change consistent with internal and external realities. A crucial by-product of this process is the building of a trust- based community that shares common purpose and values.

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To develop a complex multilevel, multiunit organization, honest conversations that matter must be held periodically in all the organization’s key subunits including its top subunit. (Frequency depends on how rapidly the environment is changing and how much work has to be done by leaders to develop trust and legitimacy.) Such a process will develop silent barriers into leadership and organizational strengths in all key subunits and ensure ongoing learning and change (Beer, 2009, pp. 311–318). If leaders at every level are held accountable by their next higher level manager (for the CEO it is the board of directors) to report what they learned about their business, organization, senior team and their leadership, as well as the action plans they are undertaking to improve, the larger organization will have institutionalized a process that will ensure that potential silent killers do not develop or if they exist that they are transformed into strengths. That in turn will ensure continuous realignment to changing realities. But what of those who cannot learn from these conversations. They become candidates for replacement. In this way the organization creates the conditions for effectiveness described earlier – a culture and norms that support honest, collective, and public conversations as an ongoing way of leading and managing. By institutionalizing honest, collective, and public conversations at every level, the organization will have created a learning and governance system that ensures continuous improvement in the quality of leadership, management, and organization at every level – a process analogous to quality improvement processes in operating environments. The Operating Principles The quality of the learning and governance system can be assessed by the extent to which it adheres to the following interdependent principles: The Senior Team Must Be at the Center of the Process. The senior team has to commission the learning and governance process, receive feedback directly, diagnose the organization, plan action, and continue the iterative advocacy and inquiry process. Too often senior management delegates the process of change to staff groups, consultants, or lower level task forces who collect the data, analyze it, and make recommendations. This distances senior teams from organizational problems and causes lower levels to doubt senior management commitment. We have found that senior team involvement in every step of the change process connects senior teams emotionally and intellectually to the urgent need for change. Making themselves vulnerable, as one leader noted, increases their power by enhancing their legitimacy, building trust and commitment. It causes senior teams to ‘‘see the system’’

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and give them the opportunity to shape the system as opposed to feeling they are the victims of politics and incompetence in the organization (Oshry, 2007). Focus Inquiry and Action on Strategy and Performance. The conversation has to be framed in terms of strategy, values, and performance. This means senior teams must develop a point of view so they can advocate it as the first step in learning and governance. Leaders of for profit or not for profit organizations care about performance. It is what they are measured on. Therefore, an inquiry focused on gaps in performance or strategy execution motivates learning. A focus on strategy and performance provides the widest aperture. It enables the discovery of what we have come to call ‘‘big boulders’’ that block effectiveness. This is in direct contrast to inquiries conducted through employee surveys and structured interviews. It is why the inquiry must start with the senior team defining their strategy and gaps in performance they are concerned about. Enable Truth to Speak to Power Safely. The intervention must break organizational silence. Unless all of the silent killers or their proxies are surfaced in the inquiry, the change will not be systemic. As has been amply demonstrated by our and many other research works, senior leaders do not learn the unvarnished truth from lower levels due to defensive routines in organizations (Argyris, 1990a; Beer & Eisenstat 2000; Detert & Edmondson, 2007). The intervention method must, therefore, provide a structure and process that will allow lower levels to provide feedback on the unvarnished truth safely and senior managers to receive feedback without becoming defensive publicly. Otherwise, the first sign of defensiveness will shut down feedback and reinforce organizational silence. Leaders are human and defensiveness is always possible. The problem is that it is hard to predict who will be defensive and when. Given the stakes – organizational health and survival – a protective structure and process is necessary. Such an open process increases trust and commitment our data shows and builds community. The Truth Must Be Delivered by the Organization’s Own Employees. Consultant or survey feedback is too easily denied and distances senior teams emotionally from life in the organization – the frustration experienced when an organization is not aligned and ineffective. Face to face interaction between senior teams and their best people about difficult issues makes the conversation emotional, a necessary condition for change (Huy, 2001) provides valuable information

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only known to lower levels, begins to build a partnership, and creates accountability of senior teams to their own people. Research has shown that surveys lead to change only when face to face conversations about findings are employed (Klein, Kraut, & Wolfson, 1971).

Data Must Be Valid and Lead to a Systemic Diagnosis. The fact that truth is enabled to speak to power is the most important measure of the data’s validity (Argyris, 1970). Truth about the system is complex and qualitative, and it has to be more than individual opinions. It has to reflect a consensus view of how the organization works. To achieve this, we have adopted a ‘‘fire hose’’ method of interviewing – big broad questions such as ‘‘what are the strengths and barriers to strategy implementation,’’ followed by probes as needed. SFP also includes a rigorous analysis to identify consensus themes. This assures senior management that what they are hearing is objective – not someone’s opinion. To be valid, emotions associated with the data must also be conveyed. The fishbowl method allows that. In early applications of SFP, task forces delivered their findings in PowerPoint slides. This removed richness and emotional context. Huy’s research (2001) on the role of emotions in organizational change supports our own findings. Emotions stimulated by honest conversation played an important part on developing readiness and commitment to change. Finally, a systemic framework and a consultant who can focus the senior team on the right question assure that multiple causal factors are considered, including the potentially most threatening leadership behavior.

The Conversation Must Iterate Between Advocacy and Inquiry. An effective dialogue requires both advocacy and inquiry. As Argyris (1985) has shown advocacy tends to crowd out inquiry. It is why we had to create a structure that iterates between advocacy and inquiry (Fig. 4). In SFP senior teams begin the conversation by articulating a strategic and values direction. Inquiry is achieved through the task force of employees who provide feedback on findings in a setting that ensures honesty and adequate attention by the senior team. The advocacy phase begins again when the senior team communicates its action plan to the task force. And inquiry into critiques of the task force is ensured by giving task forces time alone to critique and report their evaluation to the senior team. This iterative process prevents defensiveness and facilitates learning, given that dialogue skills are underdeveloped in most organizations.

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Senior Team Must Be Accountable to Lower Levels. Unless senior teams commit themselves to a public conversation – one in which everyone in the organization knows what feedback the senior team heard, their diagnosis, and their action plan – they have not made themselves accountable to the organization. It is the public nature of SFP – the partnership that it creates – that makes the senior team accountable to lower levels and lower levels accountable to the senior team for acting on the data. If results of the inquiry and planned changes are not made public cynicism about leaders’ intentions will increase and commitment will decrease proportionately. The Conversation Must Be Collective and Public. By collective I mean that information about problems and solutions must be gathered from differentiated departments along the value chain. This not only sheds light on problems of integration and economic value creation, but it provides insights about leadership, values, and cultural issues in different parts of the organization. It produces commitment to learning and change by all parts of the organization. Because not everyone can be directly involved in the conversation, making inquiry findings, diagnosis, and action plans for change public – what did we hear, what is our diagnosis, and what are our plans for change – builds trust and humanizes the senior team. This in turn enables the building of a community of purpose so essential for integration, commitment, and organization adaptability required in a knowledge economy (Foote & Heckscher, 2006). The Conversation Must Be Structured and Facilitated. The most important problems facing businesses give rise to emotions. Task forces we worked with conveyed the frustrations of lower levels and, as noted above, aroused defensiveness until we designed the process to prevent it. A ‘‘container’’ is needed to guide managers and their people through emotionally charged conversations. Even the most open leaders can make defensive mistakes when hearing about difficult issues from lower levels. Task forces may smooth their findings, avoiding feedback about the most difficult and emotionally charged data. And it is all too easy for honest conversations to become destructive. A structured process that fits the specifications described here and a consultant who can facilitate the process and be a resource to senior teams makes the honest conversations predictable and safe. A structure and process also makes it possible, in our experience, for internal HR or OD consultants to facilitate honest, collective, and public conversations, reducing dependency of external consultants and making institutionalization possible.

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The Conversation Must Be Recycled. In a world of competition and continuous change, ongoing learning and adaptation is required. Moreover, organizational designs and new practices seldom work as planned. They have to be adapted based on experience. The Hewlett Packard SRSD case illustrates this. Though the matrix organization they introduced in the first year worked pretty well initially, they learned in the third annual application of SFP that the two-boss performance evaluation system so crucial to the matrix was not working. It led them to specify the process and train leaders in how to enact it. The most profound and sustainable changes occurred in organizations that recycled SFP. The field of organization change and development is fragmented (Worley & Lawler, 2010). It is defined by multiple interventions unconnected to a theory of organizational effectiveness. Our action research has allowed us to connect the dots – to develop a theory and method that are internally consistent. Twenty years of experience and our empirical research findings provide some evidence for external validity. Within the boundary conditions we have identified, the operating principles for enabling an honest collective conversation transform silent barriers into organizational strengths. They developed a more effective organization in a relatively short time frame. More research is of course needed to test theory and method.

IMPLICATIONS FOR PRACTICE For Management and OD Practice In my experience, managers often choose interventions that bypass the silent killers and consultants who will collude with them in their effort to avoid hard realities and choices. A lot of effort and money is invested with relatively little impact on the organization’s effectiveness. The field and the consultant lose credibility in the eyes of informed observers. Though much more work is required, the integrated normative theory for developing an effective organization presented in this chapter provides managers and their OD consultants with a framework for conversation about the current state of their organization (Do the silent killer exist, what are their effects and why?), a desired future state (What will be different if silent barriers are transformed into strengths and why?), and the means for change senior teams have chosen. It also specifies principles for learning and change that ideally should be followed to transform silent barriers into strengths. Because the theory specifies boundary conditions for success, it

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enables managers and consultants to have a conversation about the conditions that must be developed to achieve success and the probability of success if they are not. In a highly fragmented field, populated with a wide array of idiosyncratic assumptions and intervention practices, the ability to predict gives OD practitioners credibility and legitimacy. It professionalizes the field by setting standards for effectiveness and the means for achieving it. Importantly, an integrated normative theory allows senior management to promote those that fit the conditions for successful learning and consultants to qualify their clients. In our experience, the leaders who embrace SFP and its underlying values and principles are the most effective leaders and those that don’t the least effective. The theory and method for developing an effective organization demands that practitioners possess a wider array of knowledge and capabilities than most practitioners do. As noted earlier, SFP opens up the system. It raises issues at the leader, leadership team, and organizational level of analysis. In effect SFP puts the case of the organization – the good, the bad, and the ugly – on the table. It demands that consultants be effective thought partners to managers in diagnosing the whole system and that they have a substantive working knowledge, if not detailed technical knowledge, about multiple facets of the organization and their relationship to each other. I have found the three-day Fitness Meeting is an extraordinary opportunity to help leaders think and act systematically. It demands consultants have a general management perspective that their clients presumably have or, if they do not, that they help develop that capability in them. To my knowledge there is no school or professional institution that provides this preparation. Most consultants, who develop a systemic and general management perspective, including me, do so through an assorted unplanned set of experiences. If OD is to become a true profession, it requires a theory and set of standards by which good and bad OD practice – that of managers and consultants – can be differentiated. An integrated systemic theory of organizational effectiveness and intervention and a means of training practitioners – managers and consultants – such as presented here can help move the field in that direction.

For Corporate Governance Corporate governance is in need of substantial reform according to informed observes and researchers (Lorsch & MacIver, 1989). In the last decade, there have been numerous examples of scandals and corporate

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failure – Enron, General Motors, Bear Sterns, Washington Mutual, Countrywide Mortgage, and Lehman Brothers. In all these instances leadership, values, ethics, or organizational effectiveness issues were the underlying cause. Journalistic reports confirm that the silent killers – particularly poor vertical communication – were present in all of these organizations (Beer, 2009, pp. 327–332). How could well-intentioned boards of directors, which in my view most are, allow their companies to fail? Not only do boards lack a good shared theory of organizational effectiveness, they lack the institutional mechanism that will enable them to learn regularly about the health of the corporation, its ethics, or the quality of its CEO’s leadership and organization (Foote & Beer, 2009). Internal to the company, CEOs have good information about the financial performance of their major business units but are left to infer about the effectiveness of their organizational units and their leaders from informal conversations with observers in the company, some of whom may be biased or not competent to make such judgments. In an increasing number of companies, formal surveys provide more rigorous data about employee engagement, for example. These surveys do not typically contain items to assess the six barriers, however. If they did, the data would not be rich enough to enable a deep clinical conversation – within the unit or between its leaders and higher levels – needed to enable leadership and OD. Nor to surveys or consultant reports engage lower levels sufficiently to build trust community, and commitment, which are fundamental conditions for long-term success. We know that alignment, commitment, and effectiveness are leading indicators of long-term performance (Denison, 1990). What if corporate boards required their CEO to conduct an SFP and CEOs in turn did the same with their key unit leaders? Findings from an SFP like learning and governance process built on the principles outlined above could provide boards of directors and CEOs truths often hidden from them, truths that could prevent unwelcome and costly surprises. If learned in time, boards or CEOs could offer managers help to develop greater effectiveness or replace them if they do not. An institutionalized learning and governance process would ensure continuous realignment and adaptation to continuous change. It would create a new and healthy psychological contract between leaders and their higher-ups – to be a leader in this organization you have to demonstrate the capacity to have honest conversations and learn from it. The transparency that SFP creates has led, in a few instances, to revelations of unethical practices and in one instance to abusive managerial behavior. It enabled leaders to confront these practices and behaviors and

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make changes. Bartunek and Woodman (in press) urge that OD can and should make a stronger contribution to the development of ethical behavior in organizations. Our experience with SFP is illustrative of the type of OD intervention needed. It suggests that if managers employ an SFP like learning and governance process, they will ensure alignment with ethical principles and espouse values. One might ask why an institutionalized learning and governance process is necessary to develop and sustain an effective organization. Why not simply select good leaders. Wouldn’t they provide opportunities for employee voice? For one thing predicting leadership effectiveness is very difficult. Even if it were possible, my observation is that even the best leaders – those who are open to feedback and learning – do not hear the truth. Research by Jim Detert and Amy Edmondson suggests that the barriers to speaking up may be bolstered by assumptions that resist change (Detert & Edmondson, 2010). They found that employees’ implicit assumptions about the negative consequences of speaking up are independent of actual experience to the contrary with their leader. While we don’t know exactly how these assumptions are formed, this research supports the idea that institutional mechanisms like SFP are necessary. To avoid undermining honest conversations, the primary purpose of an SFP like institutional learning and governance process would have to be development and not replacement. Replacement should occur only if the leader and his/her organization do not become a more effective learning organization. The CEO of BD, where SFP got its start, offers a glimpse into how SFP might be incorporated into corporate governance. When he conducted a corporate SFP to identify barriers to higher growth and innovation, goals defined jointly with the board, he reported barriers identified by the task force to the board and told them they would get reports of progress ascertained by future SFPs. The company is also in the process of revitalizing its internal capabilities to conduct SFPs with the goal of institutionalizing the method. They have not yet decided to require every key unit managers to apply SFP. If they and other corporations did, they would have developed a process for developing and ensuring high-quality leadership and management throughout the corporation, analogous to the role of total quality processes in improving quality in operational settings. The development of SFP was, in Neil Armstrong’s language, a social engineering task. By designing an intervention method aimed at helping senior teams discover the truth about their organization’s effectiveness, applying the method over a 20-year period, and collecting data about

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what SFPs revealed and how and when they worked, we have been able to develop a theory and method that I hope contributes to OD theory and practice. What is now needed is systematic cross-sectional research that validates the silent killers’ relationship to effectiveness and performance. Also needed is comparative intervention research. How does SFP compare to other intervention methods in transforming six silent barriers into strengths. And experiments in institutionalizing SFP are needed to learn about the practical problems of such an endeavor and its potential not only for ongoing OD but also for leadership development.

NOTES 1. The intervention method, research, and emerging theory were developed in collaboration with Russel Eisenstat. 2. This study was conducted in collaboration with Russell Eisenstat, Nathaniel Foote, Barry Sugarman, Derek Schrader, Mitch Dickey and David DeLong.

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Miller, D. (1986). Configurations of strategy, structure: Toward a synthesis. Strategic Management Journal, 7, 233–249. Miller, D. (1987). The genesis if configuration. Academy of Management Review, 12, 686–701. Miller, D. (1990a). Organizational configurations: Cohesion, change and prediction. Human Relations, 43, 771–789. Miller, D. (1990b). The Icarus paradox: How exceptional companies bring about their own downfall. New York: Harper Business. Morrison, E. W., & Milliken, F. J. (2000). Organizational silence: A barrier to change and development in a pluralistic world. Academy of Management Review, 25(4), 706–725. Oshry, B. (2007). Seeing systems: Unlocking the mysteries of organizational life. San Francisco: Barrett-Koehler. Oswick, C., Grant, D., Marshak, R. J., Cox, J. W. (2010) (Guest Eds) Organizational discourse and change. Journal of Applied Behavioral Science, 46(1), 8–15. Pascale, R. T., & Athos, A. G. (1981). The art of Japanese management. New York: Simon and Schuster. Porter, M. (1985). Competitive advantage: Creating and sustaining superior performance. New York: Free Press. Schein, E. H. (1999). Process consultation revisited: Building the helping relationship. Reading, MA: Addison Wesley Longman. Schumpeter, J. (1942). Capitalism, socialism and democracy (3rd ed.). New York: Harper & Row. Senge, P. M. (1990). The fifth discipline: The art and practice of the learning organization. New York, NY: Doubleday. Senge, P. M. (2006). The fifth discipline: The art and practice of the learning organization. New York: Doubleday. Shani, A. B. R., & Docherty, P. (2003). Learning by design: Building sustainable organizations. Cornwall, UK: Blackwell Publications. Shani, A. B (Rami), Morhman, S., Pasmore, W., Stymne, B., & Adler, N. (Eds). (2008). Handbook of collaborative management research. Thousand Oakes, CA: Sage Publishing. Tushman, M. L., & O’Reilly, C. A. (2002). The innovative organization. Boston: Harvard Business School Publishing. Van de Van, A. H. (2007). Engaged scholarship: A guide for organizational and social research. New York: Oxford University Press. Vroom, V. H., & Jago, A. G. (1988). The new leadership: Managing participation in organizations. Englewood Cliffs, NJ: Prentice Hall. Vroom, V. H., & Yetton, P. W. (1973). Leadership and decision making. Pittsburgh, PA: Pittsburgh University Press. Wageman, R., Nunes, D. A., Burruss, J. A., & Hackman, J. R. (2008). Senior leadership teams: What it takes to make them great. Boston: Harvard Business School Press. Weisbord, M. R. (1987). Productive workplaces: Organizing and managing for dignity, meaning, and community. San Francisco: Jossey-Bass. Worley, C. G., & Lawler, E. E. (2010). Built to change organizations and responsible progress. In: W. Pasmore, R. Woodman & A. B. R. Shani (Eds), Research in organization change and development (Vol. 17). Bingley, UK: Emerald Press.

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APPENDIX The following are the key steps in the SFP process. Details about the process, agendas, time frames, and substantive content consultants require can be found in the SFP manual (Eisenstat & Beer, 1998). SFP is a flexible process and has been adapted to the situation – size, scope, and complexity of the organization. Step 0: Contracting: Discussions with the general manager about the performance challenges faced by the organization and the SFP process are the start. This is followed by a meeting with the senior team as a whole to describe the process and test for commitment to undertake SFP. The leader must frame SFP as a way to close a gap in performance for the inquiry to be motivated properly. SFP is not a survey or a human resource engagement program. And the leader of the senior team must be informed about the unvarnished truth they are likely to hear and that not responding with a sincere effort to deal with the problems surfaced is not an option. Step 1: Define strategic and organizational direction: a. Senior team meets for a day (more if needed) to define goals, strategic direction, and guiding values. We begin with the assumption that the senior team understands their business and the challenges it faces and have a strategy, though it may not be clear or there may not be total commitment to it in the senior team. The role of consultants is to help senior teams through the process of writing a two-page statement of organization direction. If the senior team has developed ideas about new organizational arrangements, these are included in the statement of direction so that the inquiry includes lower views about their validity and implementability. If a strategy has not been developed that work must precede SFP. b. Senior teams commission a task force of eight of their best (high performing, high potential) people one to two levels below the senior team. (We have sometime had as many as 14 but 8 is the preferred number.) Each senior team member is asked to nominate someone from their activity. The whole team must, however, agree on those selected – that they are credible and objective people who they can trust to produce valid data. SFP avoids the problem consultants sometimes encounter – denial of feedback. We have found that senior teams sometimes resist selecting their best people,

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arguing that they are already busy, but that is an essential feature of the process that we have learned not to relax. Step 2: Task force is trained to interview and selects 100 to be interviewed: The task force meets for a day to prepare for their assignment. It begins with the CEO/general manager sharing the two-page statement of direction and fielding questions and challenges. This is an important symbolic step in the process. It signals that the inquiry is a line-driven activity not an HR program and begins a partnership between the leader and the task force. Task force members are then trained in conducting confidential interviews and interview each other for practice. Their views are included in the data. After this point they become researchers and reporters. The task force, not the senior team, selects the people to be interviewed – those across the value chain most knowledgably to answer the three questions below. Step 3: Interviews regarding strengths/weakness: Participation in SFP is not a full time task. Task force members commit about nine to ten days of their time over a six- to eight-week period. They conduct interviews outside of their own organization to enable more honest conversations. Interviewees are sent the statement of organizational direction in advance. A ‘‘fire hose’’ theory of interviewing is followed. Interviewees are asked the following three questions: 1. Does the statement of strategic intent make sense? 2. What are the core strengths of the organization that must be retained? 3. What do you see as the barriers to executing the strategic direction senior management has articulated? Sometimes probes are added that senior management or the task force think will reveal important information. Consultants interview the senior team with the same questions to learn about issues and for separate feedback as appropriate. Step 4: Report unvarnished truth to senior team: a. Task Force Data Analysis: Task force member convene to analyze their data and prepare for feedback the day prior to a three-day ‘‘Fitness Meeting’’ – the main SFP event. Task force members are asked to review what strengths and barriers were reported by a majority of their interviewees. These are written on Post-itst and placed on a wall. With the help of facilitators these are organized into themes about strengths and barriers.

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Task Force Feedback (Day 1 of Fitness Meeting): The report of findings is conducted on the first day of the Fitness Meeting. We learned early on that PowerPoint slides do not convey the richness of the data and make it harder for the task force to be open. Consequently, we designed a fishbowl method. Task force members are seated at a round table with the senior team sitting in an outer U (Fig. 2). The meeting begins with the general manager speaking about what he hopes to accomplish through SFP and urging openness. Consultants present ground rules for engagement between the senior team and task force (perceptions are fact; senior management cannot challenge findings and are limited to questions for clarification). Each task force member then takes the lead in orchestrating a discussion of one theme. Senior team members can ask questions for clarification after each theme, and a longer discussion for clarification between them and the task force occurs at the end of the feedback. Fishbowl discussions have lasted between three hours and seven hours. This design is robust and requires no facilitation. The task force leaves the meeting after their feedback. c. Communicates with Interviewees: Task force members are asked to communicate with those they interviewed about their experience but not the substance of the feedback (that comes later). The intent is to signal to the 100 interviewed that their voice was heard, that the senior team accepted feedback nondefensively, and that they, the task force, were able to do it safely. d. Consultant Feedback: Consultants feedback findings from their interviews with the senior team after the task force leaves. The questions they ask are the same as those the task force employs, but they probe about senior team effectiveness. If there are interpersonal or trust issues, these are discussed at the end of the first day to clear the air for the diagnostic and action planning discussion that follow on day 2 and 3. Diagnose the system (Day 2 of Fitness Meeting): In preparation for this second day, senior teams are given an overnight assignment – summarize what you heard and present your diagnosis. A systemic framework for diagnosis is sometimes used to facilitate this process.

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Redesign the organization and develop change plan (Day 3 of Fitness Meeting): The senior team, with consultants participating as expert resources – framing issues and offering alternative solutions – develops an action plan. The amount of substantive help senior teams require varies substantially depending on the complexity, scale, and scope of the organization. Confirm/challenge agenda: The senior team meets with the task force after the Fitness Meeting to present what they heard, their analysis, and their action plan for change. The task force then meets for three to four hours alone to critique the action plan. Is it responsive to the feedback? Is something missing? Is it implementable as currently conceived? Revise organization design and change plan: Senior teams revise their action plan based on the feedback from the fitness task force. On a number of occasions task forces have come back with major doubts and concerns, prompting senior teams to change their action plan collaboratively with the task force. Meet with 100 þ to mobilize organization: Senior teams present what they learned from the SFP process and their action plan. Small groups discuss the action plan and provide further feedback and concerns. Task forces and working groups are created and further interventions planned.

STRATEGIC CHANGE AND THE JAZZ MINDSET: EXPLORING PRACTICES THAT ENHANCE DYNAMIC CAPABILITIES FOR ORGANIZATIONAL IMPROVISATION Ethan S. Bernstein and Frank J. Barrett

ABSTRACT How can leaders adopt a mindset that maximizes learning, remains responsive to short-term emergent opportunities, and simultaneously strengthens longer-term dynamic capabilities of the organization? This chapter explores the organizational decisions and practices leaders can initiate to extend, strengthen, or transform ‘‘ordinary capabilities’’ (Winter, 2003) into enhanced improvisational competence and dynamic capabilities. We call this leadership logic the ‘‘jazz mindset.’’ We draw upon seven characteristics of jazz bands as outlined by Barrett (1998) to show that strategic leaders of business organizations can enhance dynamic capabilities by strengthening practices observed in improvising jazz bands. Research in Organizational Change and Development, Volume 19, 55–90 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 0897-3016/doi:10.1108/S0897-3016(2011)0000019005

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Leadership involves turning unpredictably challenging situations into predictably successful outcomes. Despite the temptation to search for one ‘‘magic formula’’ – a set of static routines or capabilities that reliably transform each problem into an opportunity – both leaders and scholars of leadership have sobered to the impossibility of such a quest. Past research demonstrates that a competitive advantage today can become an organization’s albatross tomorrow. Thus, focus for leaders has shifted away from development of a single set of perfect routines toward the development of dynamic capabilities, or higher-level routines, which operate to change existing static routines to address future novel challenges. How strategic leaders in business build such dynamic capabilities remains a relatively unanswered question. A review of the management literature on dynamic capabilities reveals that while much has been written on the ‘‘what’’ of dynamic capabilities, frighteningly little is known about the ‘‘how.’’ Based on our experience studying successful jazz leaders, however, we believe a far more developed theory of how to lead the creation of dynamic capabilities exists in jazz than in business. We call this leadership logic the ‘‘jazz mindset’’ and consider, as the primary contribution of this chapter, how that mindset can help business leaders shape the development of dynamic capabilities and long-term competitive advantage in their organizations. Our argument proceeds as follows. First, we briefly revisit the forces of inertia that plague organizations, make it difficult for organizations to change, and therefore prompt leaders to either draw on the organization’s capacity for ad hoc problem solving (‘‘firefighting’’) or invest in dynamic capabilities (Winter, 2003). We then discuss the nature of jazz improvisation, pointing out the notion that jazz bands, like successful firms, face the challenge of balancing exploration and exploitation (March, 1991) in a way that involves investment in, and enhancement of, dynamic capabilities. Borrowing from the research on jazz improvisation, including Weick (1996), Hatch (1998), and Barrett (1998), we explore the mindsets that jazz musicians have adapted to enhance dynamic capabilities. Stories of jazz musicians serve as touchpoints that offer a window into similar practices by strategic leaders of innovative firms. This is not primarily a chapter about jazz improvisation. Rather we are using the principles that have been shown to be operative in jazz improvisation as a way to understand the success of firms in building excellence in dynamic capabilities and change.

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ORGANIZATIONAL INERTIA There is broad consensus in the literature that successful firms can fail to sufficiently adapt when faced with certain exogenous shocks, including disruptive or radical technological change (Abernathy & Clark, 1985; Tushman & Anderson, 1986; Henderson & Clark, 1990; Christensen & Rosenbloom, 1995; Christensen, 1997; Sull, Tedlow, & Rosenbloom, 1997; Tripsas, 1997), market shifts (Adner & Levinthal, 2001), and environmental jolts (Clark, 1988). As evidence, one need only reflect on the image of the CEOs of GM, Ford, and Chrysler – what had been the ‘‘Big Three’’ auto manufacturers only a year earlier – arriving for their US Senate hearing in Washington, DC on November 18, 2008 to explain why the US taxpayer should bail them out. As Rick Wagoner, then CEO of GM, told the Senate, ‘‘we’re here today because we made mistakes, which we are learning from, and because some forces beyond our control have pushed us to the brink.’’ The publication landscape is replete with other classic examples: Disney’s initial inability to export its US theme park success to Europe; LEGO’s loss of market share when electronic toys began to replace plastic ones; Kodak’s failure to address the implications of the emergence of digital technology as a threat to its core business in paper and film; Borders inability to survive in a world with Amazon; Polaroid senior managers’ mental block against recognizing the need to compete in software rather than hardware (cameras) (Tripsas & Gavetti, 2000). The phenomenon is not new, as demonstrated by the Akron tire companies’ failure in the 1970s to address the threat posed by radial tires (Sull et al., 1997) and Swiss watch manufacturers’ failure in the 1960s to address quartz watch competition from Japan (Landes, 1983). In several cases, these firms had innovative technology, foresight into market changes, or accurate predictions of environmental risks before their competitors, but they were unable to take advantage of their ideas or bring products to market. This has become known as the success trap or competency trap – the very strengths and capabilities that were responsible for success are sometimes the source of the rigidities that block the adaptation process (Levitt & March, 1988). Usually these successful firms have enough resources. They have the resources that led to success in the first place, including knowledge, skills, and capital. Capabilities and resources that give one competitive advantage can also get in one’s way. These successful firms are rarely inactive or unresponsive, but instead suffer from what Don Sull termed active inertia: an ‘‘organization’s tendency to follow established patterns of behavior – even in response to

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dramatic environmental shifts’’ (Sull, 1999). As we demonstrate below, this is a challenge that jazz musicians also face when they improvise. One approach dominates the literature in response to the problem of organizational inertia: the creation of dynamic capabilities (Teece, Pisano, & Shuen, 1997). The creation of dynamic capabilities involves investment in a sustained pattern of activity that allows firms to change and adapt (Winter, 2003) – a routine that acts to change other routines. As such, dynamic capabilities are higher-order capabilities, extend beyond ordinary short-term capabilities, involve an ability to adapt in the longer term, and are an alternative to ad hoc problem solving or ‘‘firefighting’’ in the face of problems for which an organization is unprepared. Teece et al. (1997, p. 516) define dynamic capabilities as ‘‘the firm’s ability to integrate, build, and reconfigure internal and external competencies to address rapidly changing environments.’’ Similarly, Eisenhardt and Martin (2000, p. 1107) define dynamic capabilities as the firm’s ‘‘processes to integrate, reconfigure, gain and release resources – to match and even create market change.’’ Zollo and Winter (2002, p. 340) define dynamic capabilities as ‘‘a learned and stable pattern of collective activity through which the organization systematically generates and modifies its operating routines in pursuit of improved effectiveness.’’ Central in each definition is the development of a routinized learning process. Dynamic capabilities are not just a one-time response to an environmental jolt but represent persistent and structured efforts dedicated to improved performance. Therefore, they require deliberate learning efforts on the part of organizational leaders. This chapter concerns what mindset senior managers could take to shape the development of dynamic capabilities and long-term competitive advantage. What might an organization that has developed dynamic capabilities look like, and what practices does it institute that might serve as models for other firms? We know something about the ‘‘ambidextrous’’ structure of such organizations (O’Reilly & Tushman, 2008; Tushman & O’Reilly, 1996) – Brown and Eisenhardt’s (1997) studies of high-velocity firms demonstrated that rigid or highly formalized routines are inconsistent with the development of dynamic capabilities. The ability to acquire, recombine, and release resources in an innovative, adaptive way requires an organic structure (Burns & Stalker, 1961), a form similar to Mintzberg’s adhocracy (Mintzberg & McHugh, 1985). However, much of the research on dynamic capabilities remains preliminary and conceptual (O’Reilly & Tushman, 2008), resting on the anomalous existence of firms that survive and prosper over multiple centuries (O’Reilly & Tushman, 2008; De Geus, 1997). Furthermore, while we know something about the structural (e.g., Tushman & O’Reilly, 1996) and contextual (Gibson & Birkinshaw, 2004)

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enablers of these ambidextrous organizations (see Raisch & Birkinshaw, 2008 for a recent review), we know far less about the mindset of strategic leaders and the practices they initiate to foster dynamic capabilities. This chapter seeks to fill that gap. It is jazz improvisers’ unique strategies to overcome the challenges of inertia that offer lessons for strategic leaders. We agree with Winter (2003) that improvisation itself is not a dynamic capability; improvised responses to novel challenges are the epitome of ‘‘ad hoc problem solving.’’ But we also agree with Winter (2003) that ‘‘in organizational improvisation, as in jazz, creative achievement typically rises from a foundation of patterned and practiced performance’’ (Miner, Bassoff, & Moorman, 2001), and thus the creation of the improvisation mindset within an organization is the quintessential investment in dynamic capabilities. This chapter aims to use knowledge about the improvisation mindset, distilled from those who originally coined the term – jazz musicians – to begin to unpack that mechanism behind organizational ambidexterity. We use a number of field studies and interviews to do so. That said, the purpose of this work is not to propose an ideal formula for organizational ambidexterity based on defined levels of improvisation at certain levels of an organization. In fact, we agree with previous authors that such analysis must be contingent upon the operating environment of the organization (Tushman & O’Reilly, 1996; Gibson & Birkinshaw, 2004). Instead, we look deeply into the ‘‘how’’ of intraorganizational improvisation – the what, where, and how long of valuable improvisation in organizations – with lessons for both leaders and academic theorists studying leadership. We find that adopting a jazz mindset equips leaders, of both jazz bands and business organizations, to maintain a sustainable balance between the passionate drive for novelty and the compassionate preservation of comfortable routines. In the next section, we explore the world of jazz improvisation in order to demonstrate that jazz bands are devoted to developing dynamic capabilities.

THE MINDSET OF JAZZ IMPROVISATION In this section, we argue that jazz bands are led so as to maximize the development of dynamic capabilities. We seek to articulate the mindset that guides players and how this same mindset can be applied by strategic leaders of organizations. Jazz bands are organized similarly to Mintzberg’s adhocracy, Burns and Stalker’s organic structure, Brown and Eisenhardt’s high-velocity firms, and

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Tushman and O’Reilly’s ambidextrous organizations. Jazz bands, in short, embody many of the characteristics of postindustrial, postbureaucratic organizing. Jazz bands have minimal hierarchy, decision-making is dispersed, and they are designed to maximize flexibility, responsiveness, innovation, and fast processing of information. A jazz band is a form of social organization that produces order with little or no blueprint, organized from the bottom up: individuals have personal freedom to take initiative and operate on their own authority (their musical imaginations) guided by the constraints of the task, the conventions of practice, and the enactments of other players. Jazz improvisation is a prototype of an organization that builds up routines and yet also values novelty and emergence – an approach that resonates with dynamic capabilities research. As a result, jazz bands engage in simultaneous exploration and exploitation, remaining adaptive to change. Jazz bands consist of diverse specialists living in turbulent environments, interpreting vague cues, processing large chunks of information, formulating and implementing strategy simultaneously, extemporaneously inventing responses without well-thought-out plans and without a guarantee of outcomes, and discovering the future that their action creates as it unfolds. To say that jazz music is improvised means that jazz music is spontaneous, unrehearsed, and not written down beforehand. In this sense, improvisation is similar to Scho¨n’s notion of reflective practice. Scho¨n defines it as ‘‘on the spot surfacing, criticizing, restructuring, and testing of intuitive understanding of experienced phenomena’’ (Scho¨n, 1983, p. 147; Yanow & Tsoukas, 2009). Weick defines improvisation as the ‘‘simultaneous unfolding of thinking and doing’’ (Weick, 1996, p. 19). Organizational improvisation seems related to O’Reilly and Tushman’s notion that dynamic capabilities are the result of leaders’ capacity to appropriately adapt, integrate, and reconfigure organizational skills and resources to match changing environments (O’Reilly & Tushman, 2008). Jazz bands too are engaged in reconfiguring assets, developing new skills, noticing, and responding to opportunities.

Jazz Improvisation: Favoring Exploration and Guarding Against Excessive Exploitation Since the music is composed and performed simultaneously, there is no guarantee of where one’s queries will lead. There is an inherent risk in improvising. Jazz musicians must balance exploration and exploitation,

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acknowledging the risks of exploration especially when performing in public with no opportunities to fix mistakes. Saxophonist Paul Desmond described what he does when improvising: ‘‘(I) crawl out on a limb, set one line against another and try to match them, bring them closer together’’ (quoted in Gioia, 1988, p. 92). When improvising, one journeys into the unknown and is expected to create coherent musical ideas that are novel and unpredictable. Jazz musicians find themselves perilously ‘‘out on a limb,’’ at the edge of their comfort level, seeking to create coherent, original statements out of disparate, evolving musical material often in the presence of an audience. Jazz musicians rehearse their art form in a way consistent with what we know about learning and exploiting routines. Following Gavetti and Levinthal (2000, p. 113), ‘‘routines reflect experiential wisdom in that they are the outcome of trial and error learning and the selection and retention of past behaviors.’’ Like with all expert skills, there is a stage of rote learning and practice necessary. Jazz musicians learn to develop routines by imitating others. Students of jazz learn the motifs and phrases of previous masters, practicing them repeatedly until they become somewhat automatic. They study the masters’ solos, learning the overall strategy, choice of notes, harmonization of certain phrases, matching of phrases to chord changes. These phrases, or what they call ‘‘licks,’’ become part of the players’ personal repertoire. According to trumpeter Benny Bailey, ‘‘You just have to keep on doing it (practicing phrases) over and over until it comes automatically’’ (Berliner, 1994, p. 165). Recalling that Harreld, O’Reilly, and Tushman (2007) propose that dynamic capabilities rely on leaders’ ability to adapt, integrate, reconfigure organizational skills and resources to match changing environments, we see a link to the process in which jazz musicians engage. After mastering others’ phrases and styles, musicians begin to combine them with previously unrelated material, introducing incremental alterations. These incremental alterations result in a unique combination of disparate materials that begins to point to the development of one’s unique style. At some point, the player begins to add, recombine, and vary the patterns that have become automatic by sheer repetition. Players borrow material from different contexts, combine unrelated modes, and apply familiar phrases to seemingly unrelated chord changes. We thus propose that jazz musicians engage in a set of meta-practices that foster a unique approach to learning and might offer insight into the mindset that allows organizations to develop dynamic capabilities. In the following section, we draw upon Barrett (1998) to explore the seven practices that jazz bands adopt to guard against overreliance on exploitation

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that leads to inertia, core rigidity, and competency traps. These include the following: provocative competence (mastering the art of unlearning), affirmative competence (‘‘yes to the mess’’), leaping in and taking action through full-bodied engagement, minimal structure and maximal autonomy, errors as a source of learning, hanging out in a community of diverse specialists, and alternating between soloing and supporting. We propose that these concrete practices help to develop the mindset that is necessary for strategic leaders to install the dynamic capabilities needed in an organization to combine exploration and exploitation (ambidexterity) and achieve sustainable advantage. 1. Leading with Provocative Competence: Helping the Organization to Unlearn Improvising introduces instability that increases anxiety and fear of failure. For this reason, there is a temptation to favor exploitation, to fall into competency traps, to rely on well-learned successful stock phrases and routines (‘‘licks’’) ‘‘which have proven themselves effective in past performance’’ (Gioia, 1988, p. 53). However, musicians who repeat their solos or flawlessly play rehearsed patterns are not regarded highly by the jazz community. Whereas traditional musicians experiment during rehearsal to deliver perfected performances, jazz musicians perfect their rehearsals to deliver an experimental performance. Like leaders of successful enterprises such as those mentioned earlier – the Big Three, Disney, Lego, Kodak, Polaroid – jazz players must guard against temptation to value exploitation of learned routines over the exploration of new knowledge. How do musicians cultivate the unique mindset that welcomes what some might regard as perilous and risky activity? How do they build up the dynamic capability to guard against competency traps? Great jazz musicians ‘‘trick’’ their automatic responses by throwing themselves into actual playing situations ‘‘over their heads,’’ stretching themselves to play in challenging contexts. Pianist Bill Evans continually practiced musical passages he did not quite understand, and once he had mastered them took on other difficult passages (Evans, 1991). Saxophonist John Coltrane learned songs in the most difficult, rarely played keys. As Keith Jarrett speaks of this challenge, ‘‘You’re never in a secure position. You’re never at a point where you have it all sewn up. You have to choose to be secure like a stone, or insecure but able to flow’’ (Palmer, 1974). Such activities allow jazz musicians to develop the leadership skill of provocative competence (Barrett, 1998), a particular kind of leadership that explores the edge of habit and familiarity, introduces incremental disruption

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to members’ routines, and demands openness to new alternative pathways. In particular, we call attention to the leadership practices of jazz musician Miles Davis. Davis is unique in jazz in that he is considered a pioneer who was one of the founders of three different movements – bebop jazz, modal jazz, and fusion jazz. He was skilled at creating conditions that enhanced dynamic capability, the deliberate investment in creating novel insights. Keith Jarrett recalls Davis ‘‘keeping the music fresh and moving’’ by avoiding comfortable routines, forcing his musicians to play patterns they had never heard before. In an effort to encourage the band to approach familiar tunes from a novel perspective, Davis would sometimes call tunes in different keys or call tunes the band had not rehearsed. This would be done in concert, before a live audience. In a famous 1959 recording session, the musicians arrived in the studio and were presented with sketches of songs – some only partially complete – written in unconventional modal forms using scales that were very foreign to western jazz musicians at that time. One song, ‘‘So What,’’ was minimally sketched without familiar chord changes using two unusual modes in a form the musicians had never played before. One song, ‘‘Blue in Green,’’ contained only 10 bars instead of the more familiar 8 or 12 that characterized American popular music. Never having seen this music before and unfamiliar with these odd forms, the musicians with no rehearsal had the tape recorder running. The result was the album Kind of Blue, widely regarded as a landmark jazz recording. The album consists entirely of ‘‘first takes’’ so that when we listen to this album, we are witnessing the musicians approaching these pieces for the first time, themselves simultaneously discovering new music and inventing it. The album introduced modal jazz, changed the history of jazz, and is the highest selling jazz recording in history. Curiously, Davis was stretching the musicians beyond their comfortable capacity; he pushed them to try new and unusual musical patterns without the benefit of rehearsal. What makes this provocative competence toward the building of dynamic capability was Davis’ introduction of incremental disruption to handicapped routines, making it impossible for the players to rely on rote learning and habitual responses (see Barrett, 1998). The musicians who played with Davis – John Coltrane, Bill Evans, Keith Jarrett, Chick Corea – went on to have very successful careers of their own and credited the leadership of Miles Davis for much of their growth and development as players. But more importantly for our purposes, many of the forms and unique phrasings that were developed during this highly innovative session were adopted, mastered, and developed by Davis and other musicians. Modal forms became influential in jazz and rock music from the 1960s onward. Davis was nurturing the sort of

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ambidextrous, dynamic capabilities that Tushman and O’Reilly discuss: exploration of new repertoires eventually developed into routines that were exploited for remarkable success. But let us return to the mindset of the leadership that facilitated the discovery of such novel ideas. What makes Davis’ disruption provocative rather than noxious? First, his interruption was affirmative (see Barrett, 1995): he held an image of members as competent performers able to meet the demands of a challenging task. He believed in their overall potential and capacity to perform successfully even if they felt uncomfortable (and possibly irritated). Second, he did more than just disrupt habit patterns: he created alternative pathways for action. He imported new material that opened possibilities and suggested alternative routes for his players. Once the song began, passivity was not an option: the activity was impersonally structured so that musicians were required to play something, to take some kind of action. Third, the interruption was incremental. These foreign contexts were scaled to be challenging but not overly disruptive – Davis drove for passion but simultaneously showed compassion for the accompanying discomfort that would be released. His leadership played a role in cultivating generative metaphors and seeding suggestive narratives (see Barrett & Cooperrider, 1990) to provide a transition from known to unknown (Brown & Eisenhardt, 1997). Miles Davis’ provocative competence as a leader helped his bands develop dynamic capability, essentially nudging them to search, recombine, and reintegrate resources (O’Reilly & Tushman, 2008) that would become new successful routines through reflective interpretation (Brunner, Staats, Tushman, & Upton, 2009). But can provocative leadership also be applied to successful firms that are guarding against reliance on prior success? Here we cite two examples: Toyota and Giant Manufacturing Company (Giant Bicycles). Consider the way Toyota developed the Lexus LS 400, the first Japanese luxury sedan and a car that ‘‘stunned the auto world, beating the [Mercedes] Benz 420SEL on aerodynamics, cabin noise, comfort, fuel efficiency, and maximum speed’’ at nearly US$30,000 cheaper (Dawson, 2004, p. 31). Shoichiro Toyoda, son of the company’s founder, initially preferred to stick with what Toyota Motor did best – ‘‘squeeze water from a dry washcloth’’ to build ‘‘cheap cars for everyman’’ (Dawson, 2004, pp. 5, 67). Fortune magazine commented that ‘‘getting the Lexus out of Toyota, whose forte is rolling out wheels for the world’s millions, is like producing Beef Wellington at McDonald’s’’ (Taylor III & Sheeline, 1989). When US consumers were asked if they would buy a Japanese luxury car, ‘‘many consumers said they couldn’t even understand the concept of a Japanese luxury car,’’ recounted

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one Toyota Motor executive, adding ‘‘they thought the term was an oxymoron’’ (Dawson, 2004, p. 40). Toyota had been exploiting well-learned routines in a lower market – it was not a luxury car manufacturer. Eiji Toyoda, President and Chairman of Toyota Motor at the time, practiced provocative competence to build dynamic capabilities. He disrupted routine and assembled a heavyweight team with an intentionally provocative challenge: Toyoda announced that the Lexus ‘‘was not to be benchmarked against the ‘best car’ in the world, but, rather, against every individual best part in the world: the best transmission; the best suspension; the best audio system y ’’ (Dawson 2004, p. xix). This was the equivalent of Miles Davis’ changing keys or introducing new forms that forced musicians to play in new and unfamiliar ways. Toyoda demanded that the Lexus LS 400 was to go from 0 to 60 in 7.9 seconds (with a V8 engine, a 4 L, 4-cam 32-valve fuel-injected motor capable of 250 hp) and have a top speed of 150 mph (faster than any of the competition), while being the only luxury car to avoid the gas guzzler tax by having a fuel efficiency rating of 23.5 mpg. To do so, the LS 400 would have to achieve a drag coefficient of less than .29, where the average luxury car achieved .38 to .40 and the average sports car achieved .32 (a Porsche was around .30). This all had to be accomplished while maintaining the design, comfort, quietness, quality, safety, and resale value required to compete with BMW and Mercedes. It was as impossible as playing a song no one had ever played, in a key no one had ever heard, using a mode that was yet to be invented. Toyota was unlearning routines in a dramatic way, primarily because the learned responses simply wouldn’t achieve the goals that had been set. Employees began to experiment on the margins: the LS 400 evolved out of some 450 prototypes, compared to 2–3 for the average Toyota, and included thousands of innovations (see Dawson, 2004 for detail). While Davis’ challenge to his musicians generated a breakthrough in jazz history, Toyoda’s challenge to his employees resulted in a car that made Toyota a leader in the luxury market: the Lexus broke countless records and has been the best selling luxury automobile in the United States for most of the past decade. Consider also the example of Giant Manufacturing Company (Giant Bicycles). By 1998, it had become the largest bicycle manufacturer in the world, producing 6.4 million bicycles worldwide. But in early 2008, its female customers were neither as satisfied nor as profitable as its male customers (Shih, Bernstein, Bernstein, Wang, & Wei, 2009). In the midst of continuing success and a worldwide biking boom, Tony Lo, CEO of Giant, offers a great example of provocative competence in his approach to the

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women’s market. When we spoke with Lo, he described his motivation for moving to the edge of the unknown with Giant’s female customers: When my wife complained that [Giant] equipment didn’t fit her needs, I would say ‘‘okay y but do you really need that?’’ and I would just try to push it off. But you know wives y even if I kept saying that, it was not enough y she was quite serious. So I tried to find products to suit her needs, and I found that very difficult! And that’s only for one woman – the wife of the CEO of the largest bicycle company in the world. Then I discovered that she’s not the only one – her, and her friends, and their friends y the bicycle has never fit any of their lifestyles. One day I said, ‘‘that’s enough! I’m going to do something!’’ (Interview with Tony Lo, March 25, 2009)

Lo discovered that Giant was systematically leaving women behind as it pushed up-market in search of profit. In the early 2000s, Giant’s retail organization had implemented a standardized sales strategy to increase profitability and sales. As a customer walked in the door, salespeople would first classify him or her as a lifestyle, performance, or sport customer and then ‘‘customize’’ the sales approach accordingly. The routine aimed to migrate customers up-market over time, from lifestyle to performance to sport, with significantly increasing margins along the way – a standard best practice in retail. On sales and profitability metrics, the routine was working wonderfully. Men were very successfully being moved up-market. Women, however, were not. In 2006, several years after implementation of the standardized sales routine, nearly every female customer was classified as a ‘‘lifestyle’’ customer. Giant’s retail stores didn’t care – their primary interest was in chasing higher-profit, higher-volume customers, and if they were men, so be it. Lo visited a number of stores only to see the same pattern over and over again – an exploitation of available routines is simpler than the exploration of new ones: No one is really paying attention [to women], and even if they wanted to pay attention, they can’t. For instance, a bike shop is already crowded y it’s very difficult for them to squish out even one corner as a women’s corner. So what they do is use the same salespeople and treat the sales the same way – the same way they sell to all of the men y . Even if you go to a pretty good bike store in the US, everything is designed for men. The language is for men. Even in the display, women always come in second. All of the models in the window are for men y . (Interview with Tony Lo, March 25, 2009)

In a demonstration of provocative competence, Lo saw a strategic opportunity. After exploring the perimeter, his next step was to dislodge habit. Rather than going to the established retail channel for answers, he decided to go straight to the customer: he was convinced that the only way to create a successful business model for women was to open a store

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exclusively for them. As he put it, ‘‘because your only customers are women, if you don’t know how to sell to them, you’re out of business – period. So you experiment for survival.’’ Giant’s more-experienced retail organizations thought Lo was crazy. Just as Miles Davis’ provocative moves often left his musicians bewildered, even as CEO, Lo met with resistance internally. Why would corporate open a store exclusively dedicated to their worst (lowest-profit) customers? In our interview with him, Lo recalled hearing over and over again, ‘‘Oh that’s a very expensive project! The market is small! And we don’t understand women!’’ And Lo admitted that, on every dimension, they were right. Lo recalls the head of Giant Taiwan telling him, ‘‘If you twist my arm, I will do it, but it’s not for business, so you cannot ask me to make money doing it. We’re just doing it for you.’’ But Lo insisted it be profitable, to which one of the field leaders sarcastically responded, ‘‘Well, if that’s the case, maybe headquarters should do it!’’ And so Lo, for the sake of openness to whatever lay ahead, did exactly that. In the process, Lo nurtured an affirmative image. He became an evangelist for the idea, which he claimed was so simple it was crazy no one had done it successfully. Lo said in retrospect, ‘‘When I encountered skeptics, I told them: ‘What about women’s apparel shops y women’s shoes y women’s spas y women’s fitness clubs y .’’’ And when the skeptics responded that there was no women’s car company, Lo pointed out that women and men interfaced with their cars in very similar ways but with their bikes quite differently, like the other examples. Each challenge was just an opportunity to learn and refine the concept, and he made sure it wasn’t his opportunity alone. In only one year, the special project team of product designers, marketing specialists, and service operations experts had already made ‘‘many, many modifications’’ to the business model. The affirmative image Lo projected provided confidence about Giant’s and its employees’ ability to be successful. Lo’s approach to the project team demonstrated the last two points of provocative competence: creating situations that demand action while opening and supporting alternative pathways. Lo picked Bonnie Tu, EVP and CFO of Giant, to lead the effort – someone with the seniority, reputation, and financial background to marshal resources – and then ‘‘gave her the freedom to break all of the rules.’’ Not coincidentally, Bonnie was the most senior woman at Giant. Having given Bonnie the mandate, Lo did something that few CEOs do: he gave her space to develop any and every option, telling her, ‘‘there are no limitations, it’s all your creation, just surprise me. If our women customers are satisfied, then

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that will be great.’’ Then Lo, who typically checked in on his most important projects daily, told Bonnie, ‘‘See you in six months!’’ Bonnie had carte blanche to be entrepreneurial. When Bonnie decided to replace Giant’s typical central store fixture – a display with Giant’s latest and greatest bicycle – with a comfortable, chocolate leather couch, Lo simply smiled in approval. Lo’s smile substantially broadened, however, when the Liv/giant store, Giant’s first all-women’s store in downtown Taipei, turned profitable only four months after its grand opening. Even after incurring nearly twice the opening costs of a typical Giant store, this was one of the fastest paths to profitability in Giant’s retail history. Everything about the store had been designed to be as modular as possible to optimize Giant’s ability to experiment, learn, and innovate. Their all-women clientele, 80% of whom became repeat customers, appreciated the effort more than anyone could have predicted. The improvisation encouraged by the provocative competence of a leader like Lo had substantially paid off. When we last talked to Lo, his greatest problem was deciding where to open the next all-women’s stores while still finding time to ride with his wife, who had already purchased three bicycles – first lifestyle, then performance, and now sport – from the Liv/giant store in Taipei. As seen in both the Toyota and the Giant examples, provocative competence guards against the temptation to continue to exploit successful routines and demands experimentation and exploration of new possibilities. Toyota, Lo, and Miles Davis are all examples of leaders who were attentive to emergent possibilities, demanded that units unlearn or abandon routines, and reintegrated and redirected resources (e.g., through a heavyweight team or a new sales channel) so that new skills could be developed and new routines created. The result: a by-the-books example of growing dynamic capabilities instead of core rigidities in an established organization (Leonard-Barton, 1992). Provocative competence is an art that must be scaled appropriately. Miles Davis did not demand that musicians switch instruments. Toyoda and Lo chose which parts of the organization to nurture and refine, creating organizational designs, structures, tasks, and culture that encourage improvisation in the right locations. Also, they were careful to preserve organizational memory, to maintain those routines that are crucial and retain practices that should not be abandoned. These leaders were good at designing organizational structures to sustain successful existing procedures while simultaneously triggering improvisation and creativity beyond existing capabilities and business models.

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One potential pitfall: leaders practicing this mindset sometimes appear to others as unrealistic and out of touch at the time. The data that would support such unusual moves simply doesn’t exist, nor therefore do the market indicators that would warrant changes in resource allocation and prioritization. That’s one reason why it’s not enough that leaders disrupt routines and create stretch goals. Part of developing a jazz mindset includes leaders engaging in very close monitoring of the current capabilities of the system so they scale the disruption to just the right amount. Too much disruption would lead to discouragement and failure. Of course none of these moves is sufficient if the leadership does not provide enough resources to allow exploration and improvisation. Lo gave his director freedom, while Toyoda devoted considerable resources (financial and human) to the Lexus project. Various parts of the organization engaged in improvisation, exploration of new routines, and resources to retain promising repertoires and routines. Provocative competence can be contagious. 2. Affirmative Mindset: ‘‘Yes to the Mess’’ Since jazz players must compose on the spot when improvising, there seems to be limited foresight and control at one’s disposal. That such a precarious situation does not lead to anarchy speaks to the subtle and tacit mindset that is sensitive to the dynamics of unfolding while envisioning future paths. The mindset that gives coherence to the music is an appreciative, retrospective sensemaking. Simply put, improvisation requires an affirmative mindset. Since jazz players cannot prescribe where the improvised music is going to go beforehand, they are left to make sense of what has just happened and guess what is likely to happen next. The musician therefore looks back on what is emerging – the various chord progressions, melodic fragments, rhythmic patterns – and then jumps into the morass, seeing the potential for embellishing on motifs, linking familiar with new utterances, and adjusting to unanticipated musical cues that reframe previous material. The mindset of appreciation, or affirmative mindset (‘‘yes to the mess’’), is a continual dialogical exchange: After you initiate the solo, one phrase determines what the next is going to be. From the first note that you hear, you are responding to what you’ve just played: you just said this on your instrument, and now that’s a constant. What follows from that? And then the next phrase is a constant. What follows from that? And so on and so forth. And finally, let’s wrap it up so that everybody understands that that’s what you’re

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ETHAN S. BERNSTEIN AND FRANK J. BARRETT doing. It’s like language: you’re talking, you’re speaking, you’re responding to yourself. When I play, it’s like having a conversation with myself. (Max Roach cited in Berliner, 1994, p. 192)

Improvisation involves continually attending to cues, retaining some part of the past while varying other parts – looking back on what has happened while extending it. Improvisation requires ‘‘daring to care’’ about integrating the passion for something new with the compassion for its impact on what has come before. At first glance, this mindset does not seem to be immediately relevant to strategic leaders. Conventional approaches to strategy emphasize a deliberative model, an analytical process based on rigorous analysis of market, customer needs, competitors’ place in the market, etc. Executives formulate the strategy and then implement it ‘‘top down,’’ beginning with a situation analysis, crafting vision statements with long- and short-term objectives, planning for how to achieve objectives, allocating sufficient resources, assigning responsibility for tasks and processes, managing the process by monitoring results, comparing best practices, controlling for variances. However, if locked into strategic plans, leaders might not notice unanticipated, emerging opportunities. Henry Mintzberg first offered the distinction of emergent strategy: day-today incremental and unplanned actions taken by managers (Mintzberg & Waters, 1985) which bear some resemblance to Lindblom’s disjointed incrementalism (Lindblom, 1979). Emergent strategy involves managers’ responses to problems and opportunities that could not have been foreseen. But what is the mindset that is necessary to notice the opportunities one had not anticipated? This is where the heuristic of the jazz mindset offers some insight. Jazz musicians respond to cues when the future is not easy to predict and there is no way of telling what the right strategy should be – when circumstances change and the deliberate strategy is no longer appropriate (even though it has been a winning strategy). Jazz players look back at what has happened with an affirmative assumption that there are positive opportunities to be gleaned, that something sensible and coherent can be distilled if one pays close attention to what has been happening. Without a jazz mindset, managers are likely to miss the subtle opportunities that emerge. Andy Grove is popularly credited with ingeniously, strategically, and deliberately leading Intel into the microprocessor industry. As we know, the real story is quite different (Tedlow, 2006; Grove, 1996). The success of Intel was largely a story of the top leadership team saying yes to the mess. Grove did not foresee the market in advance, plan for shifting strategies, and

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allocate resources in the traditional model of deliberate strategy. Instead, as the DRAM market slipped away, Intel’s profit went with it: from $198 million in 1984 to less than $2 million in 1985. It was then that Grove, in his own words, ‘‘stepped outside himself’’ and adopted his now well-known first step in attacking difficult problems: ‘‘set aside everything you know’’ (Tedlow, 2006; Grove, 1996). Why? Because everything Intel senior management knew was holding them back. As world leader in DRAM technology, they continued to invest resources there. Scientists, technologists, the sales force, even Intel customers were so familiar with the existing processes that they could not imagine Intel NOT focusing on DRAM. The comfort of their past experiences, based on their own familiar histories, was overwhelming the external reality. In fact, Intel’s initial progress in microprocessors was somewhere between accidental and clandestine. An Intel manager invented the microprocessor accidentally while developing technology for a calculator, but Intel strategists barely noticed the separate market potential of microprocessors. Owing to Intel’s profit-based algorithm for allocating fabrication capacity, microprocessors were getting manufactured (as they were very profitable), but the shift in strategy was entirely emergent. In fact, the deliberate strategy remained focused on DRAMs – it took Intel three long years to get out of the DRAM business. Jazz musicians find themselves in situations similar to the Intel strategic leadership team. Jazz players are successful because of their confidence that no matter how incoherent or unpredictable the current situation appears, there will be some positive pathway out – a creative possibility to be found and explored. They find themselves in the middle of messes all the time. They cannot stop to problem solve or put situations in order or say to other players, ‘‘I don’t like those notes you played. They didn’t match with what I had in mind, so let’s go back and do it over.’’ In fact, the major reason why improvisation works is that the musicians say an implicit ‘‘yes’’ to each other. Comedy improvisers have a deliberate phrase to capture this. They call it ‘‘Yes, and y .’’ In comedy the practice is that actors make offers as they enact scenes. The other actor’s responsibility is to accept the offer and move it forward. Andy Grove and Gordon Moore had an affirmative mindset – they were able to notice an emergent strategy and say ‘‘yes’’ even though it would mean a radical shift and there was no guarantee that it would succeed. Indeed, as Grove recounts in his book, Only the Paranoid Survive, ‘‘I looked out the window at the Ferris wheel of the Great America amusement park revolving in the distance, then I turned back to Gordon

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[Moore] and I asked, ‘If we get kicked out and the Board brought in a new CEO, what do you think he would do?’ Gordon answered without hesitation, ‘He would get us out of memories.’ I stared at him, numb, then said, ‘Why shouldn’t you and I walk out the door, come back and do it ourselves?’’’ (Grove, 1996) ‘‘Welcome to the new Intel,’’ Grove announced in a speech not long afterwards (Tedlow, 2006). An affirmative mindset is needed to develop dynamic capability because it involves openness to new opportunities and willingness to respond to the world as it evolves, taking a few steps at a time as one discovers what is sustaining. It takes a certain approach to ‘‘unlearn’’ the routines associated with deliberate strategy, to notice the small, spontaneous acts that are usually not intentional (Brunner et al., 2009) – the paths that emerge from opportunities in the environment. They can come from throughout the organization, just as a phrase or rhythmic pattern can appear from anywhere in the jazz combo. 3. Leap In and Take Action: Learning Through Full-Bodied Engagement and Ongoing Experimentation Research on engagement at work has shown that when people are fully engaged, they are more committed to contributing to the effectiveness of the organization. Kahn (1990, p. 694) calls engagement ‘‘the harnessing of organizational members’ selves to their work roles; in engagement people employ and express themselves physically, cognitively, and emotionally during role performances.’’ However, a standard portrayal of the competent manager is as a detached observer – analytical and dispassionate – removed from the immediacy of conflicts to handle challenges objectively. This is tied to a desire for an organized picture of life, perhaps one that lends a feeling of control. When novel, challenging situations arise, leaders are ‘‘expected’’ to not lose their cool and to seek an analytic explanation. The action is inside the mind: management is a process of noticing discrepancies, stepping back and analyzing them, and working through the puzzles intellectually. However, detached intellectual analysis usually means that people ask familiar questions, generate standard classifications, and produce familiar types of answers. Relying on a detached mindset is far more likely to bind to established routine than lead to breakthrough insights. Jazz players, on the other hand, leap in and take action, risking full engagement. They leap in with full commitment even with the possibility of embarrassing themselves. Jazz players frequently throw themselves into

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situations that are novel, perhaps even terrifying. They are anything but detached. If you look at photos of jazz musicians playing their instruments, you see individuals fully immersed, completely absorbed in their playing. When Keith Jarrett is improvising jazz, he is completely absorbed and can often be heard moaning. Although he doesn’t mention moaning, Lee Fleming’s detailed description of Hewlett-Packard (HP) and its success in inkjet printing provides an example of an organization leaping in and taking action in several ‘‘high variance inventive trials’’ to create ‘‘technological turbulence’’ (Fleming, 2002, p. 1073). HP exploited some of its existing knowledge but mostly engaged in rapid prototyping and testing – what Fleming calls ‘‘a repeated and continuous process of recombinant search’’ and a ‘‘stream of inventive episodes’’ – to achieve technological breakthroughs in inkjet printing (Fleming, 2002, pp. 1066–1072). The two key HP inventors, John Vaught and Dave Donald, ‘‘considered and built numerous combinations of inks, resistors, slides, electrodes, explosives, lasers, and piezo-electrics’’ before developing the final product (Fleming, 2002, p. 1072). In his own words, Vaught described a portion of the inventive process in January 1979: My first thoughts for a design were quite conventional y but before the parts got out of the shop I conceived of a pair of electrodes using the ink between them as a resistor to vaporize a small portion of ink very near the end of the tube thereby ejecting a droplet. We built such a device and Dave provided the electronics to drive it. It failed because we couldn’t get the resistivity of the ink low enough to produce enough heat and it also produced hydrogen and oxygen at the electrodes. New idea! Let’s produce a small spark between the electrodes and ignite the bubbles to eject the drop. It worked! One small problem, we couldn’t produce the explosive mixture of gasses rapidly enough to meet the 2 kHz vision. Oh well, let’s just put all the energy required for vaporization in the spark and forget about hydrogen/oxygen explosions. It worked! About this time we got permission to turn the gravure printing investigation into an ink-jet investigation. Finally, we were out from under the table. Dave and I life tested this version and got two days operation at 2 kHz before it failed which was not nearly long enough. Electrode erosion was the culprit. Then came the idea of a small resistor on the inner wall of the capillary to provide the energy necessary for vaporization. All this time Dave is strongly urging me to enter all these ideas in my lab notebook; what a waste of time I argued y (Fleming, 2002, p. 1066)

Even after they got it to work, admitted John Meyer, ‘‘it wasn’t clear at an elementary level how it actually worked y ’’ (Fleming, 2002, p. 1069). Vaught sounds a bit like a jazz musician when he admits in an interview with Fleming, ‘‘I bore easily. [But] HP Labs was a wonderful place: I had to work in a single field for only two or three years and then like magic it was a

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whole new field; a paradise for creativity’’ (Fleming, 2002, p. 1065). John Meyer at HP recalled of the entire team of inventors, ‘‘we were very much involved during this time, ideas were flowing freely back and forth, people were doing things in one area and other people working on different aspects of it, it wasn’t compartmentalized’’ (Fleming, 2002, p. 1068, emphasis added). When the manufacturing team set out to build their own prototype printhead, the process was so rapid that they punched the inkjet orifice by hand using a sewing needle borrowed from an engineer’s wife (Fleming, 2002). Meanwhile, inspiration came from everywhere, including the coffee percolator on Vaught’s desk: You think of things that are totally unrelated y Inventors just don’t go home and see it at that moment in time. It is something that has happened way back in time. Due to a lot of things. As near as I can recall the percolator [inspiration] y it wasn’t [rising] bubbles, if you think about it, if you left the top off, it went poof, poof, poof and blew gobs of coffee all over the place. When it comes to the moment of truth, you think about a lot of things. (J. Vaught, personal interview) (Fleming, 2002, p. 1067)

The HP story is also particularly relevant because it demonstrates that breakthrough innovations do not have to come from outsiders. HP was an established firm that was also successful in creating breakthrough innovation internally. In fact, Fleming argues that it was, in part, because of HP’s size that it was able to innovate successfully: ‘‘it is less likely that the engineers from a purely mechanical or purely electrical engineering firm would have thought of or built such crazy combinations, simply because they would have lacked access to or inspiration from such a wide variety of readily available components’’ (Fleming, 2002, p. 1072). Consider also IDEO, the Palo Alto-based design firm famous for producing a number of creative products in a range of industries including household, commercial, and industrial products and services. It invented the computer mouse, the ‘‘neat squeeze’’ stand up toothpaste tube, the Polaroid I-Zone instant camera, the thumbs up/thumbs down on TiVo’s video recorder, etc. IDEO is famous for its ability to learn about customers’ needs and design new products to meet those needs. The company includes employees from diverse backgrounds including MBAs, electrical engineers, software designers, and linguistics experts. David Kelley, the founder of IDEO, deliberately assembled a diverse group of people who could think outside the box. He refers to the employees as ‘‘crazies’’ and ‘‘weird,’’ proud of their deviance. They look at issues from a variety of angles, and according to Kelley, this is the source of their creativity. They leap in and throw out ideas, play with a myriad of material, get physically involved by creating material prototypes, testing them

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out, destroying old ones and building new ones. Employees are encouraged to become intimately familiar with ‘‘user needs.’’ Engagement extends to physical space – each employee creates his or her own work environment. There’s a wide range of strange items in the workspace including a DC-3 wing suspended from the ceiling in the Palo Alto office. The work environment is playful and highly interactive with toys and strange objects at anyone’s disposal. People are highly energized and engaged, sharing stories, playing with gadgets, proposing ideas. IDEO has a highly collaborative culture; work is intense and hands-on, continuously involving the company’s version of ‘‘deep dives.’’ Employees become like cultural anthropologists, inquiring into the world of the users, engaging in deep empathy. They essentially do field research into the world of the user, then regroup and share what they noticed through intense brainstorming sessions. Kelley calls the process ‘‘focused chaos’’ – a phrase equally applicable to Keith Jarrett’s performances. 4. Minimal Structures and Maximum Autonomy Traditional organizations seem enamored with control and structure – rules, regulations, proper reporting relationships, job requirements, standard operating procedures, clear and rationalized goals, and forms of centralized control. Unfortunately, they often structure out creativity. Creative teams, on the other hand, tend to adapt minimal structures. Minimal structures help to create mindfulness and help people to be responsive to one another. Minimal structure, a concept of modularity, refers to patterns of loose or tight coupling in a group. Loose coupling connotes weak or infrequent ties between people or units. Tight coupling means that the behavior of one unit has a direct effect on what happens in other units. Jazz improvisation is a loosely structured activity in which action is coordinated around songs. Songs are made up of patterns of melodies and chord changes, marked by sections and phrases. Following Bastien and Hostagier (1988, p. 585) songs are ‘‘cognitively held rules for musical innovation.’’ The musicians know the chord changes to ‘‘All of Me’’ or a 12 bar blues, so that often musicians who have never met are able to ‘‘jam’’ and coordinate action. These minimal constraints serve as signposts that occur regularly and predictably throughout the tune, signaling the shifting context to everyone. When musicians improvise, it is usually based on the repetition of this song structure. These guiding structures are nonnegotiable, impersonal limitations: musicians do not have to stop to create agreements along the way. But in some moments, the task trumps the rules: that is,

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regardless of the explicit rules, I may be called upon to respond in concrete spontaneous ways. I must be open to the invitation, the stimuli coming from others, and be loyal to those moments rather than loyal to a normative, decontextualized set of a priori rules. Weick has pointed out that ‘‘bonds among most subsystems, in most organizations, should be relatively loose. This means that both stability and adaptation are achieved with less interdependence, less consensus, and less mutual responsiveness than we usually assume’’ (Weick, 1979, p. 110). These minimal constraints allow considerable freedom to express diversity. Players are free to transform materials and intervene in the flow of musical events, altering the direction of the piece. Once there is a mutual orientation around the root movement of the chord patterns, even the basic chords themselves can be altered, augmented, or substituted. These minimal structures also allow temporal flexibility. A healthy group typically shifts from tight to loose coupling over time. Coordination is not achieved by static rules, but through the evolution of ties between players, allowing for the emergence of surprising detours. There is strong enough interdependence to complete tasks and bring ideas to fruition, but the ties are not so tight as to be suffocating. One example of a firm that has demonstrated dynamic capabilities in such a loosely coupled context is Omron, a $7 billion, 35,000-person global Japanese manufacturer of sensors, control system components, advanced electronics, health care devices, and related services. Omron’s ‘‘song’’ is its deeply rooted, globally defined Principles. In our interview with him, Omron CEO Hisao Sakuta specifically identified the Omron Principles as one of the most important strategic structures – a singular commonality that connects all activity within the firm (Kanter & Bernstein, 2009). When we challenged him on how one set of principles could possibly unite people across dozens of different geographies, languages, and cultures, he had no delusions of grandeur, recognizing the minimal nature of that structure and openly encouraging improvisation around it: Whenever I speak with employees, I tell them their interpretation of the Principles should not be a set answer. Please be true to your own personal understanding and how you can express it using the language of the Principles. We have 35,000 employees, and I think it’s perfectly fine for there to be 35,000 different understandings of the Principles y . No matter how different the workplaces are in terms of race, value sets, geographical locations, etc., as long as we can continue this common debate and discussion, we are able to maintain a flexible attitude to respond to any changes to come in 50, 100, 200, 300 years. And I believe we will be able to refine the Principles by doing so. (Interview with CEO Sakuta, December 20, 2007)

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Building dynamic capability that keeps the best of learned routines and also encourages novelty and experimentation. In the case of Omron, the nonnegotiable minimal structure is the core principles; but too much agreement and too much consensus on what these principles mean would be limiting. Some leaders would try to force universality and compliance, putting in place structures to ensure strong governance across a global footprint. Instead, Sakuta uses the minimal structure of the Principles – not how they are written, but how they are interpreted – as his governance structure. The result is maximum autonomy for localized innovation that can ultimately help produce Omron’s next major innovation. Past successes included using Omron’s advanced sensor technologies to prevent counterfeiting on highresolution color copiers, make digital cameras capable of automatically identifying and focusing on faces in a photo, create auto systems that automatically applied the brakes prior to an accident, develop automated systems that nearly eliminated the possibility of fatal injuries in industrial laundries, subway stations, and construction sites, and improve food safety through the deployment of biosensors capable of automatically detecting if food would be harmful (past date, diseased, poisoned, etc.) if ingested. Another organization that understands dynamic capability means mastering minimal structures is Toyota. The same organization that was capable of unlearning enough to create the Lexus also learns through constant improvisation on the factory floor. Toyota operates on four simple rules: ‘‘(1) All work shall be highly specified as to content, sequence, timing, and outcome; (2) Every customer-supplier connection must be direct, and there must be an unambiguous yes-or-no way to send requests and receive responses; (3) The pathway for every product and service must be simple and direct; and (4) Any improvement must be made in accordance with the scientific method, under the guidance of a teacher, at the lowest possible level in the organization’’ (Spear & Bowen, 1999, p. 98). Those simple rules provide the minimal structure necessary to avoid chaos on a fast-moving factory floor. Outside of those rules, ordinary workers are given maximum autonomy to constantly improve their methods and suggest improvements elsewhere. They have mastered the art of learning while simultaneously executing for efficiency. On a recent tour of Toyota’s Tsutsumi Plant, we watched as the installation of the center console on the third-generation Prius caused a bottleneck in the process, it triggered a full line stop three times within our short observation time window. As problems mounted, more supervisors came over to investigate the problem. In many manufacturing environments, there are sets of rules that dictate responses to breakdowns in the manufacturing line. Usually the problem rises up the hierarchy. Solutions

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are removed from the purview of the line worker. Why? Because managers are more capable of handling exceptions and unusual events. That’s what supervisors do – they handle the messy breakdowns. But not at an organization like Toyota that holds to four simple rules above and allows the employee the autonomy to address unusual challenges. Here the supervisors did not tell the operator what to do. To the contrary, the supervisors provided support to get the line moving again, doing the operator’s job for him, freeing the operator to solve the problem by adjusting the tooling facility to make the installation smoother. This was all done in seconds, even as the line continued to move. Like IDEO’s policy of allowing employees to design their own workspaces, Toyota is famous for allowing its operators to design their own tools, workspaces, and processes. The result: seamless processes that almost resemble a dance in the most unlikely of places – a factory floor. Toyota performs thousands of such dances leading to extraordinary throughput and quality by providing operators with minimal structure and maximum autonomy. When supervisors get involved, they bring expertise and extra hands, not autonomy-squelching structure, very similar to the ‘‘semi-structures’’ that Brown and Eisenhardt found in their computer industry studies (Brown & Eisenhardt, 1997). What makes this part of building dynamic capabilities? Investments in minimal rules that free employees to deviate from normal practice in response to challenges are investments in organizational learning. In these cases, learning does not come from an attempt to achieve a major breakthrough; rather than ‘‘trying something new,’’ learning comes from the much less momentous act of momentarily ‘‘trying something else.’’ Freedom to inquire into and solve nonroutine problems supports employee learning about larger systemic issues. On the surface it looks like what Winter (2003) said dynamic capability is not – ad hoc problem solving. But by institutionalizing the principle of minimal nonnegotiable rules that demand employees otherwise adapt and respond to problems as they arise, these organizations are fostering a meta-capacity for improvisation and organizational change. What jazz bands, Omron, and Toyota have in common is a jazz mindset that supports dynamic capabilities. They are able to explore and experiment with novel ideas (autonomy) while still staying loyal to essential routines (structure). 5. Errors as Source of Learning Appreciating the affirmative potential in every musical utterance, even errors, becomes a self-fulfilling prophecy for improvising musicians. Jazz improvisation is marked by a restless adventurousness, an eagerness to

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travel into unexplored territory. There are hazards, risks, gambles, chances, speculation, and doubts. Jazz is an expressive art form that encourages players to explore the edge of the unknown, and since improvisation legitimizes risk taking, it is inevitable that there will be discrepancies, miscues, and ‘‘mistakes.’’ Jazz musicians often turn these unexpected moments into something sensible or perhaps even innovative. Errors are a source of learning. They are often integrated into the musical landscape as an occasion for further exploration that might lead to new pathways otherwise thought impossible. Herbie Hancock recalls that Miles Davis heard him play a wrong chord but simply played his solo around the ‘‘wrong’’ notes so that they sounded correct, intentional, and sensible in retrospect. Jazz musicians assume that ‘‘you can take any bad situation and make it into a good situation. It’s what you do with the notes that counts’’ (Barrett & Peplowski, 1998). When errors do happen, rather than search for causes and identify responsibility, musicians treat them impersonally: they make adjustments and continue. Davis does not seek to fix blame or search for causes of the mistake but simply accommodates it as material to be queried for possible direction. Such a move is affirmative as well as forgiving: his utterances contain fragments of Hancock’s, making the ‘‘error’’ sound intentional in retrospect. Such reflection grants validity to the other’s offering and leads to transformation, redirection, and unprecedented turns. Jazz improvisation assumes that there is affirmative potential waiting to be discovered from virtually any utterance: rather than treat an unintended enactment as a mistake to be avoided, often jazz musicians treat these gestures as another theme. They do not stop to analyze the error, problem solve, and set up controls to prevent its recurrence. Rather they repeat it, amplify it, and develop it further until it becomes a new pattern. In 2006, Amazon launched UNBOX, a video download service with great promise. Within a week, the device was pronounced ‘‘a complete and utter failure’’ (O’Brien, 2009). It took as long as 7 hours to download a 90-minute movie and, once downloaded, the movie could not be shown on any other device. As if that wasn’t bad enough, the Amazon player would intermittently launch itself. We might imagine that the designer of the service was in deep trouble, but such was not the case. CEO Jeff Bezos reflected, ‘‘The thing that allows for all the teams to come together after a failure is the recognition that this is just a first failure (for the project). We may have to work through a couple more,’’ says Bezos, ‘‘ y if we have conviction, that gives us energy to pursue (another) approach’’ (O’Brien, 2009).

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Amazon CEO Bezos illustrated strategic improvisation – an example of learning while doing. It’s a story about taking action, revising assumptions, valuing learning from failures, trying again, discovering as you go. When Bezos calls it ‘‘just a first failure,’’ he furthers a unique leadership logic, essentially an improvisation mindset. Jeff Bezos sounded like Miles Davis when he announced, ‘‘if you only extend into places where your skill sets serve you, your skills become outmoded’’ (O’Brien, 2009). But in the desire for discovery, for taking risks, for replenishing knowledge, and for renewing skills, errors must be embraced. Indeed Amazon is able to glean important lessons from its errors. Consider the Kindle (which, sources suggest, had built-in wireless because Amazon learned from the UNBOX how important fast delivery-on-demand was). The first version of Kindle was very imperfect – anyone who saw the device got the sense that you were watching Amazon learn as they go. Kindle 2, in fact, included a special section called ‘‘experiments’’ so that users can access the ongoing experiments Amazon is attempting. And the Kindle DX has built upon all of this. It’s predicted that, in two years, Kindle devices will produce $840 million in profit based on $3.7 billion in sales (O’Brien, 2009), nearly 20% of Amazon’s sales and profits today. Although open heart surgery would not appear, on its face, to be a good context in which to exemplify using errors as a source of learning, Amy Edmondson, Richard Bohmer, and Gary Pisano found that cardiac surgery teams with a ‘‘learning leader’’ who fostered ‘‘a learning environment by admitting (his or her) mistakes to the team’’ were most successful in adopting a new surgical technique (in this case, minimally invasive cardiac surgery) and performing it effectively (Edmondson, Bohmer, & Pisano, 2001, p. 10). In what they term ‘‘serving as a fallibility model,’’ team leaders who would say, for example, ‘‘‘I screwed up. My judgment was bad in that case,’ signaled to others on the team that errors and concerns could be discussed without fear of punishment’’ (Edmondson et al., 2001, p. 10). The authors emphasize the importance of creating an environment of psychological safety for the team, but also inherent in their data is the importance of focus on learning from mistakes. Learning from mistakes became a meta-capacity of the surgical team, a form of double-loop learning over time (Argyris, 1977) that is resonant of the development of dynamic capabilities. On the other hand, failing to use errors as a source of learning is indicative of the organizational inertia of organizations that fail to adapt – Bazerman and Watkins (2004) argue that organizations that fail to learn from errors become vulnerable to predictable surprises, and Sitkin (1992) ties the

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unwillingness of organizations to embrace small contemporary failures to the failure to respond to a large future crises. In a well-documented example, Ulmer, Sellnow, and Seeger (2007, p. 141) find that ‘‘many of the flaws in NASA’s organizational culture that led to the Challenger disaster reemerged in the Columbia crisis’’ a decade and a half later, even after ‘‘dramatic changes in leadership, shuttle structure, and communication procedures were enacted to remedy problems found during the Challenger investigation.’’ Jazz bands do not change leadership, structure, and procedures when they encounter an error. To do so is to use an ad hoc solution to a dynamic problem. Instead, the impersonal acceptance of those errors makes them ripe for learning and the creation of dynamic capabilities. 6. Hanging Out in Communities of Diverse Specialists An essential part of learning jazz is becoming a member of the jazz community, ‘‘hanging out,’’ learning the code, behaving like one of the members. Learning is not simply a matter of transmitting decontextualized information from one person to another. Local jazz communities of peers in large metropolitan areas such as Detroit, Chicago, and especially New York have served as informal educational systems for disseminating knowledge. Musicians get together to listen to recordings of great soloists, memorize their solos, play tunes in different tempos and keys until they find the right feel. They join other musicians, ‘‘hanging out’’ in coffee shops and bars after a performance to exchange stories. Stanley Turrentine remembers he learned from others by ‘‘asking about things I didn’t understand’’ (Barrett, 1998). Novices discover they need to learn certain ‘‘standard’’ tunes, which include appropriate keys, tempos, norms, and conventions of the trade that are not written down. One young trumpeter even recalls learning how to dress from ‘‘hanging out’’ with Miles Davis (Berliner, 1994). A special fraternity develops among jazz musicians as they guide each other through various experiences, trading ideas along the way. Brown and Duguid (1991) refer to organizations as communities of practices. To foster learning, they contend, organizations must see beyond conventional, canonical job descriptions and recognize the rich practices themselves. Xerox repairmen, for example, were known to teach each other how to fix the recalcitrant machines through war stories shared during coffee breaks (Orr, 1996). Essential to organizational learning is access to legitimate peripheral participation (Lave & Wenger, 1991), understanding how to function as an insider. This recognizes that learning is much more than receiving abstract, noncontextual, disembodied knowledge. It is a matter of learning how to speak the language of the community of

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practitioners. That is done, in part, through interaction with a wide variety of practitioners in the community, producing ‘‘generalists’’ with diverse experience in the field. In an elegant empirical test of the value of these generalists, Huckman and Staats (forthcoming) have demonstrated that ‘‘teams with relatively more generalists are more likely to deliver projects successfully when tasks change’’ (emphasis added). The need for success in the face of task change is a common feature of both jazz bands and organizations handicapped by organizational inertia. If we think of important innovations over the last three hundred years, we typically associate them with individual creativity and genius. In the 14th century, Johannes Guttenberg invented the printing press. In the 18th century, James Watt invented the steam engine and Eli Whitney invented the cotton gin. In the 19th century, Thomas Fulton invented the steamship, Alexander Graham Bell invented the telephone, Thomas Edison invented the phonograph and the light bulb, and Marconi invented the radio. In the 20th century, Henry Ford created innovations for the assembly line and produced the modern automobile; Steve Jobs invented the personal computer. The list goes on and on with examples of innovation that occurs because of individual genius. Andrew Hargadon cites the following New York Times obituary written to honor Thomas Edison: No figure so completely satisfied the popular conception of what an inventor should be. Here was a solitary genius revolutionizing the world and making an invisible force do his bidding – a genius that conquered conservatism, garlanded cities in light, and created wonders that transcended the predictions of utopian poets. (Hargadon, 2003, citing the New York Times obituary section on October 18, 1931)

As Hargadon points out, this glorification of genius is misleading. What gets overlooked are the interactions through which innovations develop. When we ask questions about where ideas come from, as in the study of Thomas Edison and the ‘‘invention’’ of the light bulb, the story is far more complex than the popular conception. Edison understood the learning potential of informally ‘‘hanging out’’ with a collection of diverse specialists. He assembled a group at Menlo Park – 10–15 engineers from different industries and backgrounds. They essentially played together, intimately experimenting and learning together as they tried out wild ideas. The groups led by Edison learned from telegraph signals, generators, and a variety of other industries and specialties. Hargadon puts it bluntly: ‘‘Edison neither invented the light bulb nor acted alone in improving upon it. The web around Edison was thick with ties to other people, ideas, and objects that together made up his particular invention’’ (Hargadon, 2003). Innovation is not so much the

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result of invention as it is one outcome from creating inventive connections and networks from diverse worlds, cultivating improvisation and learning by doing, cherishing failures as essential for learning. In other words, innovation is facilitated activity in a community of diverse specialists hanging out together, telling stories about incremental iterations, unexpected outcomes, new insights and approaches, hints about future probes. This is exactly what jazz musicians do. They know that learning depends upon your relationships with others in the jazz community. They do not innovate by isolating, breaking off from others. They don’t wait for inspiration. They don’t think of themselves as creating something out of nothing. They innovate by being tightly coupled to a diverse group of specialists, noticing the potential in people, ideas, and utterances, making comparisons with other people and different activities, seeing the best in what already exists, combining disparate parts in new ways. This takes the mystery out of improvisation. Jazz players are skilled at combining and recombining. They do not ‘‘think outside the box.’’ Rather, they bring together the owners of lots of different boxes and combine and recombine them. Jazz musicians do what Edison did – they connect various units, notice positive variations, and redistribute emerging ideas. The focus on individualism in invention has led to some popular aphorisms that now seem virtually unchallengeable. Individual managers should ‘‘think outside the box,’’ ‘‘push the envelope,’’ and question the constraints that have been taken for granted. Managers are encouraged to break away from the constraints of tradition to create something new. In fact, efforts are made to guard creative people and creative activity from the flow of organizational life. So R&D groups are separated from the organization – physically as well as culturally. ‘‘Skunkworks’’ groups are created to break away from the ordinary culture so as to free the imagination to create something brand new that will be a game changer. None of these principles or practices is blatantly false or irrelevant. However, one of the claims of this chapter is that they are misleading in some cases and fail to understand the nature of the creative process. Creativity and innovation are inherently social accomplishments and involve linking with current and past activities, not separating from them. Building dynamic capability means that experienced people have a chance to query one another, tell stories, and share wisdom. Much of this kind of relational learning happens in informal settings. This insight is likely to get missed if we continue to valorize individual genius. Separating creative types from day-to-day activity might lead us to lose sight of the most important task – connection with disparate ideas and diverse specialists.

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7. Alternating Between Soloing and Supporting One of the most widespread, yet overlooked, structures in jazz is the practice of taking turns. Jazz bands usually rotate the ‘‘leadership’’ of the band: that is, they take turns soloing and supporting other soloists by providing rhythmic and harmonic background. Each player has an opportunity to develop a musical idea, while others create space for this development to occur. In order to guarantee these patterns of mutuality and symmetry, players take turns accompanying, or ‘‘comping,’’ one another. In written arrangements, the scored passages often precede the soloist’s improvisation and channel, sustain, and embellish it. In a sense, the background accompaniment conditions the soloist and organizes the course of the solo through passing chords, leading tones, and rhythmic accents. In every part of jazz, it is not enough to be an individual virtuoso, one must also be able to surrender one’s virtuosity and enable others to excel. In order to ‘‘comp’’ or accompany soloists effectively, jazz musicians need to be very good listeners – interpreting others’ playing, anticipating likely future directions, and making instantaneous decisions in regard to harmonic and rhythmic progressions. They also may see beyond the player’s current vision, perhaps provoking the soloist in different direction, with accents and chord extensions. This has considerable implications for organizational learning. Dynamic capabilities are frequently seen as top-down competencies. The senior team learns and acts dynamically for the organization. Based on the jazz analogy, we propose a different model: leading the development of dynamic capabilities involves accepting a soloing and supporting mindset – leaders who learn the art of leading and followership, just as members of a jazz band do. Novel ideas often come from voices that traditionally have been silenced. The deceptively simple practice of taking turns creates a mutuality structure that guarantees participation, inclusion, shared ownership, and organizational dialogue (Senge, 1990; Weick & Roberts, 1993; Tsoukas, 2009), all of which can lead to dynamic capability in organizations just as it does in jazz. Recent research on collective intelligence confirms this: ‘‘groups where a few people dominated the conversation were less collectively intelligent than those with a more equal distribution of conversational turntaking’’ (Woolley, Chabris, Pentland, Hashmi, & Malone, 2010). Recent studies of distributed leadership in schools (Higgins, Young, Weiner, & Wlodarczyk, 2009) and collaborative intelligence (Hackman, 2011) provide further support for the powerful value of simply taking turns: ‘‘team leadership is not a solo activity y shared leadership is an extraordinarily

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valuable resource for accomplishing the full array of leadership functions needed for team effectiveness’’ (Hackman, 2011, p. 165). Soon after becoming CEO of IBM, Sam Palmisano proposed a ‘‘values jam’’ – a 72-hour web chat about what IBM stands for, open to over 350,000 IBMers in 270 countries. One board member questioned whether this was ‘‘socialism’’ (Kanter, 2009), but Palmisano nonetheless proceeded with considerable success. Approximately 140,000 IBMers participated, and IBM found itself a new values statement. Since then, IBM has executed a number of organizational jam sessions – for new products, services, etc. – and even markets the tool at collaborationjam.com. Taking turns soloing and supporting is ultimately about taking turns at egocentric passion and altercentric compassion. As technology makes it easier to accomplish that, perhaps the sort of dynamic capability jazz bands have been building for decades will become more common in organizational life as well.

CAPABILITIES IN IMPROVISATION, NOT IMPROVISED CAPABILITIES In witnessing the application of these ideas through our fieldwork at a number of organizations worldwide, we have observed four commonalities at firms that are most successful in building dynamic capabilities through a jazz mindset. First and foremost, returning to Winter’s (2003) precise definition, dynamic capabilities arise from improvisation only when improvisation ‘‘rises from a patterned and practiced performance’’ (Winter, 2003). The leaders discussed in this chapter, both jazz and business, were adept at building improvisation capacity. While such ad hoc problem solving may be successful, it is not the focus of this chapter and may, in fact, lead to chaos. Instead, we are proposing a mindset – a set of meta-responses – that may improve the chance that an organization will adapt ordinary routines in the face of an exogenous shock. This is a key point: we are describing a defined process by which improvisation can transform ordinary routines into dynamic ones – a meta-practice that itself is not improvised but rather quite specific. Jazz bands have a specific practice for building capabilities in improvisation and keeping the jazz mindset alive. This is a disciplined practice that allows adaptation and improvisation.

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In the examples above, all leaders – jazz and business – communicated their intentions transparently to others. As such, the jazz mindset was a shared mindset and a shared set of practices. In each case, the leader made it clear (whether through words or notes) when it was time to improvise – and when it was time to fall back to what Winter (2003) calls ‘‘the ‘how we earn a living now’ capabilities.’’ None of these leaders advocates abandoning routines on an ongoing basis. The jazz mindset must be bounded – for a certain period of time, within a certain group of people, within a certain location, etc.

CONCLUSION Adaptation is difficult for many successful firms. The data is quite conclusive – surprisingly few leading firms survive more than a few decades (Louca & Mendonca, 2002; Foster & Kaplan, 2001; Devan, Millan, & Shirke, 2005; Wiggins & Ruefli, 2002; O’Reilly & Tushman, 2008). Christensen and others have demonstrated market leaders’ tendency toward failure to discern or respond to disruptive innovations (Christensen, 1997). However, firms that develop dynamic capabilities and become ‘‘ambidextrous,’’ whether structurally or contextually, are able to exploit the routines that lead to market success while simultaneously adapting to new markets and technologies – the solution to Christensen’s innovator’s dilemma (Christensen & Raynor, 2003; O’Reilly & Tushman, 2008; Gibson & Birkinshaw, 2004). Senior leaders of these firms notice discontinuous innovations and the emergence of novelty, legitimizing search processes and reprioritizing, recombining, and rearranging resources accordingly. However, we know little about the mindset of leaders who are able to succeed. Following March (1991), ‘‘much of the research exploring how dynamic capabilities might enable firms to adapt to changes in markets and technologies is preliminary and conceptual. What is missing is a clear articulation of those specific capabilities that facilitate exploration and exploitation.’’ In unpredictable markets, it’s rare that strategic leaders know the right strategy in advance. They must learn to manage so that the correct strategy emerges within the firm. This means leaders need to do more than make incremental improvements on sustainable products. The genius of strategic leaders such as those described above is not that they can see into the future. Instead, their genius is rooted in the construction of dynamic capabilities and

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improvisational competence in their organizations, through the practices of provocative competence (unlearning), affirmative competence (‘‘yes to the mess’’), leaping in and taking action with full-bodied engagement, minimal structures with maximum autonomy, hanging out in diverse communities of specialists, learning from errors, and alternating between soloing and supporting. In short, they nurture a jazz mindset.

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COMMUNICATION FOR CHANGE: TRANSACTIVE MEMORY SYSTEMS AS DYNAMIC CAPABILITIES Luis Felipe Go´mez and Dawna I. Ballard ABSTRACT The concept that an organization’s actions or inactions constrain or enhance its future options and outcomes and – ultimately – its long-term survival, is here referred to as the organization’s viability. Following a dynamic capabilities framework, we identify two communication practices that help develop both transactive memory systems and a firm’s long-term viability, information allocation and collective reflexivity, and call for the development of others. We discuss the interrelationship of these two practices as nurturing the development of transactive memory systems critical for organizational long-term viability. We then discuss organizational structures that prompt or constrain the development of these two communication practices – organizational members’ perceived environmental uncertainty, perceptions of time as scarce, feedback cycles between actions and outcomes, and organizational members’ temporal focus – and offer propositions concerning these relationships. We emphasize the relevance of TMS through the exploration of three characteristics of the relationship between TMS and the long-term viability of organizations. Finally, we conclude with recommendations for organizational development practitioners for fostering TMS through the facilitation of sites for collective reflexivity. Research in Organizational Change and Development, Volume 19, 91–115 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 0897-3016/doi:10.1108/S0897-3016(2011)0000019006

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An organization’s viability refers to the concept that an organization’s actions or inactions constrain or enhance its future options and outcomes and – ultimately – its long-term survival. Organizational change is embedded within a constant tension between the present and the future as reflected in common phrases such as ‘‘pay now or pay later’’ and the framing of negative short-term outcomes as ‘‘learning experiences’’ for the future – both prominent themes in issues of adaptation, which are captured in literature on ecological perspectives in organizational communication (e.g., Monge & Poole, 2008), organizational sensemaking (Weick & Sutcliffe, 2001), organizational ambidexterity (e.g., O’Reilly & Tushman, 2008), and organizational change (e.g., Lewis, 2006). Because the integration of knowledge across organizational members is critical for an organization’s ability to adapt over time, Grant (1996) calls this integration of knowledge ‘‘the essence of organizational capability’’ (p. 375). Transactive memory systems (TMS) reflect Grant’s integration of knowledge as the capacity to learn because TMS relate to identifying the expertise of others in the organization and allocating and retrieving information across organizational members (Hollingshead & Brandon, 2003). Further, because both the evolutionary framework and TMS have a temporal dimension, and perceptions of time are recursively related to organizational action (Ballard & Seibold, 2003), research related to this integration of knowledge benefits from considering long-term viability through TMS and the inherently temporal nature of change (Pettigrew, Woodman, & Cameron, 2001). Viability reflects organizations’ adaptive responses to changes in their environments (O’Reilly & Tushman, 2008; Zorn, Page, & Cheney, 2000) and we posit that these adaptive responses are mainly achieved through organizational members’ communication competencies. Our main thesis is that the development of transactive memory systems (TMS) is a dynamic capability achieved through the interaction of at least two communication practices – information allocation and collective reflexivity. We define information allocation as ‘‘forwarding new information to the organizational actor who can better act upon this information immediately and/or store it for future organizational actions.’’ This definition builds on the definition of information allocation in TMS research (Huang, 2009; Wegner, 1995) and adds the possibility that the information will be acted upon immediately rather than simply stored. We further propose that the development of shared awareness, a critical component of TMS, necessarily requires collective reflexivity, and define collective reflexivity as ‘‘organizational workgroup members pausing from their daily activities and coming together to exchange their views of action-outcomes linkages’’ (Barge, 2004; Huber, 2004). In Grant’s (1996) view of knowledge integration, the

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integration of individual and departmental knowledge leads to an organization’s operational routines. In contrast, the two communication practices proposed here reflect triggers to organizational adaptive responses to their environments – they become practices that enable organizational members to sense their environments (Teece, 2007) and evaluate action–outcome links of organizational action (Argyris & Scho¨n, 1996). We suggest that TMS and these two communication practices are dynamic capabilities because they are enabled and constrained over time by organizational characteristics such as perceived environmental uncertainty, perceptions of time as scarce, length of action–outcome feedback cycles, and future temporal focus. Because information allocation and collective reflexivity develop over time and are difficult to imitate we consider the resulting transactive memory systems that emerge over time to be dynamic capabilities (Teece, 2007). Before further explaining these two communication practices we first describe TMS and their relationship to dynamic capabilities. Fig. 1 presents the model we developed of the relation between transactive memory systems and organizational viability.

CONCEPTUAL FOUNDATIONS OF TRANSACTIVE MEMORY SYSTEMS AS DYNAMIC CAPABILITIES Scholars have suggested that, because environments are dynamic, viability is based more on an organization’s capabilities to adapt to their environments

Dynamic Capabilities

Environmental Uncertainty

•

Experience of Time as Scarce

Feedback Cycles • Length • Variability

Fig. 1.

Transactive Memory Systems o Information Allocation o Collective Reflexivity

Organizational Viability • •

Social Integration

Adaptation Learning

Sensing Temporal Focus

Development of Transactive Memory Systems and Organizational Change.

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than on their market position (Teece, Pisano, & Shuen, 1997). In order to enact adaptive actions, organizations need resources that take time to acquire and deploy, and which may be barriers to market entry and positioning (Barney, 1986; Wernerfelt, 1984). Resources that provide some advantage to the organization need to be nontradeable, nonimitable, nonsubstitutable (Dierickx & Cool, 1989), and valuable (Barney, 1991).1 Organizational resources that fit these characteristics are intangibles such as tacitness of knowledge (Dosi, 1988; Teece, 1976) and absorptive capacity (Cohen & Levinthal, 1990) because ‘‘prior related knowledge confers an ability to recognize the value of new information, assimilate it, and apply it to commercial ends’’ (Cohen & Levinthal, 1990, p. 128). Thus, the distribution of knowledge across organizational members and the adequate retrieval of that knowledge represent a dynamic capability to the organization. This distribution of knowledge necessarily implies a TMS – ‘‘a collective level cognitive system’’ (Peltokorpi, 2008, p. 379). Suggesting that what is difficult to imitate are not the resources themselves but the ways in which organizations configure their resources into actions, Teece, Pisano, and Shuen (1997) propose the concept of dynamic capabilities as the ‘‘capacity to renew competences so as to achieve congruence with the changing business environment y [by] y appropriately adapting, integrating, and reconfiguring internal and external organizational skills, resources, and functional competences to match the requirements of a changing environment’’ (p. 515). In this sense, organizational long-term viability is based on what organizations can do given their resources and these critical capabilities become intangibles such as skills and the expertise embedded in different functions within the organization. These skills and expertise are only capabilities if organizational members can retrieve them when the situation requires them. A TMS facilitates the retrieval of these skills and expertise. One of the intangible assets of organizations that scholars (e.g., Lei, Hitt, & Bettis, 1996; Leonard-Barton, 1992; Teece et al., 1997) emphasize is learning. Organizational learning is reflected in the range of potential behaviors, not necessarily in the behavior or action per se (Huber, 1991). Any change in the range of potential behaviors, either reducing or increasing it, implies learning. Further, the greater the range of potential behaviors, the greater the variability of actions organizations can take to face an unexpected event in the environment (March, 1991). Because organizational learning does not rely solely on individuals’ skills and expertise, but in the range of collective actions through its members, we suggest that transactive memory systems (TMS) become a dynamic capability fostering the viability of organizations.

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Organizational learning – the range of potential behaviors organizations can enact – is not enough for successful adaptation without the ability to sense changes in the environment. Organizations require dynamic capabilities that allow them to identify opportunities and threats in their environments, act upon those opportunities, and maintain the benefits of those opportunities through the configurations of their resources (Teece, 2007). Accordingly, Teece gives especial attention to ‘‘sensing’’ – identifying those opportunities and threats in the environment. We suggest that identifying those opportunities and threats is a collective process where organizational members allocate new information to the member with the expertise to either store the information or act upon it. Sensing cannot be complete without information allocation – forwarding new information to those organizational members who can better store it (Huang, 2009) or act upon it. Besides being directly related to information allocation, sensing and acting upon opportunities and threats is also related to other components central to TMS such shared awareness and perceived interdependence. Transactive memory systems relate to knowing who knows what and retrieving information from other organizational members (Hollingshead & Brandon, 2003) or allocating information to a nonhuman repository from which the information is later retrieved (Yuan, Fulk, & Monge, 2007). Because ‘‘transactive retrieval occurs when at least two people work together to retrieve uniquely held information’’ (Peltokorpi, 2008, p. 379) the emphasis is on memory as represented by the information being allocated and stored – ‘‘held’’ within the TMS. As can be seen in Peltokorpi’s depiction of transactive retrieval, it is important to note that TMS are not groups or organizations; TMS are emergent processes that arise through the interaction of organizational members. Although groups and organizational networks are the structures or locales where TMS emerge, TMS only occurs – is enacted and brought to existence – when interaction leads to a shared awareness of who knows what and the appropriate allocation and retrieval of information within the group or network. This emergent property is what makes TMS a dynamic capability. Further, information allocation can only occur when individuals can recognize those with the expertise to better store the information (Huang, 2009; Wegner, 1995) through the development of shared awareness. Although shared awareness seems to be a cognitive process, it also relates to other forms of interdependence. We next describe shared awareness and interdependence as not easily imitable and as critical to the development of TMS.

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Shared Awareness and Interdependence The original conceptualization of TMS focused on the transactive memory within dyads of intimates because TMS require an ‘‘organizational scheme that connects the knowledge held by an individual to the knowledge held by the other’’ (Wegner, Giuliano, & Hertel, 1985, p. 257). Scholars have now incorporated the notion of TMS into groups and teams in organizational contexts, where relationships will be more distant than in established intimate relationships and consequently it becomes more difficult to develop the ‘‘shared awareness of who knows what within the group’’ (Peltokorpi, 2008, p. 378). This shared awareness has been considered in different forms across research incorporating TMS into workgroups and networks. For example, Brandon and Hollingshead (2004) talk about perceived interdependence – ‘‘group members rely on one another to take responsibility for storing information’’ (p. 634) – and how this reliance necessarily requires group members’ understanding of the different taskexpertise-person (TEP) units within the group. In other words, a shared understanding of the type of expertise needed to perform a task and the person responsible for that expertise represents the cognitive interdependence necessary to develop a transactive memory system. Similarly, Palazzolo, Serb, She, Su, and Contractor (2006) relate to this cognitive interdependence when they discuss ‘‘accuracy in expertise recognition’’ as the degree to which people accurately perceive the expertise of others in the network (p. 226). Palazzolo and colleagues’ emphasis is not on accuracy by an individual member but accuracy at the network level. Thus, their ‘‘accuracy in expertise recognition’’ is consistent with the cognitive interdependence necessary to link the knowledge in the network through the interaction of its members. Shared awareness – whether reflected in shared understanding of the different TEP units (Brandon & Hollingshead, 2004) or as network level ‘‘accuracy in expertise recognition’’ (Palazzolo et al., 2006, p. 226) – necessarily requires a recognition of interdependence among members that may take time to develop or may not develop at all. Accordingly, we posit that shared awareness is a precursor to TMS that illustrates the characteristics of TMS as a dynamic capability that is not tradeable or imitable. Further, we suggest that perceptions of interdependence are also related to organizational members’ having a focus on the future. Specifically, we suggest that group and network members are more likely to perceive interdependence – and hence engage more in information allocation and collective reflexivity – when they have a higher focus on the

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future. In social psychology, temporal research on social dilemmas indicates that people are more prone to collaborate with a group if they perceive future interdependence in their interactions (Parks & Posey, 2005). The two communication practices we discus as being key in the development of TMS rely on collaboration and the perceptions of future interdependency. The following section elaborates on these two communication practices identified as dynamic capabilities – information allocation and collective reflexivity – their role in the development of TMS, and their interplay with McGrath and Kelly’s (1986) three problems in collective action – uncertainty, scarcity of resources, and collective reflexivity. First, we draw on Teece’s (2007) sensing as a dynamic capability and Huber’s (2004) eclectic sensor responsibility to define information allocation. Then, we draw on Barge and colleagues’ research on reflexivity (Barge, 2004) as well as on organizational learning mechanisms (OLMs) such as after-action reviews (AARs, Lipshitz, Friedman, & Popper, 2007; Ron, Lipshitz, & Popper, 2006) to define collective reflexivity. Then, we describe McGrath & Kelly’s (1986) three problems in collective action in relation to the two communication practices proposed here. Finally, we provide examples illustrating the pervasive need for managing the temporal dimension of viability in TMS across organizational contexts and suggest practical application for organizational development (OD) practitioners.

INFORMATION ALLOCATION, COLLECTIVE REFLEXIVITY, AND VIABILITY The purpose of information allocation and collective reflexivity is to enact communication that fosters organizational viability through actions related to Huber’s (2004) eclectic sensor responsibility and Teece’s (2007) sensing – both prescribing an organizational intelligence practice that can help firms adapt to the future by identifying changes in the environment. Our description of viability allows an inclusive view of organizational adaptation that goes beyond achieving competitive advantage – the relative positions of organizations vis-a`-vis their competitors (e.g., March, 1991) – which has been the focus of research on temporal myopia (e.g., Levinthal & March, 1993), dynamic capabilities approaches (e.g., Teece, 2007), and on organizational ambidexterity (e.g., Tushman & O’Reilly, 1996). Although we recognize the importance of performance relative to competitors, we propose that viability is relevant for all kinds of organizations and their

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environments, rather than being exclusive to the context of for-profit corporations. The two communication practices proposed here – information allocation and collective reflexivity – represent the development and maintenance of TMS in organizations. As we develop these two practices – and the transactive memory systems they nurture – as dynamic capabilities we draw upon McGrath and Kelly’s (1986) three problems in collective action – uncertainty, scarcity of resources, and conflicting interests – as structures that play a role in constraining organizational members’ engagement in these two communicative dynamic capabilities. First, we define and explain the two communication practices. Second, we describe how the enactment of these practices is constrained by three problems in collective action identified by McGrath and Kelly (1986) – uncertainty, scarcity of resources, and conflicting interests and develop several propositions.

Information Allocation Information allocation is related to Huber’s (2004) eclectic sensor responsibility because organizational viability is enhanced when organizational members are ‘‘alert for firm-relevant information unrelated to their specific job responsibilities, and y communicate it to the relevant parties in the organization’’ (p. 55). Huber’s eclectic sensor responsibility contrasts with the traditional practice of filtering in only information relevant to one’s own work or that of close coworkers. Further, eclectic sensor responsibility also implies that organizational members do not wait until they are asked for this information. We draw on Huber’s eclectic sensor responsibility and on prior definitions from TMS (Huang, 2009; Wegner, 1995) to define information allocation as ‘‘forwarding new information to the organizational actor who can better act upon this information immediately and/or store it for future organizational actions.’’ The following example can illustrate the concept of information allocation: A corporate recruiter seeking petrochemical engineers for a large oil corporation may learn at a university job fair that a faculty member at this prominent university is working on a private 20-million-dollar grant to fund research on alternative fuels. We may consider unlikely that this recruiter would take the time to find out who needs the information and ‘‘shoot them an e-mail.’’ Further, even when this recruiter forwards this information, the person who could act on the information may filter it out due to information overload (Walsh, 1995). In other words, information allocation requires both the

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organizational member stumbling on the information and the expert who can act upon that information to have a shared awareness as to share the meaning of the message and have a shared understanding of the relevance and potential benefits of the information (Beebe, Beebe, & Ivy, 2006). Information allocation requires the organizational members to not only invest time and effort in sharing information, but also have developed a prior shared awareness in order to have a common understanding of the relevance of the information. Thus, long-term viability through TMS requires organizational scholars and practitioners to consider communication as a practice that organizational members may enact as soon as they recognize that they possess information valuable to others in the organization and that such recognition may only happen when these organizational members have developed a shared awareness necessary for the development of a TMS. We further suggest that in order to develop shared awareness and transactive memory systems over time organizational members need to engage in collective reflexivity, which is discussed next.

Collective Reflexivity Reflexivity, the awareness of one’s position and assumptions about reality, is included in most organizational learning perspectives (Barge & Oliver, 2003). ‘‘Collective’’ reflexivity requires that organizational members pause from their daily routines to reflect on their actions with other organizational members in order to understand the link between their actions and organizational outcomes (Barge, 2004; Huber, 2004). Collective reflexivity allows organizational members to continually adapt their work instead of waiting until they face a more dramatic disruption to their activities brought about by the oversight of trends and potential problems. However, even at the individual level, reflexivity has a cost because organizational members must become actors and observers in the interactions they are performing in order to be reflexive (Barge, 2004). When describing managers as simultaneously interacting and observing, Barge focused on individual reflexivity – the reflexive practice of managers as individuals. Here we further propose collective reflexivity as similar to an AAR – ‘‘a multilayered process of retrospective sensemaking, the detection and correction of error, social comparison, social control, and bonding’’ (Ron et al., 2006, p. 1083–1084). To complement AARs, we focus on the temporal issue of reflexivity and define it as organizational members pausing from their daily activities and coming together to exchange their views of action–outcomes linkages.

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The possibility of cross-functional reflexivity complements the traditional view of AARs as based on a specific function and event. AARs have been studied in organizations where actions are clearly delineated, such as F-16 fighter squadrons engaging AARs after each flight mission (Ron et al., 2006). Similarly, AARs have been linked to high-reliability organizations (Allen, Baran, & Scott, 2010) and projects that are clearly delineated by a specific event (Brock, McManus, & Hale, 2009). Indeed, given this restriction, some research views AARs as occurring only within subunits (Allen et al., 2010). A view of AAR as only applicable to events or subunits inhibits their applicability to organizational-wide OLMs. We propose collective reflexivity to emphasize that OLMs such as AAR may not be limited to a subunit or function. Nevertheless, promoting collective reflexivity across functions presents additional challenges to the organization. Collective reflexivity implies pausing from day-to-day activities in order to engage in collective reflection across organizational functions. Hence, the resource most important for collective reflexivity is available time. This creates a paradox: in order to adapt to their changing environments, organizations require reflexive practices that incorporate frequent collective disengagement from everyday routines. Further, reflexivity needs to be collective in order to help organizational members coordinate their activities and develop shared awareness. When members do not appreciate reflexivity as a collective practice and focus instead on their individual or subunit goals without regard to their interdependence, they may hinder the performance of their colleagues, their unit, and the whole organization (Rice, 2008; Thompson, 1967). This problematic is illustrated by Perlow’s (1997) study of software engineers where short-term individual goals led some engineers to constantly avoid meetings – sites of collective reflexivity – because they felt they had no time to get involved. Ironically, the focus on individual short-term goals was the behavior recognized and rewarded by the group’s managers (Perlow, 1997). Collective reflexivity may be beneficial in the long term but may not lead to short-term tangible results or rewards for organizational members. The description of the two communication practices identified here as nurturing the development of TMS as a dynamic capability – information allocation and collective reflexivity – illustrates how the conditions of daily organizational action may inhibit their enactment and make them difficult to develop and even more difficult to imitate. Organizational viability is also a central theme in McGrath and Kelly’s (1986) three issues in collective action – uncertainty, conflicting interests, and scarcity of resource – and these three problems influence organizational members’ development of

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TMS. The next section discusses these two communication practices in relation to McGrath and Kelly’s three structures that constrain them.

STRUCTURES AFFECTING INFORMATION ALLOCATION AND COLLECTIVE REFLEXIVITY Three conditions inherent in collective action identified by McGrath and Kelly (1986) – environmental uncertainty, scarcity of resources, and conflicting interests – illustrate the centrality of everyday coordinative challenges in organizational viability. McGrath and Kelly suggest that these problems result from the interaction between opposing individual and organizational needs, such as the need to increase predictability, coordinate activities, and set priorities at the organizational level; and the need to reduce role ambiguity, role conflict, and role load at the individual level. Environmental uncertainty and its effect on the development of TMS through information allocation and collective reflexivity are discussed first. Then, the constraints of scarcity of temporal resources on these two communication practices are explored. Finally, the tensions between diverse goals across organizational functions and its effects on TMS are discussed. Environmental Uncertainty and the Development of TMS The first problem in collective action – environmental uncertainty – captures the inherently unstable relationship between the organization and its environment, as well as the role uncertainty experienced by the individual members that co-construct the organization. When facing uncertainty about their role, organizational members’ orientations toward short-term and long-term outcomes influence whether they are willing to sacrifice present benefits for future ‘‘potential’’ outcomes (D’Alessio, Guarino, De Pascalis, & Zimbardo, 2003; March, 1991). For example, organizational members may put all their efforts into the accomplishment of quarterly performance goals because quarterly results might seem to be more controllable regardless of whether these short-term goals may compromise their long-term viability. Despite a general acknowledgment of the need for organizations to consider long-term viability, most organizational members exhibit temporal myopia, or a preference to focus on short-term outcomes (Levinthal & March, 1993) – and focus on providing quick fixes to current problems

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without assessing future consequences. Temporal myopia is related to longterm uncertainty because it is based on the tendency of organizational members to recognize that the future is unpredictable (Crossan, Cunha, Vera, & Cunha, 2005; March, 1991) and to respond by focusing on the present over the future (Levinthal & March, 1993). Levinthal and March suggest that temporal myopia leads organizations to engage in exploitation – ‘‘the use and development of things already known’’ (p. 105) and to reduce their engagement in exploration – ‘‘the pursuit of new knowledge, of things that might come to be known’’ (p. 105). In TMS terms, organizational members focus on retrieving information that they require for short-term actions with outcomes that are known and relatively immediate in contrast to allocating information to be used for long-term actions, where the outcomes are uncertain and distant in time (March, 1991). Organizational members’ bias toward the certainty of the present is evident when some organizations rely on established routines and procedures that may not be the most adequate but have been successful in the past (Clampitt & Williams, 2005; Rice, 2008). Based on this discussion, we propose that environmental uncertainty also has a temporal component. When there is short-term uncertainty regarding the current link between organizational actions and outcomes – where what has worked in the past is no longer viable – organizational members will engage in exploring potential alternatives (Levinthal & March, 1993; March, 1991). For example, if the organization faces a crisis, an incident, or an accident, the current courses of action may not be appropriate and the organization may need to find alternatives. In other words, sensemaking processes are triggered when organizational members perceive uncertainty – ‘‘a doubt that blocks or delays action’’ (Lipshitz et al., 2007, p. 86). Uncertainty as defined by Lipshitz and colleagues is immediately experienced and relates to pressing issues and course of actions that may be delayed due to doubt. Lipshitz and colleagues’ (2007) definition of perceived uncertainty reflects short-term uncertainty. In contrast, we suggest that because the long term is inherently more uncertain than the short-term (Levinthal & March, 1993; March, 1991) organizational members focus on exploiting current everyday routines – information already stored within the TMS – as long as they keep being satisfactory. Focusing on exploiting current routines and knowledge inhibit reflecting on their work or on identifying and allocating new information to other organizational members because information allocation and reflexivity would take time and effort away from short-term activities with more certain outcomes. Therefore, long-term uncertainty

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leads organizational members to focus on retrieving what is known in the TMS and inhibits the engagement in both information allocation and collective reflexivity. Proposition 1a. The inherent uncertainty of the long-term is negatively related to organizational members’ engagement in allocation of new information. Proposition 1b. The inherent uncertainty of the long-term is negatively related to organizational members’ engagement in collective reflexivity. Proposition 1 illustrates the challenge of adaptation – organizational members’ engagement in information allocation and collective reflexivity is critical yet inhibited when long-term uncertainty follows from environmental dynamism (Huber, 2004, Teece, 2007). Uncertainty over the longterm would not be problematic if organizational members had excess time and other resources to engage in as many organizational practices as they considered necessary (Sidhu, Volberda, & Commandeur, 2004). However, most organizations have limited temporal (i.e., person-hours, opportunity windows), material, and financial resources. Given the scarcity of resources, organizational members experience a tension in resource allocation (McGrath & Kelly, 1986) that may manifest itself as a tension between engaging in information retrieval actions related to short-term outcomes versus engaging in information allocation and reflexive actions critical to long-term outcomes. Organizational members’ experience of time as scarce is briefly discussed next.

The Experience of Time as Scarce and the Development of TMS In order to deal with the scarcity of time and other resources, organizations establish priorities (McGrath & Kelly, 1986). For example, organizational members may focus on quarterly results before turning their attention to long-term projects. Further, to deal with the role load created by temporal scarcity, organizational members regulate their interactions with others in the organization (Perlow, 1997). For example, Allen and colleagues (2010) found that busyness, which they relate to time-availability, inhibits the engagement in AARs in fire stations. Because the orientations to present and future play a role in individual choices and actions (Zimbardo & Boyd, 1999) we posit that organizational members’ temporal focus will enhance or inhibit their engagement in dynamic communication practices when

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resources are scarce. The higher scarcity of time and other organizational resources, the more organizational members will focus on what is working well in the present – information retrieval – and in their own specific goals rather than in other activities such as allocation of new information. In contrast, when organizations have surplus resources such as time, organizational members are more likely to invest time and other resources in future-oriented actions (Sidhu et al., 2004), a practice necessary for longterm survival (Schumpeter, 1942). As described above, the relationship between long-term uncertainty and organizational members’ enactment of the sustainability practices depends on the scarcity of time experienced by organizational members. In many organizations, time is socially constructed as a scarce resource (Ancona, Okhuysen, & Perlow, 2001; Ballard & Seibold, 2004). We propose organizational members’ views of time as a scarce resource will influence the degree to which they engage in information allocation and collective reflexivity. Organizational members who focus on getting their urgent and present things done are unlikely to allocate their scarce time to engage in allocating new information to other organizational members because such behavior may not be perceived as related to short-term benefits. Because they are performed in time, information allocation and collective reflexivity necessarily require taking time away from organizational members’ day-to-day routines and activities. In such instances, organizational members experiencing time as scarce may even avoid engaging in allocating information that has been requested (asked for retrieval) by their colleagues in order to have time to achieve their own present goals (Perlow, 1997). Proposition 2a. Organizational members’ experience of time as scarce is negatively related to their engagement in allocation of new information. Proposition 2b. Organizational members’ experience of time as scarce is negatively related to their engagement in collective reflexivity. The previous discussion describes how organizations tend to allocate scarce resources to exploiting present routines because the future is uncertain and time is perceived as scarce. However, organizational members in different organizational groups might not share the same perceptions of time (Ballard & Seibold, 2003). The interaction of organizational actors from different functions and hence with different contextual demands reflects McGrath and Kelly’s (1986) third temporal problem in organizations – conflicting interests – because organizational members from different

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organizational groups may have goals with different timeframes (Ballard & Seibold, 2004).

Conflicting Interests and the Development of TMS Organizations and their members attempt to manage conflicting interests through coordination and through the development of norms regarding sequencing of activities across organizational members (McGrath & Kelly, 1986). Sequencing of activities across organizational functions may be problematic because diverse functions may have different experiences of time (Dubinskas, 1988). For example, a production department that perceives the need to quickly expand manufacturing infrastructure might not have the same experience of time with the research and development function, focused on ensuring long-term product innovations. These two departments may have both different temporal orientations (Dubinskas, 1988) as well as different short-term goals and hence disagree on resource allocation. This is especially true in the case of different organizational functions such as research and development (R&D) and sales, because the outcomes of their actions have different feedback cycles (Dubinskas, 1988). Feedback cycles are a critical communication structure that shapes organizational members’ experience of time (Ballard & Seibold, 2003). Specifically, we suggest that conflicts will arise across functions that have differing feedback cycles because these different feedback cycles lead to conflicting interests. The longer the feedback cycle between an action and its expected outcome, such as an engagement in R&D, the longer their temporal focus will be. A long-term temporal focus will in turn foster the engagement in learning – increasing the range of future potential behaviors – through activities such as allocation of new information into the organization and collective reflexivity. In contrast, short feedback cycles, such as those in sales, may lead to a bias toward the short-term and inhibit the engagement in these practices. Thus, we advance the following propositions: Proposition 3a. The length of the feedback cycle between organizational members’ actions and the outcomes of those actions is positively related to organizational members’ engagement in allocation of new information. Proposition 3b. The length of the feedback cycle between organizational members’ actions and the outcomes of those actions is positively related to organizational members’ engagement in collective reflexivity.

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Proposition 4a. The relationship between length of the feedback cycle and organizational members’ engagement in allocation of new information is mediated by temporal focus. Proposition 4b. The relationship between length of the feedback cycle and organizational members’ engagement in collective reflexivity is mediated by temporal focus.

Social Integration and the Development of TMS Conflicting interests represent different perspectives that may hinder social integration across organizational members. Propositions 3 and 4 relate to the reasons why organizational members may have conflicting interests across different functions and departments based on the different feedback cycles of their activities and their focus on either the present or the future. Conflicting interests thus represent different views that may hinder the informal relations necessary for developing shared awareness and engaging in communication behaviors that foster the development of a TMS. Specifically, we suggest that information allocation cannot be mandated and is thus based on informal relations rather than on formal structure. Accordingly, social characteristics of the organization will influence whether organizational members engage in information allocation and develop TMS. One social characteristic is the diversity of organizational members’ feedback cycles, temporal focus, and their potential for conflict. Differences in feedback cycles and temporal focus can be regarded as deep-level diversity issues that grow stronger over time (Harrison, Price, Gavin, & Florey, 2002). Unlike demographic diversity, which is superficial and reduced through interaction between organizational members over time, deep-level diversity relates to assumptions about the nature of work and the expected goals (Harrison et al., 2003). Harrison and his colleagues found that deep-level diversity reduced team social integration. Because social integration is necessary for members’ development of shared awareness, and their engagement in information allocation and collective reflexivity, we propose that diversity of feedback cycles among organizational members will reduce their engagement in these practices: Proposition 5a. The greater the variance (diversity) of feedback cycles among organizational members, the lower their engagement in allocation of new information.

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Proposition 5b. The greater the variance (diversity) of feedback cycles among organizational members, the lower their engagement in collective reflexivity. Proposition 6a. The relationship between diversity of feedback cycles and organizational members’ engagement in allocation of new information is mediated by social integration. Proposition 6b. The relationship between diversity of feedback cycles and organizational members’ engagement in collective reflexivity is mediated by social integration. Proposition 6, asserting that social integration influences the enactment of communication practices that lead to the development of TMS, is consistent with Gibson and Birkinshaw’s (2004) proposal of social context as promoting ambidexterity in organizations. Gibson and Birkinshaw suggest creating a context that facilitates alignment with current processes and adaptability to changes in the environment. Although these authors take a business unit level perspective by studying organizational system properties, they suggest that these systems are enacted by organizational members’ actions. The view of social integration as necessary for the development of TMS complements Gibson and Birkinshaw’s suggestions of social context as nurturing organizational ambidexterity by advancing that communication practices that foster the development of TMS may be promoted through social context. The practices suggested herein as developing TMS as dynamic capability foster organizational viability, which is the desired outcome in most research on organizational ambidexterity (Raisch & Birkinshaw, 2008). The relationship between viability and TMS is pervasive in different types of organizations, regardless of whether they are for-profit, nonprofits, or state institutions. The next section illustrates the relevance of relating TMS to organizational viability and identifying their recursive relationships in terms of temporal horizons.

VIABILITY AS AN ORGANIZATIONAL REALITY Three characteristics of organizational viability in the long-term underscore the need for both scholars and practitioners to attend to this taken-forgranted aspect of organizational life. First, the tension between the present and future is pervasive in organizations. Given the pressures now imposed on government and even on nonprofit organizations to perform – they are

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competing for funds, re-elections, or other resources from stakeholders – viability is not solely an issue for for-profit corporations but also for all kinds of organizational forms. State transportation planning organizations in high-growth cities decide whether to construct new roads, highways, and overpasses to alleviate traffic problems in the future at the cost of both financial resources and an increase in traffic problems in the present. Organizations of all types have to balance investing in future developments while keeping reserves to face unexpected short-term obligations. The Federal Government has to balance the future solvency of Medicare, Social Security, and the budget deficit against our current tax benefits and government expenditures. Further, TMS becomes critical when facing these challenges because organizations of all kinds need to attend to and allocate new information to their members who can better act upon it or add it to the organization’s memory to further long-term organizational viability. A second characteristic of the relationship between TMS and organizational viability is that organizational actions may lead to unintended consequences such as the decay of TMS. TMS emerge from organizational members’ interactions over a relatively long period of time. Further, the ability to allocate and retrieve critical information from TMS is a capability difficult to imitate. However, organizational actions focused on short-term benefits may quickly erode TMS. For example, downsizing may be necessary in some cases to create lean and productive organizations (Kinnie, Hutchinson, & Purcell, 1997). However, because TMS are based on informal rather than formal structure, ‘‘downsizing can have a devastating impact on innovation, as skills and contacts that have been developed over the years are destroyed at a stroke’’ (Cravotta & Kleiner, 2001, p. 90). Thus, TMS need to be maintained in some cases even at the cost of short-term efficiencies. If learning implies a change in the range of potential behaviors (Huber, 1991) and those behaviors depend on the resources developed over time by the organization, by definition increasing efficiencies by becoming lean – letting go of diverse expertise – implies negative learning and the potential crippling of TMS within organizations. A third characteristic of the relationship between TMS and viability is that, because information allocation may not represent any short-term benefits to the organizational member allocating the information, the costs and benefits of developing dynamic capabilities such as developing TMS may be unevenly distributed among organizational members. For example, some organizational members may avoid engaging in meetings where taskrelated information is exchanged to develop shared awareness through collective reflexivity and may also screen out potentially relevant

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interactions with others in order to create their own time to get their own job done (Perlow, 1997). However, because these organizational members missed critical information to perform their jobs, they may retrieve information – and hence interrupt – organizational members who attended those meetings and engaged in critical interactions to acquire new information and learn. As Perlow notes, the result is that the members who interrupt others but do not reciprocate may achieve more individually and end up being evaluated favorably, while those who spent their time reflecting and helping others may be viewed as unproductive. These three characteristics of the relationship between organizational viability and TMS illustrate the relevance of TMS for organizational research. Regardless of the type of organizations, be nonprofit, for-profit, or public agencies – viability issues are pervasive and related to collective action through TMS. Differences in organizational outcomes over time are sometimes due to unintended consequences of the enactment of organizational practices such as downsizing that may cripple TMS (Cravotta & Kleiner, 2001). Finally, as Perlow’s (1997) study illustrates, a critical issue with TMS is that the organizational member engaging in allocating information and in collective reflexivity may incur the cost but not reap the individual benefits. Both of these practices need to be constantly enacted in order to recognize environmental trends and reflect upon current processes. Enacting these practices may affect how organizations sustain themselves over time and reduce unintended consequences of short-term actions because organizational members may have greater shared awareness of trends and be more reflexive of their organizational processes. Nevertheless, it is important to recognize that enacting these practices may be unappealing for individual organizational members because their information allocation and collective reflexivity take time and resources yet may not represent short-term individual benefits to them in their localized functions. Given the importance of developing transactive memory systems for organizational viability, OD, and change management practitioners can play a critical role in the development of TMS as discussed below.

PRACTICAL IMPLICATIONS: ENHANCING THE DEVELOPMENT OF TMS TMS emerge from the interaction of organizational members over time and information allocation is a voluntary communication behavior that cannot

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be mandated. Nevertheless, OD practitioners can nurture the development of TMS by moderating the cycles of collective reflexivity. Practitioners can draw on the specific components of AARs as thoroughly described by Ron and colleagues (2006) and by Lipshitz and colleagues (2007) in order to adapt those specific recommendations to a process where participants represent different organizational functions. Collective reflexivity as proposed here implies that in most organizations where different organizational members are engaged in different activities AARs are more difficult to establish than in groups where collective actions are specific and everybody is engaged in the same activity, as in the case of flight squadrons (Ron et al., 2006) or where members share the same main concerns and learn through the same incident, as emphasized in high-reliability organizations (Allen et al., 2010). The first step in initiating the engagement of OLMs such as AARs beyond high-reliability organizations and reviews of single, discrete events, and the main challenge for OD practitioners is first understanding the temporal characteristics of collective reflexivity, such as its frequency and cycle. OD practitioners can foster the engagement in OLM by establishing the frequencies and schedule of collective reflexivity in order to not wait for an incident, accident, or specific event in order to learn. Specifically, establishing the frequencies and schedules of organization-wide collective reflexivity meetings require OD professionals to have a systemic view of the organization as well as an understanding of the different action–outcome feedback cycles across organizational functions. Based on the understanding of the different feedback cycles, OD practitioners can schedule and develop sites of collective reflexivity in order to best promote an understanding of the inter-relationships across functions throughout the organization. Scheduling collective reflexivity meetings across organizational functions also promotes the development of TMS through shared awareness. Specifically, TMS and information allocation necessary require a shared awareness of not only who knows what, but also who may need certain information. Without the development of sites of collective reflexivity, diverse organizational functions may rarely interact, hindering the development of shared awareness regarding the information needs and the expertise of different functions. In addition, information allocation also relies on informal interpersonal relationships. As Ron and colleagues (2006) suggested in the case of AARs, developing these sites for collective reflexivity would allow for the bonding relationships across members from different organizational functions that may not connect with each other otherwise. Thus, the appropriate development and temporal scheduling of

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sites for collective reflexivity by OD practitioners are critical for the development of TMS.

CONCLUSION This chapter explores TMS as a dynamic capability by focusing on two communication practices that nurture the development of TMS and subsequently enhance organizational viability. The first TMS communication practice discussed here – information allocation – allows organizational members to identify opportunities and threats in their environments in a timely manner. Similarly, the second communication practice discussed – collective reflexivity – allows organizational members to collectively pause and evaluate the link between their actions and desired outcomes, thus helping them identify potential issues before they become considerable disruptions. Further, collective reflexivity nurtures the development of shared awareness, which in turn is critical for the development of TMS. The two communication practices proposed as nurturing TMS as dynamic capabilities are not inclusive, our intent is to explore these practices and the conditions that nurture or inhibit them. The concept of collective reflexivity in this chapter contributes to the research on OLMs in general and specifically builds on the AARs because it focuses on how the frequency and scheduling of collective reflexivity becomes vital in organizations where collective action is not clearly delineated – where different inter-related actions happen at the same time across different organizational functions. We emphasize the role of OD practitioners is developing and scheduling sites for collective reflexivity across organizational functions performing diverse activities. After explaining information allocation and collective reflexivity we identify conditions affecting these practices by adapting McGrath and Kelly’s (1986) three issues in collective action into environmental uncertainty, temporal scarcity, and conflicting interests due to differences in feedback cycles across diverse organizational units (Ballard & Seibold, 2003). Based on the two communication practices and the three issues in collective action we propose that (a) environmental uncertainty is negatively related to organizational members’ engagement in information allocation and collective reflexivity; (b) organizational members’ experience of time as scarce is negatively related to their engagement in information allocation and collective reflexivity; (c) the length of the feedback cycles between organizational members’ actions and the outcomes of those actions is

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positively related to engagement in information allocation and collective reflexivity, and these relationships are mediated by temporal focus; and (d) diversity of organizational members’ feedback cycles is negatively related to organizational members’ engagement in information allocation and collective reflexivity, and these relationships are mediated by social integration. In order to further illustrate the relevance of TMS for organizational viability we described three temporal characteristics of viability and TMS in organizations: (a) tensions between present and future actions and their effects on TMS are pervasive in organizations; (b) some organizational practices may lead to unintended consequences such as the decay of TMS; and (c) given the long-term collective benefits of TMS, the costs and benefits of engaging in TMS are unevenly distributed across organizational members. By setting forth these two practices and emphasizing the critical relevance of TMS for organizational viability we propose a framework where scholars and practitioners may identify other conditions constraining the development of TMS as valuable dynamic capabilities.

NOTE 1. Barney (1991) reframes Dierickx and Cool’s (1989) resource characteristics to provide organizational advantage into valuable, rare, imperfectly imitable, and nonsubstitutable.

ACKNOWLEDGMENT The authors appreciate George Huber’s invaluable support and feedback for the development of this chapter. The insights and feedback of Richard W. Woodman, William A. Pasmore, and Abraham B. (Rami) Shani, which were critical to strengthening this chapter.

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DEVELOPING AND SUSTAINING CHANGE CAPABILITY VIA LEARNING MECHANISMS: A LONGITUDINAL PERSPECTIVE ON TRANSFORMATION Tobias Fredberg, Flemming Norrgren and Abraham B. (Rami) Shani ABSTRACT Increasing market pressures require organizations to rethink the development of change capability. Building a sustainable and flexible organization capable of responding in a timely manner to quickly changing customer demands without compromising technological excellence and quality is a complex task. This chapter builds on a five-year study of transformation efforts at a product development unit of Ericsson. The complexity of designing and managing learning mechanisms as both a transformation engine and a way to improve new product development is captured. The chapter points toward the challenges of designing and managing learning mechanisms that enhance organizational agility.

Research in Organizational Change and Development, Volume 19, 117–161 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 0897-3016/doi:10.1108/S0897-3016(2011)0000019007

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INTRODUCTION In mature markets, learning mechanisms are a cornerstone of a firm’s competitive advantage (Edmondson, 2008; Lipshitz, Friedman, & Popper, 2006; Shani & Docherty, 2003). Developing the flexibility for fast allocation or reallocation of resources and the capability to customize products or services without compromising technological excellence and quality are critical (Verganti, 1999). Mature organizations find it challenging to design structures, processes, learning mechanisms, and systems that support ongoing needed transformation (Beer, 2009; Tushman & O’Reilly, 2002). The appropriateness of traditional views on organization design, organization change, and the management of change and development are being questioned within the context of the recent global economic downturn (Verganti, 2009). Organizations that counted on traditional ways of organizing and on previous successful change processes are finding out that they are not able to respond to the increasing demands for change (Worely & Lawler, 2010). The purpose of this chapter is to explore the role and impact of the design, development, and management of learning mechanisms in enhancing ongoing organizational transformation. The approach advanced in this chapter represents a radical departure from other perspectives in the field of organization development and change in three dimensions:  First, while a wide variety of organization-wide planned change models and orientations can be found in the fields of change management and organization development and change, few are concerned with the development of new and ongoing organizational capability.  Second, while many of the organization development and change models focus on organizational transformation, most do not address the institutionalization of learning mechanisms.  Third, a significant shift in the principles guiding organization development and change and the business models underlying strategies is required, since prior principles and models rely on phases, activities, and processes that facilitate change and not in the development of capabilities that will enhance the facilitation of continuous change with almost no time for crafting a change process and change phases. We anchored the study in an organizational transformation effort within a new product development organization of a mature company. Enhancing new product development continues to be one of the more pressing issues for mature organizations (Tushman & O’Reilly, 2002). Capability

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development is at the heart of sustainable new product development process (Eisenhardt & Martin, 2000; Winter, 2003). Embedded in the drive to develop new products and/or services is the understanding that they are critical in ensuring long-term business success as measured by the continuous ability to respond to changing customer demands. In this chapter, we explore the challenges in creating the capability to develop new products in mature companies. During the past decade, many companies have attempted to build organizational capability by rethinking and reorganizing their product development processes. Some of the approaches taken include  M&As and strategic alliances to gain access to the innovations of others (i.e., Cisco Systems and Microsoft; General Motors and Toyota’s joint venture of NUMMI)  incubating capabilities (i.e., Bang & Olufsen separating software and hardware development; Xerox Palo Alto Research Center)  product sequencing (i.e., Ericsson’s ‘‘scrum’’ product development method, Sony’s parallel development efforts of 10 different video tape recorders)  open innovation (i.e., P&G’s solving of traditionally internal R&D issues such as ideation and problem solving through collaboration with outside partners)  internal development of learning processes and mechanisms (i.e., Kaiser Permanente’s attempt to better understand the emergence, structure, and development of organizational capability through the creation of learning processes and mechanisms). This chapter draws on a five-year longitudinal study of a product development unit (PDU) within the telecom giant Ericsson. During the studied period, the unit tried to speed up its product development process and become quicker footed to become better in customer demands. Our focus is on the development of the capability for ongoing organizational transformation via the designing and implementing of learning mechanisms that served as the engine in the transformation effort. The Ericsson experience exemplifies how this capability was supported by a change and development model – the strategic fitness process (Beer & Eisenstat, 2004) – that resulted in the design and management of learning mechanisms. We begin with a review of organizational transformation, planned change models, and the strategic fitness process. Next we explore the nature of learning mechanisms and the learning mechanisms embedded within the strategic fitness change model, and the role that they play in organization

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development, change, and transformation. We then turn to the transformation at Ericsson PDU organization. Then, in the discussion section, we explore four key issues:    

designing and implementing the platform for learning inventing new learning mechanisms the agile nature of learning mechanisms leading transformation through learning mechanisms.

We argue that a way that organizations can enhance ongoing transformation is for them to design, develop, and manage learning mechanisms. Over time, a transformational change process evolves to become an organized flow of strategic development efforts. This is analogous to the way the PDU organized the fundamental product development method according to a methodology called Streamline development. We conclude the chapter with implications for managerial action and future research.

TRANSFORMATION AND PLANNED CHANGE There is a long history in the field of organization development and change concerning the conceptualization of planned change, organizational transformation, and transformational change. A review of the literature on these three areas is beyond the scope of this chapter. For the purpose of this chapter, we view organizational transformation as a systematic effort by the organizational leadership to fundamentally change the organization. Organizational transformation is an effort ‘‘ y directed at creating a new vision for the organization. Vision change occurs most effectively when an organization develops the capability for continuous self-diagnosis and change; a learning organization evolves’’ (Porras & Silver, 1994). We view organizational transformation as profound organizational attempt to either respond to environmental changes or initiate such changes. It is a large-scale change in organization form (Bartunek & Reis Louis, 1988). It is the creation of something new that is brought into being. It is metamorphic in that there is a reformulation of old ways of thinking, structures, processes, and the emerging of new ones (Egri & Frost, 1991). It is a way to help the organization become a learning organization (Sugarman, 2007). Finally, it is a way to create new organizational capabilities (Roth, Shani, & Leary, 2007). Transformational change processes are multilevel, multidimensional, and involve multistakeholders in a complex process. As Beer, Eisenstat, and Spector (1990) point out successful change often starts at the unit level, rather

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than in the corporate center. A few models have been proposed in the literature that suggest that the transformation process proceeds through several phases or steps (Bartunek & Reis Louis, 1988). For example, Bartunek (1988) advanced a four-stage process model that includes a challenge to the original frame, preparation for reframing, frame generation, and frame testing and decision-making. The sociotechnical system school of thought advances a transformational change model that proceeds through four phases, namely discovery, understanding (via an elaborate sociotechnical system analysis), design, and implementation (i.e., Pasmore, 1988). Sugarman (2007), following a comprehensive literature review, groups transformational change models into two: Growth models and driven models. ‘‘Grow’’ orientation are models that are based on the empowerment of employees in collective learning and problem solving such that their new knowledge may be applied to improve organizational processes and practices. ‘‘Driven’’ orientation are models that are based on the change leaders world view in which more faith is placed in the power of changes in reward systems, regulations, resources, controls, and other structures to bring transformational changes. The same basic idea is likewise represented in Beer and Nohria’s (2000) ideas about O-strategies building on the creation of organizational capability (‘‘Grow’’) and E-strategies building on economic rationale (‘‘Driven’’). Recent research has identified the many challenges and difficulties that organizations face in the facilitating sustainable and effective transformation efforts (Worely & Lawler, 2010). Beer and Eisenstat (2000) captured the challenges in what they viewed as the Six Silent Killers that block and hinder transformation: (1) unclear strategy and/or priorities, (2) poorly functioning management team, (3) too top-down or laissez-faire management style, (4) blocked vertical communication, (5) poor coordination between organizational functions or units, and (6) inadequate leadership skills down the line. The term silent killers, borrowed from medicine, suggests that they are not apparent at first, but lie under the surface, hidden. The root cause of that is that most organizations fail to have an open and honest conversation that allows ‘‘truth to speak to power’’ about important issues, the authors claim. The ideas have been advanced through a series of projects since the 1980s (Beer, 2001, 2009; Beer & Eisenstat, 1996, 2004; Beer et al., 1990). Beer and Eisenstat also advanced a systematic method to guide organizations in the effort such that the likelihood of successful change can be enhanced. Their model ‘‘The Strategic Fitness Process (SFP)’’ builds on the creation of an organizational dialogue facilitated via a task force of selected managers who are trusted by both senior management and the broader

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organization. Their model advances the notion of ‘‘fit’’ (i.e., that strategy, structure, culture fits the present environment) and the need to develop ‘‘fitness’’ capability (i.e., the capacities to continuously adapt and learn to the ongoing environmental changes in the hypercompetitive markets). Fitness is to be achieved by creating a system for safe, open, and honest conversations between top management and the rest of the organization about the direction of the company and what it takes to implement that direction. An infrastructure for learning is achieved by involving key people in the company to research the organization and provide data-based feedback to the top team of how people in various units and at different levels perceive the strategic direction, what they see as roadblocks and levers for implementation. The key persons researching the organizations are selected by the top management according to a set of criteria, including that they are persons who are well respected not only by the top team but also seen as people with high integrity by the rest of the organization. By introducing repeated cycles of advocacy and inquiry between top management and the organization, through the task force interviewing a sample of employees and giving feedback to the senior team, the intentions are to unblock vertical communication, reduce filtering and politics, and allow for ‘‘truth to speak to power.’’ The method is designed to create a conversation that addresses the most critical, strategic issues and empower people to have points of view and learn about the red and hot topics without fear of negative sanctions. At the core of SFP, one can find the commitment to successful organizational transformation, the design and management of learning mechanisms, and the ongoing commitment to the creation and enhancement of learning. The SFP approach suggests that stage models for organizations change, moving from a present state to a desired state is not enough, but rather advances the need to create systems that are capable of continuously transform themselves through iterative cycles of learning. The SFP is built around three fundamental dimensions of how to overcome the silent killers: create a quality of strategic direction for the company; improve the quality of learning, and enhance the quality of implementation. Beer claims that the method has been refined, tested, and implemented in hundreds of companies around the world since the 1990s (Beer, 2009).

ORGANIZATIONAL LEARNING AND ORGANIZATIONAL LEARNING MECHANISMS Organization learning is a scientific field that emerged in the late 1970s. We have argued above that organizational transformation requires systemic

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change across levels and boundaries. Clearly the learning processes entailed in such change are likewise systemic. March (1991) was one of the first to translate learning concepts from individual psychology to an organizational context, and today there are almost as many definitions of organizational learning as there are writers on the topic. In this chapter, our point of departure is Pedler’s definition of a learning organization as ‘‘an organization that facilitates the learning of all its members and continuously transforms itself in order to achieve its strategic aims’’ (1991, p. 28). This definition emphasizes the comprehensive character of the learning endeavors, individual, collective and organizational, and on their strict focus on the strategic aims of the organization in the effective and sustainable achievement of the goals of its key stakeholders.

Learning Mechanisms Learning mechanisms are organizational features that foster requisite learning processes. They are planned proactive features that enable and encourage organizational learning (Shani & Docherty, 2003). An assumption is that the capability to learn can be designed rather than left to evolve through the normal activities of the organization. Although some may simply emerge informally, our argument in this chapter is that learning mechanisms can be purposefully designed to support the acceleration of organizational transformation and the development of new capabilities. Because organizational transformation occurs in the context of a complex activity system, the mechanisms must foster learning processes that are practice-based, multilevel, cross-community-based, and systemic and integrative. Literature on learning mechanisms identifies three foci: (1) cognitive, (2) structural, and (3) procedural (Shani & Docherty, 2003). Together these match the complexity of the new bundle of competencies and features that constitute a new capability. Although we argue that a tapestry of the three different kinds of learning mechanisms must be designed to house and stimulate the requisite learning of organizational transformation, we next discuss learning mechanisms with each of these focuses. 1. Cognitive Learning Mechanisms Cultural or cognitive mechanisms are the bearers of language, concepts, symbols, theories, frameworks, and values for thinking, reasoning, and understanding consistent with the new capabilities. Cognitive mechanisms are management’s main means for creating an understanding among all employees on the character, need, and priority of the new capability and the

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learning and changes required to realize it. They include company value and mission statements, strategy documents, policies and plans, management– union, or company–partner joint agreements. These are among the systemic frameworks that underpin generically subjective sense-making (Weick, 1995) and enable various elements of the activity system to operate with shared meaning. Cognitive learning mechanisms are a foundational part of the emergent multilevel and cross-community social fabric of the firm, and underpin the dispersed practice-based learning processes. As an illustration, value and mission statements have been shown to be important stable reference points and new capability enablers for organizations in complex, ever-changing, high-speed growth industries, such as the information and communication technologies (ICT) industry and certain investment services (Lapidoth, 1996). 2. Structural Learning Mechanisms Structural mechanisms are organizational, physical, technical, and work system infrastructures that encourage practice-based learning. Organizational mechanisms house and enable the collaboration and discourse required for collective learning of new practice – the intersubjective, or person-to-person sense-making entailed as individuals and groups learn from experience (Weick, 1995). These may include communication channels, the establishment of lateral structures to enable learning of new practice across various core organizational units; changes to the work organization, including the delineation of roles and the establishment of teams with shared accountability and thus a mutual need to learn; formal and informal forums for joint exploration and debate, networks for mutual learning; and learning-specific structures such as parallel learning structures, benchlearning structures, and process improvement teams. The physical structure may be laid out to facilitate contact between members of various units and/or multiple organizations for sharing and combining of knowledge (Bushe & Shani, 1991). Technology mechanisms may include learning centers, e-learning programs, databases and data warehouses, e-mail, and document and data sharing systems. Technology mechanisms facilitate virtual contact between members that stimulate collective sense-making, or provide access to key process and content documents that provide generic frameworks that are generated to guide the enactment of the new capability. The work organization can be designed to facilitate collective reflection and learning. For example, new knowledgeable experts may be temporarily or permanently added to a unit, or new units or teams may be composed that combine different knowledge bases to work together on specific topics. If these

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are cross-community groupings, they will facilitate home and away learning. For example, joint expert problem solving brings together temporary groups of discipline experts with varying kinds and degrees of experience of the new capability to learn from one another in the process of addressing real problems of practice (Dixon, 1999). Cross-level groups can be established to facilitate the institutionalization of new knowledge and practice at the larger organization level. For example, ‘‘development forums,’’ composed of a vertical slice from an organization trying to develop new capabilities can be established not only to share experiential learning laterally but more importantly to house multilevel interpretation of these experiences through the lens of their alignment with the new strategies, and to guide further management activities to facilitate the emergence of shared understanding and to institutionalize the change (Bjerlo¨v & Docherty, 2006). 3. Procedural Mechanisms Procedural mechanisms concern the rules, routines, methods, and tools that can be institutionalized in the organization to promote and support learning (Pavlovsky, Forslin, & Rienhart, 2001). These may include tests and assessment tools and methods, standard operating procedures, and methods for specific types of collective learning, such as action learning or debriefing routines. Learning processes may be built directly into practice routines if steps are defined in the work processes themselves where people share knowledge and/or combine it. The focus of the routine or work process will influence the degree to which the procedural learning mechanism is multilevel or cross-community boundary. Organizations may also adopt methodologies to facilitate the conduct of dialogues for collective reflection in groups, and build these as pervasive core routines to carry out the learning required to implement new capabilities. These may be within or cross-organizational. ‘‘Start conferences’’ (Emery, 1982), ‘‘democratic dialogues’’ (Gustavsen, 2001), work-based dialogue (Bjerlo¨v & Docherty, 2006), and debriefing procedures (Lipshitz, Popper, & Friedman, 2002) are different methods that have been successfully applied to allow participants to systematically learn from each others’ experience through reflection and the encoding of new knowledge in new practices and/or repositories.

Building a Tapestry of Learning Mechanisms Leading organizational transformation entails the planned coordination of an organization’s efforts regarding dynamic effectiveness: learning,

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transformation, and innovation. It is not a question of a handful of interventions, but of a sustained effort involving a broad tapestry of interventions to achieve both cognitive and behavioral changes in the organization (Bogner & Thomas, 1994; Shani & Docherty, 2003). The learning is of such a magnitude that it cannot happen solely through ‘‘special’’ learning events. It must form a natural part of individuals’ and groups’ work and of the collaboration and cooperation between groups and organizations, that is, it must be practice based. This may require changes in routines, job descriptions, project specifications, reward and evaluation systems, and governance practices. Structural, procedural, and cognitive mechanisms combine to facilitate the learning processes in different types of learning collectives, within work groups, and between individuals or groups from different communities and/or levels in an organization, and between organizations. These must address different competence, experience, values, professional or organizational identity, goals, and priorities. It is especially important to ensure efficiency in the learning across internal and external boundaries, where different learning contexts exist on each side of the boundary. Particular learning mechanisms often entail cognitive, structural, and procedural dimensions. An example of a structural and procedural tapestry is the combination of Emery’s ‘‘start conferences’’ (Emery, 1982) and Gustavsen’s ‘‘democratic dialogues’’ (Gustavsen, 2001), which are used to facilitate learning in cross-community, cross-level, and interorganizational groups. The structure includes the main stakeholders in the organization(s), levels, and communities. The process includes analysis and specification of the new capability, identification of the facilitating and obstructing conditions in the organization(s), and agreement to the key tasks to be addressed. These are discussed in different constellations during a two-day workshop. Cognitive frameworks are shared and emerge, and behavioral action plans are created. Such dialogues are carried out at regular intervals during the transformation or development process. The challenge that most organizations face centers on the ability to design, develop, and manage the learning mechanisms that are the core of enhancing ongoing transformation.

METHOD This chapter builds on a five-year longitudinal collaborative research study of the transformation process at Ericsson PDU Packet Core Lindholmen, Sweden. Several authors have argued for more longitudinal studies (many

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times including action elements) to thoroughly understand organizational transformations (Balogun & Johnson, 2004, 2005; Beer, 2011; Pettigrew, 1990; Pettigrew, Woodman, & Cameron, 2001). Two of the chapter authors were deeply embedded in the change process as process facilitators. The work with the organizations was highly collaborative in nature (Adler, Shani, & Styhre, 2003; Shani, Mohrman, Pasmore, Stymne, & Adler, 2008). It was based on elements of action research (Argyris, Putnam, & McLain Smith, 1995; Argyris & Scho¨n, 1978), in which the researcher takes on the role of an active participant in the process under study (Gummesson, 2000; Rapoport, 1970) as well as engages the other actors in the organizations in the research process (Adler et al., 2003; Shani et al., 2008). During the period of study, the authors acted as process support for the strategic change process and used the Strategic Fitness Profiling (SFP) process described by Beer & Eisenstat (1996, 2000, 2004) six times. The role of the process facilitators included:  Providing feedback to the management teams on the condensed strategic documents that they produced  Training 40 managers in change methodology  Distributing and collecting in total 145 surveys about internal climate and managerial work  Coaching  Six implementation teams were each coached three times  Continuous follow-up discussions with three key people in the PDU (unit head, head of largest division, head of R&D operations)  Training 20 task force members in SFP methodology  Supporting the task force members in conducting over 360 interviews of more than one hour (some interviewees were asked in more than one of the six SFPs) and synthesizing them to a fishbowl format  Holding reflection sessions together with the management teams to achieve results  Planning sessions with PDU staff to set up new rounds of SFPs  Supporting the management team in creating a communications plan. Moreover, 13 formal interviews were conducted (in March–April 2009) with 10 management team members and 3 earlier task force members. Since the researchers were present at multiple stages of the SFP work, we have data from all the data points above, including the over 360 interviews that the task forces conducted (summaries of key points, not transcripts).

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THE CASE OF ORGANIZATIONAL TRANSFORMATION AT ERICSSON PDU ORGANIZATION Peter Lundin came to Ericsson’s PDU for packet core products (PDU Packet Core) in 2005 as the unit progressed toward a technological shift. Mobile broadband was in the planning phase and with the new technology came a new market. In 2000, Ericsson had made Gothenburg the center for packet core development. From 2000 to 2005, the technology was plagued by quality problems as it was not stable when the number of users grew. In 2005, the situation stabilized. ‘‘It all became very calm,’’ says Magnus Stenson, head of R&D Operations. ‘‘Our products were starting to become stable in the field. Peter [Lundin] came in and had a full year of peace and quiet.’’ As mobile broadband developed, the market situation started changing rapidly. Until 2004, the packet core products (transport nodes for data traffic in mobile communications systems) were mostly a ‘‘give away’’ included in large system sales and used to a limited extent by operators. When the demand for smart phones skyrocketed a few years later, that vastly increased the amount of data that was sent through the nets, and hence the demand for efficient packet core products soared. As we approached 2006, everything changed says Lundin. When the table was set for the new technology, the real war began. We had to fight outwards, but our whole way of acting was internally oriented. There was almost no market dimension in what we did.

Intel launched ACTA – a telecom platform that several of Ericsson’s traditional rivals such as Alcatel, Nokia, and Siemens adopted. In addition, market entrants from low-cost countries were making strong efforts within the packet core area. Huawei from China started to grow rapidly with full systems offerings. Starent (an Indian/US owned niche firm) began to make serious inroads to the specific packet core market and was beating up Ericsson in the competition for customers in country after country. ‘‘The environment was changing, new entrants appearing and old actors re-grouping within our product area, and at the same time the product was starting to become a commodity. I thought that if we don’t play an active role in this change we will lose the transition to a mobile all-IP supplier and all will be lost,’’ Lundin says. Lundin and his team began to discuss a strategic change process that would enable them to succeed through the technological shift and the market changes that it implied. They realized that change needed to be

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thorough and continuous. Lundin argued that the R&D unit needed to relate more to business issues, and that it was time for the local resources to become much more internationally oriented and to understand how globalization was becoming an issue for the telecom industry. The result was an initiative called Active Change Management (ACM) (it took about a year before this became the official name). But they did not know what it should contain, or how it should be organized. The initiatives developed over time, guided by the basic principles that everybody in the organization needed to be on board and committed to the vision, and that the unit needed to become much more market oriented. An overview of what the ACM process resulted in can be found in Fig. 1. The case that follows captures the different parts in the change process and explains how the strategic implementation and learning process progressed through a series of evolving steps.

Starting Point: The Active Change Management Process Armed with slides and inspiration from an executive program at Columbia University, Lundin started working on a new strategy with his executive team during a three-day retreat in March of 2006. The team produced an 18page document called ‘‘Strategy 2010.’’ The process demanded that the team focus on the emerging business reality and capture its key features. The reality that major shifts are occurring in the industry provoked anxiety. The team realized that the uncertain nature of the business environment was likely to have major impact on PDU and its leadership role in the market. To Lundin, the strategy process resulted in an epiphany. It suddenly became clear to him what was needed to be done. ‘‘We really needed to take control of our own destiny. And this could not be done without us changing our mindset. It would not be enough to launch a change initiative here and there, adding some new people, changing the structure. We needed to fundamentally change the way we were steering this ship, how we acted as managers and how we were leading our people.’’ It became apparent that the unit had bad intelligence on what happened in the market and with its competitors. Although such information was available centrally within Ericsson, it was not broadly known, nor used, in the PDU. Lundin told his team that it would be impossible to believe that the unit could keep its existing structure and way of working because the competitors could gain ground on the unit. They needed to question everything they did and how they did it. This meant a fundamentally

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Fig. 1. Overview of the Active Change Management Process at PDU Packet Core. Acronyms: ACM, Active Change Management, the umbrella term for the change initiative; ACMT, Active Change Management teams, the implementation teams. The setup of the teams were changed over time; AEM, all employee meetings; PDU, product development unit; SFP, Strategic Fitness Profiling Process.

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different way of approaching work, a new management structure, and a management function consisting of a collective leadership that continuously could work with a changing market environment. Consequently, in the spring of 2006, the PDU undertook a restructuring of the simple functional design it had operated under since its founding (captured in Fig. 1 as ‘‘Reorganization to achieve org. flow’’). It focused on increasing efficiency. The basic principle was ‘‘Operational Flow,’’ that is, the way assignments are taken from product management to system management (the architects of the systems) down to project office that makes sure that the different projects are run. About half a year after the restructuring and in the midst of trying to launch the strategic implementation, Lundin realized that there were great variations in the changes that were introduced at various parts of the organization. In many subunits, change was something discussed at upper management levels but did not cascade down to the projects. The PDU had increased its efficiency to some degree, but it was far from being consistent and much more room for improvements. Competitors were making offerings that were significantly cheaper, more efficient, and could be implemented quicker. Despite the fact that a very comprehensive manual for cross-functional teamwork as well as training activities was provided, only a few strategic change teams were implemented. People were more involved in determining how to interpret the terms in the strategic plan than in implementing the concepts. It became clear that the awareness for why the PDU needed to change and the urgency for result was not shared across the organization. According to Ulf Bengtne´r, head of System Management and Technology Strategy, the 2006 reorganization did not fundamentally change the way of working within the unit. There was little, if any, change in leadership and culture. Creating a new structure did not yield the desired results. Top management realized that beyond getting buy-in from managers, they also needed to be given the knowledge and tools to start behaving differently. Based in the work with the strategy, the unit had also launched a set of implementation efforts called active change management teams. The teams started working, but no real speed was gained until the beginning of 2007, when ‘‘Active Change Management’’ (ACM) also became the official name of the process. The name was chosen to create awareness that change would be a never ending, everyday process. ACM now had to be filled with content. There was no excuse for waiting. Peter Lundin wanted to provide training in change management for all managers with the aims of creating shared knowledge and opportunities for

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the participants to develop a shared model on the process issues of change. He called a research group at Chalmers University where two of the researchers also worked as consultants and process facilitators with a larger group at TruePoint Partners (onwards: the process facilitators). Two of the process facilitators are also two authors of this chapter. Lundin had himself been a task force member at his former job at Ericsson Microwave Systems (EMW – now SAAB Microwave Systems). After joint deliberations, it was decided that ACM would be started through a mix of different types of interventions: 1. Training: A 2 þ 2 day change management education for all managers 2. SFP process 3. ACM teams – teams of managers taking on a number of change initiatives. 1. Training The change management education was designed to inform the participants about recent process-oriented models for managing change, contextualized knowledge about management and change in R&D settings, knowledge management/organizational learning, and coaching of change processes. The educational process was made up of lecturing, experiential learning (simulations), and team assignments in between sessions. The training was delivered for two cohorts of 20 persons. Each cohort attended a 2 þ 2 day course with a team assignment to be carried out between the sessions. The content of the lectures, the experiential learning modules, and the home assignments were all based on cases and models that were addressing change in product development settings. The content of the training was mainly focused around change as a learning process and how to create system-wide change. The themes of the sessions included how performance and commitment can be achieved in parallel, the importance of action as a basis to develop new thinking, and dialogues as means for learning and change. All 40 managers in the unit participated. Upfront, they all agreed that they would be divided into the ‘‘ACM teams’’ by the end of the course. These teams would be cross-functional management teams that were to get implementation of change going directly after the training sessions (see below). During the training course, the management team had introduced a number of problem areas they felt needed to be dealt with. The action plans that came out of the educational sessions were based on the areas defined by the top team. The refinement and execution of these action plans were

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divided between the different teams to enable execution across the organization. 2. Strategic Fitness Profiling To test the strategy that had come out of the Columbia strategy process, Peter Lundin decided to engage in a broader strategic dialogue with the employees in the unit to prepare the ground for the change work he intended to launch. In line with his desire to involve as many as possible in the strategy, the PDU chose to engage in the SFP process described above. The strategy document that had come out of the Columbia strategy process had been criticized for being too long and unclear (it was 18 pages). The management team, supported by the process facilitators, developed a two-page version of the strategy – the ‘‘Strategic Intent PDU Packet Core.’’ The document contained both information on the content of the PDU strategy and a proposed road map (strategic tasks) to be implemented. The road map described five areas of work that to a high extent overlapped with the areas defined for the ACM teams a few months earlier: ‘‘Ways of working in development’’; ‘‘Workload and pressure;’’ ‘‘Competence utilisations and build up’’; ‘‘Organizational setup in terms of clarifying responsibility and the relation between project-line’’; and ‘‘Reduced Time To Market.’’ The ‘‘Strategic Intent’’ was to be used by a task force consisting of nine trusted key persons appointed by the management team (SFP1). The task force members had different positions (middle management, software programmers, testing personnel, etc.) and represented all parts of the organization. Each of the task force members would interview nine persons each. The task force members were trained by the process facilitators on March 19, 2007, and selected 81 interviewees to be interviewed. Only interviewees who the task force members saw as being trustworthy, influential (formally or informally), and knowledgeable about the business were chosen. Moreover, they needed to represent different levels, functions, and groups of coworkers. No one was allowed to interview a person from their own subunit. The list of interviewees was held strictly confidential. Peter Lundin and the management team never learned the names of the people that had been interviewed. The task force members then sent out the Strategic Intent document to the selected interviewees, asking them to read the document and to agree to a one-hour eye-to-eye conversation about its content. After four weeks, the task force analyzed the results of the interviews with the assistance of the process facilitators. They also rehearsed a feedback session in which the reactions and comments of the 81

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interviewees would be presented to the PDU management team. Three days later, the management team was given a two-hour fishbowl presentation by the task force followed by a one-hour discussion of the results with the task force. During the fishbowl presentation, the task force basically had a discussion among themselves on the findings. The management team was only allowed to listen, take notes, and ask questions of clarification. The feedback was tough on the management team:  Management was criticized for low persistency in strategic work and for not being very present in the organization.  The employees had little trust in the ability of the unit to perform faster and reduce time to market (TTM).  The respondents were extremely positive about being engaged in discussing the Strategic Intent for the PDU, yet doubted whether or not the initiative would have lasting effect.  Employees saw the management team as being disconnected from the rest of the organization.  Employees thought that earlier initiatives had gotten stuck within the management layers, not reaching out and was more ‘‘talking than walking.’’  Employees feared that the emphasize on TTM was going to jeopardize quality and increase what already was viewed as high stress levels  Employees were skeptical about the ability of managers to implement all the initiatives within the ACM initiative. The task force was heavily praised by the management team. Members of the management team confessed that they for the first time had had some tough truths laid on the table that they for a long time had felt were present, but that they had not been able to put their fingers on. The members of the task force felt energized. Several of them expressed that although the interviewees had been critical to several things in the organization, they had been extremely happy to have been asked for their opinions. They felt valued as employees and colleagues. Peter Lundin himself reported that he took many pages of notes, and that he was stunned by the depth of the feedback. As a result of the fishbowl and following the discussion, the management team decided to add one theme – software development methodologies – to the list of strategic initiatives and make each initiative the focus of an ACM team. A roll out action plan was crafted. It was decided that the task force would conduct a follow-up feedback process before the end of the year.

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3. Active Change Management Teams The ACM teams would continue to work on six change themes that evolved out of the course and out of the SFP process. The resulting teams were called      

Workload and pressure Organizational set-up Software development methodologies Competence utilization and build-up (Reduced) TTM Ways of working – cross-functional teams (XFT).

Each manager at PDU was obligated to participate in one of the ACM teams. After initial meetings in the management teams, each of the ACM teams received three half day coaching from the process facilitators. The work was launched at an All Managers’ Meeting on April 19, 2007. Rethinking Development Convinced that he had put things in place that would lead to a change in culture and behavior, Peter Lundin went on paternal leave in August 2007, and left responsibility to his deputy, Klas Moreau, who stepped up from his normal job as head of operational development. In the fall of 2007, a top management meeting was held to review and evaluate the results of the intervention thus far. In general, there was agreement that the educational part had been valuable and very well received but that the ACM teams had not shown much effect. They had deepened managerial knowledge about problems, lead to better definitions of problem areas and listing of possible solutions but produced only very limited action. The lack of action was a clear disappointment. Although the top management team members admitted that the process facilitators had tried to push them to do piloting of change ideas as field tests, they had reverted to doing mostly analysis work. In the discussions, the managers agreed that the whole organization needed to be engaged to increase pressure. But they also acknowledged that the teams had been completely overloaded with assignments and issues that needed instant attention. Reflecting upon the process, Magnus Stenson said: When we gave an assignment to a group we did not really think it through. It went very quick. Some groups ran off and did something that they wanted, disregarding the instructions from the management team. Another thing was that the management team had not really thought through the deliverables and the consequences.

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Despite the problems in the ACM teams, the implementation of some strategic tasks accelerated during the fall of 2007. The work with creating cross-functional teams had already started in the PDU, but was emphasized through the ACM process. Gradually almost all designers, many of the integration/verification persons, and some system engineers became colocated in cross-functional teams. Together with reforming the scope and time frames for projects, TTM was reduced. In order to get more attention on the customer, responsiveness, and quality, Peter Lundin introduced an adjustment of the organization. The design managers who were in charge of the product-oriented departments got an additional role for total product responsibility to ensure simplified communication with Ericsson’s product management organizations and for responding to quality issues from customers. Also the project that focused on new ways to reduce TTM moved forward with the introduction of the ‘‘Streamline development’’ model that built on a continuous flow of development activities, rather than a series of large projects. The other projects that had to do with ways of working, stress reduction, and customer responsiveness were not implemented as successfully, partly because of a lack of engagement from the ACM teams. To handle these problems, the management team decided to change the structure of the teams. They were given clearer assignments, and the leadership of the teams was given more authority and accountability. An SFP follow-up was done in the fall of 2007 (SFP2 in Fig. 1). When eight of the nine task force members (one opted out because of work load) met to prepare for the process, they were nervous, hesitant, and cynical about the process. They thought that too little had happened. Some of the interviewees from the first round had come back to them individually and asked why so little had been implemented in the organization. ‘‘Why has the management team not come back to us and told us how the work is going?’’ one task force member said. ‘‘We invested a lot of time and energy in this and expected to be treated better.’’ Interviewees, as well as the task force members themselves were also surprised that the management team had not worked more actively with the Strategic Intent document. Instead of using the short version that many agreed gave a proper overview, the management team had reverted back to the long version from the strategy process. Although critical, the task force agreed to do another set of interviews to ask for opinions about the actions during the six months that had passed since the last interview. To increase diversity in the material, 25% of the respondents were changed.

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The task force gave feedback to the management team on November 9, 2007. It showed only partial success for the ACM work and the strategy implementation.  Interviewees agreed on the general direction and the focus areas, the task force told the management team. However, ‘‘the strategic work has created very high expectations, but people have seen very few actual changes. People that are supposed to be subject to change are not involved. There is a willingness to engage. People want to be involved, but they don’t have time, or there is no room. The change work has taken place too far away from the employees.’’  There existed very high expectations on the strategic work. The task force could also conclude that people did not see the changes that they expected. Those who were affected by change did not feel really engaged and committed in implementing it. There was a lack of connection between the high-flying strategies and the daily work.  It was clear that there existed limited knowledge about the ACM initiative, its content, and goals in the organization. ‘‘People do not connect the different things that they see to the Active change management initiative.’’  Some of the changes that were supposed to have been implemented had actually not been realized. The respondents even reported about managers encouraging their people not to change their way of working, although upwards they reported that they had implemented the change.  Management was seen as invisible and powerless. There was a high demand on individual managers to become more visible. ‘‘Make use of the fact that we are now all in open office spaces. Do small things, tap people on the shoulders, or sent out a weekly e-mail, just so we know that things are happening.’’  The ACM teams were not known at all, except for the workload and pressure team that had put up posters by the coffee machines some months back.  Interviewees were suspicious. They questioned whether the management team really were working according to the Strategic Intent or if there was a different, hidden agenda.  Interviewees worried about quality of products as well as balance in life suffering as a consequence of time pressure. Aside from the successful implementation of cross-functional teams and the more effective project design, it became clear that there was an uneven implementation across units and still doubts about the willingness of

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management to empower employees and engage in improving customer orientation and quality initiatives. There was little awareness of the ACM initiative in general. Most agreed that the visibility of the initiative was very poor. Still most of interviewees expressed a positive attitude toward the new approach of engaging employees in strategic dialogues. Peter Lundin had temporarily come back from paternal leave to listen to the task force feedback. ‘‘I was surprised with the low energy level in the management team. I thought they had lost focus and energy and acted like ‘this is just another thing that that we need to do.’ My impression was that they did not understand that they were working on an extremely important transformational issue. Most people only did the work because they were told to. And that made me very sad. It did not feel good at all.’’ Lundin was troubled that the organization still did not feel actively involved in the change program. He was convinced that the PDU was on the right track. The overall result showed that there was progress. The important TTM measure was down over 30% since the ACM work started, efficiency (input–output ratio) up over 25%, and customers expressed more openness and understanding for their needs from the PDU’s side. In an analysis made of the work so far, Lundin and the process facilitators concluded that improvements were quite good but not breakthrough – they were mainly the result of cross-functional teams and revised project spans. The more deep-rooted understanding had yet to occur and the organization had not become accustomed to continuous changes. In order to keep up with the fast-moving competition, more needed to be done requiring much more drastic actions. The only way this could happen was if all within the organization felt they were on board. Lundin was firm in his belief in that a mobilization of the organization and a process for getting sharp feedback from the organization was the way to proceed. Coming back from parental leave in January 2008, he called a meeting between the management team and process facilitators where he was clear that the progress was too slow, and that the competitive landscape moved faster than the internal affairs of the PDU. When I came back, I realized that the ACM groups did not work well enough. We had to do something different to ensure that the strategy was implemented. Instead of having cross-functional management teams taking care of different tasks, the work had to be put in the line organization.

Consequently, teams were formed in the line organization to pursue the implementation of strategic tasks. Lundin argued that the whole organization needed to become aligned around the fact that the competitive situation

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was now changing fundamentally. Technological leadership would not be enough for Ericsson to stay ahead – agility and speed needed to become on par with the Chinese and Indian competitors. Under Klas Moreau’s deputyship, a new strategy had been created, where core initiatives were allocated to 13 focus areas. The strategy put a larger emphasis on the international dimension and the need for the PDU to stay world leader in its area. A new slogan had been adopted, ‘‘Crush the New Competition,’’ referring to the changes in the market environment. Shortly after Lundin’s return, the new subunit Converged Core (later Converted Gate Way – CGW) was founded along with the two large product areas GGSN (Gateway GPRS Support Node) and SGSN (Serving GPRS Support Node). Jo¨rgen Engstro¨m, the manager of GGSN, went to head the new unit, which was in the very forefront of packet core technology. Klas Moreau instead became the new head of GGSN, and Magnus Stenson took his job as head of organization development. The management team decided to set up an all managers meeting on March 17, 2008 to recharge the ACM initiative. They wanted to make the external threat more visible by inviting experts on ‘‘low-cost’’ competition to provide input to the meeting. The ACM initiative (defined as all the activities under the ACM umbrella) was emphasized as one of most important ways of staying competitive and the seminar was well received. The management team agreed that there was a need for being persistent in both content and process. In terms of process persistence, this meant that the management team needed to become much clearer in communicating direction and challenges with all employees. It also needed to continue a learning and dialogue approach toward change by actively involving employees in the strategic change process. Content wise, persistence was to be achieved by staying with a focus on speed (TTM), efficiency in resource utilization (streamline product development and cross-functional teamwork), technological leadership in mobile packet core, customer responsiveness (more frequent product releases and faster response to customers), and quality in both initial deliveries and field services. The management team decided that the task force should carry out a new SFP, but that these SFPs would focus on the key product units SGSN, GGSN, and the newly founded subunit called CGW. In an all employee meeting a few months later (May 21, 2008), the management team showed a video with a famous Swedish speaker on the effects of globalization to address the potential consequences of globalization for the PDU. The speaker – Fredrik Ha¨re´n – pointed out that most people in the West are completely ignorant of fact that the differences in pay are enormous, while the educational level and technological skills are the same.

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Likewise, many people in Asia have very thorough understanding of Western conditions and culture, while most people in the West neither know the name of the president of India nor know anything about Asian music, art, or film (how many Indian pop songs do you know?). The reaction among the employees was mixed. Some were terrified, others fascinated. In June of the same year, Ha¨re´n attended an all managers meeting to discuss the globalization issues. The management team gave each manager in the organization the task of discussing the issues with their employees to reflect upon the issues and possible ways to handle the development. This was a step in line with the increased production in Shanghai, where the PDU continued to expand its activities after having established a site there in early 2007. An addition to the earlier strategy was made, as the management team concluded that the PDU needed to increasingly adapt to the consequences of globalization. To implement Western practices everywhere would not be right, they argued. Instead the unit needed to increase its capability to adapt to local markets.

The ACM List As the change effort progressed, the management team realized that one important piece was missing, the internal communication. The call to increase the communication efforts came after the TMT had been alerted on the poor knowledge about the ACM initiative. There was a lack of connection between the different pieces in the ACM initiative. There was a strong need to ‘‘connect the dots’’ in terms of how different initiatives related to each other. Too many activities were happening at the same time, using different labels for similar approaches. Few still seemed to know what ACM actually meant. The management team had already earlier decided that the managers of GGSN, SGSN, and CGW, and the head of organization development (Magnus Stenson) should develop a more effective way of communicating direction and the execution of change initiatives to get all employees to learn more about objectives, engage in implementation, and learn about the totality of the change efforts. The task to create the communications framework fell on Magnus Stenson: ‘‘Our experience tells us that people are unable to work with a message that has not been broken down to a few distinctive things,’’ he said. ‘‘They ask: ‘What is it that you want us to do?’ ‘What should we work with.’ Everyone is smart enough to realize that everything is important, but they need guidance to know in what order to work with them.’’

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To create an additional focus on the change implementation efforts, the management team launched what became known as the ‘‘SJ list’’ (later the ‘‘ACM list’’). The ‘‘SJ’’ list should give an overview of all the change initiatives that were ongoing. Peter Lundin made it clear in a management meeting that he expected the roll out of the activities on the list to get top priority. The idea was that you should tick off the boxes on finished activities, and thereby keep track of progress. The list was inspired by the Swedish Railroad company SJ, that a decade earlier publically had used such a list to show its customers how it was improving its quality. All the subunit heads should provide input into the list to create an overview of the different activities that were ongoing. However, when the heads of SGSN, GGSN, and CGW provided input to the SJ list, it became clear that both the vocabulary used and the emphasis on different issues varied substantially across the subunits. Counting the different initiatives, they summed up to over 200. In order to simplify and facilitate understanding of the ACM work, there was a need for a simple communications tool. The 13 focus areas were consolidated into 6: 1. Best in class TTM: cutting lead times without compromising functionality or quality. 2. Best in class customer responsiveness: better understand and take action on customer input. 3. Market leading functionality: continually be innovative through technological leadership. Be able to deliver customized solutions and functionality fast and efficient. 4. Superior quality: becoming leaders in doing right from the beginning rather than doing corrections by the end. 5. A high commitment place to work: empowering people and teams to create a climate where work is exiting and where we all feel we belong to a winning team. 6. Leveraging capabilities within PDU and with other Ericsson units: Sharing knowledge across the PDU units þ take advantage of Ericsson’s global presence, brand, and capabilities. Second, the management team agreed on the need to create consistency in language over time and across units. To meet this end, the formulations of the six areas should be used in all communication to increase the feeling of persistence. Third, to sharpen the process, the management team needed to push itself to present the overall strategy and the SJ lists on one piece of paper to

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provide an overview that people could understand. Each subunit created their own document based on the SJ lists it had created. The whole document that became known as the ‘‘ACM List’’ was posted in each subunit’s hallways and on the intranet. The six focus areas became headings. The front page was the same for every subunit. On the second page, the subunits customized the lists by putting their different initiatives under each heading. The first ACM lists were posted in August 2008. The idea was to create a dynamic communication tool, where initiatives that were finished would be crossed out, and new ones added. At each point in time, a maximum of eight change initiatives underneath each heading was allowed. It was decided that each subunit was to be responsible for keeping its list aligned with the general strategy in terms of the overall headings and vocabulary but that they could vary in the way they prioritized concrete initiatives under each heading. The subunits were also accountable for continuously updating their lists in terms of which initiatives that were ongoing, results achieved and initiatives that were stalled or finalized. Local Feedback Processes In fall of 2008, the management team made a rather conservative revision of the overall PDU strategy. It also decentralized the execution of the strategy to SGSN, GGSN, and CGW to let the different management teams carry out their own feedback process using the same format that had been used on the overall level the preceding year. A new SFP (Fig. 1, SFP 3) was conducted in the largest subunit (SGSN) during the autumn of 2008, involving some previous task force members from that subunit but adding a few new ones. It was also decided that the process facilitators would back off from taking the lead, having the OE team, and the task force take the prime responsibility with the process facilitators as more of back office support. The feedback from the SGSN task force revealed a clearly different pattern than previously. The most prominent results were:  There were very few complaints and grumpy reactions.  The task force reported that most employees feel that they have accomplished great gains in TTM and that Streamline development was seen as finally being well implemented.  The SGSN head Lennart Allinger and the members of his management team were appreciated for their commitment.

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 The primary concerns were that ‘‘we need to become more customer oriented,’’ ‘‘we could improve more in delivering even more frequent releases’’ and the remaining more critical points of view were related to that there were worries about the overexploitation of key persons and work-related stress.  The ACM list was seen as helpful and valuable in creating understanding of the situation that the unit is facing. It was also seen as a powerful aid in keeping track on various initiatives and how things were progressing.  There were worries about the risk that the Swedish site would become smaller due to the fact that the Shanghai unit would expand. Some employees also expressed their fears that the quality of the deliveries would be difficult to maintain as TTM continued to decrease and that some key people became overexploited. A new SFP was also conducted on the second largest subunit, GGSN, during the spring of 2009 (Fig. 1, SFP 4). The unit was known to have several internal cultural issues, and had experienced a high degree of internal turmoil due to employee turnover and change in leadership. Although this was reflected in the feedback from the task force, the management team was astonished that there was such as positive response from the people within GGSN. The management team felt that there were many things to build on and was energized to pursue the work. However, a reorganization that was decided shortly after the fishbowl put things on hold. Turmoil prevailed in the subunit. Alas, the same was true for the third subunit, CGW, which never did an SFP at this point in the process. Reorganization and New Leadership On April 1, 2009, Peter Lundin left the unit to take responsibility as key contact for new generations of mobile communication toward one of Ericsson’s major customers. His successor, Riku Vastela, continued the work with the strategic feedback processes. The first change that took place under the new leadership had already been planned under Lundin. It was a reorganization that put focus on the different product areas and put back what were previously support units to the major product units SGSN, GGSN, and CGW. The reason for the organization was to increase accountability on the product level and give responsibility for the whole product life cycle to the product units. The expectation was that they would thereby increase their customer understanding. The goal was to further shorten the TTM, increase ability to plan time, cost, and functionality in the product deliveries, and to increase quality by reducing the number of customer service requests and trouble reports. Partly as

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a result of the increase in accountability and authority over the product life cycle, the different units started inviting key customers to discuss quality issues. The meetings, although not that many, became very popular in the PDU and the knowledge of them spread quickly through the unit. In early 2010, Vastela and Stenson initiated a follow-up of the reorganization and decided to use the SFP format again. Instead of a ‘‘Strategic Intent’’ the management team put together a one pager about the objectives of the restructuring and asked a task force to conduct interviews based on that document. The feedback given was rather clear. The people interviewed were in alignment that the new structure worked fine, with the exception of some remaining lack of clarity concerning roles and responsibilities for product life cycles. But the fishbowl session included some surprises for the management team. People were reported to wonder if there was an emerging split within the top team since there was no new strategic direction announced. The vast majority of interviewees felt that it was time to address the future strategic issues for the whole PDU, not only to get getting objectives for next year per product area but also to see a joint statement from the top team showing alignment. Most of the remaining feedback contained very positive attitudes toward the unit; ‘‘a great place to work’’ and ‘‘at the forefront of innovation and modern ways of working within the Ericsson Corporation’’ were typical expressions.

New Strategy, Reorganization, and New Leadership Lundin’s strategy was officially called ‘‘Strategy 2010.’’ Consequently, the PDU management team went on an offsite in Spain (September 7–9, 2010) to craft a new strategy, supported also by the feedback given in early 2010 on the need for some new strategic thinking. The major difference between the new Strategic Intent document and the earlier versions was a much higher emphasis on customer orientation and on understanding the whole value chain, both from a customer perspective – catering for a greater part of the customers’ whole need for telecommunications solutions – and from a product perspective – understanding how the technology could be made more flexible and how existing modules of products and solutions could be used in future technology generations. During the years, the PDU had expanded its operations in Madrid and Shanghai (first opened in 2007). For the first time, the unit decided to include people from those sites in the SFP feedback process. A task force of 10 people (6 in Gothenburg, 2 in Madrid and Shanghai, respectively) conducted a total of 93 interviews, which was fed back to the management team during a 2.5-hour-long fishbowl on October 14, 2010 (SFP 6). The task

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force spoke vividly about the positive energy that they had experienced when doing the interviews. Especially in Madrid and Shanghai, interviewees described the pride they felt in having been asked to participate in the process. But there was also an almost restless desire to get things done. People demanded action, and they demanded that the management team should have a plan for how to proceed as quickly as possible. The management team was credited with having created the best Strategic Intent document so far. Several hundreds of change suggestions had been given to the task force, which transferred them to the PDU management team, as input for their further work. The management team took impressions and its analysis to an offsite All managers meeting a week later to create an action plan to start the implementation process (Table 1).

DISCUSSION The case of the transformation of the PDU Packet Core is an illustration of the anatomy of the change process in a multiyear renewal process. An attempt was made not only to transform the organization but also to learn how to change under the assumption that change would be the normal state of the foreseeable future. As can be seen from the case, the development evolved around a central learning mechanism – the strategic fitness process. However, the organization also established a number of other change initiatives and learning mechanisms that became institutionalized during the period. Over time, the organization added new skills and change capabilities. The case illustrates the interplay between top management initiatives and organizational responses from different constituencies that gradually increased their engagement in the change process. It also highlights how a central idea of an improved strategic dialogue can breathe life into empowerment and learning throughout organizational levels. The argumentation in this chapter is based on the assumption that companies in hypercompetitive settings will continuously need to transform themselves fast and in a seamless way. The nature of the environmental context is such that relying on sequence of stages and procedures may not be the optimal approach for business transformation as advocated by others (Bartunek & Reis Louis, 1988; Sugarman, 2007). The chapter proposes that an organization capable of changing through ongoing learning by a number of different learning mechanisms increases its likelihood of being agile enough to deal with the challenges posed by competitors and increasing demands from customers (Beer, 2009; Lipshitz et al., 2006).

Time

Overview of the Change Initiatives at the PDU Packet Core, 2006–2010. Event/Activity

Participants/Mechanism

The development of Strategy 2010

PDU management team (MT)

April–May, 2006

Organization redesign

Whole PDU

Oct–Dec, 2006 Jan, 2007

First ACM teams established PDU office in Shanghai created

MT members Small team from Sweden, mainly Chinese employees

Feb, 2007

Change management education

PDU managers

Feb, 2007

PDU

Feb–April, 2007

Creation of strategic intent based on Strategy 2010 SFP1

April–May, 2007

2nd generation of ACM teams

All managers in PDU, placed in cross-functional teams

Oct–Nov, 2007

SFP2

MT, 8 task force members, 64 interviewees at the Lindholmen site

Nov 2007–Feb 2008

Update of PDU strategy

Mainly deputy head Klas Moreau and PDU MT

MT, 10 task force members, 81 interviewees at the Lindholmen site

Outcomes An 18-page document labeled ‘‘Strategy 2010’’ New organization based on ‘‘Operational Flow’’ Initiative to establish change initiatives Need to understand global competition, need to manage a global unit Extensive teaching to set a ‘‘change language’’ and to establish tools for change Five different focus areas Feedback on the strategic intent document. Many complaints about lack of communication, bad leadership, poor coordination, and badly functioning MT Too many initiatives cramped into the agenda. Disappointment with outcome Cynicism reflected by employees. ‘‘Nothing has happened, and nothing will happen.’’ Few knew about the ACM initiative New strategy created in bottom up initiatve. 13 new focus areas created, badly mapping against the five earlier initiatives

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Table 1.

3rd generation ACM teams

Mar–Aug, 2008

Globalization sessions

April–Aug, 2008

Creation of SJ list and communication plan

Implementation initiatives are driven by teams in the line organization Fredrik Ha¨re´n, important Swedish speaker on globalization issues, with MT and later all PDU managers All managers in PDU, Magnus Stenson

Aug, 2008

Creation of local SGSN strategy

SGSN MT

Sep–Oct, 2008

SFP3 (local on SGSN unit)

Sep, 2008–Feb, 2009

Creation of local GGSN strategy

SGSN MT, 7 task force members from across the PDU, 35 interviewees at the Lindholmen site GGSN MT

Feb–Mar, 2009

SFP4 (on local GGSN unit)

Apr–Jun, 2009

Reorganization to increase accountability

Feb–Mar, 2010

SFP5 on reorganization

GGSN MT, 4 task force members from across the PDU, 30 interviewees at the Lindholmen site Whole PDU

Continuous discussions on the demands and challenges of globalization Visualization of current change projects, wall posters displaying key parts of strategy, including six focus areas (boiled down from the 13 in the strategy) Specific focus on the SGSN strategic initiatives Praise to SGSN MT, worry about PDU development

Specific focus on the GGSN strategic initiatives Engagement for the strategy. Demand for more action

Divide up joint competences on the product units. Increase product unit level responsibility to increase understanding of customers and product life cycle Clear momentum for change. Positive attitude toward participating in the change work

147

PDU MT, 6 task force members from Lindholmen, 60 interviewees

More speed in the implementation process

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Feb–Mar, 2008

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Table 1. (Continued ) Time

Event/Activity

Participants/Mechanism

Jun–Sep, 2010

New strategy work

PDU MT

Sep–Oct, 2010

SFP6

PDU MT, 10 task force members from across the PDU, 93 interviewees at the Lindholmen, Madrid and Shanghai sites

Outcomes Strategy document and short statement of direction building on five new focus areas Praise for the MT, eagerness to get to know more about the action plan coming out of the strategy work

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The case presented above demonstrated how the organization developed a number of different ways for both leaders and engineers to work strategically. This meant learning how to adopt the way to organize both structures and ways of working. Over the five-year period, the unit also learned how to learn, becoming gradually able to design and modify its own learning mechanisms, not only adapt to those provided by researchers and process facilitators collaborating with the unit. At the heart of this transformation, lies the design and implementation of a learning platform, such as the SFP intervention that was utilized in this study, which in itself represents a tapestry of learning mechanisms (Beer & Eisenstat, 2004; Docherty & Shani, 2008). But this chapter argues that the platform is something more fundamental than a collection of mechanisms. When institutionalized, it changes the way leaders and employees are dealing with transformations from a telling, hierarchical approach to a situation where there is more of an egalitarian and communicative approach where nonleaders can join in the strategic dialogue.

The Platform for Learning As the case illustrated, the basic design of the SFP incorporates a number of generic components that represent the different types of learning mechanisms that were identified and discussed in the first section of the chapter, namely cognitive, procedural, and structural learning mechanisms (Shani & Docherty, 2003). Cognitive (Language, Concepts, Models, Symbols, Theories, and Values) An example of a cognitive mechanism that was crafted in the PDU case was the process and articulation of the Strategic Intent. A two-page document was developed by the top team and in which the strategy, values, and priorities for change are laid out in a language understandable for all employees and which is communicated to all people during the process. It tells the story about why the strategy calls for changes; it states the values underpinning both strategic choices and how change will be dealt with; and it explains how people will become involved and empowered to participate in the process. Aside from the statement of intent, there exist basic templates for how to communicate the process to the employees over time and the leadership team then crafts their unique version for communicating what goes on during the execution of both the process and what is becoming implemented through an action plan open for all to take part in.

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Structural (Feedback Channels, Communication Channels, Technical Structure, Physical Structure, Forums, Arenas, Networks, and Work Organization) An example of a structural learning mechanism that is built into the SFP model that was utilized in the PDU case is the preplanned and committed organizational setup for engaging the senior leadership team in having an open and honest conversation with the organization. The senior team commits itself to stage meetings where they are advocating their direction but also opens to receiving feedback from the organization. This is done by commissioning a task force that researches the organization by interviewing roughly 10% of the employees at various levels and units and feedback reactions or alternative proposals from the organization to the leadership team. In the case presented, this infrastructure has been in place for more than three years, and has been used for both the whole unit and within subunits in six cycles. Procedural (Methods, Models, Procedures, Rules, and Tools) Many procedural learning mechanisms were established in the PDU transformation process. The process of learning mechanisms of the SFP consists of tools and methods for how to collect data, how to interpret and organize data, rules and routines for creating safeguards for openness and dealing with honest feedback, and making the data and feedback public for all working at the unit. As we have seen in the PDU case above, these four procedural mechanisms were an integral part of the learning process. Reflecting on the variety of learning mechanisms used, one can see that a tapestry of learning mechanisms was created. For example, the learning platform by itself can be viewed as a tapestry of learning, and since it has been continuously repeated and recreated over time, it has become an integral part of the routines used. The often referred to division between doing actual work and on top of that doing change gradually diminishes as people get to know how the process unfolds and starts to trust the serious intention behind the leaders invitation to participate and be empowered to engage in strategic change dialogues.

Inventing New Learning Mechanisms Based on the progressively more successful experiences for the use of the SFP, the organization initiated the use of a variety of different learning mechanisms.

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 The organization accelerated the implementation of cross-functional teams and discovered that it was natural to also colocate several hundred people in teams of five to six members representing different disciplines (structural learning mechanism).  The unit head organized seminars for all leaders inviting both external and internal speakers to share knowledge to keep introducing new knowledge such as the globalization issues (cognitive and structural mechanisms).  Work methods (Streamline and Agile programming) spread horizontally across units (process mechanism).  The leadership team initiated ACM teams composed of five to seven leaders from different units/levels who got together for developing change proposals and testing them out and communicating the results (structural, process, and cognitive). In the first generation of change management teams, all managers in the PDU belonged to a team. The agenda for the teams was so immense that they felt ‘‘choked,’’ according to a manager in the PDU. After the first and second SFP, the ACM teams started changing to have one clear leader with clearer accountability. A year later, as the SFPs focused more on the product division level, the change management teams also became focused on changes in the divisions, rather than on the PDU level. The major new initiatives introduced by the PDU management team are described in Fig. 2. Perhaps most importantly we could see both how at the overall unit level and within subunits leaders started to initiate their own learning mechanisms when they saw challenges arising:  When seeing that the subunits out of their local ‘‘SFPs’’ developed a local language and at times not so compatible solutions, the PDU head took the initiative to create a common communication tool including two-way cascading (procedural learning mechanism).  Ensuring that people working for different time periods and projects for different subunits he realized that a common, simple labeling of change initiatives (cognitive learning mechanism) was important to avoid confusion. The labeling, also helped making sure that people in different parts of the PDU would be able to follow how things progressed across functions/units, that they could learn from each other, and that they still could take pride in following the progress at the local level. Using a common template increased cognitive learning and a sense of strategic identity in how the unit as a whole made progress. Local units were

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Strategy process

Change Mgmt Teams1

Change Mgmt Educ. SFP1 Change Mgmt Teams2 Educ. re. Globalization

Fig. 2.

SFP2

ACM-list Change Mgmt Teams3

Direct customer feedback

SFP6

Educational efforts

Strategic dialogues

Communication efforts

Strategy implementation efforts

The Major New Initiatives Regarding Learning and Implementation.

able to drive initiatives underneath the general headings they saw most fit with their local needs. In one unit, quality problems were dealt with by running a ‘‘micro’’ SFP, where the subunit head, a middle manager, and quality expert worked out a proposal for a new quality process. They then had two persons interview four cross-functional teams about the proposal, and arranged a fishbowl feedback session with the subunit management team. Based on the feedback, they redrafted the new quality process, and subsequently implemented it across all teams. Our interpretation of the development of new learning mechanisms is that over a period of five years the PDU learned how to learn. The platform constituted by the SFP created a familiarity with how organized dialogues between senior leaders and the rest of the organization worked. This created a space where more open and honest conversations about the red and hot topics (the strategic issues) could occur without fear of negative sanctions. The public posting results of feedback sessions with the ACM list provided the possibility for people to continuously follow the progression of implementation efforts

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and the corrections of problems. This chapter argues that this contributed to a productive learning climate. Based on the fact that the PDU did not only learn how to apply the prepackaged components of the SFP but also developed its own learning mechanisms and institutionalized them, it can be argued that the unit learned how to learn based first on modeling and then generating its own solutions to emerging needs.

The Need for Persistence While observing and intervening in the change process at the PDU, it became clear that there are some key dimensions on the change process itself that need to be taken into account. The top management team needs to lead the process and provide clear direction while engaging the employees in various ways. The SFP process itself creates the foundation for both employees to learn more about the firm and for managers to learn from the organization. In turn, this creates expectations from the employees’ side, which creates a pressure on the senior team to continue inviting feedback and dialogue. And as seen over time (Table 1), the feedback shifts from being mainly critical of managers’ proposals to include proposals from the employees on how to move forward. Sticking to the learning platform over considerable time constituted a stabilizing factor in a very fluid situation. The way to change through a set of basic and stable learning mechanisms provided a sense of recognition and predictability around process issues so that people at various subunits and levels felt safe and comfortable while learning how to cope with the changing nature of demands, working routines, and principles for organizing projects and departments. By demonstrating that leaders take feedback on employees’ proposals seriously, the senior team increases employees’ confidence in the process and thereby also the likelihood that they will contribute by giving a point of view. After one and one half years (around SFP3 and SFP4), members of the PDU could make sense out of the new situation and rather than reacting to proposals from the top team they began to initiate proposals and actions that were viewed as beneficial in dealing with emerging external challenges.

Learning from Practice and Theory SFP is grounded in theory about how to build a resilient yet learning organization. It has been developed based on analysis of what prevents

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organizational change and theoretical models for organizational learning such as Argyris and Scho¨n (1978) to overcome barriers to change. The theoretical components are built into the process but are only initially carried by outside experts – after a few rounds the leadership teams and their commissioned task forces learn by doing – executing the learning loops on their own and modifying the original concept to fit their needs. The repeated use of the basic format makes the organization comfortable with holding structured but open conversations between different levels and subunits. After some time, it becomes a vehicle for organizational change which is not that different from methods used by engineers to execute R&D by applying engineering methods for solving technical problems. It becomes an integral part of problem solving but applied to organizational problems. It enables learning at multiple levels and units and across units and geographies. At the basic level, safe dialogue creates empowerment where people can engage in sharing control over the ongoing change and trust that their points of view are respected even if not always incorporated.

Leading Transformations Through Learning For a long time, transformational leadership (Bass & Avolio, 1990, 1994) has been associated with visioning, and bold leaders have been able to create a sense of urgency around a new direction. It has been claimed that not only transformation must be driven from the top but it must also be accompanied by change leadership skills down the line. In the case presented there, no doubt existed a committed and very active transformational leader of the PDU, entrusted by his boss to develop a strategic direction for the unit. As can be learned from the case, however, just developing the change leadership skills of all the 40 managers of the unit was not enough to get the implementation moving. Not until the tapestry of learning mechanisms started to develop did the transformation take off and people started to make sense of what the changes in an operational sense could mean and have the changes make a difference to them. The different learning mechanisms, repeated over time and inviting people to take part, gradually engaged leaders from the top and down in learning by doing and reflecting on the feedback they received from different constituencies. Developing a number of practice-centered means for learning that could be executed, driven, and gradually designed by the line managers, provided convincing arguments for the many hundreds of engineers that this change was for real.

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IMPLICATIONS FOR ORGANIZATION DEVELOPMENT AND CHANGE A primary motivation for writing this chapter was to illustrate the potential embedded in the designing and managing of learning mechanisms as a critical component in organizational transformation. A central process for development and change – the SFP – was used as a central method to increase learning. The process enabled the development of learning mechanisms that together created the tapestry over a period of some years. In this section, we identify and explore some implications for future research and some implications for practice. Implications for Research The need to investigate empirically the relationship between specific learning mechanisms and transformation output using economic/performance indicators. The case presents data about the outcomes of the transformation as it was progressing, yet it is really hard to know how much of the success can be attributed to the development and deployment of the learning mechanisms. Most likely, the effectiveness of the learning mechanisms is difficult to measure, as they primarily worked through improving the implementation efficiency of other organizational processes such as Streamline development. Furthermore, the fact that a tapestry of learning mechanisms was used illustrates the difficulties of measuring the impact of specific mechanisms both on the transformation process and economic performance. Conducting traditional experimentations with control groups (some form of experimental design), even in a company such as Ericsson where many pretty similar PDUs exist, is problematic due to the dynamic nature of the company and each of its units. The complexity in carrying out such empirical studies is compounded by the fact that as the organization learns the added value of the learning mechanisms, new mechanisms were created. These challenges require exploration of research design that can capture dynamic transformation. The current chapter points toward the potential added value for a hybrid research approach that is based on collaborative research methodologies, longitudinal case study methodology, and grounded theory building. The need to investigate the causal relationships between key features of Strategic Fitness Profiling (SFP) and learning mechanisms. The PDU’s case captured the transformation process over a five-year period. At the foundation of the transformation was the ‘‘strategic fitness

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profile’’ change initiative that was led by external SFP experts. As we have seen, the SFP is based on the creation of a tapestry of learning mechanisms that trigger ongoing organizational learning and action. At the center of SFP is the notion that by creating safe, open, and honest conversations between managers and employees dynamic ‘‘fitness’’ will be achieved. Some of the learning mechanisms such as procedural mechanisms or structural mechanisms tend to be initiated by top management. Thus, by the very nature of their creation, employees might perceive them as ‘‘another management ploy’’ and would not be open to share what they know and understand. Investigating the potential cause and effect relationship between such SFP features and the creation of specific learning mechanisms is likely to shade light on these complex dynamics and guide future transformation studies. Creating the culture of open dialogue via structured and unstructured conversations. As could be seen from the case, SFP contains a number of learning mechanisms that are there by design to foster honest conversations. According to Beer (2009), the SFP is a method that has been used in many hundreds of organizations across the world. This could create an opportunity to look into how the different learning mechanisms operate and how they are appreciated by the ‘‘users.’’ From a research perspective, intriguing questions center around (1) what general learning can be generated about the nature of the structured and unstructured conversations and (2) to what extent the conversations foster an organization culture that is based on honest dialogue and learning. In the same vein, some questions that can provide additional insights about transformation culture include (1) How do management teams crafting statements of direction learn from having to compress their strategy into a two pager (prioritizations, linkages between values and business objectives)? (2) What do the different constituencies being interviewed or those not being interviewed learn over time? (3) What specific learning mechanisms (cognitive, structural, and processual) embedded in the SFP, as an integral part of the generic design of the intervention, allow for better data collection and data interpretation in a company transformation process? Transformation phase-based models, open ended/emerging transformation process-based, and mechanisms-based model and the development of new organization capabilities. One of the arguments advanced in this chapter is that in a hypercompetitive market, following a phased-based transformation model has many limitations and is not likely to enhance the new needed capabilities needed.

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As such a transformation orientation that is based on an SFP platform grounded in the creation of a tapestry of learning mechanisms was advanced. Such an approach, it was argued, creates new organizational capabilities. While our study illustrated the emerging new organizational capabilities, more scientific research is needed in order to substantiate such claim. Furthermore, a comparative investigation into the two different orientations (the phase-based vs. the process mechanism-based transformation) and their possible role in the creation of new organizational capabilities is likely to be of added value.

Implications for Practice The role of the OD practitioner as a learning designer and learning facilitator in the implementation of SFP. The case presented was initially driven by the head of the unit who was partnering with process facilitators in building the first stages of the transformation. Gradually, managers at all levels got involved and the internal OD function became the main partner in assisting the broader execution. This was apparent as the change implementation efforts continued after Peter Lundin, the initiator, left the unit. As the external experts gradually transferred their knowledge to the internal staff and managers, the role of the process facilitators and the head of the unit changed to become more of overseeing the total process and assisting in introducing new learning mechanisms. The OD practitioners worked in partnership with line managers and acted as designers that facilitated building and testing learning mechanisms (as opposed to offering readymade solutions). It could be argued that such a role for the OD specialists avoids the pitfall of lack of ownership by line management. In this case, the learning mechanisms are codesigning and leaders have the accountability for executing most changes as well as deploying the learning mechanisms. How to sustain SFP and nurture learning mechanisms? What methods can be used to accomplish such goals? The case represents a time span of five years and as can be seen the unit still is using and redesigning a number of learning mechanisms – both those introduced in the beginning and those developed after two years. It can be argued that persistence is important in terms of the top management staying with the basic design of the process (strategic learning dialogues, learning from experience, and learning across levels, units, and geographies). Persistence also seems to be of importance in choosing to stay with change

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objectives until problems have been fixed for real – not giving up half way and compromise on standards. Finally, persistence in staying with wordings and conceptualizations creating a familiarity across the organization about what was meant and finding the local translations to fit the most pressing issues at different units. What are some of the shortcomings of SFP? How to overcome some of the shortcoming during organizational transformation effort that utilizes SFP and learning mechanisms? SFP and the related learning mechanisms developed throughout the process no doubt were central for the outcomes of the transformation. It became clear that there was more to it than learning mechanisms. The follow-ups done on a regular basis created a pressure on management teams not only to listen and discuss but gradually to become much more expedient in implementing own and others ideas. Especially in the first two years, implementation (of new work methods, alternative models for managing projects and organizational restructuring) was somewhat slow and unevenly dispersed. Follow-ups and very consistent push from some managers made things move, but momentum took some time to achieve. Effective tools for implementing could have resulted in a faster development. SFP and other ‘‘learning tapestries’’ could be well complemented by more action implementation features not relying on action planning too much under the maybe false assumption that just because a plan exists, actions get implemented well enough.

CONCLUSION Our hypercompetitive business context requires the development of new organizational capabilities. As new competitors enter the market, and old competitors remain, and as prime customers require more unique features and new end users are emerging, developing new capabilities seems to be the only way to survive or be successful. Most planned change and transformation models are limited, and their ability to enhance the business agility has become a necessity in many industries. This chapter illustrated that a process-based and learning mechanism-based approach to organizational transformation seems to provide a possible transformation solution. The hybrid approach of SFP platform with an increased focus on the design and implementation of a tapestry of learning mechanisms triggers the development of needed organizational capabilities.

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The five-year transformation effort of Ericsson’s PDU organization provided the empirical case for this chapter. The chapter captured the complex transformation process, mechanisms, activities, and outcomes. The coherence of the SFP orientation coupled with design and implementation of learning mechanisms provided the engine for the transformation effort. Some of the many unanswered questions and implementation challenges were identified and discussed. Developing the new capabilities to address the emerging demands and opportunities is a challenge that must be faced by many companies. Yet, as the chapter illustrated the complexity of company transformation is such that few if any short cuts can be taken. Developing agility by engaging people at all levels in continuous learning about what needs to change and decentralize how this should be solved might be the path to follow.

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MAPPING MOMENTUM FLUCTUATIONS DURING ORGANIZATIONAL CHANGE: A MULTISTUDY VALIDATION Karen J. Jansen and David A. Hofmann ABSTRACT In a series of studies, we develop and validate an approach to studying momentum fluctuations over the course of organizational change to better understand the dynamics of change processes. The first study experimentally examines momentum fluctuations in a controlled change context and explores individual predictors of variance in momentum. The second study utilizes a real organizational setting, examining organizationally relevant predictors of momentum variance and the ability of momentum trends to predict meaningful organizational outcomes. Combined results provide evidence that momentum mapping is a valid approach for researchers and managers exploring processes that unfold over time.

Organizational change is both complex and dynamic. From afar, the change process often appears to be organized, smooth, and incremental (Weick & Quinn, 1999). At close range, however, the flow of events and activities

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constituting the change process is actually quite dynamic, reflecting fluctuations in rhythm, oscillations in energy and enthusiasm, and interim breakthroughs and setbacks (Beer, Eisenstat, & Spector, 1990). Most organizational change research has focused on the more static aspects of change (e.g., variable approach, Mackenzie, 2000; or variance theory, Mohr, 1982), especially antecedents and consequences of the change process (Van de Ven & Poole, 2001), rather than the dynamic and unfolding characteristics of the change process itself (Mackenzie, 2000; Pettigrew, 1990). In recent years, however, studies of ongoing, dynamic processes within organizations have become more prevalent (e.g., Barley & Tolbert, 1997; Benner & Tushman, 2002; Repenning & Sterman, 2002). In response to calls for further investigation of the dynamics of organizational change (Huy, 2001; Pettigrew, Woodman, & Cameron, 2001), a similar trend is emerging within the change domain (e.g., Amis, Slack, & Hinings, 2004; Stevenson, Bartunek, & Borgatti, 2003; Whelan-Berry, Gordon, & Hinings, 2003). One recent process-based stream of research focuses on energy (Cross, Baker, & Parker, 2003; Quinn & Dutton, 2005) and change-based momentum (Jansen, 2004), exploring fluctuations in energy and enthusiasm during the pursuit of change. We believe that the pattern of momentum fluctuations is an important process variable that can help to explain how energy, and individuals’ perceptions of it, combine to create traction (Cross et al., 2003), facilitate goal attainment, and provide useful insights for leaders attempting to more effectively manage the change process. The purpose of this series of studies is to lay the groundwork for a new approach to visualizing, collecting, and analyzing energy fluctuations during a change process. We begin by reviewing the theoretical underpinnings of momentum. We then describe the circumstances leading to the creation of ‘‘momentum maps,’’ which are visual depictions of change participants’ situated renditions of, and attributions for, observed fluctuations in momentum over time. We then validate this measurement approach in two studies. The first study experimentally controls for the change context and focuses on individual variation in maps. The second study moves to a real organizational setting and examines contextual influences and the ability of momentum trends to predict relevant outcomes. Based on the promising results of these two preliminary studies, we provide recommendations for further leveraging this process-based approach for studying energy fluctuations during organizational change efforts.

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CHANGE-BASED MOMENTUM Momentum has been examined at multiple levels of analysis, including collectives pursuing social change (Adler, 1981), groups participating in sporting contests (Burke, Burke, & Joyner, 1999), and individuals focused on performance (Vallerand, Colavecchio, & Pelletier, 1988). In studying the momentum associated with large-scale organizational change,1 Jansen (2004) defined change-based momentum as energy fluctuations experienced as an organization pursues a new trajectory or change goal. Building off Adler’s (1981, p. 15) assertion that ‘‘momentum must be recognized as a constructed and negotiated aspect of social life,’’ Jansen conceptualized momentum as an organizational-level construct, and her study investigated both the collective manifestation of (e.g., social construction) and participants’ perception and interpretation of momentum. At the aggregate, the theory and evidence for change-based momentum suggests that social information conveying urgency (e.g., ‘‘we need to do this’’), feasibility (e.g., ‘‘we can do this’’), progress (e.g., ‘‘we are doing this’’), and dramatic devices (e.g., music, moving appeals, powerful imagery) positively influence change-based momentum, while attention-diverting events (e.g., competing priorities, alternative activities requiring a prolonged investment of time and energy, or cyclical milestones) decrease it (Dutton & Duncan, 1987; Gersick, 1994; Ginsberg & Venkatraman, 1995; Jansen, 2004). At the individual level, there is evidence that commitment to the change, subgroup membership, exposure to change-related conversation (e.g., ‘‘buzz’’), and initial alignment with the change goal are positively associated with perceived momentum (Jansen, 2004). In her study, Jansen (2004) described an innovation in collecting momentum data during interviews. She asked informants to retrospectively draw the fluctuations in momentum they had observed over a three-month period, and asked them to label any inflection points on the graph, where the x-axis represented time and the y-axis represented the amount of momentum. She utilized these annotated maps to assist informants during interviews and further probe reasons for momentum fluctuations. Interestingly, the obtained maps were remarkably similar in shape, showing that momentum continually increased from the time the change leader arrived through his formal announcement of the change. All then showed a marked decrease in momentum attributed to competing priorities and lack of activity, followed by another marked increase when the change leader held an

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all-participant meeting. The relevant point for the present study is that there appears to be some aggregate-level awareness of, and agreement about, momentum trends. Even though these maps had a similar shape, there was occasional variation in the attribution made for a given inflection point, primarily due to the constraints of each informant’s vantage point (cf. Meyer & Goes, 1988). However, the similarities in the visual graphs provided preliminary evidence of convergent validity and, perhaps more importantly, suggested that such maps may be a valid method for collecting and analyzing temporal fluctuations in momentum over the course of organizational change. Based on these preliminary results, we sought to develop an appropriate methodology for capturing momentum trends. We first examined existing methods for collecting and analyzing process data. In the area of data analysis, substantial innovation has occurred, with two statistical techniques gaining in popularity: hierarchical linear modeling and latent growth modeling. These methods are useful for conceptualizing and examining phenomena that evolve across time and allow for a more sophisticated approach for studying temporal phenomena (Chan, 1998). For example, many of the recent advances in the study of dynamic performance (e.g., Deadrick, Bennett, & Russell, 1997; Hofmann, Jacobs, & Gerras, 1992; Hofmann, Jacobs, & Baratta, 1993), to some extent, resulted from the introduction of these methodologies. In contrast, innovativeness in data collection lags far behind advances in design and analysis (Daft & Lewin, 1990; Faulkner, 1982; Scandura & Williams, 2000). Meyer (1991, p. 219) points out that ‘‘in gathering data, we almost always limit our subjects to counting, talking, and writing.’’ However, informants often have much more detailed and nuanced information than can be communicated verbally (Meyer, 1991). He advocates the use of visual modes of reporting organizational phenomena as part of data collection efforts because they are often the simplest and most powerful (Tufte, 1983). A graphical data collection approach was desirable for the present studies given the dynamic and complex nature of organizational change processes. However, there were very few exemplars in which process data (e.g., charting a change in a variable over time) had been collected in graphical form. One particularly salient example is a study that examined the course of an emotional episode. Sonnemans and Frijda (1994) asked subjects to draw a diagram of the intensity of emotion they experienced over its course. They then used pieces of this diagram to ask more specific questions about the duration and intensity of the episode. They concluded that such an approach was preferred to traditional Likert-scale questions for measuring temporal aspects of emotion (Sonnemans & Frijda, 1994). Their study informed the design of the instrument we developed.

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STUDY 1: VALIDATING MOMENTUM MAPS Our primary goal in this study was to assess the validity of momentum maps. To do this, we favored precision over realism (e.g., McGrath, 1982; Thorngate, 1976) by conducting a controlled experiment in which all change participants observed the same unfolding change process depicted in a feature-length film. This allowed us to control for contextual effects such as individual position or exposure to different change stimuli and to determine the viability of a graphical approach to collecting process data. We also examined content validity by assessing the degree to which the slopes of graphically drawn fluctuations in momentum are associated with established predictors, specifically positive and negative social information conveying urgency, feasibility, and progress (Dutton & Duncan, 1987; Gersick, 1994; Ginsberg & Venkatraman, 1995; Jansen, 2004). Research suggests that the use of dramatic devices (e.g., music, suspense, and surprise) during an announcement meeting or in conveying social information can influence perceptions of momentum and help promote organizational change (Fox & Amichai-Hamburger, 2001; Jansen, 2004). The controlled environment and use of the film allowed us to examine the extent to which such dramatic devices and concomitant emotional reactions to them influence reported levels of momentum. A dramaturgical analysis focuses on the performance, actors, and roles (Goffman, 1959; Feldman, 1995) associated with organizational experiences in general (cf. Rosen, 1985; Boje, Rosile, Durant, & Luhman, 2004), and organizational change in particular (cf. McCormick, 2007; Mirvis, 2005). The film depicting an organizational change in this study provides a unique opportunity to study the dramatic devices employed and their relationship with momentum. More broadly, the relationship between momentum and these dramatic elements suggests that momentum perceptions are likely to be influenced by both the cognitive appraisal of events and the emotional reactions to those events (Fox & Amichai-Hamburger, 2001). We anticipate that the intensity with which an individual experiences emotional reactions (Gross & John, 1998; Larsen & Diener, 1987) will influence reported levels of momentum, which can be used to control for variance in reported momentum levels, or can be leveraged to facilitate contagion among employees. Individuals identified as high in affect intensity report more powerful responses to actual and hypothetical daily life events regardless of the valence and intensity of the emotional event itself (Larsen, Diener, & Emmons, 1986). From a momentum mapping perspective, we believe that affect intensity will influence the overall level of momentum highs and lows reported graphically. Those individuals

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high in affect intensity will therefore have maps that have greater variability than individuals lower in affect intensity. Visually, a momentum map for a high affect intensity individual would be expected to resemble an uppercase ‘‘W,’’ while the map for a low affect intensity individual would resemble a lowercase ‘‘w.’’ Thus, it is hypothesized that individuals with high affect intensity will have stronger (both positive and negative) reactions to events they are observing and will draw maps exhibiting greater variability (i.e., higher highs and lower lows). Hypothesis 1. Affect intensity will be positively related to variability in the momentum map.

METHODS Participants Participants were 335 undergraduate students from a junior-level business course for nonbusiness majors at a large research university. Their average age was 20.7 (SD ¼ 2.01) years. As expected of a survey course, the class represented a cross-section of the university student community in terms of ethnicity and academic background. Students were provided extra credit points for participating in the study.

Procedure To maintain control over the context of change and the amount and type of information subjects were exposed to, we contemplated many different ways to convey the change circumstances, including a written case, an experiential exercise, or the analysis of an actual organization. Each of these was subsequently ruled out based on issues of control, richness of description, and/or development requirements. Using these same decision parameters, we decided that a feature-length film maximized these criteria. We previewed and researched more than 20 films to find one that best documented an organization’s pursuit of a change goal. We ultimately chose Tucker: The Man and His Dream, which documents a 1940s entrepreneur’s (Tucker) pursuit of building a safe and futuristic automobile. Participants attended one of two administrations of the movie in a large auditorium setting (n1 ¼ 171, n2 ¼ 164). Movies depicting management issues

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had frequently been utilized in this class as opportunities for earning extra credit, so participants were familiar with the venue and time investment required. They first completed a brief survey. The next page provided a definition of momentum and a sample map depicting three hypothetical momentum maps of a students’ job search process. These examples were reviewed verbally, as were the instructions about completing the actual momentum map. To design the momentum map data collection sheet, two researchers involved in the project viewed the video and independently coded the movie minute by minute, highlighting key events. Twelve lulls at various points in the movie were identified, defined as moments in which no plot-related or momentum-related events occurred, and these points were used as interim reporting periods. Fig. 1 depicts the actual data collection instrument used in the study, in which the x-axis was scaled by minute and the reporting periods were identified by a vertical line placed at the time increment corresponding to each identified lull.

Fig. 1.

Chart and Instructions for Collecting Momentum Map Data.

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The survey was pilot tested with 18 doctoral-level business and psychology graduate students to verify that the directions were easy to follow and the mapping activity could be properly completed. In addition, eight members of this group were asked to label their inflection points on the momentum map during the movie. This functioned as a check on the events coded by the two researchers during the initial survey design and helped verify the lulls and general shape of the momentum map. For the actual survey administration, an overhead projector was turned on at each specified lull during the movie, displaying the reporting period corresponding to a particular portion of the map, and asking subjects to draw momentum since the last reporting period up to that vertical line. Thus, in the first reporting period, participants were asked to start at a predefined point (marked by an ‘‘X’’) in the middle of the y-axis, chart all changes in momentum that they observed during that reporting period, and stop at the first vertical line (marked x1). The subsequent reporting periods followed the same pattern, such that participants were asked to start from the previous end point and chart changes in momentum observed in this interval, stopping at the next vertical line marker identified by the number displayed on the overhead projector. At the end of the movie, participants responded to another brief set of survey questions.

Measures Affect Intensity The 11-item Impulse Intensity Measure (Gross & John, 1998) was used to measure the degree to which individuals experience emotion. Items were rated using a 5-point Likert agreement scale (a ¼ .72). Sample items include ‘‘Seeing a picture of some violent car accident in a newspaper makes me feel sick to my stomach’’ and ‘‘I sometimes cry during sad movies.’’ Momentum Map The drawn map was digitized into (x,y) coordinates where x represents the time index and y represents the level of momentum. To do this, maps were first traced onto blank paper (without axes, directions, etc.) so that the simple curves could more readily be scanned. A software program was developed for this study that read each pixel of the map and created an array of y-values at the pixel level. Thirteen hundred and forty-one data points were obtained for each map. These arrays were later smoothed to 93 data points, representing each minute of the film.

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RESULTS In order to assess the impact of dramatic devices on momentum perceptions, a researcher specializing in film media, who was unaware of the goals of the research project, conducted a dramaturgical analysis of the film. Similar to the qualitative coding conducted by the research team, the media researcher coded the time and duration of scenes and the degree and type of dramatic devices employed. The criteria used to classify high and low drama events included the type and volume of noise or music, pace of editing, transitions in lighting or location, and unique camera angles. In addition, a map of dramatic fluctuations was created from the detailed analysis using an input form identically scaled to that of momentum. The dramaturgical analysis was mapped to our qualitative coding of momentum events. A subset of that analysis, drawing on 10 key events from the movie, is reported in Table 1. Examination of these events, as well as events identified as momentum lulls, indicates that drama varied independently from momentum. Discriminant validity was also tested by comparing the average momentum map of study participants with the drama map provided by the dramaturgical analyst. The correlation was based on an N of 93 representing the number of data points throughout the movie on which drama and momentum were assessed. The correlation between participants’ assessment of momentum and the drama analysis was significant (r ¼ .26, p ¼ .01), but lower in magnitude than the correlation between study participant momentum and the momentum of the pilot group (r ¼ .58, po.01). In fact, the test of the difference between these two correlations is significant (t (90) ¼ 2.81, po.01) providing further evidence of the greater convergence between the two groups of momentum scores when compared to drama scores. A comparison of the average participant momentum map and the drama map is shown in Fig. 2. Thus, it appears as though participant ratings of momentum were tapping the momentum of the change initiative, not merely the dramatic elements of the film. Combined, the analyses provide evidence that momentum and drama are distinct. Even though dramatic devices can be, or often are, employed in real organizations to help build momentum using staged events, elaborate kickoff meetings, and music, it appears that participants were able to distinguish between momentum and drama fluctuations in drawing their graphs. We predicted that affect intensity would be positively related to the variability in momentum maps. In order to investigate this hypothesis, we computed the variance in each participant’s momentum map and then estimated the correlation between this variability and affect intensity. The

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Table 1. Event Code

Time (min)

A Comparison of Momentum and Drama for Key Events.

Event Summary

Momentum Indicators

Drama

Drama Indicators

Finance meeting with Karatz ends with ‘‘No chance’’ Obtain and tour new factory; lunch meeting with investors

Low

No funding represents a setback in goal attainment A new factory and the prospect of obtaining funds fuel enthusiasm

Mixed

Partial funding obtained from Karatz creates positive energy/ enthusiasm Senator’s implied threat presents a roadblock in attaining the goal

Low

Represent delays and difficulties in attaining the goal

High

Soft, very slow background music (piano), dark lighting, faces in shadows, hushed voices, some suspense Scene begins with close-up of violent photo (unexpected event), followed by a quick pan over men getting sick, Tucker in shadow lit only from projector looks menacing Muted, natural lighting, no background music, lots of slow-paced dialogue, quiet voices, very slow rhythm, long scene with long takes (continuous shot without many edits) Drama heightens when the camera pans up onto the Senator, tilt shot (looking up) showing the Senator as an ominous giant surrounded by skyscrapers, ominous music Scene begins with fast music (drums), building noise in the garage unexpected events (car falling on Eddie; Tucker’s explosion), suspense (will they ever get it to work?)

x1

7–9

x2

17–19

x3

23–25

Difficulty getting financial backing for prototype

Mixed

x4

34–36

Meeting with Senator; ends with ‘‘Stay out of the car business.’’

Low

x5

37–42

Problems with engine; oil is leaking, car falls on Eddie; Tucker loses his temper

Low

High

Mixed

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Momentum

43–54

x7

56–63

x8

66–72

x9

76–82

x10

85–94

First public unveiling of the High car; ‘‘biggest day in automotive history’’; prototype revealed Need to find steel; changed Mixed specs; no rear engine; change in colors; Bennington in charge Testing car on track; High car flips and safety is proven

Significant progress milestone; social buzz; dramatic unveiling Roadblocks; lack of support from the board

Highest

Major milestone reached; high enthusiasm

Highest

Karatz resigns and confesses prison record; plant is closed 50 cars finished

Major roadblock for goal attainment; lost hope Resolve to push on despite obstacles; goal achieved

Low

Lowest

Highest

Mixed

High

Band music in background, loud cheering, bright lighting; each time Tucker begins to introduce car; music, excitement and christening of car at the end No background music, slow-paced dialogue; quick cuts revealing potential problems ahead (suspense) Jump cut to scene with loud engine, fastpaced music starts (drums), suspense (will car hold up?), the sounds of the racetrack (building suspense), car flips (unexpected event), but car is a success Dark lighting, no background music, hushed voices Begins in bright, sunlit factory in the midst of celebration, sounds of whistling, cheers, ends with pep talk by Tucker

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x6

173

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Drama

Momentum #10

#2

#1 a

#8

#6 #4

#9 #7

#3 #5

1

5

9

13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93 Time (in minutes)

a Numbers correspond to event codes reported in Table 1

Fig. 2.

Comparison of Average Momentum and Drama Maps for Changes Observed During Tucker Movie.

results revealed that affect intensity was significantly related to the variability in participant momentum maps (r ¼ .12, po.05). The direction of this relationship suggested that participants who reported greater levels of affect intensity drew momentum maps that contained greater variability. This relationship remained when we controlled for people who had previously seen the movie, suggesting that their reporting of momentum was not influenced by prior experience. Therefore, Hypothesis 1 was supported.

DISCUSSION This study provides evidence that momentum mapping can be a useful approach for measuring momentum fluctuations over time. Beyond validating this data collection and measurement approach in a controlled context, we found evidence that individuals with high affect intensity had greater variability in reported momentum, even when we controlled for having seen the movie before. This finding suggests that each time an individual observes a change process, it is with the capacity to experience it anew emotionally. Alternatively, it is important to recognize that how an individual experiences emotions does

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influence momentum perceptions. Thus, at a minimum, researchers should consider controlling for affect intensity when assessing momentum perceptions in this manner. In addition, the dramaturgical analysis conducted as part of this study shows that although drama and momentum sometimes share variance (i.e., drama may be purposefully employed to help build momentum), they are distinct constructs. These findings add to the discriminant validity evidence for the momentum construct. Although the setting of this study was somewhat contrived and raises questions of generalizability, these results underscore the utility and promise of a process-based measure of momentum. In a second study, we move to a real organization in the midst of change to further validate this approach.

STUDY 2 – A FIELD STUDY The first study provided evidence that participants observing a change can graphically report fluctuations in energy as an organization pursues a change goal. In addition, we identified an individual difference variable that can serve as a control in future studies, or which can potentially be leveraged to help build further momentum. In this study, our goal was to address the utility of this approach in a more generalizable and realistic change setting. By reintroducing contextual variance, it allows us to examine the impact on momentum trends over time of two contextual factors suggested by momentum theory: stakeholder groups differences and personal benefit. Also of importance is establishing if momentum trends, rather than the average level of momentum typically measured in a survey, explain relevant outcomes.

Contextual Influences on Momentum Trends Because various stakeholder groups and constituencies are likely to perceive momentum and attributions for fluctuations differently (Jansen, 2004), we sought to better understand how momentum fluctuations are differentially reported by various stakeholder groups. We predict that various stakeholder groups within the organization will differentially interpret change-related events, which in turn, result in differing perceptions regarding the momentum of the change effort. We base this prediction on processes of social construction (Berger & Luckmann, 1966) and sensemaking (Weick, 1995), especially within organizational change (Gioia & Chittipeddi, 1991;

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Isabella, 1990). Because organizations are complex systems, multiple constructions and interpretations of organizational events are likely to exist (Martin, 1992). Dougherty (1992) describes these potentially conflicting perspectives as thought worlds, where what is known (or taken for granted) and how it is known (e.g., systems of meaning) influence sensemaking activities. Thus, the divergent histories and perspectives of organizational departments (e.g., marketing versus manufacturing), various ranks (e.g., management versus rank-and-file), or geographical locales is likely to lead to different patterns of sensemaking. Two studies support the existence of differing perceptions of organizational change phenomena. First, Taylor (1999) found that senior managers differed from lower level employees in the way they interpreted change. Senior managers tended to describe change as revolutionary, while lower level employees described change as incremental. Second, focusing on initial momentum perceptions, Jansen (2004) proposed and found support for differing momentum perceptions across stakeholder groups (e.g., divisions within the organization) whose current trajectory was more (or less) aligned with the goal of the change program. Thus, we predict that momentum trends will vary across stakeholder categories. Hypothesis 2. Reported momentum trends will differ across stakeholder groups within the organization. The often touted practical advice for overcoming resistance to change is helping individuals to find some personal benefit from the change initiative (Coetsee, 1999; Lawrence, 1954). The rationale behind this advice is that the more the change is viewed as beneficial for the individual, the more likely the individual will commit to the change, interact with others who will positively benefit, and self-interestedly take action in support of the change. These actions and corresponding progress have been shown to increase perceptions of momentum (Jansen, 2004). Also, selective attention processing (Fiske & Taylor, 1984) would suggest that when the change positively impacts an individual, he or she is likely to be more attentive to positive events and activities in order to maintain cognitive consonance (Festinger, 1957). Thus, we predict that personal benefit will be positively associated with the mean and linear trend in momentum. Hypothesis 3a. Individuals who perceive personal benefit from the change will report a higher mean level of momentum. Hypothesis 3b. Individuals who perceive personal benefit from the change will show a stronger increase in momentum over time.

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Utility of Process in Predicting Outcomes A theme emerging from recent research underscores the importance of managing energy during change (e.g., Cross et al., 2003; Senge, Kleiner, & Roberts, 1999; Welbourne, Andrews, & Andrews, 2000), but we know very little about how the pattern of energy influences individual attitudes. According to social identification theory (Tajfel, 1982), these change-related circumstances are likely to influence individual attitudes such as commitment and satisfaction. Research shows that individuals want to identify and be affiliated with groups that are making forward progress and to distance themselves from groups that are not (Snyder, Lassgard, & Ford, 1986). Researchers have also proposed a spiraling relationship between momentum and change-related commitment, whereby momentum builds commitment and commitment leads to increased effort to ensure the goal is accomplished, further building momentum (Jansen, 2004; Seo, Barrett, & Bartunek, 2004). Similarly, the trend in momentum is likely to generate positive or negative progress toward goal attainment, which has been shown to influence satisfaction (Maier & Brunstein, 2001). This implies that, over time, a positive trend in momentum is likely to signify greater commitment to and satisfaction with the change, while a negative trend in momentum will be associated with decreased commitment and satisfaction. Hypothesis 4a. The overall trend in momentum will be positively associated with commitment. Hypothesis 4b. The overall trend in momentum will be positively associated with work environment satisfaction.

METHODS Sample We collected survey data from 499 of 520 employees from two adjacent physical plants of a manufacturing organization located in the mid-Atlantic region of the United States. The organization was in the midst of a strategic change initiative to adopt lean manufacturing throughout the plants. Although the actual transition to lean manufacturing can be a daunting process requiring new machinery, physical restructuring, and work role adjustment, it generally leads to positive consequences for the employees

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(e.g., increased skills and autonomy) and the organization (e.g., competitiveness and viability). Following a six-month investment in training, the three-year program of change began with a period of transitional moves and two major project initiatives. Our survey was administered six months into this process. The momentum map was included in a broader survey examining attitudes about change. Complete data was provided by 405 employees, representing a 79% response rate. Sixty-one percent of respondents were male; 84% had a high school degree, and 10% had a two- or four-year degree. The median length of time employees had been with the surveyed organization was seven years, with just under nine years of experience in the industry.

Procedure The survey was administered over two days across both shifts. Groups of 30–50 employees were sent to the company’s cafeteria by work area during their shift, providing them paid time to complete the survey. The research team explained the purpose of the survey and assured participants that participation was voluntary and that no one from the company would see their responses. The sample momentum map and the instructions for completing the map were reviewed aloud. In contrast to Study 1, in which momentum maps were completed in real time, respondents in this study were asked to graph momentum retrospectively. Finally, following Jansen’s (2004) procedures for collecting retrospective maps, we asked subjects to label events and reasons for inflection points on their maps.

Measures Momentum Trend An over-the-counter software program was purchased to digitize the data points of each map. The program requires two sets of input: identification of the corners of the figure (to determine the scale) and the starting point of the line. It then digitally follows the line image to create the (x,y) coordinates. Perceived Personal Benefit Following a prompt stating ‘‘once the lean transformation is complete y’’ were eight items assessed on a 5-point Likert agreement scale (a ¼ .70). Sample items include ‘‘I will have acquired useful new skills,’’ ‘‘I will have

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more opportunities for advancement in the company,’’ and ‘‘I will no longer be able to interact with my friends at work’’ (reverse-coded). Affect Intensity We used the Impulse Intensity Measure (Gross & John, 1998) as in Study 1. However, company representatives were a bit hesitant to include four items that had been found to be reactive during pilot testing in a similar manufacturing company (e.g., ‘‘there have been times when I have not been able to stop crying even though I tried to stop’’ and ‘‘I often tell people that I love them’’). We complied with their wishes by including just 7 of the 11 items, but in doing so, suffered a minor decrease in reliability (a ¼ .63). Commitment Commitment was measured with eight items from Mowday, Steers, and Porter (1979) Organizational Commitment Questionnaire (OCQ; reversecoded items were omitted). Responses were provided on a 5-point Likert agreement scale. The coefficient alpha for this scale was .87. Job Satisfaction Job satisfaction was measured using three items (a ¼ .76). Two items were drawn from Brayfield and Rothe (1951), stating ‘‘I find real enjoyment in this work environment’’ and ‘‘I consider this work environment rather unpleasant’’ (reverse-coded). For both items, respondents indicated the extent of agreement using a 5-point agreement response format. The third item was Kunin’s (1955) 11-point Faces Scale, often recommended for industrial settings. Responses to these items were standardized before calculating scale scores.

RESULTS We content analyzed the reasons provided for inflection points on respondents’ momentum maps over the six-month period. A summary of that analysis by time is reported in Table 2. In terms of overall frequency, performance was the most frequently cited trigger for changing perceptions of momentum. For example, changes in production volume, sales, or quality were frequent indicators of momentum change. In addition, progress in the form of visible changes, milestones met or missed, and problems with implementation were frequently cited as triggering a change in momentum. A second trigger negatively impacting momentum was attention-diverting activities such as holidays, the start of hunting season, and an environmental

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Table 2. Content Analysis of Study 2 Activities by Month Corresponding to Reported Increases or Decreases in Momentuma. Time (months)

May June July

August

September

October

a

Event Summary

Number of Comments by Direction of Impact

General progress (steady improvements) Business as usual; nothing happening Visible change (new building, new machinery) High production volume (increased productivity) Visible change (repairs and restructuring) High production volume (overtime) Reality of scope and size of change Launch of Project X (first major initiative) Visible change (physical moves, new processes) High production volume (overtime) Doubt about changes made; fear of layoffs Visible change (workflow, physical moves) External environmental jolt Implementation problems with Project X Low production volume (slowdown) Visible change (new operations, physical moves) Implementation problems with Project Y Drop in quality, sales, and production

15 (þ) 9 (none) 11 (þ) 4 (þ) 14 (þ) 8 (þ) 4 () 12 (þ) 10 (þ) 7 (þ) 6 () 21 (þ) 29 () 20 () 7 () 16 (þ) 21 () 12 ()

Themes with more than 3 comments are reported; Table reflects 226 of 271 comments.

jolt (e.g., Meyer, 1982). A less frequent, but still noteworthy, category focused on leadership and communication. A change in a key management position was recognized as being a negative factor early, but a positive factor later, and uncertainty about the size and scope of change and its impact on job security were cited as triggers for decreasing momentum. We tested Hypothesis 1 as we did in Study 1, by computing the variance in each participant’s momentum map and then estimating the correlation between this variability and affect intensity. As predicted, affect intensity was positively related to the variability in participant momentum maps (r ¼ .11, po.05), providing support for Hypothesis 1 and replicating the findings in Study 1. Affect intensity was then used as a control variable in subsequent analyses. For the remaining hypotheses, the analysis involved estimating withinparticipant growth models in order to get an overall summary of the participant’s momentum map over time. Orthogonal polynomial trends were used to model these growth curves. From an analytical perspective, this

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analysis involved regressing each participant’s momentum scores onto orthogonal polynomial vectors representing linear, quadratic, cubic, and higher order trends. This is a similar process to that used by Hofmann et al. (1992, 1993) when modeling performance over time. The estimation of individual growth curves provided us with summaries of each participant’s momentum map. This summary was reflected in the parameter estimates from the regression analysis described above. In other words, the growth curve estimation allowed us to summarize each participant’s 100 momentum data points in a much smaller set of parameters (e.g., intercept, linear, quadratic, and cubic trends). Table 3 provides the means, standard deviations, and intercorrelations of these trend parameters with the other variables included in this study. To test Hypothesis 2, we separated respondents by functional department (six in one plant and four in the other) because physical location and role in the transformation differed by department. We then investigated the degree to which there were systematic differences across these departments in terms of the parameters describing their overall view of momentum. A one-way ANOVA revealed that there were significant differences in average momentum (i.e., intercept; F(9,343) ¼ 2.73, po.01), the linear change in perceptions of momentum (i.e., linear trend; F(9,343) ¼ 3.31, po.01), and the overall shape (curvature) of the graph (i.e., quadratic term; F(9,343) ¼ 2.10, po.05). This suggests that different stakeholder groups did view the change process somewhat differently based on their physical

Table 3.

Means, Standard Deviations, and Intercorrelations of Study 2 Variablesa.

Variable

Mean

SD

1

1. Intercept (average momentum) 2. Linear trend 3. Quadratic trend 4. Personal benefit 5. Affect intensity 6. Commitment 7. Job satisfactionb

51.61

9.22

–

1.63 1.12 3.32 3.18 3.38 .02

5.85 3.99 .56 .50 .64 .81

.68 .36 .13 .05 .17 .15

a

2

3

4

5

6

7

– .32 .23 .01 .22 .22

– .16 .08 .09 .08

– .08 .39 .41

– .12 .03

– .60

–

N ¼ 405. Scores on the satisfaction items were standardized prior to computing the scale score.  po.05.  pr.01. b

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proximity to observable change events and the role these functional areas had in the overall change effort, providing support for Hypothesis 2. Hypothesis 3 predicted that perceived personal benefit would predict both the average level of the momentum maps and the overall linear trend. HLM was used to investigate this hypothesis. Specifically, the level-1 model consisted of regressing each participant’s momentum scores onto orthogonal polynomial trends reflecting linear, quadratic, and cubic trends. The level-2 analysis investigated the degree to which perceived personal benefit predicted the intercept (i.e., overall mean of the momentum map) and the linear trend in the momentum maps. The results revealed that perceived personal benefit was significantly related to both the variance in the intercept term (g01 ¼ 3.33, t (327) ¼ 3.68, po.01) and the variance in linear trends (g02 ¼ 18.33, t (327) ¼ 4.34, po.01). The direction of these relationships suggests that individuals who believed that the change had greater benefit for them personally reported a higher level of momentum (intercept) as well as a stronger increase in momentum over time (linear trend). These results support Hypotheses 3a and 3b. Hypotheses 4a and 4b predicted that an overall increasing trend in momentum would be associated with commitment and satisfaction, respectively. Analytically, we tested this by investigating the correlation between the linear trend parameters emerging from the growth curve analysis and the appropriate outcome variable. Inspection of Table 3 reveals that the linear trend parameter was significantly associated with both commitment and job satisfaction (both with r ¼ .22, po.01). The direction of these relationships suggests that those participants who had steeper positive linear trends in their data reported greater commitment and job satisfaction. These results support Hypothesis 4. In addition to testing our specific hypotheses, we also investigated the degree to which the intercept term (average momentum) and the linear trend in momentum would jointly predict commitment and satisfaction. The results reveal that the overall level of momentum (intercept) was significantly related to both commitment and satisfaction (r ¼ .17 and .15, respectively; both po.01). When both the intercept and linear trend are considered simultaneously in their prediction of commitment and satisfaction, there was a significant effect for the linear trend (commitment, b ¼ .02, t (403) ¼ 3.10, po.01; job satisfaction, b ¼ .03, t (403) ¼ 3.17, po.01), and a nonsignificant effect for the intercept (commitment, b ¼ .003, ns; job satisfaction, b ¼ .002, ns). These analyses suggest that it is the overall linear trend, as opposed to the average level of an individual’s momentum that is predictive of subsequent attitudes. Yet this is precisely the information that is lost when using overall

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measures that aggregate across time to index momentum (e.g., asking subjects their overall perception of momentum over the last six months).

DISCUSSION In this series of studies, we have taken a meaningful first step toward improving our understanding of momentum fluctuations during organizational change processes. The first study developed a measurement approach and methodology for analyzing momentum trends over time. The second study employed this methodology in an organizational setting, allowing for a content analysis of the reasons provided for momentum fluctuations. We found that momentum increases were associated with visible progress, positive performance indicators, social interaction, and key change-related announcements. Momentum decreases were associated with attention being diverted to other activities or projects, missed milestones, and lack of communication. These results add to the validity evidence for the momentum construct by supporting prior results found in a military academy undergoing a culture change (Jansen, 2004), as well as identifying additional triggers for momentum fluctuations in a manufacturing setting in the midst of a lean transformation effort. Results also reveal that various stakeholder groups sometimes report differing levels of momentum following change-related events. Depending on contextual circumstances, these differences appear to be predicted by hierarchical differences (cf. Taylor, 1999), and proximity to observable change events. We also identified individual factors likely to influence reported momentum levels and trends over time. First, we found that the intensity with which individuals experience emotion was positively correlated with momentum variance. Second, an individual’s belief about whether a change initiative is personally beneficial predicted the level and trend in momentum, and provides empirical support for the notion that employees need to see the personal relevance of a change before they will be energized to pursue it. Finally, our results indicate that overall trends in momentum are positively related to satisfaction and commitment, suggesting that change-based momentum matters and is relevant to organizations. Across studies, results revealed that the trend in momentum was more predictive of attitudes than average momentum, underscoring the utility of this measurement approach. While this research highlights important aspects of change-based momentum, much remains to be done. First, future studies can examine

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additional triggers of momentum fluctuations in a variety of settings and change contexts. More importantly, theoretical elaboration of when and why change events will affect all participants versus some subset of them is needed. Our results show that some events were consistently reported by participants, while others showed more variability across participants. These observed patterns suggest that it is likely that there are two classes of momentum events: localized and global. Some events are likely to influence small pockets of change participants and have a localized and variable effect, while others will have a more far-reaching effect, serving to coalesce and crystallize momentum perceptions across the organization. Another important step is to more directly capitalize on the interim fluctuations in momentum. In this study, we primarily focused on overall trends. Our results are promising in suggesting that trends are a more important predictor of attitudes than average levels. However, one key advantage of this approach is the ability to analyze interim shifts throughout the process. One recent study employed profile analysis to highlight patterns within the change process (Ford & Greer, 2006). Analytic techniques such as profile analysis or momentum mapping can identify change patterns and address process questions during change. For example, does commitment fluctuate in accordance with momentum? Do upturns and downturns in momentum help tell the story of turnover or project failure? Is there a particular pattern of momentum fluctuations that is most effective? Clearly, the utility of such analytic techniques is in the details rather than the overall trends. Armed with the knowledge that momentum maps are a viable approach to studying process-based measures, future studies can be designed to leverage these interim shifts and overall pictures of energy fluctuations. Finally, the dramaturgical analysis in Study 1 adds to the discriminant validity evidence between drama and momentum. However, the findings that emotional intensity and drama are both at least somewhat related to momentum suggest that there may be an emotional component to the construct that merits further examination. In fact, scholars have recently recognized the role that emotional contagion plays in influencing behavior (Barsade, 2002) and have highlighted the importance of attending to the emotional elements of organizational change (Fox & Amichai-Hamburger, 2001; Marshak, 2006; Sanchez-Burks & Huy, 2009). The finding that a prior viewing of the change process in Study 1 did not detract from the intensity in affect and momentum reported suggests that rather than the popular wisdom that prior experience with change can be a hindrance (i.e., in terms of jaded, battle-weary change participants), each change experience may be approached with openness and untarnished emotion (cf. Cooperrider & Whitney, 2005). Further research that

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sheds light on the role that emotion plays in increasing or decreasing perceptions of momentum would help change leaders to design activities that can positively fuel momentum or minimize any negative emotional impact of change. A clear strength of momentum mapping is that it brings qualitative richness to the data and provides visual insight into an otherwise complicated dynamic process. As Jansen’s (2004) results showed, graphs of momentum fluctuations were effective in qualitatively pursuing particular aspects of the pictures and facilitating recall. In these cases, a picture does indeed seem to be worth a thousand words. Thus, beyond the statistical and quantitative approach to analyzing momentum map data, qualitative researchers may find this a valuable tool in interviews and interactions with informants. Although the graphing activity may be a stimulating and engaging activity for some, Meyer (1991) cautions that people may vary in graphic aptitude. Thus, care should be taken in assessing the degree of verbal explanation and researcher involvement required in their administration. Future research can also improve upon the methodological aspects of this study. First, it should be noted that asking subjects to draw a continuous line potentially biases the results toward uncovering continuous processes, rather than punctuations or disjointedness in the phenomena. The topic of study will certainly dictate the importance of this issue, but researchers are cautioned to be attentive to it and to design alternative approaches for eradicating this potential shortcoming. Second, there appears to be an implicit trade-off between real time and retrospective data collection techniques (e.g., Van de Ven & Poole, 2001) with respect to momentum maps. The former generally provides more detailed maps and highlights additional short-term fluctuations that might be overlooked in a retrospective account. However, real-time data collection can produce measurement artifacts and can be difficult to implement in real organizational settings. Conversely, retrospective reporting is potentially easier to employ in organizations, but can introduce bias and tend to smooth out the shorterterm fluctuations that might otherwise be reported. These trade-offs must be weighed against the broader researcher goals and the specific organizational circumstances. The findings obtained from this series of studies have important implications for management practice. First, armed with the knowledge of which events and activities positively and negatively influence change-based momentum, and aware of the localized or global effect they may have on various constituents, change leaders can better manage energy and enthusiasm over the course of organizational change. Effective energy management can

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potentially shorten implementation time and improve the odds of a successful change initiative. Thus, having a means for measuring the impact of various events on momentum perceptions can be quite useful for change leaders, who can at times mistake the drama of a crisis or an elaborate kickoff meeting for momentum. The reality supported by our research suggests that change participants are rather adept at differentiating between dramatic devices and actual momentum-building activities. Although dramatic elements can help to increase momentum, determining the appropriate timing and impact of such elements is something that will only come from experience. Another practical implication lies in the utility of momentum maps for conveying change process data to organizational leaders. Especially with complex temporal phenomena, it is frequently difficult to convey results in a simple manner. However, seeing an aggregate employee map of momentum or one reflecting the differential momentum perceptions held by various subgroups can be similar in power to the way social network diagrams simply convey quite complex data. Both the researcher and the organization obtain richer information as a result. Using momentum maps as a communication tool is particularly salient for action research, where the feedback of data can be used to direct subsequent action and inform decision-making. The ability to compare maps across stakeholder categories at different stages of the change process is also an important source of information for change leaders who are tasked to mobilize involvement and engagement. Finally, momentum maps can be used as a retrospective learning tool to better understand what happened during a change implementation to affect momentum, when it happened, and the significance of its impact (Nelson & Jansen, 2009). They can also be compared and contrasted with other maps to better understand the topography of successful versus unsuccessful changes. Comparing multiple maps can provide insight into typical patterns or those that are more or less effective. Questions that this approach can address include, do most successful changes begin with strong momentum and is a constant high level of momentum advantageous for successful change? Nelson and Jansen (2009) compared 51 momentum maps from IT project implementations, and noted that all of the projects in their sample experienced at least one significant decrease in momentum, with an average of five significant inflection points. As patterns of momentum fluctuations emerge, practitioners will have more insight for managing momentum during change (Ford & Greer, 2006; Nelson & Jansen, 2009). This research has further validated and elaborated a theory of changebased momentum. We have added to the empirical body of evidence

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explaining how and why momentum fluctuates during the pursuit of largescale organizational change initiatives, where maintaining energy is a critical component of success. The graphical data collection and analysis techniques employed appear promising in helping to illustrate dynamic processes that unfold over time. We encourage researchers to further refine these conceptual and methodological ideas and to supplant or supplement their traditional survey techniques with process-based graphs or drawings.

NOTE 1. This view of momentum stands in contrast to the concept of strategic momentum first introduced in organizational studies by Miller and Friesen (1980) and expanded upon by Amburgey and Dacin (1994), Amburgey, Kelly, and Barnett (1993), and Amburgey and Miner (1992). See Jansen (2004) for a more thorough review.

ACKNOWLEDGMENTS The authors gratefully acknowledge the unique contributions provided by Jay Maynard, Purnima Bhaskar, Jennifer Borda, Mike Rovine, Eric Loken, Dave Harrison, Alicia Grandey, and Bernadette Kasshanna. A portion of funding for this research was provided by the Pennsylvania Hardwood Development Council.

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TOWARD A DYNAMIC DESCRIPTION OF THE ATTRIBUTES OF ORGANIZATIONAL CHANGE Guido Maes and Geert Van Hootegem ABSTRACT The literature on change is characterized by an opposite, dichotomist view on the subject. Many authors describe only one or some of these characteristics and attribute a normative value to it. When discussing one of these attributes they will make a deviating classification in the way in which change arises. Although types and attributes of change are largely studied in the change literature, there is no general agreement on the attributes that can best describe the different types of change. The purpose of this chapter is to try to consolidate the vast literature on the types and attributes of change in order to find a more homogeneous set of attributes. From an extensive literature research on change articles and books from 1970 onward, eight dimensions of change attributes were found that are able to describe the characteristics of a change in a dynamic way. In order to overcome the dichotomist view, organizational change is approached not as a process changing a system but as a system by itself.

Research in Organizational Change and Development, Volume 19, 191–231 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 0897-3016/doi:10.1108/S0897-3016(2011)0000019009

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Although the borders between the change system and the system to be changed are not always easy to perceive, this view seems to create a richer picture on change. A systems approach allows to define the attributes of change in a holistic way that captures the always paradoxical state change is in.

INTRODUCTION The literature on organizational change is characterized by a dichotomist view, always separating the subject into two classifications. This dichotomic approach has resulted in a cluttered jumble of change models that do not tend to promote the general understanding of this subject matter. A systems approach can provide a way to describe change based on all the attributes of the change system. If organizational change is considered a system in itself, that system will show dynamic fluctuations during the change process that can be described based on the attributes of that system. From an extensive literature research of change articles and books from 1970 onward, eight attributes of change were found. Using these attributes an organizational change system can be defined in all its aspects. This approach is also much better able to view change as a process of becoming than the static definitions resulting from the dichotomic approach. In the first section of this chapter we investigate the way that changes are being described in the literature on change as well as the resulting conclusions that can be drawn. Next, the characteristics of changes will be grouped in a dynamic entity, which will allow describing all attributes of a change. Finally, we study an alternative way that systems theory can be applied to change management.

FROM ONE DICHOTOMY TO ANOTHER The literature review on the different types and attributes of organizational change that was executed provided 624 articles and 55 books that investigated the type of change and/or one or more characteristics. Based on a first analysis it becomes clear that change has many facets (French & Bell, 1999). Many authors describe only one or some of these characteristics and they attribute a normative value to it. When discussing one of these attributes, they will make a deviating classification in the way in

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which change arises. According to Ford and Ford (1994) it is the logic of the observer that defines the way that change is experienced. So it is no surprise that the larger part of the literature on change originated from criticizing models from other writers and taking an opposite, dichotomist point of view. Incremental change is then opposed to Transformative change (Dunphy & Stace, 1988); Episodic change to Continuous change (Weick & Quinn, 1999); Planned change to Logic incrementalism (Quinn, 1977, 1980); Evolutionary change to Revolutionary change (Pettigrew, 1985), First-order change to Second-order change (Moch & Bartunek, 1990); Convergent change to radical change (Greenwood & Hinings, 1988; Miller & Friesen, 1982). This dichotomic approach to change resulted in a cluttered jumble of change models that – although they all contain an element of truth – do not tend to promote the general understanding of this subject matter. Moreover, the change’s general usage is ambiguous and inaccurate (Marshak, 2002). Thus, comparing the change that was handled with its principal characteristic without specifying the other attributes could cause a lot of confusion. For example, the main quality of planned change is the degree to which change is being controlled. However, there can be substantial differences in planned change – if only based on another characteristic such as the way in which this planning is done (participative or coercive). In order to reduce open-ended descriptions of change into a parsimonious set of attributes for theory testing and building, Glick, Huber, Miller, Doty, and Sutcliffe (1990) described four attributes of change: (a) the type of change: designed or not; (b) the impetus of change: proactive or reactive; (c) the difference between discrete events and ongoing processes; (d) the relative importance of changes. Ferlie and Pettigrew (1990) come to four other attributes: speed, quantity, process, and quality. Marshak (2002) claims that multivariable typologies are much better placed to grasp the dynamics of organizational changes. This is initiated by means of a 2  2 matrix where two attributes are being combined to have four variations. This method is often used to model complex problems and business issues (Lowy & Hood, 2004) and applied by many authors on change (e.g., Huy, 2001; Dunphy & Stace, 1988; Nadler & Tushman, 1989; Meyer, Brooks, & Goes, 1990; Meyer, Tsui, & Hinings, 1993b). The image of change with this method – although resulting in new perceptions – is still fragmental. Besides, in this way 28 matrices are required to oppose the eight dimensions of attributes that were found in this inquiry. Burnes succeeds in taking into account several factors using yet an alternative method. He puts two aspects of change as independent variables in a quadrant: the scale and the speed of change. Other attributes (level,

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focus, and approach) are considered as dependent variables of these two aspects (Burnes, 2004). However, the definition of the independent and dependent variables is entirely the author’s view, since other combinations can be made as well. Mintzberg and Westley (1992) are among the few with a holistic approach to change and who try to comprehend the different dimensions of change. They look upon change as a system of moving cycles where change shows itself on different levels and in different ways. In this way they developed a framework of change by organizations built on various concentric cycles to represent the contents and levels of change: circumferential to represent the means and processes of change, tangential to represent the episodes and stages of change, and spiraling to represent the sequences and patterns of change. In this way, possible variations in different attributes of change (content, scope, control, stages, and frequencies) are described and visualized. All of these studies provide additional understanding in the complexity of change. However, gaining more uniformity in the terminology regarding change is a prerequisite in order to advance the study on change. As each identification of change with one or more attributes always supposes its opposite, this approach will always remain fragmentary. In order to present an alternative way of looking at things, in the next session we will summarize the different types and attributes of change found in the literature and in the subsequent session try to classify them into a logic frame.

TYPES AND ATTRIBUTES OF ORGANIZATIONAL CHANGE Based on our analysis of the literature on change, the following picture of the types and attributes can be drawn: A majority of articles are about some type of transformation and the difference with adaptation. Beside this the distinction between planned change and emergent change has been investigated many times. A lot of attention is also being paid to the distinction between discontinuous and continuous change as well as to the absence of change: stability or inertia. Incremental change as opposed to revolutionary change is also the subject of discussion. Finally, we found four additional attributes that received less attention in the change literature. We will now enter at length into these aspects.

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Transformation Whereas the adaptation perspective was a dominant perspective in the sixties and seventies, organizational transformation (OT) appeared in the eighties as a response to a new global economic perspective which started to affect more and more organizations (Singh, House, & Tucker, 1986). As the environment became more complex, adaptation was not enough, organizations needed to transform themselves (Fletcher, 1990). Johan Adams’ Transforming Work (Adams, 1984) was one of the first books to explore the concept of transformational change, quickly followed by several others who further developed the subject (Levy & Merry, 1986; Tichy & Devanna, 1986; Quinn & Cameron, 1988; Kilmann & Covin, 1988). Transformation is a frequently used term with a different content depending on the author. It also happens to be a vogue word: the exact difference with change is quite unclear and there is much overlap with other concepts in change management (Tosey & Robinson, 2002). The focus is more holistic on change of the organization as an entity rather than smaller groups or departments (Pettigrew, 1987). Transformational change directly affects organizational mission and strategy (Burke & Litwin, 1992). Appelbaum and Wohl (2000) define transformation as creation of a new context, a new area of possibilities that did not exist before. Hence, the line between transformational change and strategic change is very thin and both concepts overlap. Transformation is compared with fundamental and discontinuous change that questions both the existing way of thinking and acting, and the established structures and patterns (Banner & Gagne´, 1995). Substantial change should occur in domains which can alter the overall pattern of organizational activity. Domains that are important to organizational survival are organizational culture, strategy, structure, power distributions, and control. Transformation is accomplished via rapid and discontinuous change over most or all these domains (Romanelli & Tushman, 1994; Ashburner, Ferlie, & FitzGerald, 1996). According to other authors, with transformation not only the strategy and the structure will change but also the culture of the organization (Hope Hailey & Balogun, 2002). OT can only be brought up when most of the staff members need to change their behavior (Blumenthal & Haspeslagh, 1994). However, behavioral change is also intrinsic to other types of change, but transformation can be brought up only when the majority of the organization needs to adopt another behavior. According to other authors, a shift of paradigm, another mental pattern, or other values and convictions are needed (Banner & Gagne´, 1995; Clarke & Clegg, 2000; Mezias & Glynn,

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1993; MacIntosh & MacLean, 1999; Sheldon, 1980). Argyris in this view speaks about double-loop learning. Double-loop learning occurs when apart from asking what is going wrong, also the reason why is being questioned. Learning can only be brought up when a problem has been found and when a solution has been implemented (Argyris, 1977). Bartunek and Moch (1987) here refer to second-order change. First-order change is incremental and convergent, second-order change is transformational, radical, and it fundamentally changes the organization. The organization endures a metamorphosis (Meyer, Bettenhausen, & Tyler, 1993a). Chapman (2002) claims that Organization Development (OD) has evolved from a treatment of mainly first-order change to a more transformational change where a change of the attitudes, convictions, and values is the main matter of importance. Schneider, Brief, and Guzzo (1996) are convinced that for a permanent change Total Organization Change (TOC) is needed, a change which permanently modifies the ‘‘feel’’ (both the climate and the culture of an organization). Creativity is an underexposed yet essential dimension when transformation is involved. For a radical change of the organization it is inappropriate to use the trusted processes; instead creative thinking is required in order to realize really new things. Notwithstanding the discontinuous context many change managers stick to the familiar incremental thinking that is based on known assumptions (McAdam, 2003). Fox-Wolfgramm, Boal, and Hunt (1998) also state that often organizations cluster round a particular archetype (Tushman & Romanelli, 1985): the strategic orientation and inertia limit changes to what is in line with the archetype – which comes down to first-order changes.

Planned Change Planned change refers to conscious and deliberate actions to improve the functioning of an organization (Bennis, Benne, & Chin, 1985; Levy, 1986; Porras & Robertson, 1992; Seeley, 2000; Jones, 2004; Harigopal, 2006). Planned change starts from the notion that there is a logical and rational way to solve problems. Thus, clear objectives for change can be determined and scheduled to be executed in a systematic way (Senior & Swailes, 2010). Planned change is an iterative process of diagnosis, action, and assessment (Cummings & Worley, 2009). It is generally agreed that Kurt Lewin was one of the first to describe how to direct and control change (Lewin, 1947a, 1947b, 1951). His three-stage model was the basis for most of the planned

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change models (Burnes, 2004). In 1985, Bullock and Batten (1985) analyzed over 30 change models. Based on a set of criteria they proposed a change model containing four stages: Exploration, Planning, Action and Integration. Every stage has a number of processes that transform the organization system from one condition into another. The process flow of planned change is usually: (1) interventions change (2) the target variables of the organization, which has repercussions on (3) the staff members’ behavior and in its turn on (4) the organization results (Porras & Silvers, 1991; Robertson, Roberts, & Porras, 1993a; Robertson, Roberts, & Porras, 1993b). Planned change normally involves an external or internal change agent (Tichy, 1974; (Ginsberg & Abrahamson, 1991; Hartley, Benington, & Binns, 1997; Doyle, 2001; Furnham, 2002; Caldwell, 2003; Nikolaou, Gouras, Vakola, & Bourantis, 2007). Intentional change takes place when a change agent deliberately and determinedly creates conditions and situations that deviate from the existing ones, by starting a series of actions or interventions all by himself or together with other people. Planned change then is starting intentional actions with the intention of achieving a particular result (Levy, 1986; Ford & Ford, 1995). OD and Socio-technical Systems (STS) approach are two related kinds of approaches for planned change (French & Bell, 1999; Cummings & Worley, 2009; Pasmore, 1988; Mumford & Beekman, 1994). The main differences between them originate from their historical background. OD is planned change in an organizational context (French & Bell, 1999). The idea of OD is to elevate the effectiveness of the organization’s human resources by focusing on the performance of groups and teams. The basic idea is that change is a common activity where managers, change agents, and staff members involved jointly tackle a problem and reach a solution. The rationale behind Organization Development is a deep humanist and democratic conviction as well as putting emphasis on the elevation of the organization’s effectiveness (Porras & Silvers, 1991). STS, on the other hand, focuses on dysfunctional social and technical subsystems. Both approaches emphasize the participation of all parties involved in the change processes (Berger, 1992). For many years planned change has being criticized, in particular the fact that planned change is based on the assumption that senior management is able to redraw and change organizations in the planned direction by simply exerting a linear logic ‘‘if y then.’’ Here changes are effected as set out in, and in accordance with, actions planned in advance. Planned change assumes that managers – apart from having a solid knowledge of the environment – are capable of predicting the result of their actions (De Cock & Rickards, 1996; Wilson, 1992; Olson & Eoyang, 2001). A main criticism is that the one

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monolithic world view is being replaced with another one that then is supposed to elevate the organization’s effectiveness (De Cock & Rickards, 1996).

Emergent Change From the beginning of the nineties authors were looking for a new ways of thinking about the process of and logic of change. According to these authors the idea the change can be planned ignores the impact of deterministic forces outside the realms of strategic choice of managers (Wilson, 1992; Wheatley, 2006; Stacey, 1995; Morgan, 2006). Change is a continuous, dynamic, and contested process that emerges in an unpredictable and unplanned fashion (Burnes, 2004). Emergence is a systems concept that can be understood as a property of novel behavior which is not built-in, prespecified, or predictable, but produced at any point in the system (Beeson, & Davis, 2000; Stacey, 2007). Emergent changes are variations that arise from a series of permanent adaptations, changes, and improvements that are not exactly orchestrated and that lack a beginning or an end (Ford & Ford, 1995; Orlikowski, 1996). Such emergent changes can only arise by means of action and cannot be foreseen or planned (Mintzberg & Waters, 1985). Emergent changes occur when people reaccomplish routines and when they deal with contingencies, breakdowns, and other opportunities in everyday work (Weick, 2000). It arises from the adaptations and experiments that result from the malfunctions, exceptions, and opportunities that occur during the daily routine. Every activity holds the possibility of new failures, unexpected outcomes, and innovations, and so more variations are possible. This cycle does not have a beginning nor an end (Orlikowski, 1996; Feldman, 2000; Feldman & Pentland, 2003). Although planning emergent change is impossible, managers and change agents can actually influence this type of change. Variations that are repeated, shared, amplified, and sustained can over time produce perceptible and striking changes. As such ‘‘the realization of a new pattern of organizing in the absence of explicit a priori intentions’’ is possible (Orlikowski, 1996, p. 65). Weick argues that managers anyhow will be attentive to this type of change and so they can be more critical when selecting a planned-change method (Weick, 2000). He has listed the pros and cons of both forms of change (see Table 1). The population ecology theory and its variants such as institutionalism and life cycle theory can be looked upon as an explanation of types

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Table 1.

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Advantages and Disadvantages of Emergent and Planned Change.

Emergent Change

Planned Change

Advantages – Increases readiness and receptiveness to planned change – Institutionalizes whatever sticks from planned change – Sensitivity to local contingencies – Suitable for online real-time experimentation, learning and sensemaking – Comprehensibility and manageability – Likelihood of satisfying needs for autonomy, control, and expression – Proneness to swift implementation – Resistance to unraveling – Ability to exploit existing tacit knowledge – Tightening and shortening feedback loops from results to action

Advantages – Captures attention and focus it on a single direction – Offers a pretext for changes that are desirable but peripheral to the transformation vision – Is usually aligned with the distribution of power – Conveys to key stakeholders the impression of a rational program – Allows a more informed choice about options for implementation – Easier to diffuse

Disadvantages – Slow to cumulate – Too small to affect outputs or outcomes – Less well suited for responding to threats than for exploiting opportunities – Limited by preexisting culture and technology – Deficient when competitors are wedded to transformation – Better suited to implementation in operations, plants, and stores than to strategy, firm-level, or corporate change – Diffused rather than focused – Insufficiently bold or visionary – Wedded to a teleological view of change – Unlikely to generate a shift from one frame of reference to a totally different one

Disadvantages – High probability of relapse – Uneven diffusion among units – Large short-term losses are difficult to recover – Less suitable for opportunity-driven than for threat-driven alterations – Unanticipated consequences due to limited foresight – Temptations toward hypocrisy (people talk the revolution but walk the talk of resistance) – Adoption of best practices that work best elsewhere because of a different context – Ignorance of top management regarding key contingencies and capabilities at the front line – Lags in implementation can make change outdated before finished

Source: Adapted from Weick (2000).

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of emergent changes in the change system (DiMaggio & Powell, 1983; Hannan & Freeman, 1977; Meyer & Rowan, 1977; Quinn & Cameron, 1983). The population ecology theory advocates the idea that organizations have problems to adapt themselves because of a number of inertia factors, and that changes rather occur because of the environmental selection mechanisms.

Stability/Inertia In general, inertia in organizations can be defined as the tendency to routinely repeat past actions and patterns of activities (Jansen, 2004). When organizations adhere to current routines and resist change they exhibit inertia (Amburgey, Kelly, & Barnett, 1993). For organizations, inertia is the inability to change as rapidly as the environment (Hannan & Freeman, 1984; Pfeffer, 1997). Inertia is closely related to resistance (Pardo Del Val & Martinez Fuentes, 2003). Miller (1993) defines inertia as resistance to changes that runs counter to a fundamental existing orientation. Structural inertia theory, developed by Hannan and Freeman (1977, 1984) as an element of population ecology theory, states that inertia arises from internal structural arrangements and environmental constraints . It results because the consecutive adaptations and refinements of processes and procedures eventually reduce an organization’s ability to change (Hannan & Freeman, 1984; Amburgey et al., 1993; Kelly & Amburgey, 1991). From a systems point of view a system will move toward stability for two reasons. First, each choice made during a system’s implementation and evolution will limit the realm of possible choices for its future. Second, the patterns of activity that take place within the system’s deep structures reinforce that course (Gallagher & Vandenbosch, 2000). Inertia in economical terms refers to the number of market-oriented changes of an organization when it changes its competitive attitude. Inertia comes in when an organization – compared to its competitors – shows little changes in its competitive practices. Meant here are rather tactical moves such as price changes, product changes, or strategic actions such as expansions, mergers, alliances, or product renewals (Miller & Chen, 1994). Martin (1993) states that inertia within companies arises in four stages: the founder’s vision from the beginning defines the product concept and a notion of the way the company needs to be organized. In the next phase, steering mechanisms keep the company afloat and on course while it grows. They structure the perceptions of the members of an organization. The subsequent phase is disrupted

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feedback. As steering mechanisms grow older they degrade marked signals and provide wrong feedback to the managers. In the final phase there is a proliferation of defensive routines. The changes that are necessary collide with the steering mechanism that supports the actual strategy. Organizations exist because they work in a reliable and safe way. Reliability and responsibility are of a high standard when the organization’s objectives are institutionalized and the processes are highly practiced. Both change and inertia coexist: the factors that give stability to an organization simultaneously offer resistance and reduce the chance of change (Feldman and Pentland, 2003). After all structural resistance prolongs the time needed to realize a change (Hannan & Freeman, 1984; Schwarz & Shulman, 2007). As time goes by organizations develop both operational routines and ‘‘change routines,’’ which are routines for defining and modifying operational routines. So there are two types of inertia. One type is sticking to operational routines which create resistance against change, the other form arises from change routines which cause that successful changes are continuously repeated (Amburgey et al., 1993). Another form of inertia is called cognitive inertia (Reger, Gustafson, Demarie, & Mullane, 1994; Tripsas & Gavetti, 2000; Hodgkinson & Wright, 2002). Actors can become overly dependent on their mental models to the extent that they fail to notice changes in the environment until these changes become so significant that they cannot be ignored. Many change programs fail because the cognitive structures of the people concerned constrain their understanding and support of the change initiatives (Reger et al., 1994). In order to change mental models managers need to go through a learning process which often requires some external pressure and time (Barr, Stimpert, & Huff, 1992).

Discontinuous Change When organizations do change, researchers have described the changes as involving some degree of discontinuous, behavioral shift. Such models as punctuated equilibrium, evolutionary, discontinuous change, episodic change or rapid, time-paced evolution focus on organizations as dynamic entities exhibiting varying degrees of discontinuous change (Knoche, 2006). Discontinuous changes are changes that happen only occasionally and in episodes. Such changes occur in times of divergence when organizations move away from the equilibrium condition in respect of the environment (Pullen, 1993; Dean, Carlisle, & Baden-Fuller, 1999). Divergence is the result of a

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growing harmony imbalance between the organization and its environment. These changes are needed because the organization was unable to quickly adapt to a change in its environment. They usually occur intentionally and are controlled by management (Weick & Quinn, 1999). The organization’s institutional powers cause a kind of inertia as a result of which the organization does not react to changes in a timely manner. At a certain moment, however, the tension will be too much for the organization or often even life-threatening so that radical changes are needed in order to close the gap (Kelly & Amburgey, 1991). Discontinuous change came to the foreground when Dunphy and Stace (1988) criticized Organization Development as an incomplete model of change which assumes that change occurs gradually, planned, and well-organized. They claimed that change is discontinuous, with periods of both relative rest and revolution. The way that discontinuous change occurs was further developed in the theory of the punctuated equilibrium, which originates from the biological theory of evolution. The theory of punctuated equilibrium combines inertia and discontinuous change (Tushman & Romanelli, 1985). Change is seen as an alternation between long periods when stable infrastructures permit only incremental adaptations, and brief periods of revolutionary upheaval (Gersick, 1991). It accepts that conflicting theories of adaptation and rigidity might both be applicable to the same system, at different times (Gallagher & Vandenbosch, 2000). From the application of principles of the evolution theory on organizations arose ‘‘organization ecology’’ which applies models from the population ecology to organizations. The results from this enquiry confirm that populations of organizations are also susceptible to ecological pressures in which periods of incremental adaptation are punctuated by discontinuities. Organizations that are most able to adapt to a competitive environment survive, until there is a major upheaval. At that point incremental adjustment is not enough, managers have to reconstitute their organization to succeed. So the processes of variation, selection, and retention seem to apply to organizations (Tushman & O’Reilly III, 1996). Gersick (1991) compared models from different disciplines to demonstrate that punctuated equilibrium can be perfectly applied to changes in organizations. She states that in every system, including human systems, a highly durable underlying order or deep structure limits change during equilibrium periods and enforces transformation during revolutionary punctuations. Romanelli and Tushman (1994) have tested the punctuated equilibrium theory. Their conclusion is that a large majority of OTs were accomplished via rapid and discontinuous change, small changes did not accumulate to produce fundamental transformations.

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Abrahamson (2000) is convinced that both substantial and minor changes should happen in succession at set times, in a system of ‘‘dynamic stability.’’ In many companies change creates initiative overload and organizational chaos, which provokes resistance. Instead, big and small changes should be implemented at the right interval. In his opinion, by pacing the changes change can be accomplished without pain.

Continuous Change Continuous change is the gradual adaptation of the internal logic to the changing external conditions (Burnes, 2004). This type of change occurs in a smooth, constant, and uninterrupted flow of events (Stickland, 1998). It consists of small adoptions that emerge from improvisation and learning and is open-ended, fluid, and less closely tied to specific shocks (Lawrence, Dyck, Maitlis, & Mauws, 2006; Ford, 2008). Continuous change is embedded in organizational processes (Feldman, 2000; Tsoukas & Chia, 2002; Ford, 2008). The rationale for this type of change is that the environment in which organizations are operating is changing rapidly, radically, and unpredictably. Only by continuously changing organizations will be able to keep aligned with their environment (Burnes, 2004). Continuous change came in to the picture when Brown and Eisenhardt (1997) criticized the punctuated equilibrium theory. They stated that in many sectors companies have to change continuously in order to survive. They found that for the most part these changes take place through product innovations. Continuous change is caused by combining a minimum of structure with intensive interactions and the freedom to try out new products, by exploring the prospects while adopting a large variety of experiments, and by continuously developing new projects from existing ones. Increasingly management scholars rely on complexity theory to describe change in organizations (Kiel, 1994; Dooley, 1997; Brown & Eisenhardt, 1997; Tsoukas, 1998; Maguire & McKelvey, 1999; Anderson, 1999; Beeson & Davis, 2000; Olson & Eoyang, 2001; Shaw, 2002; Styhre, 2002; McMillan, 2006; Burnes, 2004, 2005; Boyatzis, 2006; Morgan, 2006; Ford, 2008; Lauser, 2010 ). Complexity theories see organizations as systems that are in a constant flux and change as a fundamental feature of organizations. It can occur at any point in the system, and not merely in specific predetermined processes. All members of an organization are living with and managing change continuously (Beeson & Davis, 2000).

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Continuous improvement is strongly related to continuous change but continuous improvement has not been fully conceptualized into the genre of the organization change literature (see Bhuiyan & Baghel, 2005 for an overview). Whereas change is often considered to be the territory of the top management, continuous improvement concepts emphasize incremental changes that are continuous, and workers play a key role in these changes (Choi, 1995). A known methodology of continuous improvement is Total Quality Management (TQM) that – as opposed to business process reengineering (BPR) – focuses on a continuous improvement of the business processes. Continuous improvement aims at better process achievements by means of implication and ideas of principally those that are involved in these processes. In this way the organization is continuously challenged to eliminate activities with no or only negligible added value, to optimize the use of resources, and to look for gradual improvements by means of benchmarking (Love, Li, Irani, & Holt, 2000; Rijnders & Boer, 2004).

Incremental Change For a significant part of the 20th century, managers used incremental change programs such as organizational development, STS theory, and later Total Quality Management to modify their organizations ((Dunphy, Griffiths, & Benn, 2002). (It should be mentioned that the Dutch version of the STS theory moved toward more transformational change.) Kindler (1979) defines incremental change as the ‘‘step-by-step movement or variations in degree along an established conceptual continuum or system framework. Incremental change is based on precedent; it is intended to do more of the same but better’’ (Kindler, 1979, p. 476). The incremental view on change holds that organizations change by step-by-step accumulation of small changes. Incremental change is about realigning the organization – working the existing ways of doing something without the presence of radical changes in the organization’s hierarchical structure or culture (Lindblom, 1979; Kindler, 1979; Nadler & Tushman, 1989; Mintzberg & Westley, 1992; Hope Hailey & Balogun, 2002; Beugelsdijk, Slangen, & van Herpen, 2002; Dunphy et al., 2002). It is a process whereby individual parts of an organization deal incrementally and separately with one problem and one goal at the time (Burnes, 2004). The rationale is that even when an organization is adjusted to its environment and when its internal organization is streamlined there still is scope for refinement, specialization, development of staff members,

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reinforcement of the engagement and confidence, making clear of the different roles, etc. (Tushman, Newman, & Romanelli, 1986). According to Nadler and Tushman (1989) it is change that focuses on individual components of the organization in order to realize or maintain congruity and as such takes place within the context of the actual components and strategy. In this view incremental change is equated with adaptation. A pioneering theory on incremental change is Quinn’s logical incrementalism. The essence of his argument is that strategies are not developed in a planned linear way but by continuously experimenting and testing (Quinn, 1977, 1978, 1980, 1989). Organizational learning is also a kind of incremental change, at least when single-loop learning is concerned, whereas double-loop learning rather stimulates second-order changes (Argyris, 1993). Although many authors prefer transformation, there are much more first-order changes. Anyway, reorientation or second-order changes are also possible by taking gradual steps (Smeds, 1997; Fox-Wolfgramm et al., 1998). Incremental change and continuous change should not be mixed up. Although confusion is possible as a result of the definitions of some authors, continuous change can occur randomly in the organization without much incrementality.

Revolutionary Change The last type of change is revolutionary change. Kanter, Stein, and Jick (1992) define revolutionary change as a fresh start that occurred suddenly without warning. It also involves a major shift in the internal power structure of the organization – in the dominant coalition. Key elements are that it is framebreaking change and that it is implemented rapidly (Tushman et al, 1986; Fornaciari, Lamont, Mason, & Hoffman, 1993). Revolutionary change is closely linked and often equated with transformation (Romanelli & Tushman, 1994; Tushman & O’Reilly III, 1996; Taylor, 1999; Sundarasaradula, Hasan, Walker, & Tobias, 2005). In this study revolutionary change refers to the process of change whereas transformation is more related to the content of the change. The literature provides little concrete information on the way revolutionary change is processed. The revolution must be realized through wholesale upheaval whereby the deep structure of the organization is dismantled, leaving the system temporarily disorganized (Gersick, 1991; Greenwood & Hinings, 1996; Wollin, 1999). New technologies or changes within an industry that impose radically different competitive requirements

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can induce new organizational forms (Meyer et al., 1990). Radical innovations can change customer expectations, alter industry economics, and redefine the bases for competitive advantage (Hamel, 2000). Crisis situations or the system’s arrival at key temporal milestones can trigger revolutionary change. When reaching a temporal milestone, people close that period and start something completely new. According to the punctuated equilibrium theory equilibrium periods are thus interrupted by strong, selfimposed signals (Gersick, 1991). A revolutionary practice is business process reengineering which requires discontinuous thinking, challenging old assumptions and breaking away from outdated rules (Hammer, 1990; Hammer & Champy, 1995). Managers can also use strategy as a revolutionary lever. Therefore ‘‘they must embrace a truly democratic process that can give voice to the revolutionaries that exist in every company’’ (Hammer, 1990, p. 108).

Four Additional Attributes Four other attributes received less attention in the literature but seem to be indispensable to fully characterize a change. The first one is the time it takes to complete a change. Time is seldom an important direct causal variable in organizational theories and remains largely implicit and unexamined in organizational change (Bluedorn & Denhardt, 1988; Huy, 2001; Mosakowski & Earley, 2000; Sirkin, Keenan, & Jackson, 2005). Nevertheless, there can be no sequence of activities and thus no change processes without time: change is time in operation (Purser & Petranker, 2005). Time dimensions play an important part in changes because they influence decision makers’ choices related to resource allocation and prioritization, timing, and urgency of organizational activities (Mosakowski & Earley, 2000). According to Sztompka there are two conceptions of time: quantitative time refers to clock time that can be precisely measured, progresses forward linearly, and flows evenly. Qualitative time has to do with the personal experience of time, which cannot be measured, and follows different indeterminate event trajectories (Sztompka, 1994). The personal experience of time in organizations is a function of individual differences, context, and the temporal structure of the organization (schedules and deadlines, rhythms and cycles of behavior, and organizational cultural norms) (Blount & Janicik, 2001). Qualitative time is important in change processes: by influencing perception of time the dimension of time can be an important facilitator for organization change. Perspectives on time influence the choice of change

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actions. Change agents with a short-term perspective often prefer actions that produce immediate results and pay less attention to long-term outcomes. Agents with a future time perspective may choose approaches that emphasize long-term lasting outcomes (Huy, 2001). Staudenmayer, Tyre, and Perlow, suggest that temporal shifts – changes in a collective’s experience of time ‘‘involve new ways of thinking about time, how much control one has over time, and how one can best use time. Because such rethinking represents a departure from the assumptions that anchor our understanding of the world, experiencing a temporal shift helps people to entertain the idea that the world is shifting, conditional, and open to their own interpretation – instead of stable and easily defined. Thus, a temporal shift is almost literally like the ground shifting under our feet, and has much the same effect. It encourages us to examine where and how we walk with unusual mindfulness’’ (Staudenmayer, Tyre, & Perlow, 2002, p. 595). In the same line of thinking, Purser and Petranker (2005) state that it is an illusion to think organizational actors can secure a position external to the flow of time. It is not possible to know the future in advance. All planning starts from ignorance and can never go beyond that ignorance. They see the flow of time as a dynamic unity, an undivided movement, pure becoming out of which one cannot step out. It is only in retrospection that time can be known and that one becomes aware of the duration. They plead for a more unconditioned time approach, one that does not require tools, techniques, or methods because there is no path to traverse and no goal to arrive at in the future. Change agents should unfreeze the temporal limits on knowledge, not by rational planning but by unfreezing the perceptual dependence and habitual knowing of the order. A second attribute is the tempo or pace with which the change is executed. It refers to the rate of speed whereby consecutive change activities are executed. Also, a few studies are available to better understand the way in which the pace of change impacts the outcome of the change. But studies designed to explore some other aspect of organization function or design have indirectly demonstrated the importance of the tempo of change (Amis, Slack, & Hinings, 2004). The third attribute is related to the functionality of the change effort. Are the goals of the change clearly defined? Creating a common view on the future is considered an essential prerequisite in order for the change to succeed. It clarifies the general direction for change, motivates people to take action in the right direction and helps to coordinate different actions in a fast and efficient way (Kotter, 1996). Goal setting often starts at an abstract and conceptual level – defined in a vision and broad strategic outlines – and gradually becomes

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concrete as the change becomes more operational (Anderson & AckermanAnderson, 2001). According to Purser and Petranker (2005) creating a vision is an attempt to overcome the lack of knowledge of the future. It is therefore the opposite of a rational planning process: Vision allows change agents to shape the future not through rational planning but on subjective will. When planning is not possible in the face of rapid change the ‘‘vision of the future’’ can provide at least an image, a dream of what can be. So, vision sets the broad outlines of a strategy, while leaving the specific details to be worked out (Mintzberg, 1993). The forth attribute in this list is the management or leadership style of the major actors in organizational change. It particularly refers to the degree of participation the change agents and leaders allow other stakeholders in the change process. The impact of the way that change is organized is crucial to the change’s chances of success. An appropriate management and leadership style can significantly reduce resistance against a change initiative (Kotter & Schlesinger, 1979).

EIGHT DIMENSIONS OF CHANGE From this study of the change literature a number of attributes can be distilled that are typical when organization change is being described. All of these attributes can be integrated into a set of dimensions with which change can be described dynamically. For that purpose these attributes need to be dynamic themselves, they should move on a continuum. Besides that every attribute should relate to only one dimension in order to avoid confusion. Hence effort has been made to probe the characteristics of changes into their most fundamental aspect – which is not evident inasmuch as extensive articles and even books have been written on specific characteristics of change such as on planned or revolutionary change (see Table 2).

Control: From Emergent to Planned The duality between emergent and planned change is an essential distinction in the literature on change. This dimension is about the extent to which change is being controlled. The question is if agents are free to choose the strategy and its outcomes, or are their choices determined by the environment or the nature of the system (Stacey, 1995). Change can occur following the intentions of a change

Dynamic Description of the Attributes of Organizational Change

Table 2.

Attributes of Change Can be Described in Eight Dimensions.

Dimension 1. 2. 3. 4. 5. 6. 7. 8.

Control Scope Frequency Stride Time Tempo Goal Style

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Attributes Emergent Adaptation Continuous Incremental Long Slow Open Participative

Planned Transformation Discontinuous Revolutionary Short Quick Strict Coercive

agent to either a small or large extent. Emergent change starts from the idea that an organization is continuously moving and that acknowledging and reinforcing this flux is the change management’s only task (Bamford & Forrester, 2003; Burnes, 2004). With planned change the change from A to B occurs in subsequent stages of deliberate change initiatives (Kotter, 1996; Beer, Eisenstat, & Spector, 1990). According to Mintzberg and Waters (1985) three conditions are required to realize a strategic change exactly as planned: (1) the intentions should be clear in order to avoid doubt concerning the result to be achieved; (2) the entire organization should back up and be aware of these intentions; (3) these intentions should be realized as was planned. Emergent change does not involve intention. The unprompted realization of a strategy is in this case only possible if there is enough discipline for the actions to consistently happen in succession. From a systems point of view one can say that in the case of planned change the intrinsic dynamics of the system are controlled by external factors that have the ability to change the behavior of the system (Knoche, 2006). In the case of emergent change the system is self-organizing: new emergent structures, patterns, and properties arise without being externally imposed on the system (Dooley, 2002).

Scope: From Adaptation to Transformation Scope concerns the intensity of change and moves on a continuum of adaptation to transformation. The crucial difference between transformation and adaptation is in the degree of change or the impact of the change on the

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organization. With adaptation the existing organization as such is not modified but readjusted (Kirton, 1976, 1980). Members of the dominant coalition scan the environment and formulate strategic responses to environmental change (Singh et al., 1986; Goodman & Kurke, 1982). Transformation concerns a radical change of the organization. With transformation the organization abandons its initial orientation and endures a transformation (Greenwood & Hinings, 1996). Many authors identify transformation through a change of the existing paradigm, of the way of thinking and doing (Johnson, Scholes, & Whittington, 2008). However, discerning authors pose that a genuine change is taking place only rarely, basically the functionalist vision on the organization is not changed (Collins, 1996). A lot of different terms are used to describe this attribute of change: adapt, re-adjust, improve, continuous improvement, first-order change, second-order change, homeostasis, alpha change, convergent change – transformation, gamma change, paradigm change, archetype change, revolutionary change, dramatic change, total, or complete organization renewal.

Frequency: From Inertia to Discontinuous to Continuous The frequency is about the number of times a change is happening. The frequency is moving from inertia with no or only barely noticeable change, over periods where relative stability succeeds periods of change, to periods with continuous change. Organizations are compelled to continuous change because the organization is being touched by powers such as adaptation to the environment, savings in expenditures, impatient capital markets, exertion of power and maintaining the competitive benefit. By contrast, stability is being forced by other powers, for example, institutionalism, transaction costs, sustained advantage, social capital, predictability, and uncertainty reduction (Leana & Bruce, 2000). Believers of the Punctuated Equilibrium Theory agree that bureaucratic organizations have longer periods of convergence and incremental changes alternating with short bursts of intense discontinuous change (Mezias & Glynn, 1993). The contrast between continuous and discontinuous change may be a question of level of observation: ‘‘From a distance (the macro level of analysis), when observers examine the flow of events that constitute organizing they see what looks like repetitive action, routine, and inertia

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speckled with occasional episodes of revolutionary change. But a micro-level view suggests ongoing adaptation and adjustment. Although these adjustments may be small, they may also tend to be frequent and continuous across units, which means they are capable of altering structure and strategy’’ (Purser & Petranker, 2005, p. 185).

Stride: From Incremental to Revolutionary Stride refers to the number of successive stages to realize the change and the upheaval that is caused by it. Incremental change unfolds in small consecutive adjustments in the organization (Fornaciari et al., 1993). Organizations use feedback from previous actions to remediate the lack of congruence between strategy, structure, culture, and people. As achieving congruence is an ongoing process this requires incremental changes. The downside is that incremental change can lead to inertia as systems and structures become better interlinked they make it more difficult to implement changes (Tushman & O’Reilly III, 1996). In the case of revolutionary change organizations undergo massive changes at once (Mintzberg & Westley, 1992). Essential elements such as formal structures, decision-making routines, and information-processing devices are altered radically and simultaneously (Romanelli & Tushman, 1994). As is often the case the stride of change should not be confused with the scope of change. The scope refers to the end state of the change (an adaptation or a transformation). Stride is comparable with the rate of flow of a river. The rate of flow can be small, allowing only little amounts of water to pass through or big when lots of water can flow through at once. In the case of incremental change the rate of flow is low, so only small changes are possible. Revolutionary change has a big rate of flow so more changes are made at once. Transformation is possible through either incremental or revolutionary pacing (Greenwood & Hinings, 1996). From a process approach there is an exponential increase of changes from process control to process improvement, process (re)design, and process reengineering (Phalpher, 1999). Incremental changes are cumulative and are able to create OTs (Mezias & Glynn, 1993). In general, incremental change is assumed to be slow and revolutionary change to be quick but this refers to the tempo or speed of change. Incremental changes can run at a high speed, while a revolutionary change sometimes can take years to accomplish. According to the Punctuated

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Equilibrium theory, incremental changes alternate with revolutionary changes (Tushman & Romanelli, 1985; Gersick, 1991). During the convergent phase that is characterized by a gradual and incremental change, the systems are stable and remain in equilibrium. Radical, discontinuous change in most or all organizational activities is required to overcome this inertia. This is happening during a period of reorientation that occurs over a brief period of time (Gordon, Stewart, Sweo, & Luker, 2000; Sundarasaradula et al., 2005).

Time: From Short to Long Time is about the duration to implement to change. Changes can occur in a short period or come about during a good length of time. Sirkin et al. (2005) state that most managers worry about the time it will take to implement change. Managers assume that the longer a change initiative takes more likely it is to fail. Studies carried out by these authors show that long projects succeed better than short ones if they are reviewed frequently. The literature usually assumes that incremental changes take longer than revolutionary changes (Dunphy & Stace, 1988), yet a radical change can take years. Changes in the social variables usually require more time than changes in technical systems. Changes performed in consultation with the parties involved take longer than changes imposed by management (Kotter & Schlesinger, 1979). Punctuated equilibrium locates change in a short clear-cut sequence of upheaval that is followed by a long stage of stability (Purser & Petranker, 2005). Continuous change can be seen as a series of ongoing and situated accommodations with no specific beginning or end, so in this case change becomes endless (Orlikowski, 1996).

Tempo/Speed: From Slow to Quick Tempo is related to time and deals with the speed with which change actions succeed each other. Change can be applied gradually or at a high speed, for instance, in order to force a breakthrough. Many authors advocate a quick implementation of change (Amis et al., 2004). A substantial motivation to implement quick interventions is that quite some authors are convinced that ‘‘in today’s Internet pace of change the rule is: change quickly, change often, or cease to exist’’ (Moran & Mead, 2001). In other words, the aggressiveness and flexibility of the external environment forces companies to make changes quickly. Another reason is

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that it may create the momentum needed to break the inertia that was built throughout the years (Miller & Chen, 1994). Furthermore, rapid change creates a synergy in which all parts of an organization pull together in a common direction (Amis et al., 2004). The chances of resistance are reduced and the period of suspense and risk is restricted (Romanelli & Tushman, 1994). Other investigators have shown that often high-speed change does not yield the success hoped for. There is less time to plan, involve people, and to experiment when change is urgent (Hayes, 2002). Gradual change allows more opportunities for trust to be established and productive working relationships to be developed (Amis et al., 2004; Brown & Eisenhardt, 1997).

Goal: From Specific to Open The goal refers to the future end state when the change is accomplished. Goal setting is an essential process in the planning of the change (Bullock & Batten, 1985). Strictly defined goals allow for better planning of the actions for change. Planned change always occurs with a specific goal in mind while emergent changes arise without a real purpose. Ultimately the change can have strictly defined goals or the final goal can be left open, meaning that there is ambiguity with respect to the change’s finality. Changes dealing with organizational behavior and organizational culture are often open-ended. They are more considered to be an ongoing process. The failure of a change is commonly compared with the failure to obtain the objectives and this failure is the rule rather than the exception: some 70% of the change initiatives are bound to fail (Beer & Nohria, 2000). Yet changes may have unexpected results with a positive effect on the organization’s achievements (Balogun, 2006; Mintzberg & Waters, 1985). Palmer and Dunford (2002) make a distinction between intended, partially intended, and unintended change outcomes according to the level managers can actually realize the goals they had in mind.

Style: From Participative to Coercive The style of leadership and decision making is particularly defined by the degree of participation that can vary from self-governing to directive, with in between some levels of cooperation and participation (Kotter & Schlesinger, 1979; Dunphy & Stace, 1988, 1993; Anderson & Ackerman-Anderson, 2001;

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Stace & Dunphy, 2002). Self-governing changes are performed by the parties involved while directive changes are imposed by the authorities. According to Greiner (1967) this is a question of power distribution which moves on a continuum from unilateral over shared to delegated approaches. Unilateral change is implemented by top management based on their authority. In the middle of the continuum there is still authority but also interaction and sharing of power. With delegated approaches almost the complete responsibility for the change is turned over to the subordinates. There has been a vivid discussion on whether participative approaches are more successful than coercive ones (Locke, Schweiger, & Latham, 1986; Falbe & Yukl, 1992; Nutt, 1998a, 1998b; Coyle-Shapiro, 1999; Bruhn, Zajac, & Al-Kazemi, 2001; Oreg, 2003; Szabla, 2007). Organizational Development uses participative methods of change in all circumstances (Beer & Walton, 1987; Nutt, 1987; Golembiewski, 1989; Burnes, 2004). Sashkin (1984) even called it an ethical imperative. The STS approach emphasizes the democratization of the corporation by transferring real power to selfmanaging teams (Elden, 1986; van Eijnatten & van der Zwaan, 1998; van der Zwaan & Molleman, 1998; Van Hootegem, Benders, Delarue, & Procter, 2005). Dunphy and Stace maintain that each type of change requires a proper leadership style. Their contingency model accommodates the use directive/ coercive as well as collaborative means of achieving change (Dunphy & Stace, 1988, 1993; Stace & Dunphy, 2002).

A SYSTEMS VIEW ON ORGANIZATIONAL CHANGE The classification of the attributes of change into eight dimensions enables a more complete characterization of a change event but does not really remediate the dichotomist view. Indeed, two types of change emerge on both sides of the continuums. On one side continuous emergent adaptation whereby incremental changes unfold slowly over a long period of time with an open-end goal and interventions that are based on participative decision making. On the other side a strictly planned transformation that is infrequently organized in a coercive way. It is a ‘‘bold stroke’’ (Kanter et al., 1992) with a strict purpose that occurs rapidly in a short period of time. Although between these two extremes endless variations are possible, a type of change always mirrors its opposite. A way to go beyond the dichotomy is to change the theoretical strategy and look for more generic views to describe change. When thinking about holistic approaches, systems theory

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comes to the fore as a way to go beyond the level of attributes. In this section we explore the possibilities of looking at change as a system. Within the process approach to change, organizations are usually considered a system and as such the process of a system change is being investigated and described. Yet, it is less obvious to consider the change mechanisms in an organization as a system by themselves. However, ‘‘the systems language has proven itself more suitable for getting to grips with realworld management problems than any other single discipline’’ (Jackson, 2003, p. 13). According to the systems theory an organization can be considered to be a system containing both subsystems (production, accounting, administrative systems, HR system, etc.) and aspect systems (hierarchic relations, data flows, etc.). As such we can assume that the management of change is a system with a specific function within the organization, the same way that, for instance, the HR system has its function. Change activities are often not organized in a formal way and therefore less recognizable – hence change management is rarely considered to be a system. Consequently only a few authors have approached change management as a system (Cao, Clarke, & Lehaney, 1999, 2000, 2001, 2003, 2004; Cao & McHugh, 2005; Kreitner, Kinicki, & Buelens, 1999; Mintzberg & Westley, 1992a). Although there are different system approaches – Jackson (2000) describes about 30 approaches – most authors agree that systems in a social context are open systems (Kast & Rosenzweig, 1974, 1985; Katz & Kahn, 1978). In its most general form an open system consists of specific inputs, particular system elements, and outputs, so these three general components are used to build the systems model for change (Kreitner & Kinicki, 1995). Change then is experienced as a dynamic fact in which the interactions between the different parts constitute an entity (Tosey, 1993). The designer is free to decide on the elements in a change system that are being considered. To Cao et al. (1999), the type of change is important: they discriminate between processual, structural, cultural, and political change. Each of these changes will exist of other change processes. Kreitner and Kinicki (1995) concentrate on the objectives of a change: organizing arrangements, social factors, methods, goals, and people. Since a system can be built of any elements whatsoever, other constructions are also possible with which abstract structures can be developed that could provide a better understanding of the complexity of changes. However, this is beyond the scope of this chapter. In general, a change system can be constructed as follows (see Fig. 1). Usually the reason for a change will be a cause beyond the change system, more specifically within the organization itself or within the organization’s

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Fig. 1.

The Systems Model of Change Management.

external environment. This cause may lead to a deliberate intervention where the change system has got to lead to the desired effects. However, the system may be set in motion directly by external factors and result in unprompted effects. In addition, the change system has its own dynamics that may generate wanted, unwanted, or unexpected effects. The input for the system model of change can be one or more elements from the organizational context (strategy, structure, people, culture). This element experiences a change through the influence of the change elements of the change system. The change elements may vary depending on the input in the system. Thus, in the case of a strategic change other change elements are involved than in case of a cultural change. Moreover, the change elements will get another interpretation when they are being looked upon from different paradigms. Apart from the intentional changes that occur, unplanned changes take place continuously. The system model of change generates specific individual or group effects, organizational effects, and social effects. The organizational and socioeconomic context affects the system which for its part affects its environment. Whatever elements are used to construct the change system, the parts interact over time to create a pattern that exists at a higher level than the

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parts. As such the whole has additional properties that can act back on the parts, giving meaning to the parts (Stacey, 2007). As a whole the parts produce some type of change. So the change system will have specific attributes by means of its action. By describing the behavior of the system it is possible to identify the type of change that the system produces. Fluctuations in one or more attributes are possible at any time during the course of the change process. This view better answers the description of change as a process of becoming than the static definitions resulting from the dichotomist approach to change. Viewing change management as a system provides new insights about change. A systems perspective on the management of change is better placed to position the different components of the change management that are not always obvious or clear-cut (Cao et al., 2004b). As such it allows for an analysis of the system’s structure and behavior, where both the individual components and the interaction between the different components matter. The specific characteristics of an open system as described by Katz and Kahn (1978; Robbins, 1987) are applicable to the change management system: Environment awareness. It is obvious that the change system is interdependent as its purpose is to change that environment, but it is also important to realize that the environment has an impact on the system. This aspect is vital inasmuch as most of the functional change models start from the idea that changes can be realized without actually impacting the change processes. The change agent, however, is not a neutral observer of change since his interventions have a direct impact on the change process. Feedback. The system continually receives information from the environment about its output so that corrective action on its activities is possible. Cyclical character. More and more students in change believe there is no real linearity in the change activities and if there are different phases in time, they are rather blurry (Mintzberg & Westley, 1992a). Negative entropy. Contrary to a closed system that runs out of energy because of lack of input, change as an open system can maintain its structure if it adapts itself to its environment. Steady state. The inputs create some kind of constancy that keeps the system moving. The change system often gives cause to new changes. Many organizations have found out that change – once it has been started, will result in new changes time and again. Differentiation. As the change system becomes more complex it will move toward growth and expansion. The change system has its own dynamics which cannot really be directed but only disturbed (Pascale, 1999). Equifinality. A variety of activities can lead to the expected change. A systems perspective on the management of change offers additional benefits: It is better placed to position the concepts that function as

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components or subsystems of the change management (Cao et al., 2004). The system approach focuses on the interdependencies and interrelations between the different components. The qualities of change management are made obvious by comprehending the interdependencies (Robbins, 1987). System attributes ‘‘turn up’’ as qualities that exceed the different system components and hence they do not appear when considering change in terms of processes (Harrington, Carr, & Reid, 1999). Change management can be put in its context by creating a system type of change because then it will be a subsystem in a bigger system. There are also some limitations. In the General Systems Theory open systems view survival prevails on goal attainment. The danger is that the emphasis is put on the system imperative to respond quickly to its environment rather than on the achievement of goals. The purpose of the change management system is to change its environment. As the system is supposed to adapt to its environment dealing with resistance can become problematic. There is a tendency to ‘‘reify’’ the change management system – grant it independent thought and action. As such human action is downplayed and people are not seen as self-conscious autonomous actors. The open systems view sees systems as an integrated whole, where the parts function in cooperation. Internal paradoxes, contradictions, and conflicts are difficult to place in this context (Jackson, 2000; Morgan, 2006). To overcome these issues, organizations are more and more viewed as complex dynamic systems of adaptation and evolution as described in the Complex Systems Theory (Anderson, 1999; Morel & Ramanujam, 1999; Ashmos, Duchon & McDaniel, 2000; McMillan, 2006). Complexity Theory does not negate General Systems Theory but adds additional types of systems. In this emergent new discipline, organizations are viewed as Complex Adaptive Systems (CAS) (Schneider & Somers, 2006). A CAS is composed of interactive adaptive agents. The complexity results from the adaptive behavior of the agents (Morel & Ramanujam, 1999). This view allows for more diverse instead of singular responses to change: ‘‘In adapting to, and absorbing turbulence, the non-equilibrium organization creates processes or ad hoc structures that facilitate information exchange across internal organizational boundaries; and tolerates (in order to generate) a wide variety of interactions and multiple views as input for decision-making, which often come into conflict and engenders tension’’ (Ford, 2008). If we consider change systems as complex and adaptive systems, the dichotomist view makes way for a dynamic and holistic approach that is able to capture the tension between the different attributes. When a system is in a state of complexity, operating close to ‘‘the edge of chaos,’’ self-organization

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and dynamic change are possible (French, 2009). In order to produce creative, innovative, continually changeable behavior, the change system must operate far from equilibrium into complexity and paradoxical states of stability and instability, predictability and unpredictability, freedom, and control (Stacey, 1995; Dooley, 1997). Instead of a dichotomistic view requiring an ‘‘either y or choice’’ Stacey (2007) is convinced that in a complex system paradoxical states are present. He defines a paradox as ‘‘the presence together, at the same time, of self-contradictory, essentially conflicting ideas, none of which can be eliminated or resolved’’ (Stacey, 2007, p. 15). Both elements of emergent and planned change, of adaptation and transformation of continuity and discontinuity and so on are always present at the same time but seldom in the same amount. The different attributes of the change system are never in balance but require continuing tension-generating behavior (Stacey, 2007). Used in this way, the eight dimensions provide a means to describe the actual or desired state of the change system in a dynamic way (see Table 2 and Fig. 2). The change system can have periods of relative stability but most of the time will be in flux whereby tensions are building up: some aspects of a planned change escape control; in an incremental change there is a sudden

Fig. 2.

Attributes of the Change System.

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hiccup; in some areas of the organization change proceeds quickly, while in others it is slowing down; a decision is taken behind the back of the change project members, etc. All these aspects make it impossible to define a change event once and for all using only one or two attributes. One needs to see the whole picture and more as film than a picture.

CONCLUSION In this chapter an analysis was made of the literature on types and attributes of change. It became clear that much of the literature on change use a dichotomist angle to provide insight into the complexities of organizational change. Although this approach has certainly produced valuable knowledge about the different aspects of change, consolidation of this comprehensive body of knowledge still seems far away. More and more (postmodern) authors plead for a more integrative view that can take into account different dimensions thereby avoiding a dichotomist view and moving toward a more holistic understanding of change (Knights, 1997; Fuchs, 2003; Pozzebon, 2004; Bates, 2006). As a possible way to achieve this is, a systems view of organizational change was proposed. The proposed systems model of organizational change allows for the description of the actual and desired state of the change; although it also demonstrates the complexity of change and its limited predictability and manageability. The model can also be used for empirical research, for instance, to show whether or not there is a particular pattern involved when change systems evolve over time and whether archetypes of change can be defined.

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REVISITING SOCIAL SPACE: RELATIONAL THINKING ABOUT ORGANIZATIONAL CHANGE Victor J. Friedman ABSTRACT This chapter revisits social space and field theory, constructs foundational to the work of Kurt Lewin but largely abandoned by his followers. It describes the ‘‘mystification’’ surrounding these concepts in the work of Lewin and the sociologist, Pierre Bourdieu. It then attempts to demystify social space and field theory by looking at their roots in the idea of ‘‘relational thinking’’ – an idea set forth by the philosopher Ernst Cassirer, who had a powerful influence on both Lewin and Bourdieu. Finally, it suggests how these concepts can generate innovative thinking about organizational change and development.

The objective of this chapter is to revisit the concept of ‘‘social space’’ as a conceptual framework for understanding and facilitating organizational change and development. I emphasize revisit because social space was a seminal idea in the field of organizational behavioral, constituting the basis for the ‘‘field theory’’ of Kurt Lewin (1936, 1948, 1951) and his pioneering work in individual psychology, group dynamics, and social conflict. After Lewin’s death, social space, as well as field theory, were largely abandoned

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in building theory and guiding practice in social psychology, organizational behavior, and other fields that took up many of Lewin’s ideas1(Martin, 2003, pp. 22–24). This chapter argues that both concepts have an important contribution to make by providing organizational actors and changes agents with what will be called ‘‘relational thinking’’ that can expand the realm of what is possible. Revisiting social space is one step in a personal intellectual and professional quest that began with my first attempt, as a high school teacher over thirty years ago, to generate organizational change. Since I had no formal training as a teacher and no experience in schools, I had to learn how to teach on-the-job and discovered that I was able help kids learn more than they thought possible. My first year of teaching was challenging, enjoyable, and rewarding. Despite many complaints I heard from other teachers about the school and especially about the principal, I loved the work, the students, and the school. During the second year, however, I became aware of limits to what I could accomplish with the students in my classroom. I felt it had something to do with what was happening in the rest of school and I could see quite a few things that needed to be changed. Rather than complain, I came up with an idea for change and the principal gave his approval, but my efforts failed. Later I found out that the change project had been secretly undermined by the principal and other teachers. I became extremely angry and was easily swept up in the stream of gossip and criticism against the principal, which only made things worse. It was like hitting a wall. When I tried to push this wall back, it pushed back at me. The harder I pushed the wall, the harder it pushed back – until it felt like ‘‘the walls were closing in’’ on all sides. I still loved teaching and my students, but my experience of the school completely changed. I felt trapped in a closed, dark, and suffocating space and left the school at the end of my second year (Friedman & Sykes, 2008). This experience of ‘‘the walls closing in,’’ which repeated itself in less extreme forms in other organizations, was puzzling and deeply disturbing. I believed that there was something profoundly wrong with organizations that blocked my best efforts at change rather than facilitating them. Furthermore, I sensed that there was something profoundly spatial in this experience. This spatial sense of the organization was in the back of my mind when I eventually entered the field of organizational psychology, so I was greatly intrigued when I encountered Lewin’s (1936, 1948, 1951) concepts of ‘‘life space’’ and ‘‘space of free movement.’’ However, I was frustrated in my attempts to really understand social space and field theory by reading Lewin (1936, 1949, 1951). I could not quite grasp his applications

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of topological concepts, his use of symbolic language, and especially his pictorial representations of the life space. Indeed, the more I read of Lewin, the more mysterious the concepts of space and field became. Then I discovered that a close colleague and friend had an interest in social space that was based on personal experience. He too had been intrigued by Lewin’s ideas, so we began inquiring together into the meaning of social space and its implications for our practice as agents of organizational and social change. We found many references to Lewin and applications of specific concepts, but no contemporary work that built systematically on social space or field theory. On the other hand, we found many applications of the term ‘‘space,’’ but no clear, systematic definition or conceptual framework of the construct itself. Kemmis (2001, p. 100), for example, applied Habermas’ critical theory to action research, arguing that a key feature of ‘‘communicative action’’ was ‘‘making communicative space,’’ meaning that ‘‘people must constitute a communicative space (in meetings, in the media, in conversations with friends and colleagues, etc.) before they can work together to achieve mutual understanding and consensus’’ (italics and parentheses in the original). Communicative space is embodied in networks of people who raise issues or problems for discussion in ways that foster the democratic expression of diverse views enable them to achieve mutual understanding and consensus about action (Kemmis, 2001). Wicks and Reason (2009) took up this idea of communicative space, arguing that a principal task for action researchers wishing to facilitate change processes is ‘‘opening communicative space’’ through ‘‘critical awareness of and attention to the obstacles that get in the way of dialogue’’ (p. 246). Another example of the use of ‘‘space’’ can be found in a study by Bradbury, Lichtenstein, Carroll and Senge (2010), in which they coined the term ‘‘relational space’’ to describe the collaborative process that formed among participants in business consortium aimed at addressing global sustainability issues. They defined relational space as ‘‘a dialogical context of shared trust and learning that precedes the emergence of shared expectations or negotiated projects and that supports project execution’’ and contrasted it to a ‘‘transactional goal oriented space’’ (p. 111). These usages of space are typical in the sense that they describe certain kind of space, but do not define what is meant by space itself. The meaning of space seems to be assumed or regarded as unproblematic. However, a moment’s reflection reveals that the concept of space is quite ambiguous. The most obvious and common usage of space refers to physical settings occupied by objects and by people who interact within it. While these researchers sometimes refer to the physical aspect of space, the term, as used

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in these studies clearly refers to something quite different, something social constituted by human interaction. However, there is almost never any clear definition of social space and what distinguishes it from physical space. The more we encountered similar references to social space, the more we became aware of the lack of clarity around the concept. At the same time, however, we discovered that the French sociologist, Pierre Bourdieu (1985, 1989, 1993, 1998; Bourdieu & Wacquant, 1992) had developed his ‘‘reflexive sociology’’ using concepts of social space and field theory that sounded very similar to those of Lewin. Although the two men are rarely associated, both Lewin and Bourdieu considered social space to be the cornerstone of a social science that would challenge the positivist mainstream and more effectively inform the practice of social change (Lewin, 1951, pp. 24–25; Bourdieu, 1998, p. 30). Since neither Lewin nor Bourdieu provided systematic explanations of social space, we attempted to extrapolate the underlying conceptual framework for space and field as they used them (Friedman & Sykes, 2008). Nevertheless, it was still very unclear what these constructs really meant, where they came from, what the differences were between physical and social-psychological space, and why social space and field were so important that two of the most prominent social scientists of the 20th century chose, quite independently, to make them the cornerstones of their pioneering work. Furthermore, we were still far from our ultimate goal of determining whether the social space construct, which appealed to us intuitively, could provide a conceptual basis for understanding and facilitate organizational and social change. I found a clue, however, to their thinking upon discovering that both men were influenced by Ernst Cassirer (Bourdieu & Wacquant, 1992, p. 228; Gold, 1999, pp. 8–9; Lewin, 1949), a 20th century German philosopher most well known for his work on culture and symbolism (Cassirer, 1944). The work that most influenced both Lewin and Bourdieu, was a book on concept formation in the natural sciences called Substance and Function (Cassirer, 1923). In a later book, The Logic of the Humanities (1961), Cassirer inquired into the difference between concepts for studying the natural world and concepts for studying the human world. Reading Cassirer’s main works (1923, 1944, 1961) not only dispelled some of the mystification around social space and field theory, but also pointed the way to creative thinking about the meaning of organizational and social change. This chapter attempts to present what I learned in this intellectual journey into social space and field theory. My hope is to begin building a foundation for reintroducing these ideas into the theory and practice of organizational and social change. I will begin by briefly revisiting social space as presented

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by Lewin and Bourdieu in order to both introduce their application of this concept and then go back to Cassirer in order to clarify its intellectual roots. Finally, I will attempt to illustrate how the concepts of social space and field theory can be applied in ways that can be potentially fruitful for understanding and advancing organizational change.

REVISITING THE LIFE SPACE In The Principles of Topological Psychology, Lewin (1936, p. 12) introduced the construct of the ‘‘life space,’’ which he defined as the ‘‘totality of facts’’ which determine the behavior of an individual at a certain moment. When Lewin referred to the ‘‘facts’’ of a situation, he was not referring to ‘‘objective’’ facts but to all those perceived elements that have an influence on a person at any given moment. This construct was expressed symbolically in the well-known formula ‘‘B ¼ f(P,E)’’ (behavior is a function of person and environment) and was meant to encompasses all the dimensions of reality of which that person is aware: self/environment, individual/group, physical/psychological, fantasy/reality, and past–present–future time. The fundamental elements of a life space are differentiated regions and the boundaries that define them (Lewin, 1936, p. 42). The life space of an individual or a group can be composed of any number of regions, each representing a psychologically important element. The structure of the life space is the number and position of each region relative to every other region in the life space. Subsequently, Lewin spoke also of larger social aggregates, such as groups, as having life space (Lewin, 1951, p. 191). The life space was a construct in Lewin’s (1951) ‘‘field theory’’ of human behavior, which was based on the principle that behavior has to be derived from a ‘‘totality of coexisting facts,’’ which he sometimes called the ‘‘manifold’’ (Lewin, 1936, p. 51; 1951, p. 24). A second principle of field theory was that a change in any one of these facts will affect the others, or what Lewin (1951, pp. 24, 187) called ‘‘dynamics.’’ Thus, human psychology was conceived as a ‘‘field’’ and life space represented the state of the ‘‘field’’ at any given moment. Life space, however, was only half of this scheme. The other half involved discovering the laws that determined behavior for any given life space (Lewin, 1936, pp. 10–11). Lewin believed that research could uncover these laws, eventually enabling psychologists to accurately predict behavior given the characteristics of a given life space. The life space of an individual, as defined by Lewin, represents a kind of potential that includes the total range of behaviors that are possible and not

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possible for a person in a given situation. Each change in a person’s life space means either expanding or contracting the range of what that person can do or achieve (Lewin, 1936, p. 14). An important feature of the life space is the ‘‘space of free movement,’’ which Lewin (1936, p. 100) defined as the ‘‘totality of regions to which the person in question has access from his present position.’’ Movement here refers to ‘‘social and mental locomotions,’’ which were ‘‘to be recognised in psychology and sociology as real events’’ (Lewin, 1948, p. 5). The space of free movement for an individual or a group is determined by ability, what is allowed and other factors such as social position and the character of social relationships (Lewin, 1936, pp. 44–45, 96). According to Lewin, limiting of the space of free movement creates tension that can have harmful psychological effects on people but, at the same time, can keep groups intact (Lewin, 1948,pp. 159–160). A generation after Lewin, Pierre Bourdieu (1985, 1989, 1993, 1998) also used the concepts of social space and field theory in building his ‘‘reflexive sociology’’ (Bourdieu & Wacquant, 1992). In this framework, social space is a set of points differentiated into ‘‘fields’’ (e.g., a professional field, artistic field, academic field, religious field), each of which has its particular ‘‘structure of difference’’ – that is, a unique logic and hierarchy that shapes the behavior of different position holders (1998, p. 32). The social world consists of individuals who occupy ‘‘points’’ in particular fields that determine their positions vis-a`-vis each other. These positions make a difference: Every position-taking is defined relative to the space of possibilities which is objectively realized as a problematic in the form of the actual or potential position-takings corresponding to the different positions y a position-taking changes, even when the position remains identical, whenever there is a change in the universe of options that are simultaneously offered for producers and consumers to choose from. The meaning of a work y changes automatically with each change in the field within which it is situated for the spectator or reader. (Bourdieu, 1993, p. 31)

Although Bourdieu did not use the term ‘‘life space,’’ he described a field in ways that were very similar to those of Lewin. Bourdieu (1985, 1989, 1993, 1998), however, took the idea farther, introducing the concept ‘‘habitus’’ to designate the logic that governs a particular field. The habitus is a durable, cognitive structure that lends ‘‘a kind of practical sense for what is to be done in a given situation – what in sport is called a ‘feel’ for the game’’ (Bourdieu, 1998, p. 25). On the one hand, it functions at the level of an entire field, as a kind of social structure regulating behavior. On the other hand, it is generated and internalized by people as a kind of psychological schema that determines how they perceive reality and how they should feel and act. Habitus functions at a preconscious level, leading social agents to

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employ relatively fixed and predictable ‘‘strategies’’ of which they are unaware. Habitus gives expression to the reflexivity of the social world, which was at the heart of Bourdieu’s sociology (Bourdieu & Wacquant, 1992). The mutual shaping of social structures and individual consciousness accounts for the relative stability of social fields. It also explains why people and groups in dominated positions act in ways that reflect tacit acceptance of the rules of the game even they reinforce their own domination by others. Thus, any given field is also a ‘‘field of struggle’’ over this logic and hierarchy (i.e., the structure of the field itself) through which patterns of domination and submission are formed, maintained, and sometimes changed (Bourdieu, 1993, p. 30). The question that arises in grappling with these concepts is why Lewin and Bourdieu chose the concept of space as the fundamental building block in constructing their theories. Lewin addressed this question as follows: we have to deal in psychology y with a manifold, the interrelations of which cannot be represented without the concept of space y It is more and more recognized y that the spatial relations of psychological data cannot be adequately represented by means of the physical space, but have to be treated, at least for the time being, as a psychological space y the first prerequisite for a scientific representation of the psychological field is the finding of a geometry adequate to represent the spatial relations of psychological facts. (1951, pp. 24–25, 187–188) The popular prejudice that the physical space is the only empirical space has made sociologists regard their spatial concepts as merely an analogy y the social field is actually an empirical space, which is as ‘‘real’’ as a physical one. (Lewin, 1951, p. 151)

Bourdieu explained his use of social space in the following way: Why does it seem necessary and legitimate for me to introduce the notions of social space and field of power into the lexicon of sociology? In the first place, to break with the tendency to think of the social world in a substantialist manner. The notion of space contains, in itself, the principle of relational understanding of the social world y directly visible beings, whether individuals or groups, exist and subsist in and through difference y they occupy relative positions in a space of relations which, although invisible and always difficult to show empirically, is the most real reality. (Bourdieu, 1998, p. 30; italics in the original).

For me, at least, these explanations raise more questions than answers: What is the meaning of space as used here and why is it essential for representing interrelations among coexisting facts? What is meant by substantialist and relational ways of thinking about the social world? What does geometry have to do with psychology? What is the difference between physical space and psychological space? Why is social space more real than

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physical space? What is the relationship between space and field? And, finally, how can the concept of space help us better understand, study, and facilitate change?

SUBSTANTIALIST VERSUS RELATIONAL THINKING In Substance and Function Cassirer (1923, p. 9) made a distinction between two basic ‘‘logics’’ for grasping reality characterized by the value they place on ‘‘things’’ and on ‘‘relations.’’ The logic of things, or what Cassirer called ‘‘the naive view,’’ is rooted in our intuitive sense that the world is constructed from material objects copied into our minds through perception. Reality is experience as being composed of these independent things and can be best grasped by understanding these things (Cassirer, 1923, pp. 291–292). Historically, this logic marked an important advance from mythical to a more rational way of experiencing reality. For Aristotle, knowledge about the world meant abstracting out the ‘‘essence’’ or ‘‘substantial’’ nature of things through acts of comparison, categorization, and hierarchical ordering (Cassirer, 1923, p. 151). Thus, substantialism came to connote an approach to understanding the world by understanding the things of which it is composed. In modern times, ‘‘substantialism’’ received its most powerful expression from empiricism, which demands that knowledge of the world be inferred from things that we can observe with our senses (Cassirer, 1923, p. 330). It is also reflected in the notion of causality as change, or variance, induced in one distinct thing (or variable) as the result of the impact from another distinct thing (Cassirer, 1923, pp. 291–292). Variables are abstractions, but they must be directly linked to, or operationalized from, directly observable objects. In contrast to substantialist, or thing, logic, a ‘‘relational logic’’ accords primacy to relations among entities. In other words, reality is best grasped as an ordering of elements of perception through a process of construction that gives them intelligibility and meaning. Cassirer gives an illuminating example of relational logic in Kepler’s discovery of the orbit of Mars: The individual positions of Mars, which Kepler took y , do not in themselves alone contain the thought of the orbit of Mars; and all heaping up of particular positions could not lead to this thought, if there were not active from the beginning presuppositions through which the gaps of actual perception are supplemented y it is only the purely mathematical concept of the ellipse, which has to have been previously conceived, which transforms this concrete aggregate into a continuous system. (Cassirer, 1923, p. 118)

In other words the orbit of Mars is not an empirical fact but rather an idea, originating in the human mind, that connects the different data points into a

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whole, meaningful relationship.2 In physics these relations are expressed as mathematical functions, purely logical relations in which every particular construction gains its full meaning only through its connections with the totality of members (Cassirer, 1923, p. 333). Relational concepts are fundamentally ‘‘rules’’ that connect the different elements of experience and determine their behavior. They originate in the mind but find their expression in the order they bring to the various elements of perception (Cassirer, 1923, p. 17). The function represents ‘‘a plan’’ for possible constructions of unity, which must be progressively verified in practice (Cassirer, 1923, p. 322). Relational logic is intuitively difficult to grasp for a number of reasons. First, relations are invisible. They are ideas with no material form or ‘‘thinglike being’’ (Cassirer, 1923, p. 21). They are abstractions of a different order from variables meant to represent observable elements. Second, relational logic is a circular logic. Knowledge of reality originates neither in the mind nor in an outside environment but rather in a constant process of interaction between them. Third, relational logic is holistic. In relational thinking, causal knowledge cannot be obtained through a process of analyzing how particular elements affect each other and then putting this knowledge together. Rather, causal knowledge means discerning the rule that connects all of the elements and explains their behavior. As Cassirer put it, ‘‘the problem is to define a ‘whole,’ that is not merely the sum of its parts, but is a systematic totality arising from their relations’’(Cassirer, 1923, p. 248). The idea of a whole being greater than the sum of its parts is today so commonly accepted that it is almost banal. However, an understanding of relational logic suggests that there may be a large gap between espousing holism and putting it into practice in our thinking and acting. Finally, relational logic flies in the face of our intuitive experience of reality because it implies that ‘‘things’’ do not have an independent existence and cannot be known outside of relationship. Relations that make things intelligible do not stem from the things themselves but from constructive activities of thought and action (Cassirer, 1923, pp. 37, 127–128). According to Cassirer, ‘‘only the total result itself is ‘real’ in the sense of experience and of psychological process, while its individual components only have the value of hypothetical assumptions’’ (Cassirer, 1923, p. 335).

SOCIAL SPACE In Substance and Function Cassirer (1923) demonstrated how, in the natural sciences, relational thinking gradually replaced substantialist thinking,

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paving the way for many great advances of knowledge. What made these advances possible was the use of the concept of geometric space as a totally abstract way of representing physical relations: In order to advance from number to material physical existence, it is necessary to have the mediation of the concept of space (italics in the original) y (Space’s) characteristic feature, accordingly, is the absolute uniformity of its parts; all inner differences are resolved into mere differences of position. The differences existing in the immediate space of perception are wholly removed, so that each particular point represents merely an equivalent starting-point for geometrical relations and constructions. Now if the real is determined from this point of view, nothing remains of it but what makes it a numerical order, a quantitative whole. Precisely in this is rooted the meaning and justification of the concept of the atom. The world of atoms is nothing but the abstract representation of physical reality y atoms y are meant to be nothing but rational constructions of thought y The magnitude and form of the atoms have now disappeared; what differentiates them is merely the position, that they mutually determine for each other in the system of dynamic actions and reactions y The assumption of the simple, not further reducible body is only a methodological device to advance to the abstraction of simple movement. In this sense the ‘‘atom,’’ according to its fundamental physical meaning, is not defined and postulated as a part of matter, but as a subject of possible changes. It is only considered as an intellectual point of application for possible relations. (Cassirer, 1923, pp. 156–161)

It was precisely this conception of space, as an abstract means for precisely representing and representing social relations, which led both Lewin and Bourdieu to see it as the essential basis for theorizing about the social world. They believed that social space would provide us with a construct that is as fruitful for studying social behavior as atomic structure is for physical behavior. As the above passage indicates, change in space is typically understood as ‘‘movement’’ or what Lewin referred to as ‘‘locomotion’’ (1936, pp. 43, 47–51, 92; 1948, pp. 5, 149–150). This kind of movement is not physical movement from place to place, but rather a change in relative position or a rearrangement of elements into new configurations (Cassirer, 1923, p. 72). Changes in position over time can be understood as a path or trajectory that can be observed, described, and explained by a rule – or function. In physics there is a long-standing debate over the nature of space (Jammer, 1954). One view, often referred to as absolute or container space, attributes an independent existence to space, which is conceived as a kind of empty box that bounds reality and in which all activity takes place. The other view sees space in more relative terms as the positional quality of the material world. According to this view, there is no empty space, only spaces that are formed by and between objects. Social space, as used by

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Lewin and Bourdieu, is based on the latter view, which currently appears to be the accepted view in physics (Jammer, 1954, p. vii). It is important to stress that Lewin and Bourdieu were not borrowing concepts from physics and applying them to social science (Lewin, 1936, pp. 56–57, 64–65). Space is not, in itself, a physical concept. In fact, as a purely logical concept, space is a psychological construct. To the naive reader, like myself, this usage of space and movement may generate considerable confusion because it differs radically from the way we usually think of and speak about these two concepts. It is difficult to think beyond the physical, material spaces that we can see and beyond movement as displacement from one location to another (Cassirer, 1923, p. 150).3 ‘‘Thinking space’’ means conceiving of reality as a kind of process that can be produced and reproduced in consciousness but has no independent, concrete existence (Cassirer, 1923, p. 286). As Cassirer (1923, p. 185) put it, ‘‘space, as definite order of the world of bodies, is at all events never finally given, but is always only sought.’’ Space, then, is a mental creation that can be used to think relationally about the physical or the social world, providing a means for making order out of any given set of elements. In its most formal terms, position is determined by distance from two or more fixed lines or axes representing the dimensions of a particular space. In more general terms, space can be thought of as a configuration that is constructed form a particular set of elements connected by a rule or logic of arrangement (Cassirer, 1923, p. 150). Either way, what makes a difference is the relative position an element occupies in the total system and its relations with other elements in space. Social spaces take shape through interaction among people who enact their thinking and feeling and encounter the enacted thinking and feelings of others. These invisible and dynamic interacts link individual cognitive, emotional, behavior, and perhaps even spiritual, processes with those of other individuals. They represent the fundamental structure out of which social space takes shape. As these interactions become regular patterned and routine, a social space, or a field, becomes differentiated from the many interactions all around it. Differentiation is a mental act in which the minds of parties to the relationship perceive themselves as linked to each other in ways that distinguish them from other individuals or spaces around them, that is, their environments. These mental acts create social spaces characterized by sets of relative positions, patterned actions, and sense of ‘‘wholeness.’’ This wholeness, however, is nothing more than a working hypothesis, created by the mind, making it possible to differentiate certain

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patterns of relations from a nearly infinite manifold in which everything is potentially related to everything else. Ongoing processes of differentiation and patterned interaction leads to the creation of complex social spaces such groups, organizations, institutions, societies, etc.

RELATIONAL THINKING AND ORGANIZATIONAL CHANGE Relational thinking and the social space provide a set of constructs for thinking about the social world and especially about organizational change and development processes. Thinking spatially means developing an awareness of the spaces, or fields,4 of which we are an active part at any given moment. It leads us to be aware of the particular configurations of actors or agents as well as their positions relative to one and the dynamic relations among people that continually reconstitute these rules and give them power. Because the social world is enormously complex, individuals may be part of many different fields at any given time-shaping them and being shaped by them. It is probably futile, if not impossible, to try to encompass the totality of fields acting on an individual or group of people. Rather, thinking spatially means attending to the relevant field that forms around an issue or problem of particular concern to those carrying out the inquiry and change. One of the obstacles to thinking spatially is that it may be impossible, and even counterproductive, to try to represent a field as a physical shape or form (e.g., as a diagram or network map). As illustrated above, social space is not physical space. It has no substance but exists in the process of thinking, enacting, and reacting to relationships, the rules of the game, and meanings – all of which are invisible. These spaces can be articulated and described verbally, but not physically. For this reason, I believe that Lewin’s (1948) attempt to create diagrams of the life space were more mystifying than enlightening and, thus, almost completely abandoned by his students. Indeed, one of the most important challenges in thinking spatially is moving beyond physical thinking about space, which is so intuitive and natural for people, to imagining the interactions that linking our reasoning and action those of others and with the collective structures of meaning that impinge upon us. Thinking spatially entails reflexivity and inter-subjectivity. Despite Lewin’s famous formula, which seemed to neatly divide the world up into

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individual and environment, his use of social space actually meant that there were no such distinct ‘‘things’’ as individual and environment. Rather than thinking about ourselves as separate, atomistic individuals, it leads us to see ourselves as continually becoming through dynamic relationships with others: the relation of the ‘‘I’’ and the ‘‘you’’ y appear in a new light. For now they can no longer be described as independent things or essences, as things in themselves, separated, so to speak, by a spatial gulf across which y there occurs some kind of effect at a distance y Instead the ‘‘I’’ and the ‘‘you’’ exist only insofar as they exist ‘‘for each other,’’ only insofar as they stand in a functional relationship of being reciprocally conditioned. (Cassirer, 1961, p. 106)

Individual and environment are continually in the process of creating each other, a formulation that enables us to overcome the agent–structure or individual–environment dichotomy [Bourdieu, 1993, p. 29; Bourdieu & Wacquant, 1992; Lewin (1949, republished in Gold, 1999, pp. 23–36); Martin, 2003, pp. 1–2]. Reflexive thinking can be applied at any level of analysis: between two individuals, an individual and group or unit; between a unit and the larger organization; between the organization and other elements in it environment; and between any group and society in general. Structures and laws that appear to govern social behavior can be seen as man-made, through the interpersonal enactment of thinking and feeling, although they are commonly experienced as impersonal forces imposed from without. Thinking spatially gives expression to the fundamental plasticity of the social world because the limits are not fixed, but rather defined by our imaginations and ability to put imagination into action through these relations. Lewin (1936) and Bourdieu (1993) wrote of the field as defining the ‘‘space of possibilities’’ for a person or group at any given moment. Thus, organizational change can be framed as expanding the realm of the possible within this particular social space: Human action is known only in its realization; only when it is realized are we aware of its living possibilities. Prior to its realization it is not restricted to a fixed and clearly delimited sphere of possibilities; indeed, its work is precisely that of seeking and creating ever new possibilities. (Cassirer, 1961, p. 37)

This belief in the malleability of the social world and the agency of individuals is what led Lewin (1948) to call for an ‘‘action research’’ and for Bourdieu (1989) to conceive of ‘‘a sociology of the perception of the social world y of the construction of visions of the world which themselves contribute to the construction of this world’’ (p. 18).

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Thinking of change in this way means that the most important limits, or boundaries, may be those that we construct ourselves. There are, of course, physical and biological limits, but within these boundary conditions, there may be much more possibility than we often realize. The limits to possibility may be imposed upon us by the ‘‘rules of the game’’ that govern the spaces in which we live, but we internalize these rules and invest them with power and a sense of objectivity by reenacting them through our own thinking, feeling, and behavior. Cassirer (1961) acknowledged these limits, but argued that human beings could escape ‘‘this prison by becoming conscious of its walls’’ (1961, p. 73). From a relational perspective, theoretical concepts are tools for thinking beyond the given and delineating the frame of the possible (Cassirer, 1961, p. 76). ‘‘Every relation, which theory has discovered’’ wrote Cassirer (1923, p. 229 ), ‘‘indicates a new way from the given to the not yet given, from real to ‘possible’ experience.’’ In this light, Lewin’s famous adage that ‘‘there is nothing so practical as a good theory’’ (p. 1951, p. 169) takes on new meaning. A central implication of spatial thinking is that the nature and quality of the relationships that people enact are central to processes of organizational change and development. From a social spatial perspective, the idea of ‘‘topdown’’ or ‘‘bottom-up’’ might be reframed as ‘‘inside-out’’ and ‘‘outsidein.’’ ‘‘Inside-out’’ changes that take place in the patterns of interpersonal relationships continually create and recreate the fields. Bringing these patterns into awareness at least creates a potential for people to think about how they might want to expand their own possibilities through their thinking, feeling, and acting vis-a`-vis others. ‘‘Outside-in’’ changes are direct interventions into the rules of the game, or the policy level, of the field. Changes in relationships are unlikely to be sustainable if they are not given some legitimacy or expression in rules of the game. On the other hand, changes in the rules of the game are unlikely to have any real impact if they are not carried into practice at the level of relationships. Therefore, it is likely these two changes strategies need to be carried at both points and in conjunction with each other. The application of relational thinking to organizational change can be illustrated from research on intervention processes in Israeli high schools attempting to become more effective mechanisms of social inclusion (Friedman, 1997; Friedman, Razer, & Sykes, 2004; Lipshitz, Friedman, & Popper, 2006; Razer, Friedman, & Veronese, 2009). The educational frameworks studied in this research serve students rejected from mainstream classrooms because of academic failure as well as severe behavioral problems. However, educators in these frameworks rarely have the training

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and support to work effectively with these students. As a consequence, they experience chronic failure, low self-efficacy, and blame, leading to feelings of ‘‘exclusion’’ in their professional roles. They, in turn, act out their own feelings of exclusion through unprofessional, ineffective teaching behaviors that reinforce students’ feelings of failure and rejection. Thus, the schools themselves become the setting for a mutually reinforcing ‘‘cycle of exclusion’’ that spreads to relationships between teachers and administrators as well as school staff and the students’ families. One important feature of this cycle is that everyone involved tends to emotionally abandon others rather than provide the support necessary to enable them to engage their tasks in objectively difficult conditions. One of the most important discoveries in helping schools reverse the cycle of exclusion was the necessity of instituting a ‘‘different relationship’’ characterized by ‘‘non-abandonment.’’ Before educators in these schools were able to change behavior or implement more effective pedagogy, they had to learn to think differently about the relationships they formed with their students and among themselves. Relationships of non-abandonment could simply be described or prescribed. Rather, they had to be enacted by the interventionists in their relationships with the school staff and gradually spread to relationships between administrators and teachers, among teachers themselves, between teachers and students, and eventually their families. These changed relationships created the necessary conditions for generating fundamental changes in the way educators thought and felt about their students as well as their own roles and for implementing new ways of teaching and dealing with problems.

FIELD THEORY AND UNFREEZING The idea of ‘‘field theory’’ was adopted by Lewin (1936, 1948, 1951) and Bourdieu (1985, 1989, 1993, 1998) from physics as a way of accounting for causality in a relational, spatial view of the social world. From the time of Newton the natural sciences regarded causality in terms of ‘‘mechanics,’’ – or the behavior of physical bodies when subjected to forces or displacement from each other (Cassirer, 1961, pp. 165–167). Mechanism proceeded analytically, explaining the motion of a whole by breaking it up into the motion of its least parts (Cassirer, 1961, p. 165). By the 20th century, however, physics increasingly faced problems that could not be solved with this kind of thinking. Gravity itself had always presented a problem for mechanics because the force exerted by gravity could not be attributed to contact with

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another body. The main difficulty was explaining how certain bodies seemed to influence other bodies without direct contact, something that went against the fundamental assumptions of mechanics. The turning point was the Faraday–Maxwell concept of the electromagnetic field, which Cassirer (1961), quoting Weyl (1924), described as follows: For a field theory, an individual particle, such as the electron, is merely a small area of the electrical field in which the strength of the field assumes an enormously high value and where there is, consequently, an intense concentration of field force. This scheme of the world reduces to a complete continuum. Even atoms and electrons are not unchanging elements shoved willy nilly by bombarding forces of nature, but are themselves subject to continuous, extended, and delicately flowing changes. (quoted from Weyl, 1924, p. 166)

In other words, a ‘‘field’’ is a space in which some force exists and exerts influence on the behavior of entities within that space. Gravity, magnetism, and electromagnetism are all field phenomena, in which behavior is caused by the influence of the field on its constituent elements. Causality in field theory is not attributed to the impact of one body upon another but by the influence of the field on a particular position within it. The existence of a field of force can be observed by its effects on entities within the field, but what causes the field may remain unknown. Another key point, especially in the electromagnetic field, is that the behavior of elements is not only shaped by the field, but also influences the field itself. Thus, the field can be understood as a continuous, whole space in which there are dynamic, reflexive relations among elements in the field as well as between the whole field and those elements that make it up. As the above quote indicates, fields ‘‘flow’’ (a mixed metaphor if there ever was one!) in the sense that they undergo ongoing process of movement and change shaped by whatever happens to be in the field at a given time (Lewin, 1951, pp. 202–207). Field theory provided Lewin and Bourdieu with a concept for understanding the seemingly invisible influence of social structures on individuals and each other (Martin, 2003). They conceived of groups, organizations, institutions, and entire cultures as fields. The most important question that arises in applying the physical concept of field to social space is what holds the social field together and exerts force if not gravity or electromagnetism? The answer, I believe, is ‘‘meaning.’’ Social spaces are invested with meaning through people’s thinking and action and these meanings act back upon perception and people’s experience of the social world. Meaning is a truly human force that differentiates social fields from fields as experienced in the world of nature (Cassirer, 1961). It was the critical importance of meaning,

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at least in part, that led Lewin and Bourdieu to break away from the positivist mainstream and turn to social space as a more fruitful way of understanding the social world. Lewin’s (1948) concept of ‘‘fact finding,’’ as a way of constructing the life space, was precisely about collecting data about and understanding the meanings people make of their situation and themselves. His studies of conflict in marriage and industry illustrated how the life space can be changed by surfacing and altering the meanings that shaped the life space of individuals, couples, and groups (1948; republished in 1997, p. 68). The force of meaning is captured by Bourdieu in his concept of ‘‘habitus.’’ Habitus is a complex structure of shared meaning that holds a field together, making sustained, orderly social interaction intelligible and reasonable. The habitus fulfills a function which another philosophy consigns to a transcendental conscience: it is a socialized body, a structured body, a body which has incorporated the immanent structures of a world or of a particular sector of that world – a field – and which structures the perception of that world as well as action in that world. (Bourdieu, 1998, p. 81)

Bourdieu also described habitus as ‘‘a practical sense for what is to be done in a given situation – what in sport is called a ‘feel’ for the game’’ (Bourdieu, 1998, p. 25). This feel for the game implies a knowledge of the rules of the game but also a set of strategies for how to play and how to interpret the actions of other players. Although there may be enormous variations in observable individual behavior (as in any game), habitus is shared by participants in the field, usually at a preconscious level, guiding thinking, feeling, and action. Otherwise, the field would dissolve, just as any game or sport would dissolve into chaos if no one knew how to play or rules ceased to exist. When participants in a field play the game in a prescribed way, the habitus is reconstituted and reinforced. Change is possible, however, because social fields always contain a certain degree of ambiguity; habitus can be challenged. Bourdieu (1989, p. 19) regarded change processes in social fields as a ‘‘symbolic struggles over the power to produce and to impose the legitimate vision of the world.’’ Furthermore, as habitus becomes reified, it may also become drained of meaning. Gaps form between the meaning structures imposed upon people and how participants in the field perceive reality, enabling them to see things differently and to literally think ‘‘outside the box.’’ When meaning breaks down, the forces that hold the field together are weakened, setting the stage for change or even dissolution of the field.

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This understanding of the field theory as applied to the social space can deepen our understanding change as a three-step process-unfreezing, change, refreezing-one of the most widely used Lewinian (1951) concept. Unfreezing is generally applied rather loosely to refer to methods to implement or accept change, usually involving some form of participation. From a field theory perspective, what changes is social space: the positions, rules of the game, and the meanings that hold a field together. Schein (1969) identified three mechanisms of unfreezing: confronting people with information that challenges their perceptions of the situation (including themselves and others), causing people to recognize contradictions between their values or ideals and their own behavior, and creating feelings of psychological safety that mitigate the threat engendered by the first two mechanisms. The first two of these mechanisms involve challenging the given meaning structures that people use to make sense of their own behavior within a particular context. This process involves becoming cognizant of and doubtful about the ‘‘rules of the game’’ that govern the field and especially the implicit meanings in these rules that hold the field together However, as these meanings break down and the power of the field weakens, the social space falls apart, which is essential for the formation of a new field around a new set of positions, rules, and meanings. This period of liminality, when people have let go of an existing meaning system but not yet fully grasped a new one, can be extremely emotionally threatening. It necessarily involves a moment of being out of control – a bit like that moment in driving a standard transmission automobile when one has shifted out of one gear and not yet engaged another (Friedman & Lipshitz, 1992). Schein’s third mechanism, psychological security, is important precisely because it enables people to endure the deep existential uncertainty involved in reconfiguring social space. Thinking about unfreezing as shifting meaning can be illustrated in the centrality of ‘‘reframing’’ in enabling educators to escape the cycle of exclusion in schools (Friedman et al., 2004; Razer, Friedman, & Veronese, 2009). Reframing is based on the assumption that behavioral patterns are held in place by cognitive ‘‘frames’’ or logics that make sense even if the result is dysfunctional (Argryis, Putnam, & Smith, 1985; Watzlawick, Weakland, & Fisch (1974)). It involves giving new interpretations to the same sets of ‘‘facts’’ (e.g., problem behavior and failure), enabling people to see the same situation in a new way that often opens opportunities for more effective action. For example, a teacher in one of these schools came into class and found a puddle of urine beside his desk twice in one week. At the weekly staff meeting, the teachers talked about the incident, expressing very angry feelings toward the students that focused on feelings of humiliation

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(‘‘they really piss on us’’) and punishing the wrongdoers before things became worse. The interventionist acknowledged the legitimacy of feelings of disgust and anger in such a situation, but suggested framing the act as an indication of a student’s extreme distress and a call for help rather than a desire to humiliate the teacher. Rather than threatening or punishing the student, the interventionist suggested, and role-played, an approach that would acknowledge the distress and invite the student to step forward so as to get help. The teacher was surprised by the proposal, but the reframing enabled him to not take the extreme misbehavior personally. He enacted the interventionist’s suggestion and within a few days the student identified himself to the teacher and asked for help. The teachers and the students in this school were all acting within a shared field, or a system of meaning, that led them to interpret each other’s actions in terms of transgression, humiliation, punishment, and more humiliation. This framing exerted considerable force over the way people perceived reality, felt, and acted in the setting. The feelings of threat and humiliation experienced by the teachers were quite real and understandable and they reinforced the cycle of exclusion, making the organization even more dysfunctional. But these feelings were not a given and the reframing suggested by the interventionist ‘‘unfroze’’ the situation. By loosening the grip of the rules of the game and the dominant meaning structure, it expanded the realm of the possible.

TRAJECTORIES: CHANGES IN FIELDS OVER TIME Fields are dynamic, so thinking spatially means thinking about changes in the configuration of a field over time – or what we call ‘‘trajectories’’ (Friedman & Sykes, 2008). So far we have identified six trajectories. The first trajectory is simple ‘‘differentiation,’’ which, for an actor, means the division of a large, relatively amorphous field into smaller fields with more specific rules of the game and meaning that connected to each in particular configurations. Lewin (1951, pp. 71–72) compared this process to the experience of arriving in a new city, which at first seems to be both amorphous and known only as those immediate parts around us. However, as one wanders through the city and learns about it, the city takes shape and differentiates itself into blocks or neighborhoods or quarters, all of which are related to each other in particular ways. Differentiation expands the realm of what can be mentally grasped and enables individuals to get where they want to go.

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A simple illustration of differentiation in helping schools overcome exclusion is ‘‘knowing the child.’’ Particularly difficult students are typically perceived quite narrowly through the problematic behaviors they exhibit, often leading to dead ends. In order to find a way of moving forward, teachers are encouraged to become deeply acquainted with these students from behavioral, cognitive, emotional, development, social, cultural, familial, and historical perspectives. This process of differentiation not only helps make sense of difficult behaviors, but it also often leads to new, and surprising, insights about students to that open new avenues for intervention. The second trajectory is ‘‘knowing one’s place,’’ in which actors in the field accept and settle into the positions dictated to them by the rules of the game. Change can be observed when new actors enter the field and, over time, assume the positions assigned to them. ‘‘Knowing’’ one’s place implies that actors develop ways of thinking, feeling, and acting that characterize their position, as determined by the rules of the game. In doing so, they reproduce the configuration and reinforce the rules of the game even when their positions are highly disadvantageous. This trajectory could be observed, for example, in Israeli high schools during the 1990s, when the Israeli government made a concerted effort, and succeeded, in lowering the rate of high school dropouts. However, research showed that these same students became ‘‘internal dropouts’’ – that is, they were still enrolled within schools, but were not participating in any meaningful way in educational processes (and were often alienated and highly disruptive) (Cohen-Navot, Frankovitch, & Reinfeld, 2000). The third trajectory, ‘‘migration,’’ involves agents moving, or at least trying to move, from one position in the field to another position. Usually migration is toward a more advantageous position as defined by the rules of the game. ‘‘Migration’’ reflects an agent’s acceptance and reinforcement of the field’s configuration as well as the rules of the game while at the same time means jockeying for position relative to other agents in the field. Working one’s way up the organizational hierarchy or interdepartmental battles over budget are typical manifestations of migration through a field. Migration leaves the overall configuration unchanged, because, as some actors migrate to more advantageous positions, others migrate down to take their place. For example, schools that are rewarded or punished according to the results on standardized test scores usually try to get rid of students who chronically fail in order to move up to more advantageous places within the field. The schools that accept these students, of course, pay the price, but even they want their schools be like ‘‘normative’’ schools and fantasize that change will come when the students or their families change.

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Both schools, however, implicitly accept goals and standards, imposed from above, even though these goals and standards inappropriate for evaluating work done with particular populations. The fourth trajectory, ‘‘emigration,’’ involves agents leaving one field and entering into another with a different configuration with different rules of the game and new meanings. Emigration leads, at least potentially, to a changed position. Emigration may sometimes involve a change in physical position as well, but not necessarily. From the perspective of the actor, emigration involves a radical change but it leaves existing fields intact. When an organization goes from being a production organization to a marketing organization or from a nonprofit to a for-profit, it experiences emigration. The same is true for individuals who change professions. Religious conversion is also a form of emigration. The fifth trajectory, ‘‘forming enclaves,’’ involves differentiating a new field within an existing field, but with its own configuration of positions and different rules of the game. It may involve connection agents into a new configuration or changing the rules of the game in an existing configuration and investing it with new meaning. Within any field there will be differentiation into configurations, or subfields, with their own particularly identity, but enclaves constitute ‘‘alternative’’ spaces within a field with rules of the game that are different, and often challenge, those dictated by a larger field of which it is part. For example, alternative organizations that try to operate according to democratic, nonhierarchical values are enclaves (e.g., Friedman, 2001; Semler, 1989). One of the most interesting questions is how enclaves relate to the larger field so as to maintain their alternativeness over time. They almost always come under pressure to conform to the larger field, which threatens their alternativeness. On the one hand, they may attempt to maintain their separateness by creating a strong boundary and strongly regulating and restricting the relationship with the larger field. On other hand, they may attempt influence the larger field by creating a field in which things can be done differently, thus expanding the range of the possible and challenging the established rules of the game. The sixth trajectory is ‘‘transformation,’’ which involves a major reconfiguration of a field and of the rules of the game. Transformation occurs when the meanings that hold a field together dissolve. It involves a change in differentiation and boundaries of the field, the meaning structures, and the rules of the game. In the wake of a severe economic and social crisis in the 1990s, the kibbutz movement in Israel, for example, has undergone a long, gradual period of ‘‘privatization’’ in which the collective, socialist system of organization has been completely transformed.

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CONCLUSION My journey into social space began with an early experience as a failed organizational change agent that felt profoundly spatial – a feeling I described as ‘‘the walls closing in.’’ Subsequently, this experience led me to take an interest in Lewin’s concept of life space and space of free movement, which both resonated with me but also mystified me. The goal of this chapter has been to attempt to demystify the concepts of social space by going back to the source from which Lewin and Bourdieu drew inspiration, especially the work of Ernst Cassirer (1923). If we are to take social space seriously, it must be asked whether we also need to reconsider Lewin’s efforts (1936, 1948, 1951) to develop a mathematics, like topology, that enable the development of abstract functions that can give expression to laws of human behavior. In reading Lewin, my feeling is that he placed a heavy layer of nonessential jargon and complexity over some of the most imaginative, elegant, and fruitful ideas and methods in 20th century psychology. Martin (2003, pp. 22–24) described Lewin’s attempt to conceptualize space through topology as nearly fatal for field theory. Ironically, the most compelling argument against attributing an inherent lawfulness to social space comes from Cassirer (1961) himself. In The Logic of the Humanities (Cassirer, 1961), he addressed the question of how the sciences that study man differ from the sciences of the natural world: The object of nature appears to lie immediately before our eyes y we go to and from the object y in order to learn to know it ever more exactly...But the cultural object requires a different kind of observation; for it lies in back of us, so to speak. Indeed, at first sight it appears to be more familiar and more accessible than any other object. For what can man comprehend y more completely y than what he himself has created? But even here there emerges a limit to knowledge which is not easy to overcome. For the reflexive process of conception is opposed to the productive process; both cannot be accomplished at one and the same time. Culture is forever creating new y symbols in an uninterrupted stream. But science and philosophy must analyze this language of symbols into its elements in order to make it intelligible. They must treat analytically what was produced synthetically. A ceaseless motion and counter-motion prevails here y the science of culture teaches us to interpret symbols in order to decipher their latent meaning, to make visible again the life from which they originally came into being.

The study of man is reflexive; it is the study of himself. Man can only understand himself by studying his works (e.g., culture and social organization), but these works are a productive, creative project that never ends. There may be lawfulness in the social world but, unlike natural law, these laws are continually being recreated and changed. Furthermore, the

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study of the social world begins with a search for the meaning implicit in these works. These meanings are the social equivalent of the mathematical functions in the natural sciences. They are what create wholeness from an undifferentiated manifold. There is an internal contradiction between the relational logic of social space, to which Lewin ascribed, in and his insistence, ultimately deterministic, that the goal of psychology is to discover the precise, mathematical laws that govern the social world (1936, p. 42). In rejecting Lewin’s typological psychology, however, his followers ‘‘threw out the baby with the bathwater.’’ By abandoning social space and field theory, they lost a set of theoretical constructs with the potential for creating communication across disciplines. Both Lewin (1951) and Bourdieu (1998) were critical of the tendency of social scientists to create different abstract conceptual frameworks to describe different phenomena, issues, or problems. Lewin (1936) stressed the importance of the construction of concepts from which a broad range of domain specific theories could be developed: the system of concepts must be broad enough to be applicable to the most primitive bodily behavior as well as to the emotions, thought processes, values, and social relationships. It must be capable of representing these processes not as single isolated facts but in their mutual dependence as expressions of a concrete situation involving a definite person in a definite condition y they must include both person and environment, both law and individual case. (p. 6)

Social space and field theory provide constructs for building crossdisciplinary theory and practice of organizational change that not only informs practice but also expands the range of the possible.

NOTES 1. The field concept did reappear occasionally, such as in the work of Emery and Trist (1965) and Warren (1967). 2. Cassirer’s work was influenced by Kantian idealism. However, the deeper philosophical roots of Cassirer’s works and the debates surrounding them are beyond the scope of this chapter. 3. This sense of space is often referred to as ‘‘place’’(Jammer, 1954, p. xv). 4. A formal definition of field, or field theory, and its importance for understanding social space will be presented later.

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REFERENCES Argryis, C., Putnam, R., & Smith, D. (1985). Action science: Concepts, methods, and skills for research and intervention. San Francisco: Jossey-Bass. Bourdieu, P. (1985). Social space and the genesis of groups. Theory and Society, 14(6), 723–744. Bourdieu, P. (1989). Social space and symbolic power. Sociological Theory, 7(1), 14–25. Bourdieu, P. (1993). The field of cultural production. Cambridge, UK: Polity Press. Bourdieu, P. (1998). Practical reason: On the theory of action. Stanford, CA: Stanford University Press. Bourdieu, P., & Wacquant, L. (1992). An Introduction to reflexive sociology. Cambridge, UK: Polity Press. Bradbury, H., Lichtenstein, B., Carroll, J., & Senge, P. (2010). Relational space and learning experiments: The heart of sustainability collaborations. In: W. A. Pasmore, A. B.(Rami) Shani & R. W. Woodman (Eds), Research in Organizational Change and Development (Vol. 18, pp. 109–148). Bingley, UK: Emerald. Cassirer, E. (1923). Substance and function and Einstein’s theory of relativity (Republished, 1953, New York: Dover Press). Chicago: Open Court Publishing. Cassirer, E. (1944). An essay on man: An introduction to a philosophy of human culture. New Haven, CT: Yale University Press. Cassirer, E. (1961). The logic of the humanities. New Haven, CT: Yale University Press. Cohen-Navot, M., Frankovitch, S., & Reinfeld, T. (2000). Open and latent dropping out among youth. Jerusalem: Joint Distribution Committee-Brookdale Institute (in Hebrew). Emery, F. E., & Trist, E. L. (1965). The causal texture of organization environments. Human Relations, 18, 21–32. Friedman, V. (1997). Making schools safe for uncertainty: Teams, teaching, and school reform. Teachers College Record, 99(2), 335–370. Friedman, V. (2001). Action science: Creating communities of inquiry in communities of social practice. In: P. Reason & H. Bradbury (Eds), Handbook of action research (pp. 159–170). London: Sage. Friedman, V., & Lipshitz, R. (1992). Teaching people to shift cognitive gears: Overcoming resistance on the road to Model II. Journal of Applied Behavioral Science, 28(1), 118–137. Friedman, V., Razer, M., & Sykes, I. (2004). Towards a theory of inclusive practice: An action science approach. Action Research, 2(2), 183–205. Friedman, V., & Sykes, I. (2008). Can the concept ‘‘social space’’ reveal a deep structure essential to the theory and practice of organizational learning? Sixth Interdisciplinary Symposium on Knowledge and Space: Knowledge in Organizations – Learning Organizations, University of Heidelberg, Germany, September 17–26, 2008. Gold, M. (1999). The complete social scientist: A Kurt Lewin reader. Washington, DC: American Psychological Association. Jammer, M. (1954). Concepts of Space: The History of Theories of Space in Physics. Cambridge, MA: Harvard University Press. Kemmis, S. (2001). Exploring the relevance of critical theory for action research: Emancipatory action research in the footsteps of Ju¨rgen Habermas. In: P. Reason & H. Bradbury (Eds), Handbook of action research: Participative inquiry and practice (pp. 91–102). London: Sage. Lewin, K. (1936). Principles of topological psychology. New York: McGraw-Hill. Lewin, K. (1948). Resolving social conflicts (Republished, 1997, Washington, DC: American Psychological Association, pp. 153–422). New York: Harper & Row.

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Lewin, K. (1949). Cassirer’s philosophy of science and the social sciences. In: P. A. Schilpp (Ed.), The philosophy of Ernst Cassirer (pp. 269–288), and republished in M. Gold (Ed.). The complete social scientist: A Kurt Lewin reader. Washington, DC: American Psychological Association, 1999. Lewin, K. (1951). Field theory in social science: Selected theoretical papers (Republished, 1997, Washington, DC: American Psychological Association, pp. 1–152.). New York: Harper & Row. Lewin, K. (1997). Resolving social conflicts and field theory in social science. Washington, DC: American Psychological Association. Lipshitz, R., Friedman, V., & Popper, M. (2006). The demystification of organizational learning. Thousand Oaks, CA: Sage. Martin, J. L. (2003). What is field theory? American Journal of Sociology, 109(1), 1–49. Razer, M., Friedman, V., & Veronese, G. (2009). The ‘‘educational-psychosocial’’ approach to overcoming social exclusion in Israeli schools. Ricerche di Psicologia, 4, 196–211. Schein, E. H. (1969). The mechanisms of change, In: W. G. Bennis, K. D. Benne, & R. Chin (Eds), The Planning of Change (pp. 98–108). New York, NY: Hart, Rinehart & Winston. Semler, R. (1989). Managing without managers: Participative management at Brazil’s Semco. Harvard Business Review, 67(5), 76–84. Warren, R. L. (1967). The interorganizational field as a focus of investigation. Administrative Science Quarterly, 12, 396–419. Watzlawick, P., Weakland, J., & Fisch, R. (1974). Change principles of problem formation and resolution. New York: W.W. Norton. Weyl, H. (1924). Was ist materie? Berlin: J. Springer. Wicks, P. G., & Reason, P. (2009). Initiating action research: Challenges and paradoxes of opening communicative space. Action Research, 7, 243–262.

TIPPING THE BALANCE: OVERCOMING PERSISTENT PROBLEMS IN ORGANIZATIONAL CHANGE William A. Pasmore ABSTRACT High rates of failure in organizational change efforts call attention to the need to identify and address persistent problems that threaten success. This chapter outlines issues that frequently hinder progress in various stages of the change process and offers advice to consultants and their clients in overcoming these issues. While models to guide intervention have advanced and the field has progressed, more attention still needs to be paid to the issues outlined here in order to enhance success rates in major change initiatives. New directions for research are suggested that would aid the field in continuing its evolution.

INTRODUCTION A recent study by McKinsey & Company (2008) and popular papers by Beer, Eisenstat, and Spector (1990), Kotter (1995) and Burke (1995) call attention to the alarming rate of failures in planned change efforts, estimated at Research in Organizational Change and Development, Volume 19, 259–292 Copyright r 2011 by Emerald Group Publishing Limited All rights of reproduction in any form reserved ISSN: 0897-3016/doi:10.1108/S0897-3016(2011)0000019011

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somewhere between 50 and 70 percent. While the great numbers of successes achieved should also be acknowledged (Golembiewski, 2009), there is clearly room for further improvement. At the present time, an organization commencing a major (and presumably important) change effort is as likely to fail as to succeed. What can be done to tip this balance toward success? Any field that ceases to question itself and to learn from its shortcomings is likely to become stagnant. Self-examination undertaken in the spirit of inquiry has been a hallmark of organization development (OD) from the early days of T-groups and data-feedback interventions (Gibb, 1975; Nadler, 1977) and continues to be a powerful tool for uncovering insights that lead to action (Lewin, 1946). Previous papers in Research in Organizational Change and Development have reviewed the evolution of the field (Porras & Robertson, 1987; Mirvis, 1988), addressed change barriers (Bartunek, 1993; Ford & Ford, 2009; Sloyan & Ludema, 2010), and offered exciting new approaches to change (Cooperrider & Srivastva, 1987; Weisbord, 1988; Jawahar, Stone, & Cooper, 1992; Shani & Stjernberg, 1995; Tobey & Manning, 2009; Beer, 2011). Yet in the approximately seventy years since the field began and the twenty-plus years that ROCD has been in publication, the issues identified here have yet to be put to bed. While this chapter won’t provide comprehensive solutions, it will call attention to the current state of affairs, offer some suggested remedies, and provide direction for future research. This treatment expands the scope of analysis beyond the widely accepted steps in the change process put forward by Bennis (1966), Blake and Mouton (1968), Beckhard and Harris (1977), Lavoie and Culbert (1978), French and Bell (1978), Beer (1980), Block (1981), Burke (1982), Kotter (1996) and others to offer consideration of antecedents and post-intervention dynamics that have a greater impact on intervention success than previously acknowledged. A four-phase model of a consulting engagement is offered as a vehicle for examining factors that threaten intervention success and then to generate suggestions for tipping the balance in favor of more positive outcomes. Following these analyses, suggestions for practice and the development of future theory and research are offered. It stands to reason that neither change agents nor their clients would knowingly embark on change efforts that are more likely to fail than succeed, yet this is apparently exactly what is happening more often than not. How can we explain this irrational exuberance concerning change? By examining issues that arise in four major phases of change efforts: (1) understanding the need for change, (2) framing the change, (3) undertaking the change process, and (4) sustaining change outcomes, we can gain insights into the dynamics that may lead to change abandonment or failure. These issues are listed in Table 1 and discussed below.

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Table 1.

Predictable Problems in Change by Phases of Intervention.

Understanding the Need for Change

Framing the Change

Failure to heed objective signals indicating the need for change

Failure to engage employees in authentic participation in decisions regarding change Choosing the wrong intervention and consultant

Undertaking the Change Emergent issues

Subjective Unanticipated sidejudgments about effects the scope and urgency of change required Lack of deep Ignoring the need for Irrational, emotional, commitment to readiness and political changes assessment responses undertaken for aspirational reasons Ambivalence arising Ensuring alignment Resistance to change from evolving and commitment to discourse the change among leaders, horizontally and vertically Lack of leadership

Sustaining Change

Losing focus, shifting priorities, turnover of key change champions

Passive–aggressive resistance

Resource starvation

Exhaustion

Unpredicted shifts in the external context

Inadequate consultant experience or expertise

UNDERSTANDING THE NEED FOR CHANGE: PROBLEMS FROM THE BEGINNING Determination of the urgency and scope of change typically derives from a reading of the organization’s position relative to its context. Organizations are open systems, depending upon their environment for resources that allow them to survive (Katz & Kahn, 1966; Pfeffer & Salancik, 1978). Whether or not executives are familiar with open systems theory, they are naturally attuned to the competitive landscape within which their organization exists. Much of the work in the field of business strategy

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(Porter,1980) is concerned with how well the firm is adapting to changing forces in its industry.

Objective Need for Change Poor performance at the level of an entire organization is readily visible in financial reports, which attract the attention of boards, shareholders, investors, higher-level administrators, and other stakeholders. Poor performance at the level of an organizational unit is less visible to the public, but still readily apparent to higher-ups using tracking measures designed to monitor performance against expectations, or trends over time. Because poor performance relative to expectations can bring a great deal of unwanted attention, executives follow performance reports closely and are highly motivated to intervene when problems arise. However, a number of factors can blunt the force of poor financial results, including the following:  Prolonged downturns: a sharp drop in performance from one time period to the next is usually a cause for greater alarm than a slow and steady decline (sometimes referred to as the ‘‘boiled frog’’ phenomenon).  Industry trends: poor performance may be forgiven if the organization is part of an industry that is performing poorly across the board, or one affected by general economic trends.  New strategies: when new strategies are adopted, organizations may be given a grace period to implement the strategy fully before results are deemed to be representative of the new way of operating.  New Leadership: new leaders are typically given time to understand the situation before making necessary changes to improve performance.  Strategic under-resourcing: an organizational unit may be deemed a ‘‘cash cow’’ in a mature market, in which performance is expected to decline over time due to product obsolescence or other factors that make the unit unsuitable for turnaround investments. It should be noted that none of these factors negates the need for change. Improvement under any of these scenarios would be welcomed if those involved believe improvement is possible. The point is simply that even the most objective measures that signal the need for change are subject to interpretive sense making (Weick, 1979). As long as viable alternative explanations (excuses) exist, even a ‘‘burning platform’’ for change may be insufficient to motivate action. When leaders are not motivated to pursue change, or underestimate the depth and breadth of change required to

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address significant issues, the effort they put into changing their organizations is likely to fall short of that required to achieve success. Hence, a percentage of change efforts are doomed to failure almost before they begin. To correct this, change agents need to help clients confront the severity of the issues they face. If this proves too difficult, change agents may need to refuse to undertake an intervention that is not adequate to address the real issues. Fewer poor starts will result in fewer eventual failures.

Subjective Need for Change If the failure to understand the need for change is a problem in the face of objective performance data, it stands to reason that the failure to properly identify the need for change and scope of change required to address real issues becomes even more pronounced in situations involving less objective signals. For example, when an executive becomes concerned about the organization’s innovativeness or customer focus compared to competitors, there are no reliable objective measures that can be used to determine how big the problem is. The size of the gap is subjective at best, giving rise to arguments from both sides: those who insist that a crisis is looming and those who maintain that the problem is being blown out of proportion. Even if the executive decides to make innovation or customer focus a priority, the debate is bound to continue throughout the change effort, resulting in wasted time, less-than-fully-supported actions, inconsistent adoption of solutions, and covert resistance (Marshak, 2006; Beer, 2011). Therefore, for changes that are based on subjective readings of the environment, we would expect the change failure rate to rise beyond that associated with efforts undertaken to address objective issues. To counter these threats to success, change agents should advise their clients to spend extra time and effort in gaining alignment throughout the organization on the need for change. Dialogue is the tool that is most suited to develop broad and deep commitment under these circumstances.

Aspirational Change Even greater jeopardy may be associated with changes undertaken for strictly aspirational reasons. While interventions driven by the broad desire to improve for improvement’s sake can be uplifting and energizing (Cooperrider & Srivastva, 1987), unless those affected come to believe

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deeply that such changes are actually required to survive or are found to be inherently rewarding, efforts that begin with positive energy may die out over time as more urgent issues rise to the forefront. Change agents must prepare their clients for the hard work that accompanies aspirational change. Leaders must be prepared to make a personal commitment that involves staying visible and engaged in the effort long after they give a visionary speech and engage others. Persistent attention by leaders is the best antidote to skepticism and failure to implement aspirational change.

Drift Through Discourse All of this brings us to the conclusion that understanding the need for change is not an objective undertaking, but rather an ambiguous search for agreement based on discourse rather than pure logic (Barrett, Thomas, & Hocevar, 1995; Ford, 1999; Eisenhardt, 2000; Piderit, 2000; Ferdig & Ludema, 2005; Ludema & Di Virgilio, 2007; Bushe & Marshak, 2009; Oswick, Grant, Marshak, & Cox, 2010; Whittle, Suhomlinova, & Mueller, 2010; Krkyri, Puutio, & Wahlstrom, 2010). Although OD practitioners are taught the value of questioning the underlying support for change from top leadership during the contracting phase of an intervention, the truth is that leaders themselves are often uncertain about exactly how critical the need for change is. Through discourse, leaders may become more or less convinced of the need for change, but any commitments based on the results of discourse can later be undone by further discourse. Since the external environment of the organization is constantly changing, there will be ongoing opportunities to reopen the discussion down the road. Change agents are guaranteed an abundance of issues that will arise to create distraction if not completely undermine commitment to the original direction. No matter how important a change seems at the moment, keeping the change as a top priority and making certain executives see it through to success is a challenging task at best. As we shall see in the third part of our analysis, the qualities of leaders and consultants, as well as the relationships between them, can either mitigate or exacerbate this challenge. At a minimum, change agents need to set up regular check-ins with their clients to assess progress and reaffirm commitment to the direction. Since things are always changing, consultants should never presume that a commitment made at the beginning of a change effort will remain a commitment throughout. While check-ins alone won’t prevent the breaking

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of commitments, they provide a forum in which commitments can be tested and wavering discourses identified and challenged.

FRAMING THE CHANGE: CHOOSING A PATH AND SHAPING EXPECTATIONS Understanding the need for change involves an assessment of the current state of the organization relative to its environment or a desired future state. Framing the change shifts the focus to the inside of the organization, as leaders attempt to engage others in taking action to address issues or opportunities they deem important. Making the case for change involves communication, of course, but much more as well. As leaders take the first steps in engaging others, a number of questions arise that if not addressed, sow the seeds of resistance that will grow into serious issues in the next phase of the change process. These questions include:  Is this change really necessary now?  How much influence can nonleaders have in determining what should actually change?  Why was this approach chosen to address the issues?  How certain are we that this approach will work?  Why did we select this consultant/firm to guide us? How do we know we can trust them to do this well?  How are we going to find the time to do this along with our other work?  How will I be affected by this? What do you expect from me? What choice do I have?  What makes us think we can pull this off when we can’ty (fix other problems)?  What responsibility are you taking as leaders for how we got into this mess, and what are you prepared to do differently going forward to make sure it doesn’t happen again? (Or, if the change is driven by positive intent, ‘‘Why do we need to care about this? What evidence is there that you leaders will walk the same talk?’’) How leaders take the important steps involved in addressing these concerns, and how consultants work with leaders to fashion an overall approach to change that is appropriate given the issues involved will either lay a strong foundation for success or sink the effort before it launches. Engaging others in ways that minimize unfounded resistance, framing the

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right intervention for the situation, assessing readiness, and ensuring that there is direction, alignment, and commitment to the path ahead are essential actions to enhance success probabilities.

Participation in Framing the Change A great deal of attention has been paid in the literature on OD to the importance of providing authentic opportunities for organizational members to understand the need for change and influence its direction (Lewin, 1943; Coch & French, 1948; Pasmore & Fagans, 1992; Neumann, 1989). Leaders and their senior teams are prone to doing a lot of analysis themselves, coming to conclusions about the need for change, selecting a consultant and approach, and only then beginning the process of inviting others to become involved in change. While there is a great deal written about the origins of resistance to change and whether ‘‘resistance’’ is really what is going on, there is concurrence among researchers that the sooner and more meaningfully involved people can be, the greater the chances of successful change (Stewart & Manz, 1997; Bridges, 1991; Dirks, Cummings, & Pierce, 1996; Dent & Goldberg, 1999; Yuan & Woodman, 2007; Greenberg, Moore, Greenberg, & Sikora, 2008; Ford & Ford, 2009). Leaders must remain open to insights and advice from others for a period of time, even regarding the need for change or the proposed approach. Adequate dialogue must precede action in order to create the full support needed to succeed in facing the challenges ahead. Recent research on perceptions of fairness during change efforts reinforces the importance of buy-in to commitment, energy, and success (Wooten, 2009; Marmenout, 2010). How direction, alignment, and commitment are created in framing the change will set irreversible dynamics in motion that affect how the change plays out. For example, when formal leaders edict change, compliance is the behavior they expect from others. As noted, in an emergency, compliance may be exactly what is required. Compliance calls for following without question, which places the burden for choosing the right direction and solutions squarely on the shoulders of those giving the orders. This may work fine in the short run, when leaders know what needs to be done and don’t require input or long-term commitment from others to make the intervention work. The problem arises when the change goes badly, and leaders need more input or action from their followers to adjust course. Since followers were instructed to comply rather than participate from the

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beginning, they act passively, awaiting further direction from the top. Rather than sharing responsibility for the outcomes, followers watch the wreck take place, despite knowing that a failed change process could result in negative consequences for everyone. At an emotional level, followers may be angry about not having been consulted in the first place, or not trusted enough to have a seat at the table. Some employees may later say that they knew immediately that the change would never work, had only they been asked for their input. Allowing the change to fail sends a message to leaders that they aren’t so smart after all, and that they should behave differently if they expect better outcomes the next time. From this example, it should be clear that leaders can edict compliance but not commitment (Walton, 1985). Leaders tend to overuse their power to edict change for a number of reasons. The following quotes from leaders are a collage of those heard over the years in undertaking modest to complex change efforts:  ‘‘There isn’t time to consult others; the need for change is too urgent.’’  ‘‘Employees don’t understand the big picture; they can’t contribute anything of value.’’  ‘‘Different groups have different views of the situation. If we consult them, it’s clear that they wouldn’t agree on what to do, so we have to decide for them.’’  ‘‘Given a choice, they would never take the actions that are needed (e.g., cost-cutting, layoffs) to address the problem. There’s no sense in asking them if we know they won’t do the right thing.’’  ‘‘That’s what we get paid for; if we don’t know the answer, they should get someone else to do our jobs.’’  ‘‘If we consulted employees every time there was a problem, we’d never get anything done.’’ Leaders underestimate their need for information and collaboration in undertaking change efforts. They assume that they can get through the change with compliance alone, but the track record of change demonstrates that this simply isn’t the case. Although providing opportunities for authentic participation can be time-consuming, doing so is more often necessary than managers believe. Leaders sometimes avoid engagement and rely on their power to force change through when they believe that employees will resist a change they are proposing. Changes in methods of work, organizational structure, costcutting, and downsizing efforts are often situations that evoke top-down directed change. But contrary to what leaders might expect, there have been

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numerous examples in the change literature of cases in which employees have been involved directly in formulating solutions that involve developing more efficient change methods, downsizing, or plant closures. These cases report almost uniformly positive outcomes from engagement under these difficult circumstances. When employees are treated with respect as trusted partners, they reciprocate with loyalty and commitment. Even those forced to leave in layoff situations have reported increased respect for their employers and a willingness to return to work if asked following highparticipation change efforts. The fear that leaders have regarding how employees will respond to negative changes is based on how employees may have responded to top-down change in the past. Using more participative methods will create different reactions.

Choosing the Consultant and Intervention Approach A second component in framing the change is choosing the right consultant and intervention to address the issues and opportunities. Over the decades since OD was born, there has been no shortage of faddish interventions that catch executives’ attention, often for the wrong reasons. ‘‘Just because everyone else is doing it’’ is hardly good justification for leaping into a complex, time-consuming, and costly intervention. Perhaps even more damaging than wasting time with the wrong intervention is the long-term impact that failed or wrongly considered change efforts can have on future opportunities to change. Employees become skeptical, mid-level leaders become resentful, and stakeholders become impatient, wondering when real change will finally take place. Despite guidance on the subject of matching interventions to problems (Bowers, Franklin, & Pecorella, 1975; Tichy, 1975; Kotter & Schlesinger, 1979) and on doing careful diagnosis before choosing an intervention (Weisbord, 1976), leaders are susceptible to the star power of gurus, and consultants are more likely than not to see every intervention as a nail requiring the application of their favorite hammer. Needless to say, choosing the wrong approach to address a problem will have a deleterious effect on the achievement of desired outcomes. Often, after conducting a thorough diagnosis, consultants are aware of the change that is required but are unable to garner the necessary support to address the real issues. Top leaders themselves may be the source of the problem, or long-standing and deeply help beliefs may not be open to question. When barriers are thrown up that don’t allow the real issues to be addressed, consultants may opt for a ‘‘foot in the door’’ intervention

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of lesser consequence. The logic is that by demonstrating competence in a smaller change, trust will grow and deeper issues will become discussable. However, the reverse effect is more often the case. Once a consultant demonstrates willingness to side-step key issues in favor of a less attentionworthy intervention, respect is lost rather than gained. Consultants become typecast as bit players rather than worthy of a seat at the table. Block (1981) refers to this as becoming ‘‘a pair of hands’’ to do menial work rather than a partner in leading critical transformations. Although it’s rare for consultants to decline invitations from clients, this is exactly what must happen for intervention success rates to improve. Clients who jump on the change bandwagon without fully appreciating the commitment required to see change through need to be told to think again. Gurus who have pioneered a popular methodology should understand what the real organizational issues are before they begin an intervention that has been successful elsewhere. Consultants who find themselves in unfamiliar territory should refrain from making it up as they go, or settling for a lesser intervention that leaves the real problems unsolved. Of course, all this is easier said than done. Consultants who work for consulting firms have revenue targets to meet and even independents must put food on the table. Courage and conviction in one’s beliefs are required to stand toe-to-toe with clients and deliver unpopular messages. The best consultants are those who are ready to walk away rather than undertake the wrong intervention. Some degree of courage and conviction is usually gained through experience; consultants who have been down the wrong road know better than to follow it again. All of us can use another person as a sounding board from time to time, and that person, if carefully chosen, can help us with making the right decision under pressure. In the end, courage and conviction separate professionals from amateurs and however one develops these qualities, they are essential to success. The high-failure rate of interventions suggests that change agents give in too easily to inappropriate client direction, and are too quick to prescribe a favorite approach or the wrong intervention to address underlying issues. While there is plenty of blame to be shared for the current state of the field, consultants need only look in the mirror to find one major source of the problem.

Assessing Readiness Likewise, much has been said about assessing readiness for change and the wisdom of ‘‘preparing the soil’’ before planting the seeds of change

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(Armenakis, Harris, & Mossholder, 1993; Holt, Armenakis, Harris, & Field, 2007; Struckman & Yammarino, 2003; Walinga, 2008). While an argument can be made that no amount of ‘‘pre-change’’ talk can prepare people for the real experience that is change, it seems wise to pay attention to factors that have endangered many change efforts and that can easily be spotted in advance. At the individual level, the change readiness literature includes assessments that examine such factors as general attitudes toward change, willingness to try out new ways of thinking, creativity, and acceptance of ambiguity. Assessing readiness also requires an examination of organizational conditions, including the availability of resources, adequacy of peer support, acceptance of the proposed change process, and agreement with the content of the change. Other factors such as top leadership alignment and commitment, clear objectives, careful diagnosis, adequate pre-change communication and involvement, and having a well-defined path forward have all been mentioned as important in setting the table for successful change. The need to collect data on such sensible and straightforward factors is sometimes tossed aside in the heat of the moment, as crises are brewing or passions about change are running high. Consultants who are invited in to help are sometimes reluctant to delay action by taking time to assess readiness when their clients are calling for immediate engagement. For both clients and their consultants, it is too easy to assume that everything will turn out fine when often, slowing down to check readiness would reveal major threats. When clients and consultants look back at the roots of failures, it’s not uncommon for them to acknowledge that they were aware of the issues that eventually led to failure early on and chose to proceed despite them. This kind of learning is painful and completely unnecessary. A related issue that needs to be addressed is that readiness assessments are designed to point out factors that need further attention before beginning interventions. Since they spot problems, they almost never result in a prescription to move faster. As noted above, clients facing real problems are likely to be impatient with slowing down. Some may even wonder if the consultant conducting the assessment is doing so as a way to expand the scope of work. One solution to this dilemma might be to build readiness assessment into the intervention itself rather than using it as a starting gate. Building readiness assessment into diagnosis could enhance engagement by involving organizational members in understanding and acting upon factors that threaten to impede successful change. If undertaken as an integral part of diagnosis and intervention rather than as a separate ‘‘precursor,’’ leadership’s concern about getting started could be addressed without giving up the need to identify and address readiness factors.

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Creating Direction, Alignment, and Commitment Finally, in framing the change, leaders should ensure that they have input from multiple perspectives and that they have created direction, alignment, and commitment to the change from the beginning, both vertically and horizontally. Just as in understanding the need for change, stakeholders at different levels and in different parts of the organization may have vastly different opinions about how best to proceed. Researchers at the Center for Creative Leadership have developed the view that the most important outcomes of leadership in organizations are direction, alignment, and commitment (Drath et al., 2008). Direction involves setting a clear course by developing strategies and objectives. Alignment requires vigorous actions to make certain that all parts and levels of the organization pull together in service of the stated direction. Commitment entails the creation of meaningful opportunities for dialogue and consensus building that build broad and deep ownership of the goals by all. These outcomes can be achieved in a variety of ways: by charismatic leaders who capture the hearts and minds of their followers; by leaders who empower others to become involved in helping to clarify the direction, create alignment, and grow commitment; and by people coming together even without formal leadership to undertake efforts they could not achieve alone. In this view, leadership does not have to be the sole province of formal leaders in a hierarchy; leadership can be shared among formal and informal leaders throughout an organization. Moreover, leadership can shift and change to accommodate the requirements of the situation. In the face of a crisis, rapid intervention by formal leaders may be the most effective way to galvanize action. In a longer-term change effort, top-down edicts might be exactly the wrong way to go about building solid understanding and commitment to a new way of doing things throughout the organization. In more complex, longer-term change situations, leaders are less likely to have all the answers themselves and almost certain to need the inputs and commitment of others to find the right solutions and see them through. Problems arise when leaders oversimplify complex problems, or take single actions that don’t address interrelated, systemic issues (Beer, 2011). Input from multiple levels and perspectives is needed to understand how the system is working and what must be done to fix it. How leaders approach change over time is an important element of the organization’s culture. Leaders who create dependent cultures by constantly invoking their power to force change on others create a culture of fear and mistrust. Leaders who stick to more collaborative methods of change on an

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ongoing basis and especially in the face of difficult challenges create a culture of interdependence, characterized by cooperation and proactivity (McGuire & Rhodes, 2009). When wishing to tap the collective genius of the organization, and when needing full-hearted acceptance of change rather than half-hearted compliance, creating direction, alignment, and commitment through shared leadership in framing the change is strongly advised.

UNDERTAKING THE CHANGE PROCESS: WHEN ALL HELL BREAKS LOOSE This phase of a change effort is when we expect to encounter the majority of challenges that result in failures. Poor work in the framing stage will show up in the form of issues as the change process is communicated and begun. But no matter how clear the need for change and how well it is framed, issues in implementation are certain to arise. Minor bumps in the road can be addressed, but serious issues are usually fatal to the overall change effort. Momentum is lost, the voices of naysayers become louder, and ultimately resources and attention are withdrawn. Leaders accept less change than desired or required, and consultants are left wondering what they could have done differently. Several categories of issues are most common during the implementation phase. These include emergent issues, unanticipated side-effects, irrational, emotional and political responses, resistance to change, a lack of leadership, inadequate consultant experience or expertise, and difficulties in the client–consultant relationship. Many of these problems are the result of issues that were not properly addressed in understanding the need for change or framing the change, but they show up here as the pressure mounts during implementation. Prior to the implementation phase, change is still a theoretical construct; no one knows exactly how it will play out or feel, or what it might affect. Once implementation begins, change becomes tangible and its consequences clearer. People who might not have had an opinion about the favorability of the effort quickly form one, often influenced by peers or direct supervisors. Rumors begin to circulate about what is really at stake, and people begin to take sides depending upon who stands to gain or lose. As Bridges (1991) notes, changes begin with letting go of the past and what is known as one takes a step toward a less certain future. Emotions run high and all involved become sensitive to signals that indicate how real the commitment to the new direction is among formal leaders and informal spokespersons.

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Stakeholders may take note and get into the act if their interests are threatened. New systems are installed or new ways of working adopted that rarely deliver what they promise on day one. There are in fact so many threats to success that present themselves during the implementation phase that it can make one’s head spin. Yet this is the nature of the work, and preparation is the best defense against unwelcome surprises.

Emergent Issues Anyone who has undertaken home remodeling is well acquainted with how a small initial project can quickly become much larger and more complicated. When an appliance or wall is removed, structural damage is discovered; electrical wiring needs to be replaced; leaky plumbing must be fixed; and while we’re at it, why stop with the kitchen when the baths also need a little spiffing up? So it is with organizational change. Problems that are diagnosed initially as single-cause and simply fixed turn out to be much more complicated. Many variables are found to be involved, and as each is addressed as they are discovered, it is found that that issue is linked to the next, and that to the next, and so on. Maintaining commitment as the change drags on and the scope creeps can be difficult. Budgets are blown and patience wears thin as ‘‘remodeling’’ seems to take forever without producing results that are attractive. In fact, the dust and noise only seems to get worse. Contractors (visionary change leaders) may be fired and replaced when disputes over who is to blame for cost overruns become heated. Banks (shareholders) may need to be consulted before enough capital is raised to complete the extra work. Patience on the part of the client (senior team) may fray to the breaking point. Turning back doesn’t seem like a viable option, but home dwellers (employees) may wish the project had never begun. In real organization changes, additional issues emerge from all quarters while changes are under way (Weick, 2000). Competitors enter a space that was once well-protected. The union goes on strike. Suppliers raise the price of key raw materials. The economy tanks and customers cancel orders. Little can be done to prevent these things from happening despite the threats they pose to successful change. While we don’t know how many change efforts are derailed by emergent issues, it’s safe to say that it isn’t unusual for significant unanticipated challenges to arise while on the road to creating new organizational capabilities. The world simply won’t stand still. Knowing this, it would seem prudent to build reserves into budgets and deadlines, yet this is

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rarely done since selling change is difficult in the first place. If the kitchen contractor told us how much the job would really cost up front, we would never get started. We don’t yet fully understand the psychology that is at work when leaders find it possible to support multibillion dollar bets on ill-advised mergers that don’t pan out (think of Daimler-Chrysler or AOL-Time Warner) yet are hesitant to spend a few more million or a few more months to make certain a strategic change effort is well-supported. What we do know is that rationality doesn’t always dominate decision making. Expecting logic to win out during change simply defies too much evidence that irrational forces often shape decisions regarding change. It may help to warn leaders that the change is eventually going to get ugly, but that alone won’t guarantee that when it does they will be patient. Likewise, contingency planning seems like a good idea but doesn’t always work well in practice. When things go wrong during a change effort, pressure mounts to do something drastic to address the issues rather than to work through them in a calm and persistent manner. Momentum may be difficult to maintain under such conditions (Jansen, 2004). Great leaders make great clients because they have the personal fortitude and political capital to weather storms on the way to achieving their change goals (Tichy & Devanna, 1986; Conger & Kanuga, 1988; Bass & Avolio, 1990). Surviving emergent threats to change may have more to do with client selection than emergency plans. Clients with emotional capability and emotional intelligence seem to do better at radical change (Huy, 2002).

Unanticipated Side-Effects While threats from any number of external sources can destroy commitment to seeing change through, change agents should understand that the change process itself will produce a variety of unanticipated side-effects, some of which are positive and some of which can be quite negative (Plowman et al., 2007; Tarandach & Bartunek, 2009). We simply can’t predict how people will react to change because people make meaning collectively as the journey unfolds (Detert & Pollock, 2008; Bernstein & Barrett, 2011). Emergent change occurs when what starts out as a relatively straightforward intervention triggers reactions that shift the change in a different and unexpected direction. A quality improvement program may make employees

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aware that they can increase control over their work environment by becoming more involved in understanding how systems work and banding together to recommend positive changes. Initial successes in improving quality may lead to greater demands for involvement in a wider range of issues, resulting in cultural changes that were not anticipated as part of the initial intervention. Alternatively, a tightly defined top-down effort to trim costs may provoke reactions that are much stronger than initially anticipated, resulting in acts of noncompliance or even sabotage. Even aspirational changes may produce emergent effects as organizational members become excited by new possibilities and expand the scope and scale of their ambitions. Normally, we wouldn’t count such positive outcomes as intervention failures, but success is often in the eye of the beholder. Leaders who feel threatened by the changes suggested by a vastly empowered and energized workforce may choose to stop the effort rather than lose control of the situation. Evolutionary and revolutionary change may only be separated by a few unanticipated side-effects. More than a few dictators have been toppled by ‘‘the smell of freedom’’ among a relatively small number of their citizens. No wonder that other leaders mistrust the ideas of participation and empowerment. The simple truth is that emergent change can be scary. When unplanned outcomes arise, whether positive or negative, the impression conveyed is that things are out of control. Surprise is not an ally of confidence, and confidence is required to see changes through to completion. To avoid failures due to emergent reactions, change agents must master the art of helping leaders and organizational members make meaning from ambiguous stimuli during unexpected events. In this way, fears can be kept to scale while recognizing that complete control of every outcome is impossible. As is often said, ‘‘the only way to avoid risk completely is to do nothing, but nothing is as risky as failure to take action in the face of change.’’

Irrational, Emotional, and Political Responses These types of responses always accompany change efforts, yet are often kept hidden or not discussed. Kotter and Cohen (2002) note that too many consultants rely on logic to drive change. They collect data, ask people to think about it rationally, and hope that they will come to new conclusions that influence their behavior. Instead, they advocate that most change is driven not by logic but by feelings; people must see the change as positive

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and develop an emotional attachment to the outcomes it will create for them. Marshak (2006) notes five ‘‘covert’’ dimensions of change that are often missed when relying on rational arguments alone to lead to change:     

Politics: individual or group interests Inspiration: values-driven attachments that support change Emotions: feelings evoked by change Mindsets: underlying assumptions and beliefs Psychodynamics: unconscious defenses.

Successful change agents don’t work to prevent these reactions, but rather to make them discussable. Unless this is done, the foundation of support upon which expectations regarding the change is built may crumble for reasons that never come to light for rational examination. Fears may be misplaced, but they have real consequences on decisions. Perceptions of potential loss of power, prestige, or resources can motivate actions that undercut sensible reforms. Often, the antidote to such concerns is information. The misinformed are among the most dangerous threats to successful change. Unfounded rumors become reality when they color judgments that trigger destructive actions. Sharing information widely, in a transparent fashion, can help head off irrational responses before they become fully formed threats. This is why a good communication plan is so important. But rational information alone isn’t enough. Unless the change is aspirational, tapping into values that attend hopes for a better future, individuals will remain unmoved. Some individuals prefer to remain uninformed despite information and aspirations being shared. These individuals are negative by nature, and often derive attention and power from taking a contrarian stance. Change agents can become entrapped by these individuals if they are allowed to become the focus of attention. No matter what actions are taken, these individuals gain by holding onto their negative beliefs and positions. The situation becomes more serious when the naysayer is powerfully placed. Attempts to deal directly and openly with the issues in a group setting may result in a political fight to the death. Consultants who enter such battles are urged to proceed with caution. Indirect discussions that don’t allow the naysayer to play to the audience may be more effective than frontal assaults. Irrational responses are not amenable to rational arguments, no matter how well and convincingly stated. Remaining firm in one’s resolve and attending to more

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positive and rational supporters of the change may help avoid public explosions that can derail progress.

Resistance to Change It was mentioned in the previous section that in framing the change, participation in defining the focus and nature of the intervention can help to prevent later resistance. Today, most writers about change do not view resistance as negative, even though it may present a considerable obstacle to change unless it is dealt with effectively. Rather than another irrational response to change, resistance is viewed as a healthy response by those most directly affected to suggested courses of action that could create disruption (Argyris, 1970; Reichers, Wanous, & Austin, 1997; Stewart & Manz, 1997; Dirks et al., 1996; Dent & Goldberg, 1999; Greenberg et al., 2008; Ford & Ford, 2009). To cope with resistance, the advice given by these scholars is to acknowledge it openly and engage in active listening and dialogue to determine its causes. Often, those nearest the change are aware of factors that higher-ups or those farther removed may not see. It may be that rewards are not aligned with expected new behaviors, or that changes in technology will create additional unforeseen problems with getting work out. As changes descend from the top to the bottom of the organization, they often must adapt to local conditions or become irrelevant (Coghlan, 1986). In other cases, changes run aground of unrecognized social conventions that serve as powerful guides to behavior (Lundberg, 1999). The role of OD practitioners is to help leaders understand that learning from resistance rather than trying to overcome it is a much better course of action (Gottlieb, 1998; Beer & Nohria, 2000). If these factors can be addressed, resistance lowers and change has a better chance of success. The line between resistance and irrational responses to change is a thin one. For this reason, it is all the more important for change agents to understand why people are reacting to change the way that they are. Ignoring complaints because they are believed to be irrational may prevent the discovery of real issues that threaten success. The idea that people always hate change and therefore will rebel against it is patently untrue. Positive changes are often met with excitement and even difficult changes can be received with acceptance if reasons for resistance are explored and addressed. Failures occur when change agents press on in the face of powerful resistance without understanding the message that is being sent.

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Lack of Leadership Leadership receives more attention than any other factor in writings about change, as it probably should. During times of change from one focus to another, people in organizations look to their leaders for direction. Change creates uncertainty because it involves doing things that are novel or different. Resolving uncertainty in order to move forward in a coordinated fashion requires that choices be made among the options available. If we must downsize to cut costs, how do we do it? If we need to improve customer focus or innovation, where do we begin? People look to leaders for direction and for answers to questions that arise as they undertake movement in that direction. Sometimes, leaders set the wrong direction to begin with because they have incorrect information, incomplete understanding, or misplaced beliefs about the problem being addressed. These situations involve poor leadership rather than a lack of leadership. Poor leadership certainly causes its share of change failures, but it is a lack of leadership that is more often to blame. A lack of leadership during change efforts is evident when any of the following conditions are present:  Little or no direction is provided; instead, people are asked to ‘‘do better’’ with little guidance about specifically what doing better means.  No clear action plan is presented; people are told what to do but left to their own to figure out how with little involvement on the part of leaders.  Leaders withdraw support for change at the first sign of difficulties or shift priorities before the change can be completed.  People who try to make changes happen are not rewarded or encouraged while those who resist are not confronted.  Leaders openly side with those who oppose change from above.  Leaders punish those who suggest that leaders themselves may need to change before others can do so.  Leaders say they support the change but in fact continue to pursue the same priorities as in the past.  Leaders are unwilling to confront their peers or superiors when their behavior is problematic.  Leaders are not willing to listen to input from people who have ideas.  Leaders are not willing to make the tough decisions that often accompany real change.  Leaders support change publicly but do little or nothing to drive change when they have the opportunity to do so.

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 Leaders await further clarity before taking action.  Leaders continue to press forward blindly when the change is obviously not working as intended, rather than stopping to listen and figure out what should be happening.  Leaders abdicate control of the change process to internal or external consultants. In each of these instances, the leader becomes an obstacle to successful change rather than a resource. Change agents who work with weak leaders find that they must fight a battle on two fronts: one in helping the organization to manage change and the other with leaders who are supposed to be their allies. Escalation of leadership issues to higher levels may create deeper resentment and even more dangerous covert resistance, while attempts to name and deal directly with the issues in a constructive fashion are not always successful. A great deal of skill and energy is required on the part of the change agent to address issues stemming from a lack of leadership. It’s little wonder that these issues derail so many change efforts.

Inadequate Consultant Experience or Expertise What happens when the issues are not with the leaders or the organization but instead with the consultant himself or herself? Engaging in consulting work does not require a license or certification; consultants are self-nominating. Many without appropriate professional training decide to take up the work, but even a formal education does not guarantee that one is skilled in practice. Without certification or peer review, buyers are forced to use other criteria for consultant selection. Buyers may believe that consultants who are part of a large firm are safer bets than independents, but this is not always the case. The fact is that good and bad consultants are everywhere, and most buyers of their services have no sure way of knowing who they are getting. The allure of the OD consulting profession lies in some combination of being able to help others, having a fair amount of autonomy in how the work is done, and being paid well to do it. Those attracted to this work need to be mindful that the results of their efforts reflect on the entire field and influence not just their own ability to attract new clients but others as well. Consultants sometimes let the desire to help or the need to generate revenue pull them into situations for which they are not prepared. In these situations, it’s easy to tell oneself that things will work out and if they don’t,

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at least learning will be gained. We hope that surgeons don’t approach their work with the same mindset, and there should be nothing about working with people in organizations that demands less care and concern. Organization development involves change. Some of the changes we help to facilitate have an impact far beyond people feeling better about their team or organization. Systemic change results in shifts in power, identity, earning potential, future options, relationships, self-esteem, and individual and organizational health. Anyone who takes all of this lightly does not deserve to represent the profession. While it’s impossible to attribute a specific percentage of change failures to consultant incompetence, it’s a safe bet that some of the more than two-thirds of failures that occur in change efforts can be traced to this source. The profession has attempted to institute consultant certification requirements on several occasions with no success. In fact, one could add these efforts to the list of failed change undertakings. There are many reasons for their lack of success and getting into those reasons here would take us too far afield. Suffice it to say that the barriers to entry in our field are a bit too porous, and methods of monitoring the quality of practice too loose to prevent future failures due to consultant incompetence from occurring. Short of certification, if we wish to address issues caused by consultant incompetence, the simplest solutions would seem to be in the form of pairing more experienced consultants with less experienced consultants to provide continued mentoring and development. In the early phases of a consultant’s career, we could construct ‘‘residencies’’ like those used in medicine to train doctors. Once graduated and practicing, consultants should pair with others as often as possible to both learn from them and to gain insight from their feedback and observations. Throughout one’s career, having a mentor, colleagues, or partners to go to when things suddenly get interesting would enable decisions to be checked before they are unleashed on the unsuspecting. For any of this to work, the consultant must be interested in learning and self-improvement. Perhaps if we could test for this trait, we could create an entry requirement for our field that has some merit.

Difficulties in The Client–Consultant Relationship Since we’ve now blamed both clients and consultants for failures separately, we should acknowledge that even among ‘‘good’’ clients and consultants issues can arise in relationships that lead to intervention failures (Carucci &

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Pasmore, 2002). Clients can expect too much or too little from their consultants, overstretching their capabilities or underutilizing their talents. Consultants may allow clients to steer too much or too little, driving efforts in the wrong direction or allowing the consultant to take too much ownership in planning the journey. A few (but certainly not all) mistakes made by the parties in the relationship are these: Client: Waiting too long to get started when there is a crisis or not matching the intensity of change to the need. Consultant: Not pushing back when the change is framed to note that there is insufficient time or too little intensity to address the real issues. __________ Client: Selecting the wrong thing to change; assuming they understand what the problem is when they don’t. Consultant: Accepting the assignment without demanding that they complete a thorough, independent diagnosis; taking the client’s word for what is going on. __________ Client: Keeping stakeholders out of decisions instead of engaging them. Consultant: Colluding with the client’s fears and insecurities about involving stakeholders instead of confronting them. __________ Client: Paying more attention to the content of the change than how it is introduced. Consultant: Paying more attention to how people feel about the change than getting it done. __________ Client: Selecting a consultant based on either fame or price. Consultant: Taking whatever job is offered, regardless of fit. __________ Client: Expecting the consultant to work without questioning their decisions. Consultant: Not questioning client decisions when they need to be questioned, even if it means losing the work. __________

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The list could go on and on. The point is that the client–consultant relationship is central to the quality of the work performed. If that relationship is not examined carefully and repeatedly, dynamics can creep in that threaten success. Success is in the interest of both parties. Therefore, one would assume that most clients and consultants pay a great deal of attention to their relationships but of course just the opposite is more often the case. The relationship is ‘‘assumed’’ to be working until it doesn’t; but by then, it may be too late to fix it. The fix is obvious; contract up front for regular two-way feedback sessions and make them meaningful. Don’t hold back the important stuff, no matter how difficult it is to discuss. Make the partnership a real partnership rather than one in name only.

SUSTAINING CHANGE OUTCOMES The final phase we will examine is that of sustaining the change, presuming earlier issues have not tripped up the change effort and there are in fact positive outcomes to be maintained. Some of the threats to sustainability are obvious: loosing focus, shifting priorities, and turnover of key change champions. Others are more insidious: passive–aggressive resistance, resource starvation, exhaustion, and unpredicted shifts in the external context. The problem of sustainability in change efforts has been brought to our attention by a number of scholars, and yet there seem to be few solutions to sustainability problems (Docherty, Forslin, & Shani, 2002; Armenakis, Harris, & Field, 1999).

Losing Focus, Shifting Priorities, Turnover of Key Change Champions Following even the most carefully planned and orchestrated change efforts, it is inevitable that emergent change will continue and that these unplanned changes will destabilize ongoing implementation activities (Tarandach & Bartunek, 2009). Champions are promoted or leave the organization to seek new opportunities; internal crises demand a shift of attention and priorities; worthwhile new causes come forward to compete for favor with leaders who need to stay focused on implementing the current change before moving to the next. As the saying goes, ‘‘stuff happens.’’ An antidote to ‘‘change drift’’ is a powerful focus by leaders on execution, making certain that measures are in place to detect and correct any slippage in outcomes (Bossidy & Charan, 2002). Planning measurement and

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feedback in the early framing of the effort can provide leaders with the data they need to confront problems later on. Consultants should help their clients understand that the intervention isn’t over once each unit involved has received its ‘‘treatment.’’ In fact, concluding the intervention is the beginning of change rather than the completion. New ways of behaving and working take time to become routine. During the first few months following the intervention, regression to old habits is more likely than not. Reinforcements in the form of rewards and encouragement, additional training, and continued dialogue regarding what’s working and what’s not are helpful in managing the full transition (Bridges, 1991).

Passive–Aggressive Resistance As discussed previously, resistance can be an obstacle to change during change efforts. Often, resistance during change can be traced to valid concerns about disruptions the change is likely to produce. If addressed, these sources of resistance can actually make the change more successful. During implementation, a different and more deadly form of resistance can arise: passiveaggressive resistance. Individuals and teams support the change in words but not in deeds. Leaders believe everyone is on board because they say they support the change, yet they do nothing to help implement it. When the change fails to achieve its outcomes, these same groups express disappointment but take no action. They wait to be directed, hoping that direction never comes. What makes passive-aggressive resistance so difficult to deal with is the fact that it is based on a lie. Passive–aggressive individuals, teams, or departments tell leaders they are supportive of change when in fact they are not. They do this because they know it is what leaders and consultants want to hear; yet they know as they are offering support that they are lying. Their motives for lying may not be evil; as Hirschman (1970) notes, when faced with a challenge from their leaders, followers must choose between exit, loyalty, and voice. Exit and voice require action and involve risk; loyalty only requires one to carry on without challenge. Leaders and consultants can’t confront the lie of passive-aggressiveness directly, because there is no evidence that the lack of support provided by passive-aggressive individuals or groups is in fact the source of the problem. The change effort could be failing for other reasons, which passive-aggressive individuals are quick to point out: ‘‘The training wasn’t very good, other teams weren’t aligned, other priorities interceded, the plan was flawed in the first place and so forth and so on. We were really hoping this would go well; too bad things didn’t work out.’’

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Passive-aggressive resistance may be one of the most powerful obstacles to change sustainability and one of the most difficult to overcome. Perhaps its prevalence accounts for the comparative success of interventions that involve technical and structural changes over interventions based on changing human processes alone (Friedlander & Brown, 1974). When systems within which people work are changed, they have little choice but to change themselves. Interventions based on agreements alone are vulnerable to those who agree to change publicly but disagree privately.

Resource Starvation When the ‘‘Big dig’’ began work to bury several major roadways and complete new tunnels to expedite traffic in Boston, the projected costs of construction were $2.8 billion. In the end, after years of delay, the project actually cost $14.6 billion. With interest costs, the actual price tag was $22 billion. Few doubt that if the real costs had been known at the outset, the project would never have been undertaken. We are used to cost overruns on military peacekeeping missions, installing enterprise resource planning systems, and home remodeling projects. Yet cost overruns on OD interventions are rarely tolerated. There are probably psychological reasons for this, but to date there has been no analysis of why leaders support cost overruns on information technology projects but not on efforts to improve human processes. What is clear is that the sustainability of positive outcomes achieved in change efforts can be threatened by a failure to budget continuing funds for measurement, problem identification, and secondary interventions needed to address emergent issues. Leaders and consultants too often presume that once success is achieved, it will be maintained forever. Changes may only work for as long as everyone involved is paying full attention to making them work. Without continued efforts, results may erode as behaviors drift off course for a variety of reasons. Budgets for after-implementation change maintenance are rarely generous if they are discussed at all. With no budget to reward new behaviors, reinforce training, make additional changes in processes, or address emergent issues, success may evaporate over time. It is no doubt true that fewer interventions would be undertaken if the cost to maintain their success was put on the table at the outset. Yet to avoid failures due to resource starvation, this is exactly what should happen. If there is no genuine commitment to the change, costs are a convenient

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excuse for derailing the effort. But if change really is desired, consultants should tell clients the truth about the costs and efforts required to make change stick. Exhaustion Money isn’t the only resource in short supply at the end of a long and demanding intervention. People are exhausted, having worked long hours to do their regular work while helping the system transition to a new state at the same time. Organizations don’t ‘‘shut down’’ during change efforts. They maintain their commitments to customers and shareholders, despite the fact that they are not staffed with extra personnel who can devote substantial amount of time to meetings, training, communication, problem solving, and changing systems. Change is real work, and it usually comes out of people’s hides. Once the intervention is completed, it’s understandable that people need a break. Still, to maintain success, energy and attention needs to be paid to fully implementing change. Consultants can help clients do a better job of planning change so that key players get the rest they need and have energy post-intervention to carry on. They can also stop defining the length of change efforts in unrealistic terms. Deep, real change in complex human systems takes time, often years rather than months. Preparing clients for marathons instead of sprints is often the right thing to do. Unpredicted Shifts in the External Context The army has an acronym for almost everything. ‘‘O.B.E.’’ stands for ‘‘Overtaken By Events,’’ which means that new circumstances have arisen that make current plans obsolete. The completion of merger integration effort may become ‘‘O.B.E.’’ if the economy worsens or competitors react with an even larger combination of rivals. Implementation of the dreams created during an appreciative inquiry intervention can fall flat if the inspirational local leader is called to a new position at church headquarters. There is little that change agents and their clients can do to prevent changes in the external environment. There are steps that can be taken to prepare, and they include identifying a strong number two to succeed the leader, setting aside additional resources to cope with competitive threats, and taking steps to engage key stakeholders whose help will be needed when the going gets tough.

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IMPLICATIONS FOR PRACTICE AND RESEARCH Table 2 captures many of the recommendations made in this chapter for enhancing intervention success. The majority of these actions require no more than dedication to good practice on the part of leaders and change agents. A few require additional resources and time. Given the current dismal rate of success in change efforts, a greater investment of time and money would seem a small price to pay for some insurance against the odds.

Table 2.

Actions to Address Predictable Problems in Change by Phases of Intervention.

Understanding the Need for Change

Framing the Change

Help clients confront the Create opportunities severity of issues and for early don’t begin unless involvement in intervention depth and framing the breadth matches the change through objective need for authentic change participation Take extra time to gain Match interventions alignment through and consultants to dialogue concerning the problems subjective change being addressed Prepare clients to play an Assess readiness and ongoing visible role in delay if necessary aspirational change to address issues identified Set up regular client Create shared check-ins to test leadership of commitments and change understand discourse around change

Undertaking the Change

Sustaining Change

Undertake contingency planning and provide emotional support

Focus on execution and reinforcing positive change

Help clients engage in sense making concerning emergent change Create transparency and strengthen resolve

Chang structural arrangements as well as behaviors

Name and deal directly with inadequate leadership behaviors Pair experienced consultants with less experienced consultants Contract for twoway feedback in client–consultant relationship

Prepare clients for long-term engagement

Plan budgets for sustainability

Identify successors and engage stakeholders

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From a research perspective, there is much here to investigate. We don’t know which of these factors have the greatest impact on change success, and we aren’t certain that the fixes recommended are the right ones in every instance. Situational factors no doubt play an important role in determining where to place focus and energy in improving change efforts. Within each factor, there are additional layers of intriguing questions to be investigated. If change agent incompetence is a threat, what skills are most lacking and how can we address those deficiencies? If leadership is inadequate, how can better change leaders be developed? If passiveaggressiveness is widespread, what can be done to assess it, confront it, and manage it? Frankly, it’s a bit embarrassing to be part of a field with such a rich history and such a poor track record. It’s easy for us to point the finger at our clients, or at factors beyond our control, but the responsibility for the current high-failure rate of change ultimately rests with us. If we know that the cards are stacked against us, and that we must play our hands differently to win, do we have the resolve to do so? Or like Charlie Brown, will we keep running at the football knowing full well that Lucy will pull it away? The cures for our current high-failure rate are at least partially known. It’s up to us to understand them more completely and then to act in accordance with what we learn.

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ABOUT THE CONTRIBUTORS Dawna I. Ballard (PhD, University of California, Santa Barbara, 2002) is associate professor in the Department of Communication Studies at the University of Texas at Austin. Her research examines organizational temporality, with particular attention to ways in which time shapes and is shaped by a range of communication processes. Her published research appears in outlets such as Communication Research, Communication Monographs, Small Group Research, Management Communication Quarterly, as well as several interdisciplinary edited volumes, including Time and Memory, Workplace Temporalities, and Time in Organizational Research. Frank J. Barrett is professor of management and global public policy in the Graduate School of Business and Public Policy at the Naval Postgraduate School in Monterey, CA. He was area chair of the management group from 2004 to 2008. From 2008 to 2010, he was visiting scholar at Harvard Business School and in the Harvard Program on Negotiations. He is also faculty member in Human and Organizational Development at the Fielding Graduate University. Michael Beer is Cahners-Rabb professor of business administration, Emeritus at the Harvard Business School and chairman and cofounder of TruePoint, a research-based management consultancy. He has authored many articles, book chapters, and authored or coauthored 10 books. His most recent published in 2009 is High Commitment, High Performance. His 1990 book The Critical Path to Corporate Renewal received the Johnson, Smith & Knisely Award and was a finalist for the Academy of Management’s Terry Book Award. Beer has served on the editorial board of numerous professional journals, the board of governors of the Academy of Management, and has consulted with many Fortune 500 companies. He is fellow of the Academy of Management, National Academy of Human Resources, and the Society of Industrial and Organizational Psychology. He is the recipient of honors and awards, among them the Academy of Management’ Distinguished Scholar-Practitioner Award, Distinguished Professional Contributions Awards from the Society of Industrial and Organizational Psychology, and the Michael R. Losey Research Award from the Society of Human Resource. The Organization Development 293

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Institute recognized him for the development of the Strategic Fitness Process with Russell Eisenstat. Ethan S. Bernstein is doctoral candidate in the management program at the Harvard Business School and a Kauffman Foundation Fellow in law, innovation, and growth at the Harvard Law School. From 2003 to 2007, he worked as a member of the Organizations practice at the Boston Consulting Group after receiving his JD/MBA from Harvard in 2003. Tobias Fredberg is associate professor in the Department of Technology Management and Economics at the Chalmers University. He is also a research fellow in the international research network TruePoint Centre. Dr. Fredberg teaches and conducts research on the management of strategic renewal processes. His recent research has been published in journals such as Long Range Planning, Harvard Business Review, and the International Journal of Technology Management. Together with Norrgren and coauthors Beer, Eisenstat, and Foote, he recently finished a major study on leadership in global companies, resulting in the book Higher Ambition: How Great Leaders Create Economic and Social Value, Harvard Business Review Press (2011). Victor J. Friedman is associate professor of organizational behavior and cochair of the Action Researh Center for Social Justice, Max Stern Academic College of Emek Yezreel, Israel. His life’s work is helping individuals, groups, organizations, and communities learn through ‘‘action science’’ – theory building, experimentation, and critical reflection in everyday life. Currently, his focus is on social entrepreneurship as a means of promoting social inclusion and the development of the idea of ‘‘social space’’ as an actionable construct. He is coauthor of a book entitled Demystifying Organizational Learning and associate editor of the Action Research Journal. He had published in the California Management Review, Management Learning, the Journal of Management Education, the Journal of Applied Behavioral Science, Teachers College Record, and the American Journal of Evaluation. Luis Felipe Go´mez (PhD, the University of Texas at Austin, 2007) is assistant professor in the Department of Communication Studies at Texas State University, San Marcos, CA. His research focuses on how orientations toward immediate or long-term organizational demands influence organizational members’ engagement in communication processes such as structured socialization, information allocation, and reflexivity. David A. Hofmann is professor of organizational behavior at the University of North Carolina’s Kenan-Flagler Business School. He received his PhD

About the Contributors

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from the Pennsylvania State University and his BA from Furman University. His research – focused on leadership, organizational climate, multilevel theory/methods, safety, and human error – has appeared in Academy of Management Journal, Academy of Management Review, Journal of Applied Psychology, Journal of Management, Organizational Behavior and Human Decision Processes, and Personnel Psychology. He has received the American Psychological Association’s Decade of Behavior Award, the Society of Human Resource Management’s Yoder-Heneman Award, and has been a Fulbright Senior Scholar. Karen J. Jansen is assistant professor of management in the McIntire School of Commerce at the University of Virginia and is also associate editor of the Journal of Applied Behavioral Science. She obtained her PhD from Texas A&M University. Before becoming an academic, she worked as a systems engineer for IBM. Her research broadly explores the process and impact of change on an organization’s employees, including how change processes gain, sustain, and lose momentum over time and how perceptions of person–environment fit change and evolve. Guido Maes is scientific researcher at the Centre for Sociological Research of the Faculty of Social Sciences (University of Louvain) He is also consultant and was an HR director for more than 20 years in different companies. Flemming Norrgren is professor in the Department of Technology Management and Economics at Chalmers University. He is partner and director at Truepoint LLC. Prof Norrgren recently published work in Harvard Business Review and Research Policy as well as in several books. Together with Beer, Eisenstat, Foote, and Fredberg, he just completed the book Higher Ambition: How Great leaders Create Economic and Social Value to be published in Harvard Business Review Press (2011). William A. Pasmore is visiting professor of practice in the Department of Organization and Leadership at Teachers College, Columbia University. He also serves as a senior vice president at the Center for Creative Leadership, directing a global practice on Organizational Leadership. He, along with Dick Woodman and Rami Shani, is an editor of the Research in Organizational Change and Development series. He is a well-known author and consults globally to organizations on issues pertaining to leadership, change, and organization development. Prior to joining CCL and Columbia, he was a partner at Oliver Wyman Delta Consulting, and before that, a professor at Case Western Reserve University.

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ABOUT THE CONTRIBUTORS

Abraham B. (Rami) Shani is professor of organizational behavior and management at the Orfalea College of Business, California Polytechnic State University, and research professor at the School of Management, Politecnico di Milano, Milan, Italy. He received his PhD in organizational behavior from Case Western Reserve University in 1981. His main research interest concerns work and organization design, organizational change and development, collaborative research methodologies, learning in and by organizations, and sustainable work systems. In addition to his published articles, chapters, and presentations, he is the author, coauthor, or editor of books titled Creating Sustainable Work Systems (2002, 2009), Behavior in Organizations (currently in its 9th edition, 2009), The Handbook of Collaborative Management Research (2008), Learning By Design: Building Sustainable Organizations (2003), Collaborative Research in Organizations: Foundations for Learning, Change and Theoretical Development (2004), Research in Organization Change and Development (2009, 2010 – an annual research series coedited with W. Pasmore and R. Woodman, Emerald), and Organizing for Sustainable Effectiveness (new annual research series coedited with S. Mohrman, P. Docherty and C. Worely – with the first volume to be published in 2011, Emerald). Geert Van Hootegem is professor at the Centre for Sociological Research at the University of Louvain. Van Hootegem obtained his doctoral degree in social sciences at the KULeuven in 1999, with a doctoral dissertation entitled: ‘‘The bearable slowness of management: Tendencies in productionand personnel policies.’’ For this dissertation, he was awarded with the triannual prize for social sciences of the Flemish Academic Foundation. He was awarded with the Francqui Chair by the University of Antwerp. Throughout his entire career, Geert’s academic work has been focused on understanding the impact of organizational structures, division of work, and team working on various aspects of employee well-being. In most recent years, much of his work has been dedicated to making organizations aware of the implications of the changing demographic reality. He is founding father of a competence pool called Flanders Synergy. This is a foundation funded by the Flemisch Government and profit and not-for-profit organizations. This foundation carries out fundamental and applied research and delivers evidence based consulting in the field of organizational performance and well-being of the workers. On the basis of these experiences, he tries to develop further on the modern sociotechnical (re)design theory.