Larry Hirschhorn (HBR, 2002)

Many executives try to change organizations. Few succeed. And as most executives who have lived through change initiatives will admit, fewer still want to try again. Who can blame them for their reluctance? The process is terribly painful, the logistics are enormously complex, the organization wants deeply not to changeand the success rate is abysmal. Yet most organizations must change, and change profoundly, if theyre to stay alive.

Session 2
Leadership, Vision, and the Initiation of Organizational Change

Topics for today

Recap: Three lenses for understanding organizational change Topic: Introducing changes in a loosely coupled system Close-up: Motorola and Galvin Debate: change from strength or weakness? Wrap-up and takeaways

Three Lenses to see Organizational Change

Political:

interests coalitions resources/power

Cultural:
artifacts values assumptions

Strategic: leadership timing process alignment

The strategic lens

Organization as a system designed to achieve certain goals; Focus on principles for organizational design
Strategic intent Linking strategy and organization Strategic grouping Strategic linking of jobs, departments, and functions Alignments of rewards & incentives with grouping Fit between organization and environments

Processes in strategic design

Assess environment (Threats and opportunities Industry analysis, etc.) Strategic Intent

Strategic Organizational Design (grouping, Linking, Alignments)

Assess organization (Core competences, Organizational capacities)

The political lens

Organization as a political coalition Identify and map relationships among stakeholders, and their different interests and goals Focus on
sources and strength of power distribution of resources coalition building bargaining processes

The Stakeholder Model

Professional Community Top Managers Researchers Local Community Workers Unions Customers Shareholders

FIRM
Middle Managers Suppliers

Public interest groups (e.g., environmental groups)

Banks/Creditors

The cultural lens

Organization as a system of symbols and meanings The importance of history and interpretations Official culture versus subculture Formal authority versus informal social control Cultural context and strategic design

Why difficult to produce change?

Strategic design
Alignment between technology, structure, incentives. Cycles of self-reinforcement

The political model

Changes implies resource/interest reallocation Vested interests in existing technologies, structures

The cultural model

Norms & expectations about appropriateness Interpretation of history The confidence trap

Organizational change in a loosely coupled system

Weick 1982

What is a loosely-coupled system? Why is it difficult to change in a looselycoupled system? Strategies of change in a loosely-coupled system Implications for the Motorola and Galvin case

Tight coupling among units within an organization

Loose coupling among units within an organization

What is loose coupling in organizations?

Loose coupling the disconnectedness, or lack of response between A & B
Between an organization and its environment Between structure and behavior Between units within an organization

Loose coupling is pervasive (during periods of time) in most organizations.

Loose coupling: Examples

Product lines in the automobile company Geographic areas within a company Different departments in a university Individual researchers in an R&D term Knowledge-concentrated companies In Motorola, different parties working in product development, production, & marketing

Loose coupling: Sources

Presumption of logic
The IBM way, the 3M way,

Socialization processes
Professional, within team, within company

Differential participation in decision making

Monday meetings information, pooling of experience

Constant variables that disconnect units

Routinizationcreating constant variables

Corruption of feedback loops

Inspection, annual review, reporting line

Loose coupling: Good or bad?

Question: How do you evaluate the loosecoupling phenomenon? Advantages
Adaptation to local environments Adaptation to own technology minimizing disturbance to the whole system

Problems of loose coupling

Unresponsiveness to global changes Difficult to initiate purposive change

Case study: Motorola and Galvin

Background: Motorola in 1983

Environment
Motorola weathered the recession in industry Positioned to lead competitive edge Cyclical nature of the semiconductor/computer industries Growing threats on the international scene Conflicts between functional manager and product-line managers Prolonged product development cycles Growing managerial layers Programs like periodic technology review become merely a formality Different voices in the tripartite structure

Structural

Personal: Bob Galvin, 61, is near retirement.

The Biennial Officers Meeting, 1983

What was expected by the audience? What did Galvin do? What are the responses from the audience? How do you assess the initiation of change in this episode? What to do next?

Further Questions

How do you evaluate Bob Galvins style of initiating change?

What impact do you think Galvins speech will have? What should Galvin do next? What should Human Resources do next? Is Galvins leadership philosophy and practice a model for Visionary Leadership?

What are the advantages and difficulties of initiating change in a good time?

Debate: Change from strength or weakness?

From strength
Resources Margin of errors What are the challenges?

From weakness
A sense of urgency Challenges of presumptions What are the difficulties?

The Paradox of strategies: Exploration versus exploitation

March 1991

Exploitation or exploration: The strategic choice Examples

IBM in the 1980s: PC or Mainframe? 3M: competing through new niche or existing markets?

The trade-off between the two strategies Exploitation: the temptation

Political Cultural The need for strategic visionthe trade-off

Reinterpreting 3M and Motorola

Why Transformation Efforts Fail

John P. Kotter

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

A sense of urgency A guiding coalition Creating a vision Communicating the vision Removing obstacles Planning for short-term wins Not declaring victories too early Aiming at cultural changes

Campaigning for Change

Larry Hirschhorn
Three distinct but linked campaigns
A political campaign
Forming alliances at different stages Changing structures to realign interests

A marketing campaign
Listening in Working with lead customers Developing a theme

A military campaign
Getting attention Choosing beachheads Creating a war room

Motorola and Galvin Case Revisited

What is the impact of Galvins speech?
A challenge to the presumed logic Activation of attention

Question: Is this enough? Question: What is next?

Summary and takeaways

Organizations evolve to become stable, predictable, and loosely coupled Vision, Anticipatory leadership are critical for organizational change Strategies of initiating organizational change Well begun, half done?

How to Initiate Organizational Change

Recognize and articulate an extremely
compelling need to change. Start with and maintain executive-level support. Understand the organizations readiness to change.

Communicate effectively to create buy-in.

Carr and Johansson 1995. Best Practices in Reengineering.

5 targets in managing change in a loosely coupled system Sources

Presumptions of logic Socialization processes Differential participation rates Constant variables that disconnect units Corruption of feedback loops

Solution
Doubt produces change Re-socialization produces change Equalization produces change Distraction produces change Dependability produces change

Strategy
Attention management Training programs

Decision structure

Organizational slack

Consultant, persistent expert sources