Listen to the podcast:
Studies put the failure rate of organizational change at 70% or higher. Yet, managers face increasing pressure to implement change to meet short- and long-term goals. Gregory P. Shea and Cassie A. Solomon share their approach to dealing with this challenge in Leading Successful Change: 8 Keys to Making Change Work. Jeff Klein, director of the Wharton Graduate Leadership Program, recently spoke with the authors about why we are not as good at change as we need to be, and how we can get better at it.
An edited transcript of the conversation follows.
Jeff Klein: We are here today with Greg Shea and Cassie Solomon to discuss their new book, Leading Successful Change. Greg and Cassie, thanks for being with us today. You start off with a paradox. You say, “We live in a world of permanent change. Our main jobs are change.” Yet, most organizational efforts to succeed with change fail. Can you talk about that?
Gregory Shea: Part of the challenge of being where we are — just in the history of the planet, let alone the history of business or of modern organizations — is that change is simply picking up speed, for any number of reasons, from advances in technology [and] the autocatalytic nature of that change, [to] changes in the financial markets and changes in globalization. It has become a more and more turbulent environment. That precipitates more and more change, which exposes us to what we don’t do particularly well, which is to [change], not just in a one-off fashion, but repeatedly. The pressure to get good at it shows us what we don’t do particularly well. We are not as good at it as we need to be….
One can argue that it’s the key skill for people. We assume that you can do the parts of your job that used to constitute your job: namely, keeping the place running. But today … the change piece has become more predominant. One can argue it’s your real job. What we’re exposing is that we’re not particularly good at it, particularly when we’re talking about being able to do it in a way that’s agile and sustainable — do it over time, and do it repeatedly. An outside pressure is providing the occasion for us to see our limits.
Klein: In the book, you talk about the lead dog myth and the myth of a leader within change efforts. What is the lead dog myth, and how can leaders avoid falling into that trap?
Shea: We tend to over-ascribe, in general, what may be an indication of a system to the characteristics of an individual…. If a change didn’t work, it must be either because you, as the follower, weren’t motivated, or it must be because you, as a leader, were not inspirational. What we know is, yes, that can be part of it…. However, in the end, human beings are much better at adapting to a changed environment than they are to being pushed into change, and we under-attend to that.
When we say it is all about the lead dog, that myth is, “Well, if you don’t see good change, either you have a problem with the leader or you have a problem with the follower….” From a systems standpoint, the place to start is not with the leader or follower. It’s to ask, “What is the environment that you want to [place] around people that would make a certain set of behaviors make sense to them?” Human beings do much better at adapting to environments than they do being told to change in a way that may or may not make sense with how the world around them — their work space, their strategic business unit, their service line — indicates that they should act. You tell them one thing, and the world around them tells them another thing. People are pretty intelligent. They will say, “You will come and go, but the world that is immediately around me — my reward system, measurement system — is telling me to do something else.”
That’s part of the reason, back to your first question, that our record for change is not so good. We put too much on the individual. Cassie and I suggest that it’s far more useful to think about the work of leadership as a critical part of that — including: How are you going to design the work systems, or the environment around people, to make the behavior that you want to see make sense to them? That’s a key part of leadership….
Cassie Solomon: I want to add to that from a different perspective. This is a very accessible set of ideas. Think, “I’m going to change my behavior. I’m going to go off to a productivity training or a time management seminar.” You can feel very inspired and motivated. You make all kinds of resolutions. This is right in line with New Year’s resolutions research. Coming out of the box, you think, “I have changed something inside of me because I’ve learned. I’m motivated.” We know, because of research, that it doesn’t last. The most dramatic example of this is people who are recovering from bypass surgery. Someone has just sawed your chest open, right? You’re motivated to change your lifestyle. But the statistics are extraordinary. Ninety-four percent of people don’t make those changes. We believe it’s really not about getting better at motivating. It’s not the charismatic leader who can convey a sense of urgency or explain the threat to your work force….
[Instead, become] more of a designer of the environment. [Ask,] how do I design the environment around myself, to change my behaviors, for time management? How do I design the bypass patient’s environment so that it’s easy for him to make the lifestyle changes? That’s a different approach. It’s a very different way of looking at change. People get really excited when they learn it. We have all experienced this, even in our own lives.
Klein: As I think about the work systems model that you have laid out, then, is part of the implication that bold change might have better success?
Shea: If you had a choice between setting up more dramatic change, and doing it in a way where you can line up enough of the environment around people that it would make sense to take the bold move, that’s more likely to be successful, we would argue, than a change that was a much more limited, where you only change one aspect of the environment….
Solomon: It has to be bold and aligned. I’m thinking of these change-management turnaround situations: “Oh, we’re going to have this bold change, and this new technology.” If these things are canceling each other out … just being bold is not the answer. It’s thinking about a coherent and aligned system that drives change.
Shea: We also fall into a trap regularly, in that in order to try to make the change “more manageable,” we do make it smaller. When, in fact, we miss the point about what the actual change is. A common example is new software. The change is defined as simply about the software. That seems like it is big enough. But actually, that’s not big enough. Because the change really is that you want a set of people making a different set of decisions, using a different kind of information, with a different set of objectives, with a different kind of collaboration, using different skills that happen to be connected with the installation of this new information system. That actually feels like a bigger change. But for the tens or hundreds of millions of dollars you’re putting into the software, you actually should be thinking about the change in a bigger way. Because if you think smaller, what you’re going to get is 10% of the functionality of the software system. People aren’t going to see why they should change their behavior. They are simply going to be compliant. What really we’re trying to do is change patterns of behavior inside the organization. Bigger could very likely be more successful than smaller, in that case.
Klein: The work systems model that you present in the book gives readers an opportunity to look across those sets of factors.
Solomon: Right. We use it to design with groups. We sit down and say, “Tell us what it is you want to see, and then use this, almost as a checklist. Design with all of these elements, so it’s coherent. People understand it, once they have learned it. They sit back and come out with pretty radical things.
Shea: The book is both a framework, which we have been talking about, as well as a technique, which we try to be specific enough about in the book, so that both are accessible [to show] how you think about it, as well as how you would do it.
Klein: Right. Part of that technique is about really envisioning what the future looks like, and importantly, the set of behaviors that are occurring in the future. What advice would you have for a reader who is trying to put himself or herself that far into the future?
Shea: There are various techniques for trying to envision the future. One [common] aspect is that you want to get far enough out into the future, so you can free people up from the present. If you want to get change to happen, by and large, you don’t want to work from, “How do we improve the present?” Because you have already got a whole bunch of constraints built in there. You’re not going to get people to be as creative as you can be if you can get far enough out. [We also talk] about back-casting, or idealized design. You want to get far enough out temporally that people get freed up to then think about: What might we actually create? That would be one piece of counsel.
The second piece would be to work hard to envision, as if you were a playwright, the scene that, if we saw it, [would suggest] we have gotten to the place we want to get to. That’s the hardest piece for people to stay with: to push to the specificity of what you would actually want to see. How would you know it? Who’s in the room? How are they talking? What tools are they using? What measurement system are they responding to? … [If we're not seeing what we want to see], let’s assume that it’s not because of those people. We can get back there if we have to. But, let’s assume it’s because of how we design the system.
What will we have to do to make it make sense to people to behave in the way we just described?… We have done the work around the scene and done the work of trying to be precise about that. Now, we have what we need to do, a pointed analysis of the systems around people that we need to change. If we don’t do that work on the scene, then we are left with platitudes, and it makes it hard to do the more detailed planning….
Solomon: I’m so glad you went there, because I was sitting here thinking, “I want to give everybody a ‘vague’ button that they can learn how to hit when they [need] it.” What is it you are trying to actually do here? “Oh, I want people to collaborate.” What does that look like? You get all these agreements at the 50,000-foot level. Conceptually, everyone is going to say, “Oh, yes. We just had a merger and acquisition. We want everybody on both sides to collaborate.” We nod our heads and walk away. Then we say, “Gosh, what happened?” What does that really mean to people? What does that look like? What’s the behavior we’re looking for? If you bring the conversation down to that level, you might discover you don’t have quite as good agreement, and you have to keep thinking and working.
Klein: One of the ways that you highlight this in the book is with the examples that you have raised. Two of them really stood out to me. Cassie, I would like to ask you about them. The first was fostering innovation at Whirlpool, and the second was about how to sustain the customer service success that Disney has seen for so many years. What I was really struck with was how these were change efforts that were born out of success, as opposed to crisis or failure. How should leaders of successful organizations think about change?
Solomon: What I love about the Whirlpool case is, the CEO had tried to change Whirlpool’s culture two or three times. Toward the end of his tenure, he said, “I’m going to take one more run at this thing. We have been an engineering company. We’re geared that way. I need to be customer-focused, and we need to be innovative.” It took years, partly because I think they started more modestly, and then just kept adding layer after layer of system change and building all of the ingredients that actually create culture. Three years into it, they had really seen tremendous impact to the bottom line.
What’s great about that, if you’re a successful leader, you see the changes coming. Before the crisis hits, before the burning platform arrives, you want to begin to move. The model gives you a way of designing into that future, without having to wait for panic to set in all the way down through the ranks. That’s too late to start a change like this. It’s going to take a big culture change.
Disney is the opposite, partly because our friend Walt had that vision from the beginning. He just was a holistic thinker. He wanted environment to convey a certain quality of guest experience. They designed feedback mechanisms for people to understand the guest experience. If you read the history of how they built the customer satisfaction experience there — and now they tell other people how to do it — it really includes all of the ingredients that we discuss in the book.
Klein: One of the things that was really helpful to me, as I was reading it, was thinking about sustaining success as a change process, as well.
Solomon: We push changes into our organizations. I’m thinking about hand-washing in hospitals, which is just a horrifically difficult change to incorporate. As long as you’re bearing down and sending the message, you’re getting the behavior you want. But if you turn your attention away, six months later, it may have slid back to the baseline. That really requires this re-engineering of the environment to hard-wire the change.
Shea: One thing I would add to what Cassie is talking about is: What are you going to use as the emotional energy for change? You can remember when it might have been different. One of the products of the 1980s is that we associate developing either a sense of urgency, or what I would term “felt need,” as based on fear. People have the very image of a burning platform. Right? Let’s take a human being, put him on a platform, and light it on fire. And that’s how we’re going to get change to happen. That language came out of the 1980s, which was a particularly difficult, painful time. Radical restructuring, lots of layoffs — all that was going on in the U.S economy.
That’s one way to go about fueling change. Yet, we know that when people are very anxious, when they are scared, you can get them focused. But at the same time, that’s not the way to get the most innovative, creative — because anxiety up, intelligence down. Another way to do it is more to what we were doing before that, which is that we were thinking more in terms of: What are you trying to create? What’s the hope, what’s the dream? Put two men in the moon, or put a man on the moon and bring him back?
If you’re trying to change an organization that’s successful, it’s hard to use the lessons from the burning platform, because where are you going to create that? Even if you do, you’re going to buy a set of problems. That’s fine, if they actually have a burning platform. But, what’s the other way to do it? The other way tends to be much more in terms of, “As good as we are, what would we like to see? What are the things that we’re not seeing here, that we would love to see if we could see?” Or, “We have come this far. What’s the next thing?” You can use this technique that we’re talking about, either when you are working off of more of a fear base, driven by the world outside. Or maybe it’s in the framework of success you’re trying to construct. “What’s the next place? Where’s the hope or optimism that we can generate, given our success, about what might be even better that we could create in the world…?” Or, “How do we get the next 10%? Or, how do we get from the playoffs to the championship?”
When we think about this process and winning organizations, that’s something that isn’t talked about, in part because we haven’t gone back and changed the constructs that we formed in a very traumatic and painful period of time. I don’t think we have quite adjusted, or balanced, or calibrated right. Hopefully, the model provides a way to do that.
Klein: Speaking as an organizational leader, I appreciate what you have said about expanding our view beyond leaders and followers to really encompass the whole environment. I know the question that I often face is, “How much is enough? How much of the environment needs to be shaped? What are the cues to let me know that we are making progress toward our goal?”
Shea: The slightly flippant answer to that would be: You have changed enough when people experience that they are in a different place than they were before. The kind of clinical judgment is, do people say: “Oh, this is different. I’m in a different domain than I was before.” To get to that place, our counsel is that you at least start by thinking of changing four of the eight dimensions that we talk about [in the book]. The point is not that there’s something magic about the four. But in the end, we come back to my first point here, which would be that people whose behavior you are trying to change should experience that they are in a different environment than they were before….
The more, the better. Can it work with fewer [dimensions changed]? Yes. But it gets harder, and you have got to pull harder, so we’re in an area where hopefully people who do research on the model will end up clarifying exactly what the answer to your question should be, Jeff.