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THESIS

’l ‘ofv

This is to certify that the

dissertation entitled

Leading the Development of Learning Capacity in Organizations:
Sustaining Momentum of Change

presented by

Robert William George Hedley

has been accepted towards fulfillment
of the requirements for

Doctor of Philosophy degree in Higher Adult and Lifelong Education

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TO AVOID FINES return on or before date due.
MAY BE RECALLED with earlier due date if requested.

 

DATE DUE DATE DUE ' DATE DUE

 

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6/01 c:/ClRC/DateDue.p65—p.15

LEADING THE DEVELOPMENT OF LEARNING CAPACITY IN
ORGANIZATIONS: SUSTAINING MOMENTUM OF CHANGE

By

Robert William George Hedley

A DISSERTATION
Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of
DOCTOR OF PHILOSOPHY
College of Education

2002

 

 

 

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ABSTRACT

LEADING THE DEVELOPMENT OF LEARNING CAPACITY IN
ORGANIZATIONS: SUSTAINING MOMENTUM OF CHANGE

BY

Robert William George Hedley

This qualitative study of executive leaders (sponsors and champions of
change) and organizations focused on how leaders build the capacity to
learn, through initiatives designed to create profound sustainable change.
The purpose was to understand how leaders perceive the nature of building
capacity within the change initiative, and how they engage growth and
limiting forces to shape and address the initiative. Eight participants,
executive leaders with extensive experience, were interviewed. Each
participant described how he/she handled the forces of growth and
resistance and built and sustained the momentum for change. The
executives described their roles and the tactical approaches they took to
foster collaboration, share knowledge, and develop new individual and
organizational capabilities.

The executive participants were identified through a network of
professional contacts and had to meet established criteria. Each executive
participated in three interviews: a preliminary qualifying telephone
conversation, an initial interview; and a follow up semi-structured interview.
This methodology gave each participant an opportunity to reflect and create a

new sense of meaning and knowing from past events. Interview data was

 

 

  
  
   

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analyzed to determine patterns and then compared with other interview data
to discover common sub patterns and themes. The analyzed data was used
to create a case narrative that best represented the executive Ieaders’
stories.

The study’s findings support four theories: building organizations with
meaningful work is a cooperative creative process; organizational learning
capacity relies on people with the capacity to produce results that are truly
important to them; leaders implicitly follow Kotter’s eight stage change
process; and, gains from enhanced learning capacity are sustainable,
cumulative and self-reinforcing. Improved understanding of the change
process limitations and constraining forces of change, as well as the affects
of improved learning capabilities on those involved in change, may have
practical implications for all leaders of change, managers, workplace
educators consultants and higher education.

The findings offer a change process model for executive leaders
embarking on their first change initiative as the executives interviewed all had
a well-developed discipline of focusing peoples’ attention on the results most
desired and the truth about the current reality. The capacity to cultivate and
maintain a creative tension was found to be a key capability of the executive
leaders. This capability lies in one’s ability to cope with and maintain a
creative rather that a reactive stance to the anxiety associated with an

identified gap between desired state and current state.

Copyright by
ROBERT WILLIAM GEORGE HEDLEY
2002

Dedication

This dissertation is dedicated to my family who inspires me to be
the best that I can be. They give meaning to my being by
contributing so much so, I may pursue my dreams.

 

 

   
  
  

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to them for 1
John
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Marilyn Am;
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Acknowledgements

In completing this research dissertation, l have drawn heavily on the time,
talent and support of many people. I would therefore like to express my gratitude
to them for the contribution each has made to this major undertaking.

John Dirkx, my faculty advisor and committee chairperson, for his
guidance, patience and editorial input, and timely encouragement. His views and
passionate pursuit of the meaning of lifelong leaming have profoundly influenced
my own thinking.

I am also grateful for the time and effort of my committee members:
Marilyn Amey, John Beck and Steve Weiland. These individuals all made timely
invaluable and much appreciated contributions to the final form of this
dissertation.

I would also like to thank Howard Hickey who early on in my journey at
MSU guided and encouraged me. Later after his retirement, Howard stayed in
touch and provided insight and helped put the study in its proper perspective.

During this educational journey many professional friends and colleagues
encouraged me with their enthusiasm for my own development as a leader. I am
grateful for the editorial input provided by Linda Moxley and personal coaching
support provided by Sue Sheldon. I especially want to thank John Rankin,
Janice Wismer, Wayne Johnson and Michael McCain for their exemplary
leadership and personal support.

Acknowledging the support and love of my family is foremost in my heart
and mind. To my parents, Bill and Lorraine who taught me the importance of
family; to my children, Erica and Stephanie who inspire me to be the best that I
can be; and, my lifelong partner, Pat who endured my unpredictable
temperament, yet sacrificed herself to make it possible for me to finish this

amazing journey.

vi

Table of Contents

THE RESEARCH PROBLEM .................................... . .................................... 1
INTRODUCTION .............................................................................................. 1
BACKGROUND AND RATIONALE ...................................................................... 3
RESEARCH QUESTIONS .................................................................................. 8
OPERATIONAL DEFINITIONS ............................................................................ 8
SIGNIFICANCE OF THE STUDY ........................................................................ 1O
LIMITATIONS AND DE-LIMITATIONS ................................................................. 12

Researcher Bias .................................................. . ................................. 12
Gender Bias ........................................................................................... 13
Subjectivity ............................................................................................ 13
Sampling Method ................................................................................... 13
Sample Size ........................................................................................... 14
Generalization Of the Findings ............................................................... 14

REVIEW OF LITERATURE .......................................................................... 15
THE TIMELINE OF LEARNING ORGANIZATION CONCEPT DEVELOPMENT ............. 16
UNDERSTANDING THE CHALLENGES OF CHANGE ............................................ 17
ORGANIZATIONAL LEARNING IN THE WORKPLACE ........................................... 19
FIGURE 2.1: TEN CHALLENGES OF CHANGE ................................................... 20
THE TYPES OF ORGANIZATIONAL LEARNING ................................................... 21
DEALING WITH CHANGE ................................................................................ 24
FIGURE 2.2: FIVE RESPONSES FOR DEALING WITH CHANGE ............................ 25
CREATING THE CONDITIONS FOR STRATEGIC OR PROFOUND CHANGE ............. 26
FIGURE 2.3 LANGUAGING: FOUR ARCHITECTURES OF ATTENTION ................... 28
LEADING CHANGE SUSTAINING THE MOMENTUM ............................................. 28
LEADERS AND CHANGE ..................................................... . ........................... 3 O

The Notion of Organizational Leadership .............................................. 31
Leaders versus Managers ..................................................................... 32
Characteristics of Leaders of Change .................................................... 32
Transformational Leadership ................................................................ 34
SUMMARY COMMENT ................................................................................... 35

DESIGN AND METHODOLOGY .................................................................. 36
PURPOSE OF THE STUDY ......................................................................... 36
EPISTEMOLOGICAL ISSUE ............................................................................. 37
RESEARCH DESIGN ...................................................................................... 38
CONTEXTUAL SETTING AND PARTICIPANT SAMPLE .......................................... 39
DATA COLLECTION PROCEDURES ................................................................. 41
FIGURE 3.1: SEMI STRUCTURED INTERVIEW QUESTIONS ............................... 42
DATA ANALYSIS ........................................................................................... 43

Trustworthiness ..................................................................................... 45
FIGURE 3.2: PROCESS-VIEW OF THE DATA ANALYSIS ..................................... 45

vii

PARTICIPANT DEMOGRAPHICS ................................................................................. 48
PARTICIPANT BACKGROUNDS .................................................................................. 49
THE INTERVIEW ANALYSIS ....................................................................................... 52

CASE NARRATIVE EXAMPLE: CREATING THE COMMON WILL
THROUGH THE ELEVATION OF ORGANIZATIONAL

 

DISSATISFACTION 53
THE CHANGE CONTEXT ............................................................................................ 53
g The company ....................................................................................................... 53
Executive leader's role ........................................................................................ 53
The change initiative ................... ‘ ........................................................................ 5 5
THE NATURE OF THE CHANGE EXPERIENCE ............................................................. 56
The company-dealer relationship ........................................................................ 56
Engaging Conversations to create a sense of dissatisfaction: The dealer
dialogue ............................................................................................................... 58
Creating 0 ‘Burning Platform’ to foster the creation of a ‘Common Will’ ........ 59
Reframing the Relationship from Seniority based structure and process to
Performance Driven ............................................................................................ 61
ENGAGING THE RESISTANCE TO CREATE CHANGE ................................................... 61
The change process ............................................................................................. 61
Changing the organizational culture .................................................................. 62
A Metaphor for Engaging the Forces of Change ................................................ 63
ENGAGING THE FORCES OF GROWTH — CO-CREATING THE FUTURE ORGANIZATION
................................................................................................................................. 65
Developing new learning capabilities ................................................................. 66
New organizational learning capacity emerges .................................................. 67
SYNOPSIS OF THE CASE NARRATIVE ......................................................................... 69
INTERESTS. ............................................................................................................... 7 1
SUMMARY OF FINDINGS ........................................................................................... 76

QUESTION 12 WHAT ARE EXECUTIVE LEADER PERCEP’I'IONS OF THE NATURE OF
BUILDING ORGANIZATIONAL LEARNING CAPACITY WHILE ENGAGED IN CHANGE

INITIATIVE(s)? .......................................................................................................... 77
“Change work is like ‘sailing into the wind” Bert ............................................. 77
Involving those affected sustains profound change ............................................. 77
Organizational Change follows a Process .......................................................... 78
Success and failure can build learning capacity at the individual and
organizational level ............................................................................................. 79
Executive leaders model the habits and capabilities needed to sustain lifelong
learning ............................................................................................................... 80

QUESTION 2: WHAT ARE THE ROLE(s) EXECUTIVE LEADERS UNDERTAKE To BUILD

LEARNING CAPACITY WITHIN THE CHANGE INITIATIVE? ........................................... 81

THE THREE LEADERSHIP ROLES ............................................................................... 82
The strategic capabilities role ............................................................................. 83
Change or process champion role ...................................................................... 84

THE EDUCATIVE ROLES: TEACHER-COACH-MENTOR ............................................... 84

QUESTION 3: WHAT ARE THE WAYS IN WHICH GROWTH AND LIMITING FORCES SHAPE

AND ADDRESS THE CHANGE INITIATIVE? .................................................................. 85

viii

Executive leaders model the habits and capabilities needed to sustain

lifelong learning ...................................................................................... 80
QUESTION 2: WHAT ARE THE ROLE(S) EXECUTIVE LEADERS UNDERTAKE TO BUILD
LEARNING CAPACITY WITHIN THE CHANGE INITIATIVE? ...................................... 81
THE THREE LEADERSHIP ROLES ................................................................... 82
The strategic capabilities role ................................................................ 83
Change or process champion role ......................................................... 84
THE EDUCATIVE ROLES: TEACHER-COACH-MENTOR ................. . ..................... 84
QUESTION 3: WHAT ARE THE WAYS IN WHICH GROWTH AND LIMITING FORCES
SHAPE AND ADDRESS THE CHANGE INITIATIVE? ............................................... 85
Leaders’ capabilities define the limit of organizational ability to confront
the internal and external forces .............................................................. 85
Involve all stakeholders: overcome fear and regenerate common will or
sense of purpose to promote creativity .................................................. 87
Co-creating the vision ............................................................................ 87
Developing Individual learning capabilities that foster generative learning
and creative leadership behaviors ......................................................... 88
Prevent stalling by using fact based analysis and aligning people with the
organization’s work ................................................................................ 90
Celebrate and anchor gains and wins .................................................... 91
CONCLUSION ............................................................................................... 91
CHAPTER FIVE ............................................................................................ 93
CONCLUSIONS - RECOMMENDATIONS .................................................. 93
CONCLUSIONS ........................................................................................... 93

APPROACHES TO UNDERSTANDING THE CHALLENGES OF CHANGE .................. 93

Personal Commitment and a Passion to Improve Performance ............ 95

Leading Change — Sharing Responsibility for Creating Sustainable

Growth through Involvement .................................................................. 96
DEVELOPING LEARNING CAPABILITIES ........................................................... 98

Living in the Gap - Leading Change and Sustaining the Momentum .. 100
SUMMARY OF CONCLUSIONS ...................................................................... 102

IMPLICATIONS FOR LEARNING ORGANIZATIONS ............................... 103
PRACTICAL IMPLICATIONS ........................................................................... 103
THE IMPLICATIONS FOR HIGHER ADULT AND LIFELONG LEARNING .................. 106
THE IMPLICATIONS FOR FURTHER RESEARCH ............................................... 107

AP PEN DIX B ............................................................................................. 1 1 2

APPENDIX C .............................................................................................. 113

LEADERSHIP CASE NARRATIVE #4 ........................................................ 113
EXECUTIVE LEADER'S BACKGROUND ........................................................... 114
Executive Leaders’ Role ...................................................................... 115
The Nature of Change ......................................................................... 119
The Executive Leader's Imprint ........................................................... 119
Building Momentum ............................................................................. 120
The Change Model .............................................................................. 121
APPENDIX D .............................................................................................. 127
LEADERSHIP CASE NARRATIVE #6 ....................................................... 127
LEADING CHANGE IN THE PUBLIC SERVICE DURING ECONOMIC DOWN TURNS .. 127
Background ......................................................................................... 127
EXECUTIVE LEADER’S BACKGROUND ........................................................... 128
EXECUTIVE LEADER’S ROLE ....................................................................... 128
THE NATURE OF CHANGE ........................................................................... 129
INTERNAL INPUT ........................................................................................ 131
RE-ENGINEERING ....................................................................................... 132
VALUE OF COMMUNICATION ........................................................................ 134
LESSONS LEARNED .................................................................................... 136
ROLE MODELING ....................................................................................... 139
LEADING BY LEARNING ............................................................................... 141
GOOD NEWS/BAD NEWS ............................................................................. 141
APPENDIX E .............................................................................................. 144
LEADERSHIP CASE NARRATIVE #3 ............................................................... 144
CHANGE EXPERT QUESTIONS UNREALISTIC EXPECTATIONS ............................ 144
THE ENVIRONMENT .................................................................................... 144
TIME ......................................................................................................... 145
EDWARD’S CHANGE MODEL ....................................................................... 148
MAKING CHANGE WORK ............................................................................. 149
BARRIERS TO CHANGE ............................................................................... 151
SUCCESSFUL CHANGE ............................................................................... 153
APPENDIX F ............................................................................................. 156
THE COMPOSITE CASE: LEADER UNITES CLASHING CULTURES TO BUILD GLOBAL
HIGH-TECH ORGANIZATION .......................................................................... 156
THE CONTEXTUAL SITUATION ..................................................................... 156
The company ....................................................................................... 156
Executive leader’s role ......................................................................... 157
The change initiative ............................................................................ 158
Building one culture and sustaining momentum .................................. 159
The learning processes ....................................................................... 161
Building capacity through new learning capabilities ............................. 163
Uncovering the common will by examining the assumptions ............... 166

TABLE OF FIGURES

FIGURE 2.1 TEN CHALLENGES OF CHANGE... ......20

FIGURE 2.2 FIVE RESPONSES FOR DEALING WITH CHANGE... ...25

FIGURE 2.3 LANGUAGING: FOUR ARCHITECTURES OF ATTENTION...28

FIGURE 3.1 SEMI STRUCTURED INTERVIEW QUESTIONS... .....42

FIGURE 3.2 PROCESS VIEW OF THE DATA ANALYSIS... .....45

xi

Chapter One
The Research Problem

Introduction

Since 1982, almost two thirds of the organizations listed in the top 500
companies of North America have either gone out of business, experienced
decline or been purchased by other companies (De Geus 1997). Many such
businesses like the aircraft manufacturer Boeing, and the retail services
company Eaton’s, were even cited in books like ‘In Search of Excellence”
(Peters & Waterman 1982) as highly successful organizations. Yet in the
1990’s Boeing narrowly escaped failure as the aerospace industry diversified
and globalized. Eaton’s, after over 100 years of successful operation,
succumbed in less than a decade to competitive pressures and diversification
of the retail industry.

Why doicompanies fail to adapt successfully? According to Pascale
(1990), some companies continue to engage in the development of practices
suited to a paradigm that no longer conforms to the shifting reality Of the
marketplace. For example, companies that continued to refine the
manufacture of analog technologies in the face of the more advanced digital
technology demanded by consumers failed to make the necessary strategic
Changes. In part, because their leaders either did not realize in time, or failed
to perceive, the coming Of the next paradigm shift (Barker 1992, Pascale,
1990)

There are numerous examples of the attempt business leaders have
made to strategically change their respective organizations. Feeling the need
for urgent change during the 19803 and 19903, many organizational leaders
undertook a variety of work place reforms popularized as reengineering,
reinvention, renewal, downsizing, rightsizing, or transformation (Hammer
1996, Peters 8 Waterman 1982). Many of these change initiatives became

unsustainable and produced less than expected results or failed. Studies
conducted by Little and McKinsey (1992) and Champy, (1995) indicated that
two thirds of the TQM (Total Quality Management) initiatives failed or were
less than successful. Kotter (1995) studied one hundred executive led
change initiatives and discovered that many failed, a few were successful and
the majority produced less than expected results. A number Of researchers
have concluded that these failures and partial successes have not been
remedied by bringing into the organization more expert advice, better
consultants, or more committed managers (de Geus 1988, Kotter 1995.
Scharmer 1999, Argyris, 1994). Rather, the source of these failures lies in
the most basic ways of thinking about Change (Senge et al 1999).

There is some evidence that initiatives designed to enhance learning
capabilities and the collective organizational learning capacity are proving to
be more sustainable, cumulative, and self-reinforcing (Argyris 1994, Dennis
1993, de Geus 1997, Roth & Kleiner, 1998, Scharmer 1999, Senge et al.,
1999, Slocum 1998). In the last decade, executive leaders responsible for
legitimizing change in organizations (Conner 1993) have begun dealing with
the forces that limit and constrain the growth of the organization. These
executives led initiatives aimed at increasing the collective learning capacity
within their organizations (Argyris 1994, Scharmer 1999, Senge et al., 1999)
To date there is very little known about how executive leaders engage in
these roles or how they perceive the building of learning capacity Within the
Change initiative.

This study focused on executive leaders that have explicitly sought to
enhance their organization’s capacity to learn. The purpose of this study was
to understand how executive leaders perceive the nature of building learning
capacity within the change initiative, their role(s), and the ways in which

growth and limiting forces Shape and address that initiative.

Background and Rationale

Historically, organizations have relied on the executive leadership
working within the prevailing system of management to plan and execute
organizational change (Argyris 1994, Bennis 1994, Byrd 1987). These
executive leaders have relied on the use of strategic planning processes to
generate assumptions and make business decisions. However, there are
profound limits embedded in the prevailing system Of management. These
limits include the following:

o The hoarding Of power

0 the commitment of managers to change as long as it doesn’t affect
them

. the “undiscussable” topics that people feel are risky to talk about.
and

. The management “silo” structure, which produces powerful
incentives to fix problems in the local functional areas, but not to
address the interactions among Silos, where real problems are,
generated (Senge et al.1999, p 8).

In addition to internal limits, there are external limits or forces, such as
competitive pressures, globalization and diversification. Toffler states that
“the leader’s failure to perceive Change and take action is due in-pan to a
dangerous mismatch between the amount of decision-making that executives
have to do, information that’s available and the speed at which an answer is
required” (2000, 4). Toffler also suggests that “business leaders need a
vision, a sequence Of temporary strategies, a process with some climate
(positive atmosphere) that makes it possible to successfully adapt” (2000, 4).
The notion of temporary strategies and processes are referred to as adaptive-
strategies.” They play an important role in enabling the organization to shift
or flex to the increasing diversity that permeates today’s market place
(Mintzberg 1989, Conner 1997), Also, as organizations gain experience

forming and executing adaptive strategies, executive leaders have begun to
pay more attention to the development of new capabilities needed to create

the climate that sustains Change, thus reinforcing organizational growth
(Argyris, 1 994; Senge et al., 1999; Toffler 2000).

This attention to the development of new capabilities became evident
in the mid 1980’s, as leaders turned their focus to the development of learning
processes and systems that would enhance or improve the quality of
business production and results (Argyris 1994, Songs et al., 1 999, Marquardt
8 Reynolds 1994). According to Argryis, this example of learning capacit)I
development was exemplified by businesses that relied on the outsourcing of
production and adaptive or single-loop learning business strategies as a
means to be fast, flexible or as the current vocabulary puts it, “agile”.
According to Dodgson (1 993) single-loop or adaptive learning can be equated
to activities that add to the knowledge base or firm-specific competencies or
routines without altering the fundamental nature of the organization's
activities. McGiIl and Slocum Jr. (1992) use the example of General Electric
(GE) of the 1980-90’s, when they used an outsourcing strategy combined with
adaptive or single-loop learning to maximize profitability. This strategy
resulted in the outsource manufacturers developing research and
development capabilities, marketing products under their own brand, and thus
becoming competitors and eventually winning market share from GE

By the 1990’s, adaptive strategies, which implemented Change
initiatives like total quality management, downsizing, and re-engineering
brought less than expected results, and the growing mismatch between the
need for change and the organization’s ability to adapt and innovate
continued. Argyris suggests that aithough strategy is essential, its purpose is
to avoid vulnerability and risk. To over—Come this natural resistance or risk
aversion to change he suggests that business leaders need to develop the

Cap’élCity for double-loop or generative learning within the organization

(Argyris 1994). This type of learning occurs when people in organizations
question and modify existing norms, procedures, policies and Objectives.

This learning also involves Changing the organization’s knowledge base or
firm-specific competencies or routines (Dodgson 1993). This will drive out the
underlying issues not examined in the absence of generative learning, when

executives encounter embedded resistance to change (Argyris 1994).

The Challenges of diffusing innovative practices or helping the
organization learn from its own members, illustrate the problems business
leaders tackled while developing double-loop or generative learning capability
within their reSpective organizations. For example, many companies are rife
with pilot projects or “skunk works” (semi-isolated teams that produce
breakthroughs in product development or process design). Sympathetic,
often-frustrated executives do not know where to begin to facilitate the
transfer of useful knowledge between people, and across boundaries of

groups, departments and divisions (Senge et al., 1999, Rogers 1995).
Attempts to manage knowledge, using information management systems

such as databases to capture and spread ‘knowledge’, have generally
produced less than expected results and often at great expense. This occurs
because “the underlying causes are similar: the organizational design isolated
work groups to intentionally keep information from one another and

management practices pit teams against one another in competition” (Brown
& Duguid 1991, p 43).

Symptoms of the challenge of diffusion go beyond the failures of
knowledge management. They include distrust, and lack of faith, confidence
and an absence of learning communities (Brown 1991, Senge et al., 1999).
Dennis Sandow, quoted in Senge et al., (1999, p420). Brown notes, there is
growing evidence that “embedded in our organizations are self—organizing
social networks that are a primary means of learning about our capacity to

support each other and our community. as well as the COWPaW’S goals.”

Nancy Dixon suggests that executive leaders need to foster cultural change
and support the change by designing cross-organizational learning
infrastructure to facilitate the diffusion of innovation (Dixon 1999).

Recently, leaders of change are addressing limits and constraints by
focusing on the development of ‘learning capabilities’, which Senge (1999,
p45) defines as "those skills and proficiencies that, among individuals, teams,
and larger communities, enable people to consistently enhance their capacity
to produce results that are truly important to them.” These new learning
capabilities include the ability to reflect on and Clarify personal aspirations, to
build shared aspirations, to talk Openly about complex conflictive issues
without invoking defensiveness, and to think cogently about systems and act
effectively on systemic issues (Porter, 1998; WIersema 8 Treacy 1 995',
Wheatley 1994; Senge et al., 1999). This type of learning initiative is referred
to as deuterO or organizational learning (Nevis, et al., 1995). While there are
documented successes, many have also failed (Barker 1993, Kotter 1997,
Senge et al., 1999). It seems that focusing on the change and the
development Of learning capabilities is essential for successful strategic
change. Therefore, without a greater understanding of the processes that

limit their growth, the rate of success Of these change initiatives may not
improve.

The emphasis on strategic organizational change is shifting from short-
term renewal efforts to strategic change initiatives aimed at creating a more
profound organizational Change sustained over time (Scharmer 1999, Senge
et al., 1999). De Geus studied companies who have successfully sustained
their organizations Over periods of time that included shifts due to global war,
societal upheaval and changes in the economy. These organizations were
characteristically based on a ‘living' set of values and principles that were
periodically renewed, and re-interpreted by the peOple working in the

organizations, He also found these organizations were able to sustain

change over time, not by focusing solely on the development of new products,
but rather on the development Of capabilities aimed at providing relevant
service within the organization and to customers (De Geus 1997). This
suggests that leaders responsible for change need to understand more about
processes that can nurture growth, as well as those that slow or cause

Change initiatives tO fall. They need to understand and take action on those
constraints that limit growth and development of new capabilities. According

to Senge et al., (1999, p8), “entreating people to try harder, to become more
committed, to be more passionate, cannot possibly have much lasting effect."
Sustaining Change requires understanding the reinforcing growth processes

and what is needed to catalyze them, and addressing the limits that keep
change from Occurring.”

The role(s) played by business or executive leaders are evolving
rapidly, with the need to grow the organization’s capacity to learn and sustain
the momentum of Change (Connor 1997). According to David Kantor and
Steven Ober in Senge et al., (1999, p262), “idealizing”, “great leaders” and
“heroic figures” is a surefire way to create and maintain change-averse
organizations. The alternative is to focus on leadership communities, such as
the interplay between executive leaders, line leaders and network leaders.
There is much more leverage when these three types of leaders act together,
than when any “hero” acts alone.

Conner (1997) defines the executive’s role metaphorically as ‘Sponsor’
of change. The sponsor is a business leader or executive who legitimizes
change, allowing for broader and more diverse participation of line leaders
and network leaders in the conception of strategy, and planning and
execution of change initiatives (Conner 1995). Conner refines this definition
by differentiating between the initiating sponsor and sustaining Sponsor roles
and activities that occur during the change cycle. Jaques and Casson (1994)
support this description of the business leader change role and adds that,

depending on the size of the organization, the sponsor’s position is not more
than two levels removed from the Chief Executive Officer (CEO). Also, the
sponsor or business leader is responsible for decisions that affect the
organization’s livelihood over a period of time that coincides with the

organization’s vision, usually not less than three years, and often five or more
years.

It is evident that the learning capacity of an organization plays an
increasingly vital role in the continued success of an organization. It is also
evident that executive leaders play a critical role(s) in growing that capacity in
order to sustain the momentum of change. There is a need to understand
how executive leaders perceive the nature of building Ieaming capacity within
the change initiative, their role(s) and the ways in which growth and limiting
forces shape and address that initiative.

Research Questions

This study addressed the following questions:

1. What are executive leader perceptions Of the nature of building

organizational Ieaming capacity while engaged in change i nitiative(s )?

2. What are the role(s) executive leaders undertake to build learning

capacity within the Change initiative?

3. What are the ways in which growth and limiting forces shape and
address the change initiative?

Operational Definitions

Learning Capabilities are skills and proficiencies that, among individuals,
teams, and larger communities, enable people to consistently enhance their

capacity to produce results that are truly important to them (Senge et al.,
1999,p.45l

Change Initiative(s) come in many shapes and sizes. They can be as simple
as a series of meetings on a crucial business objective or as complex as a
corporate wide “transformation”. They are often linked to other types Of
corporate change activities: in-depth quality improvement efforts,
“sociotechnical” high-performance team projects, marketing reorganizations,
environmentalism, and participative process redesign efforts (Senge et al.,
1999, p. 43).

Growth Processes refer to three fundamental reinforcing processes that
sustain profound change by building upon each other, only one of which is
concerned explicitly with improved business results: enhancing personal
results, developing networks of committed people, and improving business
results (Senge et al., 1999, p. 42).

Limiting Forces are sets of forces that oppose change. They come into play
in all initiatives aimed at deep and extensive or “profound” Change- “They

are, as best as we can tell, the organizational analogs to water, soil, nutrients,
sunlight, and space for roots to spread (Senge et al., P, 25)"- Examples

include the challenges of: control; adequate support resources; relevance;
management clarity, consistency and work context; conflict between grOUps
and organizational culture; fear and anxiety; negative reinforcement; isolation
and ignorance; prevailing governance structure; and diffusion Of innovation
(Senge et al., 1999).

Organizational Strategy and Purpose involves revitalizing and rethinking the
organization’s intended business focus, its contribution to its community, and

its identity (Senge et al., 1999, p- 29).

Organizational Learning is the way firms build, supplement, and organize
knowledge and routines around their activities and within their cultures, and
adapt and develop organizational efficiency by improving the use of the broad
skills of their workforces (Dodgson 1993, p 377).

Learning Organization is a firm that purposefully constructs structures and

strategies so as to enhance and maximize organizational learning (p 377).

Significance of the Study

This study will identify practical implications by describing and interpreting
the executive leaders’ experience. The common insightful perceptions about
the nature of change gathered from the stories of executive leaders engaged
in the development of learning capabilities and organizational learning
capacity may have direct application in higher education and other public and
private sector organizations. Analyzing and gaining a greater understanding
of the process limitations and constraining forces, also may have practical

implications for all leaders of Change, managers, workplace educators,
consultants and employees. Other practical implications include:

' Clarifying the educative role(s) executive leaders play in supporting the
development of learning capabilities and organizational learning capacity
Within strategic change initiatives;
' Identifying those role(s) specific to the position of Chief Learning Officer or
Sti‘ategic Capabilities Executive;
. Building a greater understanding of the requisite eXperience, roles, teams,
and Ieaming needed to prepare business leaders for the leader’s “3‘93
Identifying the formal and informal learning programs that have proven

benefiCiai to leaders in their work role or as developmental experiences;
and

1

‘IO

0 identifying communities of practices relevant for business leaders in
organizations.

The results of the study provide valuable information to individuals, groups
and Organizations about case examples of strategic change, and the learning
initiatives that have either failed or succeeded in the goal of developing
sustainable change in an organization. If we can gain greater understanding
of the executive’s role in leading strategic change initiatives, then we may
provide information helpful in the selection and development of executives.
From a Practical standpoint, the shared experience of these executive leaders

can Provide a template model for individuals about to undertake their first
change initiative.

There are implications for theory building in the fields of leadership,
organizational or deutero learning, generative or double-loop learning,
diffusion of innovation, workplace Ieaming, and transformative learning,
organizational change process and systems management. In addition, we

may discover information that underscores the value of Ieaming in
Organizations, such as implications for:

' Designing curricula and delivering mid-career higher education leading to
Master’s and Specialist’s degrees;

' Building communities of executive leaders who are committed to the

development of organizational learning capacity within change initiatives;

' BUilding learning communities and/or other cross boundary knowledge
She ring infrastructures in organizations;

' BLIiIding information systems for knowledge management on the
deVelopment of generative learning within the organization and it’s impact
on a strategic change initiative;

’ Mitigating the impact of process limitations and constraining forces on
employees and front line managers; and.

11

0 Understanding the effects of improved learning capabilities on employees
and front-line managers.

Limitations and De-Iimitations

While this study seeks to understand the experience and perceptions of
organizational leaders known as ‘leaders of change’, and roles played by
these leaders, the case study narrative is limited to the following:

° Organizations and leaders who are committed to enhancing the
collective learning capacity by developing learning capabilities to
sustain strategic change;

The interrelationship played between ‘strategy and purpose’ and
organizational change through networks of committed people, personal
results, and business results;

0 The voice and interpretation of leaders of change in organizations;

and,
- Large business (private sector) and public educational (public sector)

organizations operating in Toronto, Ontario, Canada.

The following are some potential limitations of the study methodology:

Researcher Bias

Qualitative research requires direct interaction of the reseal'el'ier With the
participants and the data. “The researcher needs to be aware 0f the need ‘0
s“Spend his or her own beliefs and predisposition” (Bogdan & Blkleh1975- p.
9), Lil”WCOln and Guba (1986) suggest that qualitative researcher bias may
occur during the development of questions and during the inteFVieW process
either verbally 0r non-verbally. In this study, the investigator also needs to be
Wenxzant 0f Possible biases, due to work experience gained as professional

12

organizational development consultant and senior director in lead i ng

numerous Ieaming initiatives.

Gender Bias

The participant selection process identified both male and female subjects
in proportions similar to that of the total population of executives. The

researcher endeavored to develop rapport with each subject by listening
intently to understand the participant’s statements and reflect candidly with

secondary and tertiary questions to seek greater understanding of intent.
This issue was contextual to the gender, personality, age, ethnicity, setting.
time and proved to be of no particular concern to the study (Glazer 1967,

Gonzalez 1 986, Bradley 1979 in Glesne & Peshkin 1992, p76).

Subjectivity

Participants are providing subjective information in narrative form and both

the participants’ responses and the researchers interpretations are
Perceptual and interpretive in nature. “To explain and understand human
soCial behavior, we need to know the meaning attached to it by the
pa’tioiPants themselves, nevertheless it is important to be aware of the

St-lbjective-objective distinction” (Nielsen 1990- P- 7)-

Sampling Method

Study Participants were recruited through a referral network 0i

professional COr‘Itacts. The sampling, may be somewhat limited by the
availability of individuals who meet the selection criteria. The researcher
exercised care in the selection process by thoroughly eXplaining the purpose

and Significance of the study and by making potential participants aware of

13

their involvement and time requirements. In one sense, it was a random
selection of participants because the first eight participants who met the

criteria and who were willing to participate comprised the sample.

Sample Size

The sample was limited to twenty subjects. These subjects met the
selection criteria established for the study. The data necessaries to establish

the emergent themes, patterns and sub patterns were achieved by

interviewing eight subject participants.

Interpretation of the Data

Since the data interpretation is subjective, the results, conclusions and

recommendations were limited to the place and time in which the study was

conducted -

Generalization of the Findings

The findings were limited to the perceptions of those subjects studied.
Generalizations or transferability of the conclusions and recommendations to
a large, population was not the primary objective of the study. In future
Studies, additional knowledge may be gleaned by examining the change

14

Chapter Two

Review of Literature

Few leaders understand the depth of commitment required building a
learning organization. As Bill O’Brien, a retired CEO once put it: “This
involves the willingness to change our mental models.” ln practice, it is
disorienting and deeply humbling, because our old mental models
were the keys to our confidence and our competence. To be a real

learner is to be ignorant and incompetent. Not many tOp executives
may be up to that.

Senge & O’Brien, 1998
Others agree with Senge and O’Brien. According to Jaworski,

“Nowhere does the burden for leading change land harder than on the
shoulders of senior management. By their nature, traditional hierarchical
organizations concentrate power at the top,” (Jaworski, 1998, 1). So, it is
inevitable that those in the most senior positions are seen as having the
greatest responsibility for change. But the people at the top got there by
mastering the old system. In many ways, executives in the top two to three
layers of management have the most invested, psychically as well as
financially, in the prevailing management system. In other words, “those with

the greatest responsibilities to lead in the changes that lie ahead may be the
least able to do so,” (Jaworski, 1998, 1).

Current management literature is full of practical advice and
suggestions. After downsizing, rightsizing, reengineering, renewals.
leadership Change, and other reactions to excess capacity, the literature has
“the to offer about how to achieve a sustainable yet Profound change
(Jaworski, Gozdz, & Senge 1998). Many firms are trapped in a vicious CYCle
of short-term Cost reduction at the expense of long-term revenue creation.
r enewed financial pressure, and further downsizing. Clearly, it is not
des\reble to dOWnsize an organization into long-term health and
Competitiveness (Jaworski, et al., 1998, p1). While the need for

15

organizational change is clear, the nature of the changes needed is not. This
chapter will begin with a brief summary of the key concepts developed
between 1938 and 1989. Then the chapter will delve into the work in
progress and related action research of The Society for Organizational
Learning (SoL). It is at SoL in 1984 that Senge, De Geus, O’Brien and a

group of organizational leaders formed a learning organization study group at
MIT, which later became SoL in 1989.

The Timeline of Learning Organization Concept Development

The conceptual study of learning organizations has been traced back
by members of SoL and is available through their website. Herein is a
summary of the key concepts relevant to this study. The first relevant
concept dates back to 1 938 with the concept of “experiential Ieaming” as an
ongoing Cycle of activity published by John Dewey. In 1947, the Macys
Conferences organized by Margaret Mead, Gregory Bateson and Lawrence
Kubie brings ‘systems thinking’ to the awareness of a cross-disciplinary group
of key intellectuals. ln 1946, Kurt Lewin proposes the idea of ‘creative
tension’ between a person’s vision and sense of reality. Also in the 1940’s
Kenneth Craik coins the term ‘mental models’ a discipline of reflection and
inoUiry skills focused around developing awareness of the attitudes and
per c3ePtions that influence thought and interaction. In the 1950’s and 60’s,
Jay Forrester (1 956) develops the concept of ‘system dynamics’ and
pUb’iShes Industrial Dynamics, while Douglas McGregor (1960) pUbliSheS The
Human Side of Enterprise, an examination of the interactions of pe0ple
impacting an organization’s effectiveness (SoL 2000).

In 1970, Argyris and Schon begin collaboration on ‘Action Science’ and
study how espoused values clash with the values that underlie real actions.
Their work was published in 1974 in Theory and Practice (Argyris & SChOh
19743 and UPdated in Action Science (Argyris, Putnam & McLain-Smith
\S'Btn- In 1973. Don Michael publishes a book for policy-makers entitled

16

Learning to Plan and Planning to Learn (Michael 1973) that for the first time
sets out the idea of organizational learning. Lastly, in 1988, de Geus working
with Senge and others in the SoL study group, publishes his ideas in a
Harvard Business Review article called “Planning as Learning” in which he
concludes “The greatest competitive advantage for any organization is its
ability to learn,” (de Geus, 1987, p 74). Later in 1989, Senge summarizes the
key disoiPlines of Organizational Learning, Systems Thinking, Personal
Mastery, Dialogue, Parallel Structuring, and Process Consultation in his book
titled, The Fifth Discipline (Senge 1990).

Understanding the Challenges of Change

The article “Planning as Learning” (de Geus 1988) resonated
throughout the business world. The members of SoL were also examining
organizations that used learning as a means to drive change from within.
Evidence gathered suggests that initially these ‘Iearning initiatives’ failed more
often than succeeded. However, many companies documented success and
were encouraged to understand more about the conditions needed to foster

greater success (Scharmer 1999, Senge et al., 1999). This is evidenced by a
Popular quote by Jack Welch of General Electric who had concluded in this
statement printed in a GE annual report:

“Our behavior is driven by a fundamental core belief: The desire, and
the ability of an organization to continuously learn from any source -
and to rapidly convert this learning into action — is its ultimate
competitive advantage.”

(Welch, 1996 in Senge et al., 1999- P 22)
Many other companies including Motorola, KPMG, coca- Cola, Ford
Mom" Company . Shell Oil and Mead Industries, have since featured the
learning organization concept in recent annual reports (Senge et al., 1999)-
The growing eVidence documented by SoL members at companies like Ford
MQtQt‘ Company, Shell Oil, US. Army national training center, Detroit Edison.
Bhtfih Petroleum, Covenant Insurance, Toyota and others suggests that the

17

 

gains from enhanced learning capacity have proven to be sustainable,
cumulative, and self—reinforcing (de Geus 1997, Senge at al., 1999,
Balasubramanian, 1998, Scharmer, 1999, Argyris, 1994, p.77).

There are, however, documented stories of failure, setbacks, and
organizational backlash to ‘learning initiatives’ (Harman 1998, Jaworski, 1998.
Marquardt & Reynolds 1994, Scharmer1999, Senge1990). Some learning
initiatives never seem to get off the ground despite a compelling business
case. In other cases, initial success is never recognized. Innovators who
expect to be rewarded and promoted lose theirjobs instead; or they just move
on, sear Ching for organizational settings more open to their ideas. Even after
years of success, learning oriented cultures can come under relentless attack

from new bosses, new members who don’t appreciate their benefits, or
sudden changes in the business environment that lead to a perceived need

for tighter controls (de Geus, 1997, Senge et al., 1999, Scharmer, 1999,
Argyris, 1994, p. 77).

Again, business leaders like Jack Welch have provided SoL members
direction to deepen their investigation. Welch in the same annual report,
identifies the ‘critical enablers’ needed to sustain learning within the
organization, such as shifts in governance structures, compensation.
aPPraisal, recruitment, retention and policy mechanisms to ensure

organizational learning becomes a reality (Senge et al., 1999 p 22-23)-
However, these identified ‘critical enablers’ are not the only limits to learning
in o'igianizationS. Also, improving mechanisms and processes does not fulfill

the requirements for strategic or profound change.

Senge Kleiner, Roberts, Ross, Roth, and B. Smith (key researchers
and n“lernlpers 0f SoL) have identified ten distinct challenges in the context of
learning initiatiVes' — change initiatives in which enhanced learning capability
was an overt Part of the strategy (Table 1, p 19). These challenges are

18

described in Senge et al., (1999) as predictable arising as natural counter
Pressures to generating change. Although seeming to be independent they
are interconnected and interdependent. Failure to understand these limits
and challenges generates frustration amongst team members, innovators.
and leaders. This ‘push back’ by the ‘system’ represents the natural
“homeostatic forces” (Senge et al., 1999) of traditional organizations and must
be understood in the context of the larger culture, structures, processes, and
norms. The SoL team has come to the view that, “no progress is sustainable
unless innovators and leaders learn to understand why the system is pushing
back, and how their own attitudes and perceptions (as well as other forces)
contribute to the pushback,” (Senge et al., 1999 p 26). When leaders and
innovators see this they start developing systemic strategies for sustaining

profound strategic change (Senge et al., 1999)-

Organizational Learning in the Workplace

The concept of a Ieaming organization is becoming increasingly
popular since organizations want to gain a competitive advantage through
innovation and effectiveness. Learning is a dynamic concept and it
emphasizes the continually changing nature of organizations. It enables
organizations and people to shift from one paradigm to another on an
aesthetic dimension of change or, in other words, create a mind change
(Dodgson 1993, Fiol & Lyles 1985, Harman 1998, Scharmer, 1999).
Organizational learning contributes to organizational memory. Thus. learning
systems not only influence immediate members, but also future members due
to the accumulation of histories, experience, norms and stories. Equally
important is the creation of an unlearning organization, which essentially
means that the organization must forget some of its past (Dodgson 1993,

lBalasubramanian 1998).

19

l

- the 3 Stem to build um each others successes.

Figure 2.1: Ten Challenges of Change
(Senge et al., 1999, p. 27-2 9)

The Challenges of initiating change begin as soon as a local team, business Unit
or senior management team conducts work in unfamiliar ways:

 

 

 

1. ‘We don’t have time for this stuff!” The challegge of control over one’s time.
2. ‘We have no help!” The challenge of inadequate coaching, guidance and support
for innovative groups, and of ultimately developing internal resources for building
ca acit .
3. “This stuff isn’t relevant!” The challenge of relevance: making a case for change.
articulating an appropriate business focus, and showing why new efforts, such as
developing leamingcapabilities, are relevant for busineggoals.
4- "TheY’re not walking the talk!” The challenge of management clarity and
consistency: the mismatch between behavior and espoused values, especially
for those championing or leading the change.

 

 

 

The Challenges of sustaining momentum take place within a pilot team as it
achieves early success, and between the team and the larger organizational
culture: —

 

 

 

 

 

5. “This stuff is The challenge of fear and anxiety: concerns about
exposure, vulnerability, and inadequacy, triggered by the conflict between
increasing levels of candor and openness and low levels of trust among pilot grouP
members or senior managment team.

6. “This stuff isn’t working!” The challenge of negative assessment of progress: the
disconnect between the organization’s traditional ways of measuring success (both
metrics and time horizon) and the achievements of a pilot or senior management
group;

7. “We have the right way! They don’t understand us!” The challenge of isolation and

arrogance, which appears when the “true believers” within the pilot group confront
their “nonbeliever” counterparts outside the group; the pilot group and the rest of
the organizational system consistently misinterpret each other.

 

 

 

 

 

 

 

 

The Challenges of redesigning and rethinking appear when change initiatives
gain broader credibility and confront the established internal infrastructure and
practices of the organization;

 

 

8. “Who’s in charge of this stuff!” The challenge of the prevailing governance
structure, and the conflicts between pilot groups seeking greater autonomy. and

,..._. managers concerned about autonomy leading to chaos and intemal_f[agmentation. ,

9. ‘We keep reinventing the wheel!” The challenge of diffusion. the inability to transfer
knowledge across organizational boundaries, making it difficult for people around

 

 

 

 

 

10. “Where are we going, and what are we here for?” The challenge of organizational

 

 

Str"i't‘i’igy and purpose: revitalizing and rethinking the organization’s intended
lMagus, its contribution to its community, and its Identity. l

20

In their research on organizations as learning systems, Nevis, DiBelle,
and GOUId (1995) report that all the firms they observed possessed learning
systems. They describe how learning has changed organizations such as
Motorola, Mutual Investment Corporation and Fiat Auto Company. These
firms had both formal and informal structures and processes for the
acquisition, sharing and utilization of knowledge and skills. They also
observed that even companies that claimed not to be good learning
organizations had certain core competencies that could exist only due to
having certain Ieaming mechanisms in place. For example, Federal Express
invests heavily in team learning for its quality improvement (Nevis et al.,
1995). The ability to learn continuously is the reason behind the success of
many Japanese firms. Strata (1989 p 68) states that although learning takes
time, once the process has started, it feeds on itself and organizational
members get better in their work, quicker. Landry (1992) and Brown and
DUQUld (1 991) also view Ieaming as a bridge between work and innovation.

The Types of Organizational Learning

There is an identified progression of learning in organizations from the
individual to organizational learning (Dodgson 1993, Fiol & Lyles 1985). Most
recently there is an identified shift in temporal learning from the past to the
future (Scharmer 1999). Argyris and Schon (1978) described three types of
organizational learning:

Single-loop learning has also been referred to as lower level learning
by Hot and Lyles (‘l 985) and adaptive learning or coping by Senge (1990).
This tYPe 0f Ieaming occurs when errors are detected and corrected.
According to Dodgson (1993) this learning can be equated to activities that
add to the knowledge base or firm-specific competencies or routines without
altering the fundamental nature of the organization’s actiVlties.

21

Double-loop learning is referred to as higher-level learning by F iol and
Lyles (1985), and generative learning or learning to expand an organization ’ s
capabilities by Senge (1990). This type of Ieaming occurs when people
question and modifying existing norms, procedures, policies and objectives.
This learning also involves changing the organization’s knowledge base or

firm-specific competencies or routines (Dodgson 1993).

Deutero-learning occurs when organizations learn how to carry out
both single, and double-loop learning. Awareness of ignorance motivates
learning (Nevis et al., 1995). Nevis et al., (1995) identify seven different
learning Styles and ten different facilitating factors that influence learning. For
example, one of the facilitating factors is identifying the performance gap
between targeted outcomes and actual performance. This awareness fosters
rec09nition within the organization that learning needs to occur and that the
appropriate environment and processes need to be created. This also means
recognizing the fact that lengthy periods of positive feedback or good
communication can block Ieaming (Argyris 1994).

Double-loop and deutero Ieaming are concerned with the why and how
of changing the organization. Dodgson (1993) states that the type of
organizational learning also depends on where in the organization Ieaming
occurs. Thus, learning can occur in different functions of the organization
such as research, development, design, engineering, manufacturing,
marketing, administration and sales.

Scharmer of the Center for Generative Leadership has extended this
concept of double-loop learning to differentiate between cognition and
pr eoognition. He and other colleagues at SoL refer to this cognitive capacity
as ‘Presencing’, “the process of sensing and actualizing emerging futures”
(Scharmer 1 999 p 1). The concept of presencing allows us to differentiate
between two types and two sources of organizational learning: Type 1

22

learning. which is based on reflecting on the experiences of the past
(feedback), and type 2 learning, which is grounded in sensing emerging
futures (feedforward). Each type of learning is based on a different temporal
source and requires managers to work with fundamentally different learning
cycles (Scharmer 1999, Bortoft1998, 1996, Jaworski 1998).

Type 1 learning (feedback) revolves around reflecting on experiences
Of the past. All Kolb-type-learning cycles are variations of this type of
learning. Their basic sequence is action, concrete experience, reflective
observation, abstract conceptualization and action again (Scharmer 1999).

Type 2 learning (feed forward) revolves around the coming into the
presence of the future. In Type 2 situations learning is based on a
fundamentally different mode of cognition, which revolves around sensing and
'presencing' emerging futures rather than on present realities (Scharmer
1999, Bortoft 1996, 1998).

Previous research on organizational learning, both practical and
theoretical, focused on the challenges of building, nurturing and sustaining
double-loop and type 1 learning processes. Scharmer (1999) notes that
recent experiences with organizations concerned with competing in the new
economy; is, how to leam from a reality that is not yet embodied in manifest
experience require type 2 learning and face additional new challenges.

These challenges, some yet to be identified, begin with the question of how to
learn from eXperience when the experience that matters most is a subtle.
inoipient, not-yet-enacted experience of the future. For example, Royal Dutch
Shell utilizes a scenario planning methodology to anticipate future state
possibilities (Scharmer 1999).

23

Dealing with Change

Although there has been a lot of talk about change, our thought models
Of Change have remained largely unchanged for decades. By and large, all
approaches to change can be considered a variation of the classical change
model of Kurt Lewin (Lewin 1952). Lewin’s insight was that in order to
manage change, one must, in addition to focusing on the change do two
things. First, before the change process begins, ‘unfreeze' and then after the
process, ‘refreeze’ (Lewin 1952, Schein 1989). Scharmer uses this
underlying logic to describe three stages as uncovering common will
(unfreezing), regenerating (redefinition), and enacting/incorporating
(refreezing), Unfreezing-change-refreezing, or to use Scharmer’s
terminology, uncovering-redefining—enacting, represents the organizational
system of incorporating a changed consciousness into practices and actions

(Scharmer 1999).

Relating this model to change in organizations, Scharmer (1999)
identifies five levels of organizational reality and, accordingly, of reorganizing
and change. The five levels of organizational reality are action, structure.
core processes, mental models, and common will. These are depicted below
in Figure 2.1 (pg. 24)

As an example, given an issue in an organization, those involved
would have the following choice: either react directly to the issue or to step
back, reflect, and reorganize the underlying contextual levels that give rise to
the problem at issue in the first place. Accordingly, we can distinguish among
five different approaches to change (Scharmer 1999). The five approaches of
change processes are a function of the depth of the uncovering or unfreezing
process. “The deeper the process of uncovering, the more profound the
change” (Scharmer 1999, p 7). The basic point of the Lewin-Schein model is

24

that the highest leverage point is located in the stage of unfreezing (Schein
1989) Also, the depth of unfreezing seems to determine the degree of
commitment in change processes (Scharmer 1999). The implications for
Change are that change leaders who want to increase commitment have to
move slole in order to surface the more profound layers of reality. Scharmer
refers to this tactic as “deliberate detouring” and as the Chinese proverb says,

it is necessary to go slow in order to go fast (1999. p 7)-

Figure 2. 2: Five Responses for Dealing with Change

     
  

 

  
     
 

   
 
 

Putting Purpose
into Practice
”Re-freezing”

Uncovering
Common Wili
”U nfreezi ng”

  
  
  

Manning

 

(Scharmer 1 999, Fig.2.1)

25

Creating the Conditions for Strategic or Profound Change

Einstein suggests, “We cannot solve our problems with the same
thinking that created them in the first place,” (Scharmer1999, p 5). Reacting,
re-strUCturing and re-designing efforts solve a minority of change problems
(Scharmer 1999). The majority of organizational problems require deeper re-
framing and regeneration, which means uncovering the underlying mental
contexts and corporate assumptions guiding corporate action. in these
approaches, often referred to as organizational learning, the problems of
action, structure and process are seen as the function of another set of
underlying context variables referred to as “mental models” (Senge 1990,
Argyris and Schon 1978) or culture, i.e., taken-for-granted assumptions
(Schein 1989). Even deeper organizational issues involving regeneration
relate to subtle contextual variables, which are referred to as purpose, shared
vision (Senge 1990) or common wills (Scharmer 1999). In all of these change
approaches focusing on dialogue, purpose and principles allows
organizations to be more flexible in situating action, structure, processes, and
mental models according to local conditions (Argyris 1999, Scharmer 1999,
Senge et al., 1999).

According to Senge (1999), Scharmer (1999), and Argyris (1994.

1999), the quality of conversation is the single most critical condition for
advancing the process of uncovering from reaction, re-structuring, re-
processing, re-frarning. Many change processes fail because they do not get
through the bottleneck or requisite conversational complexity. For instance.
without the capacity for dialogue, teams (senior management. design.
engineering, etc.) are unable to surface their tacit, taken-for-granted
assumptions as to how reality works (Scharmer 1999).

Scharmer (1999, p8-9) describes four levels of conversation beginning
With “talking nice” or polite, to “talking tough” or debate. to “reflective dialogue”

26

or inquiry, to “generative dialogue” or flow. The first two levels describe a
process that is non-reflective, re-enacting the current reality. The second tvvo
levels describe a process that is self-reflective, enacting, emerging, future
looking. This framework for conversation is supported by the findings of
Argyris (1990), Schon (1996), Schein (1985, 1989) and Senge (1990).

The four fields represent four generic attractors that define the rules
according to which the drama of human conversation plays out. The
attractors differ in terms of complexity that they are able to capture and
represent. The more that people in organizations learn to move with ease
across the four fields of conversational action, the more they will succeed in
unfreezing and accessing the deeper and more subtle levels of learning and

change.

Figure 2.2 (following page) outlines a process archetype that was
developed through action research, and community building experiences
(Scharmer 1999). The model is based on four generic stages or fields of

listening and languaglng.

Throughout the full cycle, the conversation moves through four fields of
performed speech acts (Searle 1969 in Scharmer 1999). The speech acts
differ in terms of how they relate to the rules of the underlying language: 1,
repeating, talking nice; 2, revealing, talking tough; 3, intuiting, reflective
dialogue; and 4, generating speech acts, generative dialogue. In general. the
deeper the process of unfreezing is intended to go, the higher the level of
r eduisite conversational complexity is required. “For example, for uncovering
the third level or reorganizing (mental models), it takes the conversational
level 0t reflective dialogue (field 3). Uncovering the fourth level of re-
organizational reality (common will) requires the conversational level of
generative dialogue (field 4)” (Scharmer 1999, p 8).

27

Figure 2.3 Languaging: Four Architectures of Attention

Self-reflective

 

 

(enacting emerging futures)
\
4 3
Generative Dialogue Reflec e Dialogue
flow inq iry
Whole Parts
1 2
Talking nice /. Talking tough
politeness debate

Non-reflective

(re-enacting current

reality)

(Scharmer 1999, p 7)

The challenge of leading change is to help teams and organizations

get “unstuck” in the first field (talking nice), and increase their capacity to
move up across all four fields of conversational action (Figure 2.2 arrow),
(Scharmer 1999).

Leading Change Sustaining the Momentum

Many organizations continue to pursue a leadership model that

28

supports the prevailing management system. The myths that “significant
change only occurs when driven from the top, or there is no point in going
forward unless the CEO is on board” continue to persist in organizations
(Senge et al., 1 999, p 10). There continues to be a propensity to idealize
leaders, and Solve organizational problems by searching for the hero-CEO to
carry OUt a turn-around change initiative and save uncompetitive

organizations (Senge et al., 1999, Argyris 1994). Senge suggests that, "th is
is a critical factor in itself, diverting our attention away from building
organizations that, by their very nature, continually adapt and reinvent
themselves, with leadership coming from many pe0ple in many places, not
just from the top” (Senge et al., 1999, p 11).

The belief that power can be concentrated at the top of an organization
is another myth. As hierarchical management structures have been flattened,
CEOs have come to realize that carrying out change in large organizations
cannot possibly be done by a handful of people at the top (Senge et al., 1999,
Jaques 8. Casson 1994). Also, these leaders realize that “flavor of the month”
change programs driven by management do not foster commitment because
they are built around compliance (Argyris, 1994, Senge et al., 1999).
Creating strategic or profound change requires leaders who foster
commitment. O’Brien says, “What people pressuring for management to
‘drive’ culture change don’t understand is: A value is only a value when it is
voluntarily chosen,” (O’Brien in Senge et al., 1999, p 13). Argyris cynically
suggests that this belief that power is only at the tOp of an organization is a
convenient strategy for maintaining the prevailing management system and
holding those at the top responsible whether or not change happens (Senge
et al., 1999).

The myth that persists in many organizations today is that the word
leader is used synonymously with top manager. When people ask, “what do
leaders think?” they are asking about the views of top managers. This implies

that those not at the top are not leaders, although they may aspire to become
a leader, but they don’t become leaders until they reach the senior
management level. If the word leader is synonymous with the word
exeCUtivel it implies that there is no independent definition of leadership
(Senge et al., 1 999 p 15-16). Fortunately this myth’s assumptions and belief
System is Challenged by many practitioners and theoreticians (Argryis 1999,

29

Senge et al., 1999, Scharmer 1 999, McGill & Slocum 1992, Jaworski 1998,
1998). New definitions of leadership in organizations are arising. Senge
suggests that, “leaders is an ecology growing from the capacity to hold
creative tension, the energy generated when people articulate a vision and
tell the truth (to be the best of their ability) about current reality,” (Senge et al.,
1999 p 16). Therefore, leaders can emerge from anywhere within the
organization and play a critical role(s) in generating and sustaining creative
tension. The SoL group are focusing on leadership communities to
understand more about the diversity of people and positions and what leaders
do to shape an organization’s future (Senge et al., 1999, Jaworski 1998,
Argyris 1999, Scharmer 1999).

Leaders and Change

Researchers have examined leadership skills from a variety of
perspectives. Early analysis of leadership, from the 19003 to the 19505,
differentiated between leader and follower characteristics. Finding that no
single trait or combination of traits fully explained Ieaders’ abilities,
researchers then began to examine the influence of the situation on leader’
skills and behaviors. Subsequent leadership studies attempted to distinguish
effective from non-effective leaders. These studies attempted to determine
which leadership behaviors were exemplified by effective leaders. To
understand what contributed to making leaders effective, researchers used
the contingency model in examining the connection between personal traits,

situational variables, and leader effectiveness. Leadership studies of the
1 9270’s and 1 980s once again focused on the individual characteristics of
leaders that influence their effectiveness and the success of their
orga nizations. The investigation led to the conclusion that leaders and
leadership are crucial but complex components of organizations.

30

 

The leadership literature of the 1970’s and 1980’s, with its focus on
effective leaders, revisited personal traits as determinants of leadership
abilities. lt primarily contributed to understanding the impact of personal
characteristics and individual behaviors of effective leaders and their role in
making organizations successful. The studies differentiated between leaders
and managers and introduced a new leadership characteristic — vision — and
explored its importance. Along with having vision, effective leaders are said
to facilitate the development of a shared vision and value the human
resources of their organizations. In addition to these insights on leadership, a

new theory emerged — transformational leadership (Bennis & Nanus, 1985).

The Notion of Organizational Leadership

Barnes and Kriger (1986) suggest that previous theories of leadership,
trait, situational, and contingency were insufficient because they “deal more
with the single leader and multi—follower concept than with organizational
leadership in a pluralistic sense” (p. 15). They contend that leadership is not
found in one individual’s traits or skills but is a characteristic of the entire
organization, in which “leader roles overlapped, complemented each other,
and shifted from time to time and from person to person implying a more
inclusive concept of leadership” (p.16). This concept of organizational
leadership has not been examined as closely as the investigations of
individual leadership traits and behaviors.

An extension of organizational leadership is the concept of shared
leadership. Slater and Diog (1988) refute the assumption that leadership is a
possession of one individual and state that such a supposition ignores the
“possibility that leadership may also be exercised by a team of individuals”
“3.296)- Murphy (1988) states that the hero-leader framework “ignores the
invisible leadership of lower-level management, supervisory and staff
throughOUt el“liective organizations” (p.655).

31

Leaders versus Managers

Burns (1978) describes managers as transactors and leaders as
transformers. Managers concern themselves with the procurement,
coordination, and distribution of human and material resources needed by an
organization (Ubben 8. Hughes, 1987). The skills of a manager facilitate the
work of an organization because they ensure that what is done is in accord
with the organization’s rules and regulations. The skills of a leader ensure

that the work of the organization is what it needs to be. Leaders facilitate the
identification of organizational goals. They initiate the development of a
vision of what their organization is about. “Management controls, arranges,
does things right; leadership unleashes energy, sets the vision so we do the
right thing” (Bennis & Nanus, 1985, p.21 ).

The underlying theme of this research is that leaders of organizations
engaged in strategic change should be excellent managers and leaders. As
suggested by Bennis and Nanus, leaders are effective managers who shape
an organization’s culture by creating and articulating a vision, winning support
for it, and inspiring others to attain it (p. 46).

Characteristics of Leaders of Change

In the 1 990’s, research focused on the complexity of leadership
attempting to identify the characteristics of effective leaders. Recent studies

have identified vision, collaboration, and personal disciplines associated with

communicating, thinking, and valuing human relationships as predominant

characteristics of effective leaders.

"All leaders have the capacity to create a compelling vision, one that
takes people to a new place. and the ability to translate that vision into reality”

32

(Bennis, 1990, p.46). Current leadership literature frequently characterizes
the leader as the vision holder, the keeper of the dream, or the person who
has a vision of the organization’s purpose. Max De Pree asserts, “the first
responsibility of a leader is to define reality” (De Free, 1989, p.9). Vision is
defined as the force that molds meaning for the people of an organization”

(Manasse 1986, p. 150).

According to Manasse, this aspect of leadership is “visionary
leadership” and includes four types of vision: organization, future, personal
and strategic. Organizational vision involves having a complete picture of a
system’s components as well as an understanding of their interrelationships.
Future vision is a comprehensive picture of how an organization will look at
some point in the future (p. 157). Personal vision includes the leader’s
personal aspirations for the organization and acts asthe impetus for the
leader’s actions that will link organizational and future vision. “Strategic vision
involves connecting the reality of the present organizational vision to the
possibilities of the future vision in a unique way (personal vision) that is
appropriate for the organization and its leaders” (Manasse, p. 162).

A leader’s vision needs to be shared by those who will be involved in
the realization of the vision. “Some studies suggest that it is the presence of
this personal vision on the part of the leader, shared with members of the
organization, that may differentiate true leaders from mere managers”
(Manasse, p. 152). Murphy purported that “it was rare to see a clearly

defined vision articulated by an executive leader (at the top of the
org anizational hierarchy) and then installed by followers” (1988, p.656).
Whether the vision of an organization is developed collaboratively or initiated
by the leader and agreed to by the followers, it becomes the common ground,
the shared ViSion that compels all involved. “Vision comes alive only when it
is shared” (Westley & Mintzberg, 1989, p21 ).

33

Leaders for change recognize that the pe0ple in the organizations are
its greatest resource. “To lead change the leader must believe without
question that people are the most important asset of an organization” (Joiner,
1987. p.21). This characteristic has three dimensions. The first is the
leaders’ valuing the contributions of other managers, supervisors and staff,
while the second is the leader’ ability to relate to people. The third dimension
is fostering collaborative relationships. Leaders of change trust the strength
of others and value their efforts and contributions in the realization of the
organization’s vision (Joiner 1987, Barnes and Kriger 1986).

Transformational Leadership

The concept of transformational leadership was introduced by Burns
(1987), describing it as not a set of specific behaviors but rather a process by
which “leaders and followers raise one another to higher levels of morality
and motivation" (p.20). Other researchers have described transformational
leadership as going beyond individual needs, focusing on a common purpose,
addressing intrinsic rewards and higher psychological needs such as self-
actualization, and developing commitment with and in the followers (Bennis 8.
Nanus 1985, Leithwood 1992).

Leaders of change recognize shifts in the environment and guide their
organization to be responsive to those changes. They are aware of the
realities of their environment and thus guide the organization to rethink the
vision (Joiner 1987, Barnes 8. Kriger1986). DeGues (1988) described this

ability as organizational learning: “understanding the changes occurring in the
external enVironment and then adapting beliefs and behavior to be compatible
with those Changes” (p. 67).

Leaders of change take a decidedly creative approach by focusing the
Organization aWay from maintaining the status quo to exploring various

34

options of the organization’s vision. Joiner’s (1 987) discussion of these
leaders of change included the skill to “access the reality of the present and
determine the gaps that exist” (p.3-4). They are effective at guiding the
organizational discussion by questioning established norms, beliefs, and
procedures. They focus the discussion on the “ultimate client” by being
provocative confronting rather than avoiding, anticipating instead of reacting
to situations and circumstances (Senge et al 1990, Joiner 1987).

Summary Comment

There is a clear progression in the research literature from static to
dynamic considerations. Recent research comparing effective and non-
effective leaders led to the identification of two dimensions, initiative
structures or organizational focus and consideration for individuals and
interpersonal relations, and revealed that effective leaders were high
performing in both. Also, leading organizational change is recognized as a
complex undertaking and recent studies have focused on identifying what
enables leaders to change their organizations. Recent studies have identified
vision, collaboration, and personal disciplines associated with communicating,
thinking, and valuing human relationships as predominant characteristics of

effective leaders.

35

Chapter Three

Design and Methodology
Purpose of the Study

This study focused on executive leaders who explicitly sought to
enhance their organization’s capacity to learn. The purpose of the study was
to understand how executive leaders perceive the nature of building learning
capacity within the change initiative, their role(s) and the ways in which

growth and limiting forces shaped and addressed that initiative.

This qualitative study followed grounded methodology. As noted in
Glesne and Peshkin (1992), Glaser and Strauss (1967), the grounded theory
approach allows for the emergence of theory or building of existing theory by
interpreting or making sense out of the social interaction described. Also,
Glaser, (2000) states, “Grounded Theory is a frequently used methodology in
management research, as it tends to get at what is really going on and has
proven faithful on dependent variables,” (Glaser 2000, p1 ).

Grounded theory methodology stems from the 1960’s social science
research work of Glaser, Lowe, Corbin and Strauss. Glaser, (2000) defines
grounded theory inquiry, as “a general methodology that uses systematic
generation, or inductive processing to derive theory from data, every step of

the way is systematic.” Grounded theory’s main assumption is that the world
doesn’t occur in a vacuum, everything is integrated and that things pattern
and people should trust patterns (Glaser 1968, 2000, Corbin & Strauss,
1 990). Therefore, this methodology is particularly appropriate because it is

multi -dimensional and emergent in design rather than causal and convergent
(Glaser 2000).

36

 

The study addressed the following questions:

1. What are executive leader perceptions of the nature of building
organizational Ieaming capacity while engaged in change

initiative(s)?

2. What are the role(s) executive leaders undertake to build learning

capacity within the change initiative?

3. What are the ways in which growth and limiting forces shape and
address the change initiative?

Epistemological Issue

The approach chosen for this study provided opportunity for the
researcher to not only capture a rich description of the participant’s
experiences, perceptions, attitudes and opinions, but also to facilitate an
Opportunity for the participants to reflect and create a new sense of meaning
and knowing from these past events. According to Bromley (1986 p3) the
case study takes an approach in which intensive study of individual cases
produces a detailed description and represents a “reconstruction and
interpretation of a major episode in a person’s life which is based on the best
evidence available.”

The research investigator has considerable experience as an
organizational development consultant and senior director/leader of various
learning initiatives. Therefore, it was important to suspend beliefs and

pr edi sposition’s while interpreting the perceptions and meaning of the data
(Bogdan & Taylor 1975), Further, Nielsen states that “to explain and
understand human social behavior, we need to know the meaning attached to
it by the participant themselves,” (Nielsen 1990 p 7). This is particularly true,

37

given that subjects were both male and female and may, therefore, differ by
gender in contextually expressing their experiences, perceptions and role( s),
The researcher developed rapport throughout the interview process, by
gaining trust, listening intently and closely observing each subject (Glesne &
Peshkin 1992). By building rapport and suspending beliefs and any
predisposition, the researcher was open to new thoughts. This presented a
rewarding experience of making sense, uncover meaning and creating new
knowledge.

Research Design

A case study approach using semi-structured interviews provided the
primary method of inquiry and data collection for this qualitative study. Each
subject’s experience and perceptions, attitudes and opinions comprise one
case. Due to the subjective nature of the participant responses and the in-
depth understanding sought by the researcher, the design consisted of three
subject interventions. The interventions consisted of the following:

1. A preliminary selection interview by telephone to verify qualifications.
gain consent, identify other candidates;

2. The initial semi-structured interview of subjects (executive leaders);

3- A follow—up interview for clarification, restatement and guided interview
using themes and patterns to inform the subject’s responses.

Based on previous research practice and training, semi-structured
interviewe provided the researcher with a familiar technique for capturing
data. These interviews produced information about the experiences.
perceptions, attitudes and opinions of the study participants. As well, this
approach provided an opportunity to gain insights about how and what these

leaders learned while making strategic change occur in their organization.

38

Each SUbiect case interview was analyzed using a constant comparative

process to determine patterns and sub-patterns within the data (Glesne 8.
Peshkin 1992).

Following the transcription and vertical analysis of each subject case, the
emergent patterns were grouped into themes, which were used to form the
basis for the follow-up interview. Subsequent analysis of the follow-up case
interview data refined the comparative analysis of themes, patterns and sub-

patterns. This analysis was compared case-by-case to the study’s research
questions.

All cases were compared in a horizontal scan to identify those themes and
patterns that were common throughout the cases (Glesne & Peshkin 1992).
These common themes, patterns and sub-patterns were then used to answer
the over all research questions. As well, this approach provided an
opportunity to gain insights about how and what these leaders learned while
making strategic change occur in their organization.

Contextual Setting and Participant Sample

The number of participants selected in similar studies using grounded
methodology ranged from less than 10 to more than 30. The actual number
was determined by the amount of subject data needed to identify patterns.

themes and sub patterns (Glesne and Peshkin, 1992, p.26-27). A pool 0t 20
participants was identified for the study. Eight participants were needed to
fulfill the data collection requirements of this study.

Study participants were recruited through a ‘chain referral process’
beginning with an initial participant. The initial participant was identified using
a criterion (see next page) developed by the researcher and agreed to with a
network of professional contacts that belong to the Association for Creative

Change and Organizational Development (ACCORD). ACCORD is

39

 

international in membership. However, for the purposes of this study, the

focus was on large organizations with a Canadian operational base in or

around Toronto, Ontario, Canada. The male and female professional

contacts were all very familiar with organizational change. Although their
career eXperience included organizations of various sizes, structures, and
managerial processes, all participants’ worked in ‘large’ organizations. These
organizations had between 2,000-39,000 employees and multiple sites and
operations located in Canada, the United States and Europe.

The professional contacts network identified a roster of 20 potential
participants. Based on the roster the researcher contacted potential
participants for a preliminary interview to gain his/her consent for the study.
For further information on the letter of consent, see appendix A for the
sample. Additional potential participant candidates were contacted by the
researcher and qualified until eight participants were selected. The

researcher exercised care in the qualification process by thoroughly
explaining the purpose and significance of the study and by making potential
participants aware of their involvement and time requirements.

Participants from the subject pool were selected using the criterion and
self-reporting elicited through a preliminary telephone interview. The
f0lloWing selection criteria served to identify individual participants:

' men and women from ‘large’ private or public sector organizations in
North America (they often had experience from both sectors};
held an executive or senior private or public sector corporate role, that
is, a position within two levels of the chief executive office (the

experience may be gained through work with one or more than one
organization);

‘ had direct accountability for the success and/or failure of numerous (at

least three) strategic change initiatives;

40

0 an interest (bias) in developing the collective learning capacity of th e
organization;

0 not personally or professionally associated with the researcher at the
time of this study;

. English speaking; and,

o Consented by signing a letter of consent outlining the study and their
participation as well as preserving identity, confidentiality and voluntary
participation.

(see appendix A).

Data Collection Procedures

The data collection procedures included a preliminary interview, an in-

depth interview, and a follow-up interview.

The nominated subjects participated in a preliminary interview of
approximately 30 minutes to self identify, providing personal background
(education, recent professional development) and a career profile to

determine qualifications, interest and availability.

Each subject participated in a personal audio-taped interview of
approximately one and a half hours giving their perceptions and describing
the events, learning and changes that they had experienced while leading
strategic change initiatives. Each subject participant was interviewed a

second time to restate for clarification and facilitate interpretation of the
emergent themes and patterns coming out of the data analysis of the in-depth

The in-depth semi-structured interviews were open-ended processes,
in which participants were encouraged to explore issues within the loose
structure of guiding questions (Tesch 1987, Glesne & Peshkin 1992). The
interview questions were designed to provoke clear descriptions, reflection

41

and in5ightful thinking of the participant’s experiences. The questions were

supplemented and probed with secondary questions by the researcher for

clarification, The questions listed below in Figure 3.1, do not correlate directly

with cash research question for the overall study. Rather, the questions Were
designed to facilitate the recollection of the experience, key events, and
reflective recall of key decisions and subsequent action. The constant

comparative analysis process for analyzing data ensured that the patterns
and themes relevant to the overall study questions were answered (Glesne 8.
Peshkin, 1992).

Figure 3.1: Semi Structured Interview Questions

1.

01th

Please tell me about your work at [name] company; position, work
responsibilities, how you came to be in this role and what you have

accomplished to date?

. Please tell me about your current change initiative.

. Please tell me about the Ieaming initiative(s) that relate(s) to the change.
. Please tell me about the challenges/problems that you face in this work?
. Please tell me what excites you about your work, the people you work

with and the organization?
How has this work affected you personally over [time] in this
organization? ‘
How has this work affected those you work with [peers] [direct and
indirect reports] (state the question twice)?
A year from now how will these people and this organization be affected
by these initiatives?
Do you have a model or image(s)that you refer to when you work that
represents how change occurs in this organization? Can you draw it for

me?

10. Do you have a metaphor that describes your work role?

42

This semi-structured interview approach allowed the participant to
answer Questions and for the researcher to explore the nature of change i n
the organization by building descriptions and constantly comparing data. The
researCher attempted to make sense of the participant stories and interpret
how they intersect (Glesne & Peshkin, 1992) by following an inductive
strategy to discover and constantly compare data. This analysis will lead to
the development of patterns, sub patterns and themes (Guba, 1987; Glesne
and Peshkin, 1992; Glaser and Strauss, 1967). The data relating to the
leader’s understanding of organizational change, their role in those initiatives
and the ways in which limits and constraints shape and address the process

of change was sensitive to a variety of coding models (Straus & Corbin,
1990).

The flexibility of this approach gave the latitude necessary to deepen

the description. As stated by Geertz (1973) in Glesne and Peshkin (1992,

19), this “thick description” is defined by (Denzin, 1988, 39) as, “the probing of
intentions, motives, meanings, contexts, situations and circumstances of
action.” This approach also allowed the researcher to investigate significant
events as they developed during the data collecting and analysis phases
(Lincoln & Guba, 1986; Moustakas, 1994). The data was captured in
memoranda and field notes and filed for reference during the interpretation

aCtiVlties_

Data Analysis

There were several steps involved in content analysis of data. Bruner
ists of actions,

(1986) describes narrative analysis as a study whose data cons

events, and happenings but whose analysis produces stories or case
histories, Although the subject may choose to respond to the interview
questions by using stories or narrative to describe their experience, the
researcher will ask probing questions to increase the depth of description and

getting to the subject’s perceptions. Irish (1983) recommends a method to

43

analyze and code data, which “involves the identification and coding of

comments which appear to be relevant, directly or indirectly, to each

individual issue of question being addressed in your study” (89). The coding
process begins by reviewing the audiotape and transcripts of each in-depth
and follow-up interview to establish preliminary categories relevant to the
research questions. These preliminary categories were then used to help
focus and shape the discussion for the follow-up interview.

The first phase of the data analysis is described as a ‘vertical scan’ of
participants’ interviews audiotape and transcript. The process of constant
coding and comparative analysis of the interview data inductively informs the
researcher. This completes the categorization and synthesis of the data by
searching for and comparing emerging patterns, themes and sub-patterns

(Miles and Huberman 1984, Lincoln and Guba 1986, Strauss and Corbin
1990, Glesne and Peshkin 1992). Although there are a number of application
software products available (eg. Hyperqual 2 Qualitative Data Analysis
software), to generate and sort lists based on coding tags, the researcher
used a manual process in order to see the text of all data in full view.

The second phase of the data analysis can best be described as a
‘hOn'ZOntal scan’ of all the sets of interviews, to re-examine across and
between participants’ interviews and determine how the data reinforced each
Other. contradicted or provided a clarification to the understanding Of a
PaniCUIar issue. Common patterns and discrepancies are identified and new
categories emerge. Figure 3.2 (p.40) provides a visual of the process for
ana'YZihg the study data.

This process gave rise to more critical reflective thinking for everyone
involved in the study. The comparative data analysis generated creative
thinking, which was retained in the memorandum and quotation files. Glesne

44

and PeShkin (1992, p155) add “this process of learning about self through
understanding others is a gift of qualitative research done well.”

Trustworthlness

The qualitative researcher uses an insider‘s approach in coming to
understand and interpret, and to end with hypotheses and a grounded theory

Figure 3.2: Process View of the Data Analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ertical
\Slcan Code Define Identify Relate l
- P ttem -
Transcript Words, Categories afid 8“: Analysis *0
For Re
Indlvl ual Questions
PartiCipants
On-Going Process
Memo/Quotation Files
Literature Quotations
Significant Event Notations
Horizontal -
Scan Identify Identify other Relate analysis
Transcript C to research
For all Common Odes' questions.&
:Iterviewss. Codes, themes Categories literature
oc ,
us Group Categories and Themes

 

 

 

 

 

 

l n this case, the investigator becomes the main research instrument as
one observes (Glesne and Peshkin, (1992). The study data and evidence is
composed of the narrative description, collected on audiotape during
PartiCipent interviews. The researcher then describes the experience.
bringing interpretation to bear on the data and then presents them in a way.
which reflects the interpretation as well as the voice of the participant.

The emergent methodology for interviews provides the researcher with
the 0Pportunity to make sense of personal stories and the ways they

intercept, by checking and rechecking the perceptions of the participants in

45

each subsequent interview. Constant comparative analysis of the data as the
interviews proceeded enabled the study to evolve in subsequent interviews.
Furthermore, the repeated listening to the audiotape and repeated reviewing
of the transcripts over time elicited critical reflection and generated new
Perspectives increasing the depth of meaning and understanding achieved by
the researcher. Coles (1989) reminds us in the quotation below that we must

be true to our participants when using this methodology:

“The people who come to us bring their stories. They hope they tell
them well enough so that we understand the truth of their lives. They
hope we know how to interpret their stories correctly. We have to

remember that what we hear is their story,” (p.7).

46

_.—__.

 

lnlr

 

 

 

aim]
Chat
pro

DH

Chapter IV
Findings

"It should be borne in mind that there is nothing more difficult to
arrange, more doubtful of success, and more dangerous to carry
through than initiating changes in a state's constitution. The innovator
makes enemies of all those who prospered under the old order, and
only lukewarm support is forthcoming from those who would prosper
under the new." Niccolo Machiavelli in 1513: [The Prince, 1978, p79]

Introduction - Chapter IV Organization

The purpose of this study was to address the following three research

questions:

1. What are executive leader perceptions of the nature of building
organizational Ieaming capacity while engaged in change initiative(s)?

2. What are the role(s) executive leaders undertake to build learning capacity
within the change initiative?

3. What are the ways in which growth and limiting forces shape and address
the change initiative?

To address these questions a qualitative study was undertaken, with the
aim of eliciting the experience of executive leaders who are engaged in
change initiatives. The findings are presented to lead the reader through the
process of analysis, which allows the reader to follow the researcher’s
process of divergent and convergent thinking. This method enables the
reader to understand what the researcher ultimately concluded about the

study questions.

The presentation of findings begins with a description of the participant
demographics and backgrounds. This information provides the reader with

47

3i) kl

cont:

 

lilo:

 

Ciel

 

 

 

an understanding of the participants’ study qualifications and situational
context.

Four of the eight case interviews successfully augment and present the
findings in this study. One exemplary strategic change initiative case study
was selected for inclusion in the findings. The other three case narratives are
included in appendices C, D, and E. The patterns and sub-pattems present
in the participant cases are woven into a case story to communicate the
sense of the experience holistically. The case narrative is an attempt to tell
the story of the change experience from the leader’s perspective.

Following the case narrative the chapter concludes by returning to the
study questions and summarizes how the findings relate to each question.
The summary identifies the sub patterns, patterns and themes uncovered in

the analysis for each study question.

Participant Demographics

The participant ‘chain referral process’ used to identify participants
produced a pool of twenty persons who appeared to meet the criteria
developed by the researcher and agreed to by a network of professional
contacts from The Association for Creative Change and Organizational

Development (ACCORD). Through the preliminary interview process
prospective participants from the pool were asked questions to verify their
qualifications, interest in the study and willingness to participate. Eight of the
qualified participants were selected for in-depth and follow-up interviews. The
entire process took about ten weeks to complete. To maintain participant and
organization confidentiality each was given a pseudonym.

The preliminary interview included questions designed to develop a
demographic and experiential background description of each participant.

48

This information was solicited expressly to verify a participant’s qualifications
for the study. No attempt was made to analyze these data or make
comparisons with Canadian or North American demographic surveys. Of the
eight participants selected for in-depth interviews, six were male and two
were female. The participants ranged in age from mid-thirties to early sixties.
One participant was a citizen of the United States residing in Canada; all
others were Canadian citizens. Four of the participants had executive work
experience in both Canada and the United States. One participant had more
than four years executive work experience in Europe. Four of the participants
had executive work experience in large private and public sector
organizations. The other four participants had career experiences exclusively

in private sector business organizations.

In summary, the participants selected for this study had broad work
experiences leading strategic organizational change efforts. Their
experiences spanned different sectors of the economy and a period of three
or more decades (1970’s — 2000). These initiatives included organizational
turnaround efforts, mergers and amalgamations of large businesses and

government ministries, and efforts to refocus or rethink business purpose and
identity. When questioned, each participant was able to recall leading change
efforts that involved the development of individual and organizational Ieaming
capabilities. Lastly, they were enthusiastic and willing to schedule time for the

in-depth interview and the follow-up teleconference.

Participant Backgrounds

The initial participant interviewed was Brian, 3 male executive of a
targe, private sector company with headquarters based in Toronto, Ontario,
C anada and retail Operations throughout Canada. Brian has over 35 years
eat-«penance Working in both private and public sector organizations in North
America. He previously held positions as a President of a Community

49

 

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College and Executive Vice-president of Human Resources with a large
private sector telecommunications organization. He is highly educated with
two pOSt-graduate degrees. He currently holds an executive officer position
reporting to the Chief Executive Officer of the company and has direct
accountability for the success and/or failure of numerous (more than three)
strategic change initiatives. These are initiatives that are intended to
revitalize and rethink the organization’s intended business focus, its

contribution to its community and its identity.

Jan is an executive of a large, private sector company with
headquarters based in Toronto, Ontario, Canada and retail operations
throughout Canada. She has over 15 years experience progressing up the
organizational ladder in a series of positions for two large, private sector
organizations in Canada. She completed a general university degree through
a degree completion program sponsored by a former employer. She currently
holds an executive officer position reporting to the Chief Executive Officer of
the company and has direct accountability for the success and/or failure of
two learning initiatives that support four strategic change initiatives.

Edward is an executive of a large, private sector company with
operations based in Toronto, Ontario, Canada and additional consulting
operations throughout North America, Europe and Australia. Edward has
over 15 years work experience in marketing, brand management, sales and

consultation. He completed his MBA education by taking a mid-life career
break. He currently holds an executive management position reporting to the
President of a large private sector consulting organization. He is directly
accountable for the change management programs associated with the
acquisition and merger of his company with a group of high-tech, new media

a nd internet companies.

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Bert is an executive of a large, private sector insurance company with
headquarters based near Toronto, Ontario, Canada and insurance operations
throughout North America and the United Kingdom. Bert has over 25 years
working experience in government policy, secondary and post-secondary
education administration, financial services and insurance. He holds a Ph.D.
in Educational Administration and an MBA. He has executive experience as
President of a Community College in Quebec, and executive officer in the
financial and insurance service companies. He is directly accountable for the
change management leadership of all strategic change initiatives in his

company.

Ann, the fifth participant interviewed, was an executive of a large
private sector corporation with divisional headquarters based in Toronto,
Ontario, Canada and operations in North America, Europe, South America
and Australia. She has over 19 years working experience in one computer
manufacturing and services company. Sponsored by her employer, she
completed an executive MBA program while she continued to work in a series
of progressive positions with the organization. She is an executive officer of
the corporation and divisional Chief Executive Officer. She is directly

accountable for all strategic change initiative work in her division of the

corporation.

Paul was an executive of a provincial government ministry with
headquarters based in Toronto, Ontario, Canada and operations throughout
the Province of Ontario. Paul has over 30 years work experience in
government policy and executive administration, post-secondary education
administration, university faculty, and philanthropy. He completed a PhD. in
history prior to entering the workforce. He was the Deputy Minister of a

ministry within the government of a Province. He was directly accountable for
the merger of five ministries and the associated workforce restructuring of

the newly formed ministry.

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Winston was an executive of a large private sector corporation based
near Toronto, Ontario, Canada with operations in Europe, the United States
and Canada. He has over 30 years working experience in a series of
progressive positions in financial services, telecommunications, and
manufacturing/sales companies. He has a post-secondary education in
business administration that he earned while studying in Europe. In his last
four executive assignments he completed a series of turnaround initiatives
and devel0ped a reputation as a specialist in saving or rebuilding business

organizations.

Casey, the eighth participant interviewed was the President of a newly
formed university based in Canada. His mandate was to form and build a
university designed exclusively to deliver mid-career postgraduate education.
Previously, he was the President of a large community college. Casey has
over 27 years public sector work experience in the post-secondary education
field. He has a PhD. that he earned while working in a series of progressive
positions as a teacher, professor and community college administrator.

The lnterview Analysis

The first phase of the interview data analysis is described as a ‘vertical
scan’ of the participant’s interviews audiotape and transcript. Bruner (1996,
p3) describes this narrative analysis as a study whose data consists of
actionS, events, happenings and insightful perceptions. These data are
elicited by open-ended and probing questions that cause the participant to
vividly recall the actions, events, happenings and reflective perceptions
which, when analyzed produces a story or case history. ln this study, eaCh
case explored the nature of change in an organization by building. a story-like
d escription or synopsis of the actions, events, happenings and reflective
p erceptions 0f the executive leader. The following narrative best exemplifies

\‘r‘e participant interviews.

52

Case Narrative Example: Creating the Common Will through
the Elevation of Organizational Dissatisfaction

The case narrative tells the executive leader’s story of the change
experience. It is structured into four sections; the context, the nature of the
experience, engaging resistance to create change, and engaging the forces
0i growth to create the future organization. The narrative concludes with a

synOpsis of the key findings.

The Change Context

The company

Since the mid-19903, a leading Canadian retailer, in business for over
80 Years and ringing in annual sales of $7.1 billion, has been fighting an
invasion of fierce competitors. U.S.-based giants, including Wal-Mart, Home
Depot and Building Box, as well as other large Canadian companies
responding to the changing retail landscape, have been opening big box
stores across Canada with alarming speed and success. These are the large
(10,000 to 200, 000 sq. ft.) single story structures in suburban locations
sometimes clustered with other big box retailers, with which shOpping malls

and downtown department stores now compete.

This venerable and highly successful retailer is recognized as the
most-shopped store in Canada. According to Brian. independent marketing
research says that 91 per cent of Canadians live within 15 minutes of at least

one of the company's stores. Ninety-six percent of Canadians shop at a
company store at least once a year, and 66 per cent shop at a company store

at least once every four months.

Executive leader's role

AS Executive Vice President (EVP), Dealer Relations, Brian is one Of
\welve members of the executive committee that sets strategy and direction

53

 

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for the entire enterprise, an unusual mix of two retail merchandizing
businesses and a financial services business with two call-centers. In total,
the enterprise employs approximately 38,000 employees, with 29,000 working
in the stores, 7,600 in merchandising and warehouse distribution, and 1,400

in financial services.

in his role, Brian is responsible for development and maintenance of
the dealer network, a diverse group of independent business people who own
and operate the company's nearly 500 stores across Canada. He manages
the day-to-day operations, finances and leadership of his functional area and,
together with four Regional Vice Presidents and staff, works with dealers to

improve overall store performance and customer satisfaction.

“Dealers are our biggest differentiator for going to market," stressed
Brian. "It’s what makes the company unique.” As the primary liaison with the
dealer Community, Brian defined his role as ombudsman on behalf of
individual dealers. “l don’t see my role for the dealer body at large as
representing the dealer interest. They would like to think that I am fighting for
their rights, for their share of the pie. What I am trying to do in senior strategy
and decision-making forums is bring the store and dealer point of view to the
executive team. As the executives are making decisions, they will better
understand the potential impact at the store level, and the preferences.
concerns and impact on dealers.”

At one time, people saw him as a non-budget man representing
employees and dealers. Not only was he supposed to make sure that
individuals were treated decently, somehow he should also be pushing for
better benefits for all employees and making sure that all kinds of negative

impacts were minimized. Brain states that “the reality is that this has changed
Gaver time and moved to where all executives make sure that human resource
\Ssues have been considered in the strategy development and decisions

54

 

 

made by the executive. Human Resources doesn’t play a more important
role than any other executive responsibility in the corporation.”

After coming into his role from another organization, Brian gradually
began to understand the dynamics of the situation by listening to people. "I
spent a lot of time one-on-one with dealers, leaders in the dealer community,
other executives and my own team within Dealer Relations," he explained.
"A5 a new member of the team, I listened with new ears about what people
WiShed to be different, and what parts of various corporate agendas
concerned dealers.” Meanwhile, the big box invasion intensified. The
executive committee was determined to significantly improve store
competitiveness through a new store design labeled class of’ and a uniform
customer experience of the highest standard. Class of stores are to a new
generation of store designs. In this instance, there were three store designs
ranging from 20, 000 to 50,000 square feet in size and including new displays
and ”00" layouts.

The change initiative

Renovating stores and raising customer service levels called for a
maior change initiative that would modify dealer behavior in two areas. "First,
we needed to ensure that dealers are striving to be the best they can be, and

not just meeting minimum standards of performance," explained Brian.
"Second, we needed dealers to realize the importance of providing great
customer experiences through the efforts of their store employees.” Dealers
had to recognize that their people were an important part of the solution in
providing uniform experiences for customers.

The company needed to get the best dealers to go through the

change, drive for excellence, and squeeze as much potential out of their
stores as possible. According to Brian, the desired end state is that over time

55

the best dealers will migrate via a selection process to the best stores and
contribute the most to the company's bottom line. Allthe dealers will believe
in hiring and keeping good people. "They will have well-trained store staff
serving the dickens out of their customers. I would say we are about half way

on a iiVe-year journey.”

The Nature of the Change Experience

The company-dealer relationship

in linking company strategies to dealers, Brian claims the biggest

change needed was in the collective relationship:

“Within that relationship he had two major challenges: .
he is increasing dealer competitiveness through the delivery of high

CIrelality, uniform customer service throughout the store chain. The
second challenge is achieving comparable store growth of 50 to 60 Per

Cent in the same market, which represents a huge uptake in store
Sales resulting from the new customer experience and bigger. brighter

Stores with better assortment of products and services.”

For most of the 78 years up to the early 1990s, the company had operated
multiple stores through an informal relationship with dealers. After a
particularly difficult period in the relationship, the company and its dealers
entered into negotiations to try capturing past pressures and codifying them
into a new contract. Past pressures, Brian said, were related to profit

expectations. A contract was completed in 1992-93.

While the relationship is now governed by formal contract, rather than
by good faith or precedent, Brian acknowledges that limits still exist on What
can and cannot be accomplished through the dealer network:

“Over the past number (7) of years, through our class of stores, We

have been trying to provide a much more uniform, high quality
eifperience for consumers. Our strategy is to maintain a unique Droduot
mix. with three Specialty stores under one roof — automotive, no me—

56

hardware and leisure products. Dealers may source up to 20 per

of their products locally to ensure local entrepreneurial leadership any
business relationships that further differentiate us from the competit/O,7
Since we are the most-shopped store in Canada, convenience is a key.
part of our strategy. We now have better looking, larger big box stores

that are very clean and bright."

The company has made great strides in creating a common and
satisfying customer experience with the remodeled stores, but Brian says
much work remains to be done in improving how store staff relate, treat, and
PrOVide service to customers:

'We have come to accept that while the dealer organization is a
tremendous strength to the chain, it can also be a weakness. Providing the
common customer experience imposes further pressures and responsibilities
Upon the dealer. Customers report great service from many stores where
emPIOYGes are well trained, motivated and friendly. They go out of their way
to help, and there are lots of employees on the floor. Then, the same

CUStomers may travel down the road to another of our stores and experience
a very different level of service.”

E erly in the process, as part of its efforts to better understand the
dealer relationship, members of the executive committee consulted with

POWGV‘U‘ Change agent Jack Welch, Chairman of General Electric. AS Brian
recalled:

"At one point in the discussion, someone asked Jack why it was so .
difficult to get dealers to do what you wanted them to do, He asked If
we ever told them what we wanted them to do. We quickly
remembered the 70,000 pages of text distributed each year by
thousands of employees to all our dealers telling them what to do.

Jack said, '0kay, first thing you do is tell them the handful of things you
care passionately about and really want them to do; the other stuff can
take care of itself. Secondly, align your rewards and recognition
programs accordingly’. So, we reviewed what we needed dealers to
do, along with the rewards and recognition we give them. "

57

Engaging Conversations to create a sense of dissatisfaction-
The dealer dialogue '

The actual starting point of the change initiative was a dealer survey to
see What the company could learn from dealers. In an effort to get a
Significant sample, the company sent dealers a confidential questionnaire
called dealer dialogue. Dealers simply faxed it back to a third party, which
assured anonymity and stood out from the 70,000 pages they usually
received. This was the first time the company actually solicited dealer opinion
on a Specific matter. The company was rewarded with a 59 per cent
response, 30 per cent higher than any previous survey, and candid responses
from dealers. In fact, people were surprised to see such candid responses
from dealers, since previously outspoken dealers risked retribution like being

Passed over for future store changes.

Bf‘ian admits he came into the role with certain biases. For example.
he t“GUS! ht the dealer bonus was an untapped tool that could be used to
change behavior. He soon discovered it was not the biggest OpportunitY-
Dealers were very concerned about a number of things, including the

subjectivity of Brian’s own department, particularly regarding dealer mobility.
the process by which dealers move through the change.

Dealers perceived that decisions on dealer placement and mobility
were neither transparent nor objective. Brian came to realize that mobility
was indeed the biggest reward for a dealer. Even though the reward bonus
might account for 15 per cent of the bottom line, mobility was a dealer's whole
future. Mobility could double the dealer's bottom line or bankrupt the dealer

who moved to the wrong store.

0n the survey, 33 per cent of dealers indicated that mobility was their
greatest source of dissatisfaction. Clearly, through the survey results, the
company had established the dissatisfaction with the status quo and now had

58

an opportunity to take this huge lever and do something with it- Next, the
company wanted to do two things. First, tell dealers the company heard them
and, in doing so, establish its credibility. Second, the company needed to
probe dealer perceptions more deeply, because the original survey was only

a few Pages long.

Creating a ‘Burning Platform’ to foster the creation of a
‘Common Will ’

The company seized the opportunity to continue the dealer dialogue
face-to-face at the upcoming dealer convention, which nearly 85 per cent of
the dealers were planning to attend. Having created a “burning platform” with
the first survey, the company and the dealers agreed to hire Of a third party
CONSUtta ht to facilitate sessions to review the survey results and further

explore dealers’ perceptions. Aided by electronic voting technology, dealers
were be free to say whatever they wished and received immediate feedback

from the other dealers at a group session.

To make a point and start building trust in the relationship, the
company executives made a significant symbolic gesture at this grOUp
session. Brain related how he and all the other executives excused
themselves from the meeting, so dealers could speak openly Without fear of
reprisal. “What powerful imagery," said Brian. Afterwards, dealers also had
an Opportunity to meet individually with the consultant. This time the company

was rewarded with 68 one-hour dealer interviews.

Brian explained how all of this activity was part of a process to build
the case for change, uncover the dealers’ common understanding, and Create

a common will:

“WefNere trying to get dealers to believe we were willing to change l
had Intentionally built momentum with the dealers, should the CEO or

59

my own staff want to keep the old methods and systems - Having
unleashed the genie from the bottle, there was no turning back now
We had effectively closed the door on the status quo and the only W5
we were going to overcome the dealers' sense of dissatisfaction was y
by going forward. I had also wanted to create tension and influence my
Peer group and staff. I wanted the President and Chief Executive

Officer and others to realize the extent of the damage to our credibility
that had resulted from some of the previous decisions.”

Next, the company struck a task force to involve leaders from all
Stakeholder groups, including dealers and senior management. The dealer
association and company council had carefully chosen the five dealer

members who joined the task force. Brian described how everyone worked
toQether and learned from one another as never before:

"The task force met periodically with a good facilitator and really .
r eacted to the staff work that was done in between the meetings. ThIS
amounted to about four full days over a four-month period. The staff

Work tested theses, gathered data, analyzed and built straw dog
m odels for the next generation store models."

B rian believes the company shaped, rather than manipulated, the
entire oh ange process and dealer mindsets through the use of two basic

toois: communication and education, and rewards and recognition. For
example, an extensive communications and education program, imptememed
across the COUhtry, helped keep everyone on the task force informed. Each
time the task force met, new information was available. "People felt their time
was well Spent and they QOt maximum value for their input," said Brian. "It
was very important to create the feeling of moving forward." When the task

force recommendations finally came out, there were few surprises and little
selling was required.

60

Reframing the Relationship from Seniority based “mag”?
and process to Performance Driven

Brian described how, in one year, the mindset surrounding the

cornDeny-dealer relationship had been successfully reframed. The
relationship had transitioned from structure and process largely driven by

Our r ent sales volume and dealer seniority to a performance-oriented
relationship driven by the company and dealer sharing responsibility and

accountability for organizational success:

"A Year ago I would have been afraid to talk about performance in that
manner. One of the side benefits is that we have learned how to articulate
what performance is and is not. As Jack Welch stressed, you need to take

the biggest reward and recognition and align it with what you want the
dealer to do. We were able to leverage our biggest reward, WhiCh was
mobility, align it with performance, and articulate what that looked like to _

the d

ealers.”

Engag i ng the Resistance to Create Change

The change process

The company used a similar engagement process to help ma

ke needed

' ed
changes to another significant reward —— the dealer bonus. Everyone InVOIV

recognized the need to make factual, accurate information mo re readily
available at all levels, in order for dealers and marketers to negotiate
reasonable sales budgets. The sales budgets, in turn, would result in fairer
distribution of bonus rewards and recognition for good store performance.

Again, the process was as follows:

create dissatisfaction;

' build the burning platform;

involve all stakeholders in the change;
define the desired end state;
03“?qu select a diverse team to do the work;

61

' Support the team with good facilitation and analysis;

‘ Communicate and educate everyone involved to build support for the
dSSired end state;

’ implement recommendations by focusing on the most significant levers,-

' cIUickly implement with care and quality; and

0 follow up to ensure that the change is sticking.

Changing the organizational culture

Brian summarized three key elements at work to change the culture by
mOdifying dealer behavior and the company-dealer relationship:
0 Reiterate the importance of dealers as leaders, especially in leading their
human resources, customer service, community service, and dealer

network as a whole.
' ’nStead of seeing each other as competitors, focus all the dealers on

growing the overall pie.
0 Now that rewards have been aligned with what the company wants from
dealers, sustain momentum through improved dealer seleCtion, training
and development. Brian anticipated this would probably take another Yea"
With help from dealers, since "They know what makes a great dealer

better than we do.”

Elaborating on the process of cultural change, Brian said that,

“Along the way we believe that these are the three key elements that W!”
contribute to changing our culture. To be effective, a dealer needs to be a
stronger leader. He or she needs to be the best, the brightest, and the
most capable of moving up to the change, rather than a solid, average
performing shopkeepers, managing a store and making a lot of money.
We think the culture will change internally when people have better tools
and more influence in communicating with dealers. We plan to align the
dealer bonus and other rewards with my own, and probably marketin
people as well, so one partner does not have advantage over the other in
this relationship. The cultural change will need to involve growing the pie

62

and working together to grow the pie, and both becoming better off, S

that is the major change I am leading in the dealer relations area, wh for?
suPports our overall major need to become better at store execution and
alooount for sales.”

A Metaphor for Engaging the Forces of Change

Bt‘ian described the change model he used as a simple fulcrum:

"i have followed Nortel’s simple change model. There are all kinds of
Change models, but mine is a very simple one and it's just like a fulcrum.
On one side are the forces against change. On the other side are the
forces for change. You have to get more things on the side of the forces
for change, and try to eliminate some of the forces against change."

Expanding on his change model, Brian referred to a quote from The
Pit/706. Written by Niccolo Machiavelli in 1513:

"It 3"! ould be borne in mind that there is nothing more difficult to arrange,
more doubtful of success, and more dangerous to carry through than .
tn'tta ting changes in a state's constitution. The innovator makes enemies
of al I those who prospered under the old order, and only lukewarm 'supli’drt
is forthcoming from those who would prosper under the new," (1978. P51)

Brian agreed that the biggest force against change is either the real or
In

perceived fear of some kind of loss, such as loss of status or prestige:
assessing the risk of upsetting the old order, dealers' biggest fears were lost
income, lost status in the face of their customers, their employees and
themselves, and lost control. Brian and other like-minded colleagues prefer

to think of the dealers as independent business people, not entrepreneurs.

"Thankfully, our dealers are not really true entrepreneurs, in the typical
sense of being risk takers. I wouldn’t want them to be. They have Come
to this company to escape control. There are a whole bunch of real and
perceived fears of loss that could have made a dealer want to stay in a
situation where he controls his people in the store, and he decides What
level 0f Customer service his customers should get. He was confident that

63

if he just stayed long enough, kept his nose clean, controlled those
variables, he would move up to the chain."

In the dealer context, Brian described how the forces of resistance are

fueled by fear of lo st control:

“The peOpIe who start to fear that the change will hurt them will be very
strong enemies of that change. Often fear is a more serious impediment
to change than reality. Then there are the pe0ple who will indeed benefit,
although they may not yet know of it, not yet believe it, or are dubious
about it. Of course, they are not particularly strong allies. So, that’s the

thing, to tip this balance.”

Brian believes that dealing with the fear begins with the process of
dialogue, in order to raise the consciousness of those involved, so they will
acknowledge the need to change personal behaviours and build support and

momentum for organizational change:

"The forces for change really begin with a dissatisfaction with the status
quo, or the familiar euphemism peOple often use, the burning platform.-
There may be lots of eloquent metaphors, but essentially you begin W‘th
those fierce enemies, even with those lukewarm allies, to help them
understand there’s something wrong with the status quo. And again, Y‘"u
YV'" a'W’aYS hear people saying ’if it ain’t broke don’t break it.‘ Those are
JUSt 00"0quialisms that they’re saying, you know: 'I am afraid of change. ‘
am not dissatisfied with the status quo, so don’t fool with it.‘ "

In recalling other work life experiences, Brian also applied his metaphor to

governments and PUblic organizations and their struggle to make PVOtound
changes:

"30, you always have to begin by establishing the dissatisfaction wlth the
status Ciuo or else nobody will even listen to the other measures - A5 an
example, l think often governments failed with changes because they ,
faced such resista rice from government employees and ended L: 59“an
In court. There was no attempt to build a case for dissatisfaction in the
status ciuo. They either waited too long or didn’t believe that the
employees would ever believe them. At the very least there is vajue in
Stems} *0 get peepie ready for change. by starting the unfreezing Process’

64

which gets to people in time. Time is a key factor, such as when you lose
a loved one. Time starts to help you heal and greases the wheels of
change’

According to Brian, another force for change is a clear definition of the
vision or ideal and state, carved out of a survivor's instinct to escape an
incredibly uncomfortable situation:

"You know, on the grandiose Churchillian and Martin Luther King level,
such as 'we shall overcome’. This is the survivor instinct. You are
dissatisfied with the status quo until you begin building a clear definition of
the end state or desired vision; all you do is make people feel incredibly
uncomfortable. You really have their attention. People are paralyzed like
’deer in the headlights’ until you go to the next stage and start weaving the
end state. Then hope or a vision of the future begins to emerge. These
must occur very close in time. As powerful and hopeful as a vision is,
there’s a long way to go. Churchill didn’t say 'stick with me until Thursday.’
I mean his passion was that he was going to win the war."

Brian described a final force for change as positive first steps towards the
goal. The first few steps may be quite small, but at least people see the
journey ahead, know where they are going, and are encouraged by each tiny
step to add another tiny step, and another, and so on. “You are working from
vision statements, which allow you to evolve the changes and just keep

moving forward. The whole motion of strategy is long term."

Engaging the Forces of Growth - Co-Creating the Future
Organization

"My definition of leaders evolving strategy is that they live in the three time
frames 0f Past, present and future.” Brian described the temporal framework
in whioh executive leaders need to live, to effectively create organizational
change. “You really have to live and think in the future, so you have to live

and think in the future together. What’s it going to be like in five or 10 years
from now? As a company, how would you do with a poor performing dealer?

65

As an independent business person, how would your dealer do if he or she

made certain changes?"

Brian described how the use of mental models, conceptual frameworks,
and factual analysis raised the level of conversation and thinking among
individuals and groups, and among teams and work practice communities of
PGOpIe. “You live in the future by modeling those behaviours that you want
others to develop and by communicating a view of what the future will be.

You have to make decisions in the present, but at the same time, you have to
value your past.” Involving these stakeholders in the process of creating
change makes common sense. “I mean the Dealers have been around

longer than i have been here, and they are probably going to be here long

after l have gone because of the nature of executive careers and leadership
mix.

Summing up his thoughts on sharing leadership responsibility and
accountability, Brian concluded that this is a process of co-creation that:

“You have to evolve strategy thinking in context of how you want to be
living in the future and make decisions in the context of the present while
valuing the past, and that I find is a tough thing for leaders. Maybe you’re
good at one of those three, but very few people put it all together. It’s
really up to CEOs, senior executives and informal leaders throughout the
organization."

Developing new Ieaming capabilities

Brian also observed how the people involved in the change developed
new learning capabilities when the work team leading the dialogue process
introduced New communications and education processes. These new
processes resulted in peOpIe working more effectively together in teams,
learning communities and collaborative work groups. For example, through

the dealer dialogue and subsequent work group activities people became

66

increasingly skilled in dialogue and critical reflection. The level of respect and
trust within and between the groups also improved as the people involved
generated the common will for change. One initiative focused on the quality
0f conversation, which involved sharpening the skills and process tools

needed to improving group productivity.

When listening to each other, people began to genuinely listen. In making
compromises, they listened to others' concerns about the status quo, why
they were interested in change, or what they feared. Consider the imagery of
a questionnaire going to all the dealers, and a consultant coming to the
convention to listen to what every one had to say. Consider the even more
powerful image of senior executives physically leaving the room. Combined,
these present an image of full disclosure of both the positive and negative

aspects of the business and the relationship. The image reflects a
relationship in which the participants are gradually learning to trust one
another and work together in identifying and handling the full reality of their
situation.

New organizational learning capacity emerges

Brian described how the dynamics began to shift significantly, as people
started to build on what they had learned about themselves, their colleagues
and the organization. Initially, conversations consisted of polite banter and
argumentative discussion. As people became more skill full listeners Brian
recalled their first use of bargaining principles to negotiate by not beginning
with their Position or attempting to axe the other position. They tested
different m0dels to explain their position.

The dealer traits that emerged as significant to success, in addition to a

drive for Performance were human aspirations, such as a desire for
cooperation, recognition, accomplishment and affiliation. These traits also

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correlated highly with the company’s stated values of honesty, integrity,
respect and dignity. “We validated a number of hypotheses and, like so many
things after you discover them, they are obvious,” said Brian. All of this
activity was in response to the burning platform, and the need for a better
customer experience, the best dealers, and the best stores.

Throughout the process of trying to improve the company-dealer
relationship, Brian and his company learned to communicate, communicate,
communicate. For example, they have learned the values of knowing and
understanding the different needs of stakeholders, such as the dealers, the
dealer’s association and opinion leaders. These are informal leaders who are
not on the association or corporate board members and officers. The
company, Brian insists, has learned to make sure that all of the messages

communicated are consistent. Different messages or playing one group off
against another leads to political implications and destroys the openness and
honesty. “Integrity, trust, honesty, and openness are so critical. Again, when
you look at failed change it’s because of lost credibility.”

Brain concludes his story by explaining how those involved developed
the capability to use feedback and critical reflection to increase self-
awareness:

“Within my own team, I had people who were excited about the change
journey and the belief that they could really make a difference.
Otherwise I would have had to clean house. I was able to use the
same tools to educate, communicate, reward and align effort to
achieve results. As a team, we have expanded our capability, using the
same assessment methods, feedback loops and development
Programs to increase self-awareness through generative reflection,
and enhance the creative approach to leadership. The group over time
has become quite resilient and adaptive."

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Synopsis of the Case Narrative

This case is about profound or strategic change in a large retail
business organization. Brian, the executive leader is engaged in a change
initiative that will refocus and redefine the business purpose and identity in
the eyes of its customers, dealers and employees. Fundamental to the
success of the change is the company-dealer relationship. The current
relationship lacked trust, honesty and was framed in an old business mindset
based on hierarchical structures and seniority. He wanted to reframe the
mindset to a performance-oriented relationship that would drive customer

competitiveness and overall business growth.

Brian followed an informal change process and employed the lessons
Ieamed from earlier change initiative work. He embraced the resistance,
which was fueled by the dealers’ lack of trust and fear of loss of control. He
began by engaging dealers and executives in conversations to build a greater
understanding of the issues and problems. Early on in the process he
launched an initiative called the dealer dialogue, which was intended to
surface the dissatisfaction, demonstrate company concern and raise the
quality of conversation. This process fueled a ‘burning platform’, or

heightened sense of dissatisfaction with the dealer-company relationship.
He then assembled a work group from the company and the dealers to lead
the dialogue and create a new "common will’ or sense of hope that the future
relationship and organization could be better.

This journey took about eighteen months. Along the way, Brian played many
different roles_ In addition to his functional role and his reaponsibility for the
on-going development of dealers, Brian was an opportunist playing many
different roles aimed at accelerating the changes. These roles included:

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- Inviting everyone to get involved in the process and then engaging other
leaders in a process of dialogue to create the desired vision or end state;
Influencing other leaders by building a work team and cooperating with
the dealers as stakeholders in the business;

Teaching, coaching and mentoring other executive leaders, dealers and

his immediate team by relating insight and the lessons learned through

experience to all stakeholders;

0 Being a role model practicing the personal or inner disciplines associated
with new learning capabilities such as self reflection, listening with an
open mind, the use of feedback and new thinking processes, fact-based
analysis;

Being intuitive and decisive when called upon to generate ideas, facilitate

other leaders or make timely decisions.

Through the months of dealer dialogue, analysis work and the generation
of a common sense of value and purpose or ‘common will’ new hopes and
drive to sustain the process developed amongst those leading the change.
Those involved developed processes for thinking, conversing and relating to
one another. These skills were quickly incorporated into new capabilities by
applying them to the work at hand. The personal and collective growth and
development was largely learned while engaging in the process of
developing the new vision or and state.

The momentum or forces for change accelerated with the growing trust
and confidence in their relationship. The company and dealers now shared
the responsibility and accountability for the success of the new relationship
and began the process of communicating and educating all those involved in
achieving the change. Again the development of new individual learning
capabilities was key in the growth of a collective learning capacity.

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In addition to the individual Ieaming capabilities and collective capacity
to learn, those involved in leading the change became more resilient and
effective experiential learners. Brian also cited an increase in self-
awareness; confidence and desire to further enhance their creative

leadership approach by sharing the responsibilities for leading and co-
creating.

SynOpsis of Case:

Values inspired strategic change: de-mutualization of major
insurance company

This case is about the significant change initiative that a prominent
Canadian Mutual Insurance company voted to engage in to convert it from a
company mutually owned by policyholders to one that was publicly owned by

shareholders. Basing this decision on the three core values of stewardship,
innovation and partnership senior VP Bert was determined to do the right
thing for all stakeholders comprised of policy holders, employees, and large
investors representing public interests.

Building the momentum for change was his first responsibility, which met with
significant resistance. Bert began by spending his time taking every
opportunity to engage stakeholders on their terms talking about what the
company ought to be and about a vision or future for people in the
organization. The external changes going on around the organization were
perceived to be significant influencing factors in minimizing the internal
resistance to change. The forces driving consolidation of the malket place

were widely evident driving a fear of demise or loss of an ability to control the
future of the company.

Bert followed a semi-formal change process to engage people in initiatives

designed to renew the company’s explicit values, No particular change model

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was adopted but a clearly articulated linear path, based on the future vision of
the company was the lifeline for change. He attempted to demonstrate why
the status quo was not satisfactory and engaged pe0ple in a process of

building the steps necessary to move to the “future state”.

Changing the structure of the organization and the ultimate refocusing of the
business into product lines specific to customers was not an easy path. .
Building a new working relationship and creating the right culture, attitude,
values, and behaviors across all sectors of the business were all necessary to
establish credibility in the change process. Examples of what Bert felt were
Significant initiatives supporting the change initiative were:
0 A 3.5 year exercise to build values in the organization which identified
common attributes and core values
. Individual work with key business leaders to clarify business issues
0 Team building and issues discussion dialogue interventions
. Diagnostic opinion surveys of employees, customers and other
stakeholders to track and measure the change in consistency of values
behavior throughout the company
0 Documentation of visible application of the values that were used to

leverage the change in culture

Bert acknowledged that he too was changed by this experience. Reflecting

on what he would/could do differently in the future. He states that he would

probably be:

o More empathetic to the fears of stakeholders

o A better listener and more engaging when probing for understanding and
building consensus

0 Better at working with people to create the change instead of pushing
them to achieve the change.

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hi

 

sVnopsis of Case:
Leaiding Change in the Public Service during economic down
turns

This case involves the consolidation of five provincial education and
training ministries into one new ministry. Due to wide spread deficit cutting
and downsizing this initiative involved an 12 billion dollar budget, a massive
organization of approximately 12,000 public service employees and ultimately

the elimination of about 1,500 full-time positions.

Paul the person responsible for orchestrating this complex transition

has a diverse background with experience in three different ministries. In his
words, “my task was to develop a brand new ministry with a service culture

that appeared seamless to the public and government.

Paul began by announcing the change and inviting everyone to
panioipate. He described the process as democratic; everyone in the ministry
had access to participation in the deSign, vision, mission and values ot the
new organization. Insecurity and job vulnerability were key concerns voiced

by many participants so Paul made a point of ensuring his direct reports
understood their situation. leadership role and commitment to their career
transition by meeting with each person individually. Paul’s immediate
functional tg am was reduced from 13 positions to 8. He started the process

by selecting a change champion to lead the organization and implementation
Of commun ications and Ieaming initiatives through which the vision, mission,
Structura| Qesign and explicit values. As sponsor of the change Paul focused
his time on attending to the voice of workers and managerS. He spent 40% of
his weekly time meeting with people. listening and Ieaming to understand the
Change "Qt-11 their perspective. He also made extraordinary effort to act as a

career coach for direct reports and others in the organization.

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The change champion chosen to orchestrate the process was selected
for her incredible leadership talent. Paul described her as an extraordinary
communicator, creative thinker and agile learner who was particularly adept

working with groups throughout the entire organization.

An internal and external consultation process was used to build
understanding of the collaborative process and involve as many people as
possible in the vision and values realization. Throughout the change
processes, Paul continued to place great importance on involving people and
in communicating honestly and candidly. A communication process, set up at
the beginning was maintained throughout the change initiatives.
Subsequently those communications media and forums were adapted to
meet the needs of the new organization maintaining development of a high

involved, collaborative culture.

Paul discussed some important lessons learned in leading change initiatives.
He described learning about the importance of beingmore than a role model
for values Consistency by focusing on a few core values which in his words
“are ”0i up for grabs”. Paul maintained his core values as “eQUitY and
authenticity” . He described how over a period of years as he evolved as a
leader how he came to realize what and why these values were core. He
described h. 0w he took time daily to write in a journal and then reflect critically
on his own performance setting daily objectives to optimize his performance.
Paul also Q escribed the process of developing the criteria used to select
leaders for the new organization. Paul viewed himself as a person who leads
by examp ' Q both in his practice and behavior. Examples of this practice
induded;
' Comm u nicating openly and frequently with people at all levels of the
organization through “brown bag” lunch sessions, use of electronic media
‘0 teach out and tell about efforts; successes, failures, questions, etc.

74

Communicating for the purpose of obtaining feedback through his weekly

e-ietter and 360 degree assessment

organizing and leading mentoring programs
His CloSing comment was one that was particularly thought provoking: “since

People aren’t compelled to understand the importance of change unless they
think there is a crisis, sometimes you have to invent a crisis, or label current
events as a crisis”. The importance of creating a sense of urgency was

prevalent across all change initiatives in this study.

Synopsis of Case:

Leading Change in turbulent times: Amalgamating two
orgenizations

This case reflects the tumultuous, unexpected change that can occur
when Mo large companies with significantly different structures, systems,
Processes. goals, values and culture were merged to create a new
organization. Investors and senior executives who made the decision on this
amalgamation expected to reap benefits from the amalgamation. These
benefits included higher productivity, cost savings, was assumed without any
due di'igenee on the human resource investors and senior executives.

(3,83% ical change management strategies like “rightSiZihg' the work

force Of 39:) roximately 10,000 employees and consolidating production did
not prove tQ be effective. Edward the champion of this change was expected
to Completg the amalgamation within six months. Edward’s appteeeh t0 the
change initi etiveh") was semi-structured. He included a cultural survey 0f
emp'OYeSS to measure several dimensions of the change initiative. He then
focused his. energies on working on the most influential individuals with the
organization _ Barriers to change were identified by Edward included:

Perceptions that the company was not spending enough time and energy

on the process of change

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° The leaders were not communicating with the people involved and/or

affected by the change
’ Leaders failed to express a vision so employees had little sense of

c0mmon purpose
‘ Cold calculating downsizing practices were pUt in place W'thOUt

Consideration of the people involved

Reflecting on these issues, Edward realized that the timeframe was a recipe
for disaster. In his words “you need to create momentum by building a sense
of urgency while maintaining the patience and perseverance needed to
sustain the momentum over the time it takes to do the right thing(s)”. He also
stated that “the success of the change initiative was dependent on whether an
or ganization had a clear picture of both ends of the change specthm
(beginning and end-state). if you are not clear about where you’re heading,

knowing where you are tells you what you’re evolving from”.

Summary of Findings

The thematic commonalties emerged very qUiCkiY as data was
compared, Although eight interviews were completed and included in the
aneiYSis of Qlata it became apparent after four interviews that the themes and
Patterns WQ re remarkably consistent. To appreciate the richness of the
deSCTiptiom g captured through the in-depth interviews, all eight interviews
were used to develop a ‘composite’ case narrative that is in appendix F.

A" Si ght participants used the interviews as an experiential learning
Opportunity to gain new insights about themselves and make inferences about
how they m ight adapt the process or attempt to change the mindset of others.
This behaVior may be interpreted in two ways. According to Glesne and

Peshk‘m (1 992, p155), this process of Ieaming about self through
Unctetstanding others is a gift of qualitative research done well. Tichy (1998,

76

 

 

 

 

919) attributes this process to a developed competency or set of behaviours
and Skills honed into a capability by executive leaders who practice the role of
teaching. Bennis in Tichy (1998, p19) says “the basis of leadership is the
Ca'pe‘eity of the leader to change the mindset, the framework of another

per SQn_ ”

Question 1: What are executive leader perceptions of the
nature of building organizational learning capacity while

engaged in change initiative(s)?

“Change work is the art of mastering the teeter totter” Brian

“ Change work is like ‘sailing in to the wind ” Bert

When asked to describe their work engagements relating to the change
'n'tiative, the executive leader would reference an analogy or metaphor.
describe their work as ‘hard’ or ‘challenging’ and claim that over time. it

resulted in progress and reward. As an example, Bert said:

“This Work is like tacking while sailing. If you’re going into the wind you
have to head slightly off the wind and then sWitch and go in the other
d'rection to make way. Its hard work and you have to look for

O DO"tunities to adapt as you move toward the destination.”

’"VQIVmg those affected sustains profound change

SteregiC organizational change that involves revitalizing or rethinking
the organ i {etioh’e intended business focus, its contribution to its community
and its ”Q htity (Senge et al, 1999, p.29) requires profound or ‘deep’ change
work on behalf of a highly committed group of involved and committed
leaders Wh 0 work collaboratively. These leaders use an ‘involvement’

approach to involve all stakeholders (people who are impacted by the
Chehge\ in a variety of learning opportunities that facilitate the rethinking and

77

redefinition of the organization’s ‘common will’ or sense of purpose and

identity,

The process begins by uncovering or acknowledging the
dissatisfaction with the current structure, processes, and systems. It requires
an atmosphere of trust, honesty and reflective critical and generative thinking
about what those involved hold in common (Scharmer 1999). By
regenerating the values, assumptions and beliefs that people hold in
common, the leaders feed the forces that generate increased levels 0f trust
and honesty, They also encourage a new level of language that enables
those involved to learn from experience and create solutions for new

p r ccessec, systems and structures.

The fact that some people are not able to adapt to the change may

s”QQest that people have a set of intrinsic values that cannot be redefined
using this involvement approach and generative reflective dialogue to foster

learning and changed mindset.

orgerN'Zational Change follows a Process

The Patterns identified by comparing each case were partially summarized
by Brian in case one, Bert in case four and Janet in case two. These patterns
are very QQnsistem with Kotter’s (1995) eight-stage process for change. In
their own Words they gave a description of a non-formal process for change.
Only Ann i n cases five and Casey in case eight did not make reference to a
process approach for engaging strategic change. All other executives
perceived their approach to engaging change as a series of planned events

and unplanned happenings referenced to a non-formal process-

HOWBV er, when comparing cases five and eight with the informal process
descn‘oeq by Brian, Bert and Janet, they also followed the events and

78

happenings consistent with the informal process. Each stage of the process
represents a pattern of events; happenings and perceptions which in-turn had
eSSOCiated sub patterns. Together they form the informal or normative

pr Ocess Regardless of the type of strategic change or scope of the
challenges described in the eight case interviews the patterns and sub

patterns were remarkably consistent.

Success and failure can build learning capacity at the
individual and organizational level

Executive leaders willingly shared the lessons learned from mistakes,
failures and successes. They provided many profound insights and
perceptive thoughts about leading change initiatives formed as a result of
critically and generatively reflecting upon their own overall performance.
SeVeral executives regard their role as one or Opportunist, helping the
business or line people understand the conceptual gap and create strategies

and develop the organizational capabilities that will close the gap.

On the organizational level, they consciously planned experiential learning
events into their initiatives to help people attain new knowledge. develop new
skills, and apply the skills and knowledge within the context of how the skills
and knowledge will be used to further the change in the organization. This
the” make% it possible for those involved to generate new insights from their
own eXper‘ i ence- For example, information that people needed in order to be
successful in their work was distributed in many forms, such as organized
dialogues . Inti-anet-based meetings and key action messages. Various forms
Of feedban on individual performance from coaches, mentors, teachers and

SUhleCt rn Stter experts were incorporated into action-based learning on-the-
’°b» Values workshops’, and traditional skills training sessions. This approach

allows learners to learn in a way that is natural to them. Wherever they
maybe, These forms of experiential ‘action based’ Ieaming initiatives also

prov‘wte \earners with the ability to learn how to learn.

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i:Urther, on an individual level, executive leaders plan time in their daily

Work life to ask for themselves what worked well, what they would do
differently next time, and how they might handle similar situations they may
encounter. These insights grew out of their own experience and led to a new

reflective practice where leaders set personal expectations for improving
Performance. Ann in case five even described a strategic change initiative as

a “transformational learning opportunity for themselves and people throughout
the organization.” Bert supports this notion of transformative Ieaming
experience in case four when he suggests that leading change work

describes his life’s purpose and meaning:
“In a sense it is difficult to speak of the change experience aside

from the work that I do. It describes my life. What drives me probably
"lost importantly above all is the building of organizations that are not only
lg performing but are fulfilling to the human beings that are working in

ose organizations. ”

Executive leaders model the habits and capabilities needed to
sustain lifelong learning
The executive leaders in this study exhibited an extraordinary capacity

to deal with an increasingly complex, competitive and fast-moving
environment. They demonstrated a drive to do well setting high standards of
values 00": gietent behaviour and self-confident in competitive situations.
They consciously value and hone specific mental habits that foster Ieaming.
These “35 its include humble self-reflection on successes and failures,
Openness ‘0 new ideas, careful listening, and embracing resistance by

solrcrting ideas and opinions of others.

The executive leaders in this study demonstrated a number of
emergent capabilities that foster learning from experience. These capabilities

\ncluded;

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' A strong sense of external focus and awareness of the environment
developed by networking outside the organization, frequently scanning the
environment and benchmarking comparing their organizations against the
performance of others.

Et‘l'ective use of a variety of communication media and approaches that
Stem from well developed habits such as careful listening, openness to
receive information, soliciting feedback, and using generative thinking

processes to integrate and use new information.
0 Ability to focus their attention and eliminate unnecessary
interdependencies to make decisions based on intuition and sound

iUdQement.

Question 2; What are the role(s) executive leaders undertake
to build learning capacity within the change initiative?

In addition to stating their formal title and functional role, each
partioipant was asked to relate their experience to whatever role they played
While engaging the change initiative. For example, Ann suggested that her
role demand a deep sense of purpose and commitment and a well-developeCt

sense 0f intuition and decisive bias for action:
"While l am fairly action-oriented, I prefer to function on the basis of
thOrQU h analysis, frameworks, and teams that deliver results. In a
sense, it’s difficult to speak of the change experience separately from
the Work that i do, since it really describes my life. What drives me
mog‘ is the idea of building an organization that is both high performing
and fulfilling for the human beings who work here.”
.AS the Cha nge initiative work proceeded, each participant WOUid provide
'“S'ght by describing other roles that they played when leveraging an
opportunity to accelerate the pace of change. Although the nature of the
Change Situation varied there were a few roles common to some or all Of
these executive leaders. There were three primary roles identified in the
findings:
‘ Leg'mmizing or sponsoring the strategic organizational change;

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0 Being the change leader who guides and facilitates the organizational
change or transformation; and,
0 Being the change or process champion or change team leader
responsible for specific initiatives and process reengineering
The executive leaders in this study did not differentiate these three roles by
function or status level in their respective organization. However, in a few
cases they did recruit and select a change or process champion to lead the
team responsible for managing the change initiatives that align work
processes. Predominantly, each executive adopted different roles, as the
situation demanded. Although there was no clear evidence, this ‘opportunist’
leadership style may have precipitated some role conflict among peers, direct
reports or other members of the organization.

The Three Leadership Roles

The sponsor role

This Sponsor role was originally identified by Connor (1997) and defined
as the leader who legitimizes the change. In this study, these execut ive
leaders exhibited many of the attributes associated with the sponsor role.
These attributes include prudent use of their authority and stature to endorse
the change effort. More significantly, they demonstrated a deep passion and
commitment to the process of building a more successful organization where
everyone carried their full share of the responsibility. Winston, Casey, Janet,
and Ann each demonstrated the capability of providing overall direction to
acquiring and aligning the necessary resources, and instilling motivation,
Janet describes this role as follows: “My role is to smash the organizational
barriers of resistance and make it possible for others to lead. I need to fly air
cover and be 100% committed to the success of the change.”

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The strategic capabilities role

Five executive leaders in this study described their functional role as
business leader that guides the organization through the change journey.
Bert, Brian, Edward, Janet and Paul each had a different formal position title
but clearly articulated similar role responsibilities. Bert described his role as,
“living in the gap between the reality of today and the vision of the future
organization. Working with business line leaders and other leaders in a
process of co-creation.” To accomplish this role these executives summoned
their experience and other sub roles to teach, coach, mentor, and facilitate

others in the process of acquiring new learning capabilities to lead the change
process.

These are the additional responsibilities associated with this role:
Oversee, manage, and coordinate all initiatives associated with the
change;

Excellent internal and external focus, and a thorough understanding Of

the strategic direction or vision that the organization’s leaders want to
pursue;

Serve as a coach. mentor about change management;

Teach other leaders, groups and teams about the process of change

and the various associated leadership disciplines, learning
capabilities, and technical tools;

Establish the business change practices and procedures;

Evaluate the effectiveness of individual leaders and assess their
potential and readiness for handling increased responsibility

Attract, recruit and select talented people to lead and participate in the
change initiatives; and,

Assess the readiness of the organization including the capabilities of

the human resource and design and implement new practices to help
adapt the organization toward the desired End State.

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In this Study, there were three executive leaders with position titles that
describe this role. The titles were Executive Vice President of Strategic
Capabilities, Executive Vice President Organizational Development, and
Executive Vice President Global Devel0pment. Bennis and Mische describe
a similar role as ‘transformational leader’ (1995, p95). Bennis and Mische
differ in that they see the role as functional and unique to a specific leader.

This is evidence that the role may be emergent and will eventually become
common place in large organizations.

Change or process champion role

The person with the direct responsibility and accountability for specific

systems and process change initiatives leads a cross functional work group or
project team who design, implement and measure the various initiatives.

i Helshe exhibits the following Characteristics; high energy, drive to pertorm
and a passion for results, works collaboratively in-groups or teams,
organization—wide perspective. and in-depth knowledge of the organizations
business practices, systems and processes. He or she works in-con j unction
with the change sponsor and strategic capabilities leader,

The Educative Roles: Teacher-coach-mentor

The executive leaders in this study each employed personal
development or learning plans. They exhibited well-honed Ieaming
capabilities such as the ability to synthesize knowledge through insightful
reflection developing intuition, which enhances self-awareness and
confidence. They used a variety of Ieaming strategies, tactics and methods
to transfer learning capabilities to others throughout the organization.
Examples of the strategies and tactics employed include the use of dialogue,

and informal and formal educational programs designed to share what an

84

executive leader knows about what it takes to succeed in his or her own
business as well as understanding business generallY- Tichy (1 999) refers to
these Ieaming sessions as ‘teachable moments’. Today. executives also
employee formal and informal coaching and mentoring programs to diffuse
knowledge, and insight across the organization. When these tactics are
employed in conjunction with process and systems change initiatives leaders
quickly integrate the knowledge and insight into new Ieaming and work

process leadership capabilities.

lt’s worthwhile noting that these executiVe leaders worked as much as
possible with little concern for boundaries such as position leveIS, and
functional turf. Although they were very aware 0f their authority. reputation
and credibility they seldom drew upon this source of power to command or
influence others. Rather they listened openly and attentively to everyone in a
dialogue. They sought out eXpert knowledge whereever it may be. This was
most evident in the extensive internal and external networks that they
partioipated in on a regular basis. They were highly sought by external
boards 0f directors, professional associations for their experience and
knowledge relating to leading change and developing strategic capabilities.

Question 3: What are the ways in which growth and limiting
forces sh ape and address the change initiative?

Lea ders’ capabilities define the limit of organizational ability
to Confront the internal and external forces

All eight cases deal with a combination of external and internal driving
forces for change. For example, in case seven, Winston confronts an

organization nearing bankruptcy and a business owner unwilling to challenge

his own assumptions or be transparent with the management team about his
dissatisfaction with their performance. He reflects on the need for the

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executive to understand the nature of organizational change. He describes
how limits in the capabilities of the leadership team prevent the team from
confronting the declining business numbers or challenging each others

analysis of the situation.

Further, he describes how perceived limits and constraints caused by
external competitors and internal ‘silo management’ create a sense 0t
hOpelessness and fear. He also reflects on the inability to communicate
effectively. Perhaps because of the fear of personal loss or lack 0f trust and
respect, dialogue is limited to polite banter or argumentative r hetorio,
Consequently, the people involved either lack the know-how or Will to
question basic assumptions about the business with each other, Which

affected their decisions, and the actions, events and happenings 0f the

organization.

Question beliefs, assumptions, and values to surface the sense of
dissatisfaction with ‘status quo’

The Cases in this study underlined the importance of establishing an
awareness of the ‘burning platform’ and fostering a sense of urgency by
engaging e hd challenging people who have a vested interest in sustaining the
‘status quo * around common beliefs, assumptions, processes and structure.
Both Br fan in case one and Paul in case six are compelled to take action and
create a Sense of urgency and awareness of the dissatisfaction. Brian refers
to this as the ‘burning platform’. In Brian’s case, he uses a variety of
facilitated dialOgues, feedback and factual analysis to help the dealers see
that the status quo is not an option worth clinging to. He uses the dealers’

expressed dissatisfaction to gain the attention of his peers and team
members and makes it virtually impossible for anyone involved to consider

resisting the change.

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Involve all stakeholders: overcome fear and regenerate
common will or sense of purpose to promote creatlwty

Successful change requires that leaders involve all stakeholders, by
creating opportunities for involvement or collaboration to rethink or redefine
the organization’s identity, by re-establishing common beliefs assumptionS

(Common will and values) processes, systems and structures. Paul in case
seven believes that the coalition leaders need to give people involved time
too personally rethink and join the change initiatives. Paul invites peOple to
come forth and participate in a process of learning about Change as a
process, and to deveIOp new skills and capabilitieS useful th dealing With
change and defining their identity and role in the new organizatien- Casey in
case eight is challenged with building a new university by rethinking and
redefining the traditional assumptions about mid-career education and the
purpose of the university. He recruits a team of leaders and scholars who
share a common set of beliefs and assumptions about post-secondary
education and then challenges them with the responsibility for creating the

5" uctur e, Processes and systems that will lead to an entirely new form of mid-
career edUCation.

co‘creating the vision

Cr it i cal generative forces in the process of change include defining the
desired Er‘n d State or vision and strategies that focus those involved on

establistttn 9 common values. By sharing the vision in the language of the
stakeholder and embracing resistance those affected gain hope and move
toward the change. Brian in case one, Bert in case four, Ann in case five and
VVlnston in case seven all approach the change initiative by creating

processes for involving large groups of people affected by the change, and

giving them the opportunity to understand the vision and define the end or
desired state.

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They begin the involvement process by having people rethink the
current state and question all assumptions about it. They begin the definition
0f the desired or End State by establishing a set of common values. As this
process happens they embrace resistance by engaging peOple in various
forms of communication and dialogue. They personally attend to these

people and attempt to understand the thinking that drives the resistance to

change.

This work is challenging and not withoplt setbacks. In each case, the
executive leader indicated that ‘time is of the essence’. In all Of these cases

the processes take months or years to execute. Executive leaders are
constantly looking for opportunities to accelerate the process and prevent the

initiative from stalling when members of the leadership community involved

leave the organization or change role responsibilities.

Del/elaping individual Ieaming capabilities that foster
generative learning and creative leadership behaviors

ExeQutive leaders need to seek feedback opportunities to increase
their sensg of self-awareness and focus their attention on key disciplines and
habits. Th ey may utilize action based learning opportunities in their work life
to develor.) and master communication and thinking processes that engender
critical and generative self—reflection (Scharmer, 1997). In each case the
executive leader used self—reflection to personally examine his/her own
thinking processes and behaviors that drive effective leadership performance.

Paul used 360-degree feedback and an e-Ietter to seek input about his
performance as a leader. Ann compares herself to her manager and openly
discusses her mistakes, her admiration for the wisdom, intuition and ability to
make bold decisions as a leader of change. In all cases the executive spoke
about risks taken and the use of self reflection, personal logs as a means of

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consolidating their thinking and learning from their mistakes and successes.
Brian in case one, Janet in case two, Bert in case four, Ann in case five, Paul
in case six and Winston in case seven all described hoW ti\ey created
Opportunities to teach, coach and mentor others in their development of
personal fundamental habits. They also took pride in describing the formal
educational programs that they initiated or supported. anh leader
Considered coaching, mentoring and teaching to be essential roles. In
addition these leaders did not hesitate to use external facilitators or scholars
to develop new skills and approaches for rethinking, communicating and
Strengthening respect and trust amongst the leaders of the organization.

Align those involved to build organizational momentum and to
adapt processes, structures and relationships
in seeking alignment, carefully select a diverse group of people or
team to do the work, ensure that team members share the vision and
common Will, take action to engage stakeholders while respecting resistance,
and model new processes when dommunicating and educating others. Each
executive leader described a variety of approaches, tactics and methods to
engage Stakeholders. In their words, the best way to engage people resisting
the changg was to begin by listening intently, allowing people to use their own
language 3nd showing respect for their points of view. While tolerant, they
also 30k” leedged that some resistance would never be overcome with the
current lev els of dialogue and single loop learning systems. Rather, they
developed generative learning capabilities and modeled these by initiating
learning activities that regenerate assumptions, values, trust and respect.
These initiatives enable individual development of generative learning
capabilities and create the capacity to raise the quality of conversation
throughout the organization. Executive leaders consistently stated that
anyone in a leadership position whose values were inconsistent or whose
behavior was resistant must be removed from their position in order to

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demonstrate that the status quo is unacceptable.

Allow for the time needed to accept and embrace change by openly
acknowledging mistakes and creating opportunities for peop|e to reflect on
the change experience. In this way they may generate new understanding of

its affect on self, others and the organization’s growing capacity to cape with
change.

Although in all eight cases there were enormous external pressures driving
the need to change, every executive leader reflected upon their own
experiences and the nature of change in organizations and acknowledged
that time is a force that cannot be ignored. In various ways, in each case, the
executive leader used time to consolidate gains or successes and allow
people involved to reflect, accommodate the new reality and develop new
skills and capabilities to deal with the change. This time was also used to

share information and generate new approaches for negotiations.

Prevent stalling by using fact based analysis and aligning
people with the organization ’3 work

Build support for those involved or leading change work by requiring
the use of fact based analysis. Encourage and support their actions by
implementing recommendations and focusing on the most significant levers to
create change. Ann in case five and Paul in case six lead large diverse
organizations with thousands of people engaged in the process of change.
Executive leaders rely on their change leaders and people involved in the
Change work to provide factual analysis. They engage their people frequently
in informal Conversations to receive briefings reflect on alternatives, dialogue
and make ClScisions. ln Ann’s words, “I spend a great deal of my time
engaged in Conversations to help people understand the vision, align their
work With the vision and help them make the connection between their work,

rewards and organizational success.”

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Celebrate and anchor gains and wins

Recognize and celebrate short-term successes or ‘wins’ and
consolidate gains by setting standards for care and quality of implementation.
Follow up to ensure that the changes ‘stick’. Brian in case one, Paul in case
seven and Bert in case four each developed programming to recognize and
celebrate short-term successes or ‘wins’. Their aim was to consolidate these
gains, affirm standards for care and the quality of implementation.

Anchor the new sense of common will (assumptions, beliefs, values)
and acquired capabilities by sharing new knowledge through communication
and education with everyone involved, to build support for the change
process and the ‘end state’ or vision. Take action on those who ultimately
cannot or will not embrace the change. Anchoring strategies varied in each
case. In cases one, two, four, and five, the values were published, and
training for living and understanding the vision and values was entrenched in
the company orientation program. In cases one, two, five and seven formal
education programs on leadership were created to build new capabilities,
such as external awareness, generative thinking, open communication,
collaboration, and action learning tactics that were needed to sustain

momentum and enhance the organization’s learning capacity.

Conclusion

This study has gathered data from eight executive leaders who have
engaged in Pnany strategic change initiatives aimed at creating profound and
sustainable organizational change. The findings are rich descriptions of their
experiences, and insightful perceptions about the nature of leading Change
initiatives. in each case, the executive leader described the approaches

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taken to deal with the forces of resistance and build momentum for the

change.

Several executive leaders acknowledged that they were intimately
invested in the status quo and that they needed to be open, listen intently and
take time to critically reflect, rethink and redefine their own fundamental habits
and behaviours. They described how important it was to have a personal
passion and complete commitment to the people involved in the change,
because it often involves deep personal change for people at every level of
involvement. Lastly, they described their many roles and tactical approaches
taken to foster collaboration, share knowledge, develop new individual and
organizational capabilities, in effect, rethink and redefine the fundamental
assumptions and values. They realigned and/or reinvented the work
processes, and structures in a series of adaptations over a lengthy period of

time to profoundly change the organization.

Chapter five will explore these findings in relation to the literature and
develop recommendations for leading the development of learning
capabilities and creating an organizational Ieaming capacity to sustain the
momentum of strategic organizational change.

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Chapter Five

Conclusions - Recommen dations

Conclusions

The executive leaders in this study share a personal passion and
commitment to create organizations that have a capacity to provide people
with productive, meaningful life experiences. They do this by sharing the
leadership responsibilities and involving people in strategic change initiatives
that redefine the organization’s business purpose, its contribution to its
community, and its identity. They build Ieaming capacity at the individual
level by modeling the personal fundamental habits and honing performance
capabilities that foster a creative leadership approach. They build support for
change by acting opportunistically in collaborative groups to help others
acquire new generative learning capabilities and over time create an
organizational capacity to learn by shifting everyone’s mindset from a

resistive to a creative leadership approach.

Approaches to Understanding the Challenges of Change

The executive leaders in this study shared a common approach to
engaging Change. This approach is the result of many years of experience
and lessons learned. The common assumption upon which they based their
approach r elates directly to the premise put forward by Argyris (1994), De
Geus (1998) , Kotter (1997), Scharmer (1999), and Senge (1999): the source
0f failure to change lies in our most basic ways of thinking about change.
Further, the so executive leaders realize that strategic organizational change
efforts will fail if those involved are not given time and personal development
SUPPort to rethink and redefine themselves within the new or changed
organization. These findings are supported by the theories put forth by

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Senge, Kleiner, Roberts, Roth and Smith (1999), and Scharmer (1999).
According to Brian, Bert and Paul the change initiative will lose momentum
and fail if those leading the initiative do not take personal action,
communicate (i.e. say what behaviour is expected) model, coach and teach
the desired behaviors because others initially will only show luke warm
support for the change. Also, Janet, Ann and Winston gave excellent
examples of how to involve and build support, by giving people their ‘full
measure of work’ and responsibility to act on the vision and then support
them to realize their change. Brian and Paul also gave examples of the
importance and value of being open to understand and incorporate new ideas
from those committed to making the change happen.

The resistance behaviors described by various executive leaders were
consistent with Senge’s (1999, p27-29) ten challenges of change. For
example, in case one, Brian, and in case six, Paul, describe the challenges
that had to be overcome by the dealers, corporate executives and assistant
deputy ministers:

. Fears that lead to putting status security ahead of the vision or desired
and state;
0 AVOiding conflict by not bringing up the real issues that must be addressed
if the organization is to move on;
Giving Up control without ever examining their deep needs “3 “Did onto it;
Waiting to take action without first knowing all the steps or challenging the
relevance . .. nothing happens;
Waiting for others to ‘walk the talk” — the challenge of management clarity
and consistency; and,
Waiting for mixed messages to go away and for a guarantee of risk-free
success before personally investing in the change.

These participant examples closely follow the four stages and ten
challenges of change described by Senge (1999) (See Table 1 p19).

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Considering the consistency of these behaviors in virtually every case

suggests a naturally occurring pattern of behavior. This can be described as
a natural negative reaction to change. The participants in this study were so
familiar with this natural reaction that they anticipated it and developed a
creative leadership approach to cope with and eventually change this
behavior pattern on a personal level and then throughout the organization.
These new behaviours accelerate the change work and create an

organizational resilience and capacity to sustain change.

Personal Commitment and a Passion to Improve Performance

This study found that each executive took complete responsibility for
his or her own leadership. They were wary of the behaviors that block or
challenge change and assumed that the success of the business and their
own success was in their own hands. They need to wait for no one to begin
creating the future organization. They realized that to win trust and
commitment for the change they needed to enhance their own creativity
capacities. They accomplished this by constantly honing specific personal
diSCiPlines and setting a very high standard for values consistency in their
creative approach to leading. These findings are consistent with the theory of
Bennis (1 989), Block (1987), Fritz (1989) and Senge (et al 1999) that this

leadership Stance requires deep inner commitment and belief in the value of
the work for a greater good.

Bert, Paul and Ann respectively described this best when they
commented about their approach to leading change:
0 “In my I‘QIe, I am the bridge between what we intend to do in the
~ marketplace and our ability to realize those things internally. I am
responsible for ensuring that we have the ability as a company to realize

the business strategies that we set out. I constantly look for opportunities
to share knowledge and learn from our leaders.”

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. “l think my change work has been really around changing the way in
which the organization sees itself in the marketplace. I work in that gap
with other executives, my team and people involved in creating the vision,

understanding the change and what human capabilities will be needed to
realize it. My team helps the line executives develop the human capital
needed to realize the change.”

. I use 360 feedback and keep a journal. Most of the ideas for change that
we get come from leaders involved in the change. lam influenced by
their creative ideas. I then start each day with a period of reflection based
on the notes in my diary and set my sights on improving my
performance.”

Each executive leader created feedback mechanisms such as engaging
in various forms of dialogue with those involved. Examples of these included
350-dogree feedback, surveys, and direct conversations to gain insight for
critical reflection. Several executives used journals or logs and daily routines
to rethink their own performance and quickly integrate new attributes and
skills. They took pride in being values consistent in their actions, decision
making and in modeling new behaviors.

Leading Change - Sharing Responsibility for Creating Sustainable
Growth through Involvement

Creating the conditions for strategic or profound change involves
overcoming the naturally occurring individual and organizational resistive
forces. AS Bert said, “I see things as related and interdependent.” Failure to
see the organization this way limits the ability to generate change. The need
to involve as many stakeholders as possible in the process of rethinking and
redefining the organization’s purpose, identity and community was well
understood by the executive leaders in this study. According to Scharmer
(1 999» 95). the majority of organizational problems require deeper re-framing

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and regeneration, which means uncovering the underlying mentaj contexts
and corporate assumptions guiding corporate action- Scharmer’s notion of
introducing change practices into the organization is evident in the findings.
Brain’s dealer dialogue and subsequent work group were adopted by the
dealers and the corporation as a new practice within the structure of their
relationship. Consolidating the change by realigning the dealer bonus
represents the putting into practices or ’refreezing’ the changed organization

(See Figure 2.1 p20). The works of Senge (1990), Argyris and Schon (1996),
and Schein (1 992) also support this finding.

Brian, Ann and Paul defined the risks for an involvement approach. They

used different metaphors to describe the challenge, such as:

o “If you’re going into the wind you have to head slightly off the wind and
then switch and go in the other direction.” Paul, case six.

“This work is like a teeter totter. Everyday you work to ensure that those
forcesdriving the initiative forward outweigh those that don’t. You do this
by engaging people in their work to ensure that everyone is supporting
those forces that will drive the change forward.” Brian, case one.

“I think it’s very much like it’s one step forward, two steps back, a very
long time before you get to two steps fonivard and one step back. You
know when you’re being successful when someone that you’ve been
trying to initiate into the change that was a force for the two steps back is
now out cheerleading for the two steps forward. He is explaining to you
why Your strategy is correct.” Ann, case five.

it is the risk that the naturally occurring forces of reaction will prevent the
forces 0f Creation from sustaining the momentum of change over time to
create the Vi sion or desired ‘end state’. In each case the executive leader
carefully reCruited and selected a group to lead or guide the change process.
They also identified early supporters and took action to ensure that their

behavior was values consistent. They had access to the support required to

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individually develop the skills and attributes needed to take a full share of the
work responsibilities and participate in the rethinking , redefining and creative
process already underway. Where this wasn’t the case the executive took

action to remove an individual(s) from the group or reorganize those involved,

Developing Learning Capabilities

The learning capabilities identified in the study align closely with the works
of Dixon (1994), Argyris and Schon (1996), Senge (1999) and Schein (1992).
These new capabilities are principally double loop or generative methods of
learning. People in organizations, even the executive leaders can no longer
rely on single-loop problem solving, instead they must learn a new set of
cognitive reasoning rules to design and implement their actions. The leaders
in this study were able to create organizational learning opportunities for
those involved, to dialogue and rethink their behavior, which lead to the
breakdown of the natural resistive forces. These capabilities included:

0 Initiating and sustaining ongoing dialogue and using language that
SUPPorts moving from reaction to discussion and negotiation, and to
critical and generative reflection (See Figure 2.2 p23);

0 Rethinking and defining common values and interpreting them in the new
organizational context;

0 Using mental models to re-frame one’s own meaning structures and
conceptualize the new organization;

' Vtthhg the organization systemically;

. Aligning new processes, systems and structures; and

° Learning how to learn.

The executives viewed it as their responsibility, to develop the ‘human
capital’ Capabilities and to create an organizational creative capacity. They
understood that to achieve the desired performance organization, the people

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participating must have the capacity to work collaboratively, and be creative,
innovative and flexible. If their individuals and teams have not mastered their
creative processes, they could not achieve a collective or organizational

Capacity to create the future organization.

They also understood that the naturally occurring, reactions to change
were often driven by fear of loss or failure. To overcome this they increased
the level of engagement by ‘over’ communicating while being very clear about
their expectations. They also listened to understand the driving force behind
those fears. Brian’s case exemplified the fear of lost control, dealer mobility,
and not knowing what was expected of them to move through the change.
Aligning the dealer mobility program with performance measures, and
supporting this change with dealer education, to gain the trust of the dealers,
demonstrated that they had listened and responded appropriately. By
communicating more clearly the intent and expectations, dealers’ anxiety and
fears were reduced. By involving all stakeholders in the process, they were
able to grow the level of trust in their relationship and create the future
desired by everyone. This success was celebrated and the sustainable
process was repeated with dealer bonuses. *

The executives in this study have demonstrated an involvement approach
to leading change. Through their acquired experiences they have evolved,
perhaps unknowingly, an approach that follows a process very similar to that
espoused by Kotter (1997, p8). Their involvement approach is derived from
the executive leader’s own passion and commitment to performance. They
create Change by honing personal disciplines that enhance their own

capability to embrace change and learn from their experiences. They hone

their own Capabilities and capacity to create personal and organizational
change.

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They lead change by involving and engaging others early in the process.
Although they are careful in the process of identifying whom to involve, they
recommend embracing the resistance to learn and understand, and find
Common ground at the level of assumptions, beliefs and values. Once
common ground and the bases for building a trusted relationship is
established, these leaders focus on creating a new vision or desired end
state. Rather than give in to the reactive stance taken by many of those who
naturally resist the change, the leader carefully removes those who are
unwilling or unlikely to take a creative stance. The methods, process and
timing of these decisions and actions varied widely depending on other forces
and pressures influencing the change, such as risk of business failure. The
executive leader uses a variety of developmental methods to coach, teach
and mentor in an attempt to transfer the personal disciplines and learning
capability to his/her people involved in the change. This working group varied
depending on the tactics taken by the executive leader. Examples of the
working group included working coalitions and reporting peer, and project
teams. Along with the executive leader these people lead the involvement
and engagement of others in the change processes. They were given full
responsibility to communicate, educate and make process and structural
changes, to continuously and collaboratively develop the needed capabilities
of those involved. This increased the organization’s capacity to sustain
momentum and grow. Once developed and tried, the process is repeatable
and sustainable,

Living in the Gap - Leading Change and Sustaining the Momentum

Janet, case two: "I have an adaptive model because change is an
adalotive process. As you rethink and reframe the vision you are
oompelled to redefine the organization and then align the structure,
processes and rewards to maintain the shared mindset to grow the
results. Internal and external feedback give you a sense of the
Changing needs and the cycle begins again.”

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Bert, case four: “My work lies in the gap between the organization that
we are creating and the current reality.”

Ann, case five: “I spend much of my time helping others understand
the vision and the learning capabilities that they need to realize the

vision.”

The above quotes exemplify a key leadership role played by the
executive leader that was identified by Senge, (1990). Leaders need the
capacity to hold creative tension. The reward is the energy generated when
people articulate the vision, the desired results and the truth about the current
reality. The gap referred to by Bert is the gap between the vision and the
current reality. These executives had a well-developed discipline of focusing
people’s attention on the results most desired and the truth about the current
reality. The natural tendency of this creative force is to resolve differences by
changing the reality over time to meet the vision (Fritz, 1989). The capacity to
cultivate and maintain the creative tension is a key capability 01‘ the executive
leader. The capability lies in one’s ability to c0pe with and maintain a creative
rather than reactive stance to the anxiety that exists in the gap.

In addition to drawing on networks for inspiration and support to
maintain a performance or creative leadership stance, six of the eight
executives in this study acknowledged their own need to develop and
maintain personal habits or disciplines, as identified in the works of Bennis
(1994) and Senge (1990).

Purpose and Commitment

Bert, Winston, Ann and Janet describe the first and second disciplines
of personal purpose and commitment. Bert, Vlfinston and Ann describe their
work as giving them a purpose in life. For example, Bert says, "What drives
me probably most importantly is the building of organizations that are not only
high performing but are fulfilling to the human beings that are working in these

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organizations.” Janet described her approach to personal commitment and
defined a ‘sponsor of change’ in her organization when she says:

“ A leader must be 100% committed to the change that you are
embarking on, I mean heart and soul. They (the Sponsor) will be there
for you through thick and thin, to coach and mentor the project team.
They will be the ambassador for the change in a broad sense, focus in
the team and outside the team. They will fly air cover is the best way

that I can put it.”

Summary of Conclusions

1. The findings of this study support the theoretical findings relating to shared
leadership and contributes to the theory that building organizations with
meaningful work for all people is a cooperative creative process allowing
all those affected by the change to participate. This conclusion is evident ‘
in Brian’s summary thoughts on sharing the responsibility and
accountability of leading change. Brian concluded that this is a process of
co-creation. You have to evolve strategic change thinking in context of
“how you want to be living in the future and make decisions in the context
of the present while valuing the past. Maybe you are good at one of those
three, but very few people put it all together. It’s really up to CEOs and
leaders throughout the organization.”

2. The findings of this study support the theory that organizational Ieaming
Capacity is a function of those skills and proficiencies that, among
individuals, teams, larger communities, enable people to consistently
enhance their capacity to produce results that are truly important to them.
Among these learning capabilities this study found that these abilities
include the following: reflecting on and clarifying personal aspirations;
building and sharing new aspirations; an opportunity to converse openly
about complex conflictive issues in a transparent manner; and, to think
cogently about systems and take decisive action on systems, process and

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structural issues (Porter 1998, Wiersema & Treacy 1995, Wheatley 1994,
Senge, et al., 1999).

3. The findings in this study demonstrated that each executive leader
followed an informal change process that closely follows Kotters eight-
stage theory of change as a process (1996).

4. The findings in this study support the growing documented evidence that
the gains from enhanced Ieaming capacity are sustainable cumulative,
and self-reinforcing (de Geus 1997, Senge, et al., 1999, Balasubramanian
1998, Scharmer 1998, Argyris 1994).

Implications for Learning Organizations

Practical Implications

Regardless of the context for strategic change, the findings from this
study offer a change process model for executive leaders embarking on a
change initiative for the first time. The cases contain rich descriptions of
leaders’ experiences and perceptions about the nature of leading change
initiatives. The interpretation of findings brings clarity to the different roles
executive leaders performed while engaging the forces of change and
fostering the development of learning capabilities and in-turn enhancing the

organization’ s learning capacity.

Executive leaders may find the case informatibn and findings that deal
with overcoming resistive forces of particular interest. The executives in this
stUdy were highly committed and embraced resistance by patiently and

creatively getting pe0ple involved. They increased the levels and frequency
0t communications, challenging those involved to rethink their reasoning and
to redefine by co-creating the new vision or end state.

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Is this creative approach practical in today’s large institutions of higher
learning where the rules of success no longer seem to serve the stakeholders
(i.e. students, faculty, administration, community, state, and country)? Others
seem to suggest that these large institutions are falling into a state of chaos
rather than orderly change and in a chaotic state this formula for change may

be unwelcome and unrealistic.

Casey, case eight, suggests that there are unique issUes concerning
strategic change in universities that offer mid-career programs for post
graduate higher education. Casey also suggests that the forces of resistance
in Canadian universities and the dissatisfaction of the students of these
institutions led to the decision to create a new form of post-graduate mid-
career education. His mandate to create an entirely new institutional model
represents the pioneering process of developing a new set of rules or
paradigm for post-graduate mid-career education. Further study of this case
or additional research may offer executive leaders of other institutions the
opportunity to understand how this form of educationis working in real time.
By studying the rules of this new paradigm executive leaders may find
opportunities for adapting or profoundly changing post-graduate mid-career
education programs.

Again, although the context for strategic change varies with each case,
the findings from this study offer a change process model for executive
leaders embarking on a change initiative for the first time. The cases contain
rtoh descr ilotions of leaders’ experiences and perceptions about the nature of
leading Change initiatives, the roles, the strategies, tactics and methods for
engaging the forces of resistance and enhancing the organizational learning
Capacity. The interpretation of findings brings clarity to the different roles
executive leaders performed while supporting the development of learning
Capabilities and organizational learning capacity.

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The findings, relating to the roles of sponsor and champion, support
the findings of Connor (1997) and may indicate that the process of managing
change is evolving into a more formal role in organizations. The position title
EVP Strategic Capabilities while unique to one case in the study seems to
announce to those in the organization the importance placed on sustainable
change. There was evidence supporting the need to have person(s)
responsible for the development of new organizational capabilities in each
case. Although position titles varied, other executive leaders in this study
also acted as sponsors and/or champions leading the development of

learning capabilities in their organization.

In every case, the ability to create a sustainable change process was
directly linked to the executive leader’s success at involving those affected by
the change. in addition to involvement, the leaders spent time and created
initiatives designed to build generative learning capabilities. This enhanced
the quality of conversation and thinking within the leadership community
responsible for the change work, as well as those affected by the change. It
is through this collective organizational generative learning capacity, relating
to conversation and thinking, that the change gains momentum and succeeds
or stalls and is less successful. An intuitive sense of timing and seizing
opportunities to accelerate the change was a critical factor demonstrated in

almost every case.

There are several ramifications relating to the generative Ieaming
capabilities of conversation and thinking. As an example, learning
organizations may look for these capabilities as a prerequisite to hiring or
promotion. These capabilities also affect an organization’s ability to foster
creativity and diffuse innovation throughout the organization and so, action-
learning initiatives designed to raise the quality of conversation, dialogue and
thinking throughout the organization may be a valuable investment that will

105

 

enhance the likelihood of organizational growth. These initiatives will go
along with the creation of building communities of learning and knowledge
management systems because generative Ieaming capability drives
continuous improvement and sustains personal renewal.

The Implications for Higher Adult and Lifelong Learning

The notion of self-awareness and the need to possess capabilities to
cognitively reason, effectively express one’s self and relate to others in a
particular context, is in no way a significant finding. For more than two
decades, adult and lifelong learning theory has explored the concept of
experiential learning as it relates to work and self—meaning. This study builds
on these theories by relating the quality of conversation and thinking to the
process of change and demonstrates how executive leaders are applying
generative learning capabilities to enhance the collective learning capacity of
the entire organization. Of particular note were executives defining their work
as fulfilling and giving meaning to their purpose in life. Also, their passion and
commitment to build organizations suitable for giving people a sense of
responsibility and meaning to their work life experience,

These findings have significance for the faculty who design curricula
for higher education. First, the need to ensure that education is relevant and
develops within the individual those learning capabilities that will enable
greater self awareness and the power to utilize feedback and reasoning to
self-renew and strengthen these capabilities over time is important. Further, it
is necessary to provide practical experience that will reduce the natural
tendency Of reverting to a reactive or defensive leadership stance, in-favor of

a creative stance. Second, to educate future executives about the process of
Chahge and its relationship to generative learning capabilities. Lastly, to
deepen understanding of the power of involvement or co-creation. Change is
a function of time and the leader’s ability to shift mindsets. The methods and
means for creating change varies with the situation and the organizational

106

context, however fundamentally it involves getting people to think and see
things in a new framework so they can over time and through adaptation

create the organization most desired.

It should be noted that visions or aspiration goals do not drive many
successful organizations. These organizations are often deemed to be
sunset industries living exclusively on financial and structural capital
ambitions. These organizations do not fit the current definition of learning
organizations. Therefore the findings in this study are limited to organizations
that are driven by visions and aspiration goals that rely on all three capitals,
especially human capita, to derive future success. In fact, these
organizations may eventually redefine our notions of economic success from
being primarily for the purpose of profit to the shareholders to being primarily
for the purpose of providing meaningful products and services and work to the

community.

The implications for Further Research

This study was balanced between case descriptions and interpretation

of the executive leaders’ perceptions, which leaves ample Opportunity for
more interpretive research about the creation of learning capabilities and
learning capacity in organizations. For example, how do individuals unlearn
years of education and experience vested in the reactive or defensive stance.
The Cognitive filters of defensive reasoning are natural and may be based
more in our genetic response system than in our learned behavior.
Developing new ways of learning, changing our process of reasoning and
being more tranSparent in our behavior will enable people to leverage the
power of generative learning capabilities, which provide a far deeper and
more textured understanding of their role as members of the organization.
Laet‘Y. these cases have provided insight into the group dynamics of conflict
and relationship building, both as individuals and as a team. Further study of

107

the group dynamics of change may lead to greater understanding and new
practices for leading change in large institutions that have fallen into a chaotic
state of organization.

108

APPENDIX A

March 26, 2002

Dear Sir or Madam:

Thank you for agreeing to participate in my study. As you know, I am
presently working toward a doctoral degree in adult education at Michigan
State University and I am in the research phase of this program. My research
focus and qualitative study is about how executive leaders perceive the
nature of building learning capacity within the change initiative, their role(s)
and, the ways in which growth and limiting forces shape and address that
initiative. I know that your expertise will contribute to my findings.

There are no right or wrong answers to the questions that I will be asking. I

will be working towards gaining an understanding of the environment in which
you work and the influences that you may contribute to the successful or
unsuccessful implementation of a strategic initiative within your organization.
I (the primary researcher) will review data collected during this study and
emerging themes and concepts will be reviewed and analyzed. It is my intent
to preserve the identity of the participants and to protect the privacy of any
participant to the maximum extent allowable by law. However, you are free
to withdraw from the project at any time without penalty or recrimination.

By agreeing to participate in this project you have consented to the following:
o An initial 60-90 min. interview (audio-taped)
in Additional phone interviews if clarification is required after the first
interview or if there are further questions that require your input
a Afollow-up 10-20 min. interview (audio-taped)

109

All information that you choose to share will be confidential between you and
me. All audiotape of interviews will be used to assist memory and aiding the
transcribing process. All audiotape will be destroyed within one year of the
final defense of the research project. Any potentially revealing comments will
be coded and only identifiable to the researcher.

If you have any questions regarding the roles and rights of any subject in this
research project, you may contact the IRB separately and ask to speak to Dr.
D.E. Wright, Chair of the University Committee on Research Involving Human
Subjects (517-355-2180). If you have any additional questions or require
further clarification please contact me at 416-699-8001 or
roberthedley@home.com. If you have no further questions and still agree to
participate, please read the attached consent statement and return it to me in
the self addressed (postage paid) envelope included in your package.

Statement of Consent
To participate in the research project directed by
Mr. Robert William Hedley
Winter 2001
At Michigan State University

I have freely volunteered to participate in the research project that Mr. R.
Hedley is conducting for the final requirement of his Doctoral studies at
Michigan State University. I have read and understand the introductory letter
describing the research and understand that my participation is completely
voluntary. I know that I can withdraw from the study at any time, without
penalty or recrimination. I also understand that all information revealed
during the interviews, and that every effort will be made by Mr. Hedley to
maintain anonymity and confidentiality. l have had my questions clarified and
acknowledge that no payment is forthcoming from my participation.

110

 

 

‘77 rifla’m“ Far-5

Having read the above agreement and accompanying introductory letter, I

agree to participate.

Signature: Date:

 

(Participant)
Signature: 1 Date:

 

R.W. Hedley (primary researcher)

Sincerely,

Robert Hedley
Principle Researcher

 

101 NEVILLE PARK BLVD- TORONTO - M4E 3P7
PHONE: 416-699-8001 - FAX: 416-699-3325 11

 

APPENDIX B

Semi Structured Interview Questions

 

 

1. Please tell me about your work at [name] company; position, work
responsibilities, how you came to be in this role and what you have
accomplished to date?

2. Please tell me about your current change initiative.

3. Please tell me about the Ieaming initiative(s) that relate(s) to the change.

4. Please tell me about the challenges/problems that you face in this work?

5. Please tell me what excites you about your work, the people you work with
and the organization?

6. How has this work affected you personally over [time] in this organization?

7. How has this work affected those you work with [peers] [direct and indirect
reports] (state the question twice)?

8. A year from now how will these people and this organization is affected by

these initiatives?

9. DO you have a theory or model for change that you refer to in your work?
Can you draw it for me?

10. Do you have a metaphor that describes your work role?

 

 

 

112

 

Appendix C

Leadership Case Narrative #4

Values inspired strategic change: demutualization of major insurance
company . .
The company and its values

In June 1999, the owners (policyholders) Of a prominent Canadian
mutual insurance company voted in favor of two big changes. One was to
give the company a new name. The other was to demutualize — convert it
from a company mutually owned by policyholders to one publicly owned by
shareholders.

The company's leaders, like those in all five of Canada's large mutual
insurance companies, had been agonizing for some time over the decision to
demutualize. However, to everyone’s surprise, this company's leaders were
first out Of the gate to actually make the decision and act on it. What made the
decision even more surprising was that, unlike the others, this company had
been created a century earlier as a mutual company owned by policyholders.

"The reason we were able to make that decision (to demutualize) as
clearly as we did, and to make the changes that we have been making as
successfully as we have, I think in large part was because Of our three core
values Of stewardship, innovation and partnership," explained Bert, Senior
Vice President, Strategic Capabilities.

”For example, we looked at our stewardship responsibilities for the
people that actually own this company through their customer relationships.
From a stewardship point of view, in terms of our responsibility towards them,
it was no longer tenable that we were using some of the capital of the firm

113

‘smut‘hr .

 

that belonged to them for other products. Most of these other products were
not products that gave them a participating share in the company."

'We were doing a number of things that were no longer tenable in the
logic of the firm and of its ownership. When we became clear about this
being the right thing to do for all stakeholders, from a stewardship point of
view, we really grew to understand what needed to be done, to change the
organization, in terms of making it a public company. SO, those values were
very much at the forefront of how we came to those decisions and how we
actually applied the decisions and implemented them."

Executive Leader's Background

Bert came to Ontario from Montreal in 1968. He took political science
at Toronto's Glendon College (York University), and completed a Masters
degree in political science at Carleton University in Ottawa. He then spent six
years with the Ontario government, working on policy and strategy
development for the post secondary school system. Much Of his time was
spent "running between Treasury and Education and explaining and
articulating how economic development was related to post secondary

educaflonfl

The Ontario government gave him good experience, he said. "I would
say that it’s good for young people because you end up with a lot more
responsibilities than you would in the private sector. You end up doing stuff
that you could never dream of doing anywhere else. I came to the Ontario
Government at an interesting time — in 1974 — when there weren’t many
young people. I was just a young guy from Quebec."

Later, while working on a doctoral degree in education at the Ontario
Institute for Studies in Education (OISE), Bert joined the Canadian subsidiary

114

F7“ “ti-*“flfira—nl

 

of a major multinational energy company, and initially was responsible for
organization and leadership development. Throughout the ensuing decade,
he held various corporate positions, including training and development, and
several operational and human resource roles.

Subsequently, Bert moved to a major Canadian bank to lead a
strategic unit responsible for renewal, which was really a change
management role. "I was Vice President, Leadership and Organizational
Development. We had six portfolios. At the time, I remember, the sixth one

was leadership development."

"The other five portfolios had to do with sorting out the people
management and development systems, diversity policies, and various other
things that had to do with preparing the organization for growth. " Once the
first five "portfolios" were well under way, Bert focused exclusively on the
sixth, and Opened a leadership center, which enjoyed much success for about
five years. "Two years after I left they closed it. I have my own views as to
what happened in the interim, but you know, a huge fundamental change

process went on through the center."

Executive Leaders' Role

Under a similar mandate, Bert joined the insurance company. "My first
position was Vice President, People Knowledge and Strategies, and I did a lot
Of work on strategic processes. Then, I became Senior Vice President,
Strategic Capabilities, and my current position. I report to the Chief Executive
Officer and I'm one of the top five or six most senior people in the company."

Senior executives at this company operate within two different forums,
Bert explained. "One is the management committee, which is really managing
the current year, the current year’s commitments, and the business finances,

115

FTah‘an—émn]

 

ensuring that all Of those issues that impact capitalization directly are dealt
with. The management committee includes the CEO, the heads Of the
Canadian, U.S., Investment and Insurance businesses, the CFO, external
advisors, and me. Then there is what we call the strategic planning group,
which is composed Of slightly different members, and includes the CEO. It’s a
group of six people who look at how the organization is creating its future,

with more like a three- to four-year horizon."

In Bert’s view, the capability most needed by senior managers is "to
understand the dynamics Of the business, to deeply understand the business
dilemmas, identify themselves first as business people, and use the tools at
their disposal to fix what’s broken, as opposed to trying to build a new car."

Along with the Canadian, U.S., Investment and Insurance areas,
Strategic Capabilities is a key business unit. Bert's bosiness unit is
responsible for ensuring the company has the ability to realize its business
strategies. For example, one of the key positions that report to Bert is a
"business manager responsible for all projects and reverse allocations that
move the company from the intention to the reality", said Bert. "Strategic
Capabilities is about building the bridge between what we intend to do in the
marketplace as an organization, and our ability to actually realize those things
internally. It involves individual capability, and all Of the policies for our

human capital, for individuals in this firm."

"If you look at the intangible assets Of the company, it's made out of
human capital, structural capital, and customer capital. Human capital is
individual capability. Structural capital is organization capability. Customer
capital is the positioning that we take, our advertising, and the customer
strategy that we have. Personally, I believe that you have to have that inter-
culture mandate to make things add up." When asked if his area included

116

1 I tr." lg.

 

corporate communications, Bert said corporate communications was
"something else."

'We also have something called Membership Services," Bert
continued. 'We don't have Human Resources. We eradicated a lot of the stuff
that belongs to the old, more traditional way of doing things." Teams were set
up to look at the issues, what was working, what are 'no longer working, and
what needed to be done. The people who worked in Human Resources were
heavily involved in determining the changes that would affect them, so they
would understand the changes more deeply. It was not an imposed change.
"This is an organization where we have done a lot of work around shared
ownership, so the teaming aspect is fairly intense," Bert claimed.

"There was a fair bit Of emphasis on what I would call accountable
team work. They had to actually wrap their minds around it in order to design
it (the new human resources department), so that when they came to the
implementation part, they had been immersed in the thinking. They
themselves translated it into the reality they wished to create. " Calling their
new department Membership Services reflected the fact that "we don't speak
of our folks as being employees as much as we speak of them as being
members of the firm," explained Bert. In all, the company has 5,000 staff
members and 3,000 agent members. Agents, while self-employed, are in
effect, employee members, since they are exclusive agents dedicated to the
company.

In considering the difference in size between the bank and the
insurance company, Bert claimed size was not a big variable. "For me, the
geography is a factor, but I am not sure that size is much of a factor. I was
working at the bank with 45,0000 employees. Here there are a total of 8,000.
Is there something materially different? Is it any easier or more difficult? I
couldn’t say that it was because of the size difference. The one thing that is

117

 

 

 

 

 

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different is that I do not have the resources I had at the bank. Here, I work
with much more modest resources, which makes the work more demanding
in terms Of finding ways of achieving things."

Bert's Strategic Capabilities area also has a group and a practice
leader in charge of organizational capability. "These are folks who do internal
consulting to ensure that we have effective teams and planning processes,
and that we proactively address issues affecting our performance,” he said.

'We also have a knowledge team that reports to me — we “have a very
significant effort around e-learning and knowledge. Branding is also part Of
my responsibilities. Branding is the connection with our customers, ensuring
that our brand is positioned as it should be, such as selecting the right name
for the company and portraying where we position ourselves in the
marketplace."

Bert is one of few senior managers from outside the company. With
his unique blend of experience in the public sector, as well as the banking
and energy industries, Bert's varied background sets him apart from his
insurance company colleagues.

"When I first came here there were not as many people from the
outside. I was one of the few people brought in at a fairly senior level from the
outside. I didn’t grow into part of this organization. So, I am an odd duck and I
remain somebody that’s not like everybody around, in some ways. In this kind
of situation, there is always a certain amount Of discomfort at first, and it takes
time for people to get to know what you're about."

"I do lead a double life, in the sense that I work within an organization,

but am also very active in an international network. I speak at many

international conferences on an ongoing basis. Although I work with one

118

 

organization, I am part of a network and work with a number of companies
outside of this company."

"For instance, I am on the Knowledge Board of( ). The office
Of Knowledge Management at ( ) has an advisory board of internal
and two external members, and I am one of the two external members. I have
been very active in helping them set up their knowledge strategy. I work on
advisory boards with “dot com” companies as well."

The Nature of Change

In Bert's four and a half years with the insurance company, “change
wor ” generally has centered around changing the way in which the
organization sees itself internally and in the marketplace. "Change here has
really been about redefining the fundamental assumptions about what it
means to be an organization in order to be successful," he said. "You
measure that by changing the evolution Of its vocabulary. SO, for instance,
now most of our business leaders look at their businesses in terms of
capability. They don’t look at their businesses simply as the outcome on the
spread sheet as much as they look at them in terms of what's needed to
actually create the value required for our customers, in order to tally up
financial results."

The Executive Leader's Imprint

"So, the change experience was probably based on the fact that I had
some views of how this work needed to be done" Bert said. "I have a fairly
systemic view of the organization and I have an equal balance of thinking and
doing, which I think most people have problems with. Many people think that
the world is split between people who “do” and people who “think”. I am of the

119

i“: .- Tf‘w

 

belief that effectiveness resides in the ability to have a good balance between
these two. So, I am fairly action oriented. I like to function on the basis of
good, well-thought-through frameworks, and on building teams that actually
deliver on these things. The change experience here is just like any other."

"In a sense, it is difficult to speak of the change experience separate
from the work that I do, because it describes my life. You are always caught
up in those kinds of things. It’s like I am a window washer and I work at a
certain height. That’s my work. It’s who I am. What drives me above all is
building organizations that are not only high performing, but also fulfilling to
the human beings working in those organizations."

Building Momentum

"Initially, I spent a fair bit of time talking about what we ought to be and
talking about the vision and facilitating many Of the concepts and things like
that. Perhaps, in hindsight, I may have done too much of this early on. There
is always push back when inserting new language into the organization. But,
I think they’ve just given up resisting, which is why I carry on, and people
have rallied quite well."

"For example, Membership Services, as opposed to Human
Resources, is now well accepted. Strategic Capabilities is now well accepted
as looking at the way we do work. While there have been, at various points, a
lot of push back, or resistance among my peer group, we’ve done a lot of
work that people know has marked the organization in very meaningful ways."

"Two or three levels down, it’s rather uneven, in terms of resistance.

Some people see me as opening up the place. Others see me in a rather
threatening kind of way, as being someone who is bringing ideas that are

120

 

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foreign to them, as kind of an outside influence that does not recognize the
glory Of the past."

’What’s been interesting during the last couple of years is the
recognition that this is something the company needed to have, given the
various things that have happened in the marketplace, which impacted the
company. At times, I thought it would be difficult for me to continue with some
of this work, but in fact, it’s (external factors) always reinforced what I was
trying to do, as it turns out."

"The external changes that keep hitting the walls of this organization
have made my task around change a lot easier, in a sense. People have
realized that there was, in fact, a business rationale for some of the stuff that
they initially were questioning."

The Change Model

Bert claimed he subscribes to no particular theory or model of change.
"I grab on to anything that goes by. I like to put out the vision that we’re trying
to accomplish, demonstrate why the status quO is not satisfactory, and
demonstrate to people the initial steps that we need to take to get ourselves
from this unsatisfactory status quo into the future."

"I am unabashedly opportunistic. However, people will probably say
that this unit is as strategic as any unit within the company. I have this way of
tacking to get there, but the vision is fairly clearly laid out, and I don’t deviate
from it a whole lot. If there’s a model, then probably it is that we line up this
vision and we do a bit Of tacking into the wind. We do have the organizational
capability unit, the group community of practice whose main discipline is
change management. And every business team has an organizational
capabilities consultant whose main role is to facilitate change."

 

121

 

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"I think it's pretty clear that structure is one of the early steps towards
transformation, because if you don’t change the structure, you can’t do
anything. So, you have to first align the structure to the overall strategy of the
firm, in terms of how it’s going to reach its customers."

"If our strategy is that we’re going to be creating customer intimacy and
really relating closely to the customer, we can’t be a product-based
organization. That much was clear, and that’s what led us to structural
change. Then once you’ve got the structural change in place, you can start
working on some of the other aspects: creating the right culture, the right
attitudes, the right values, behaviors, responding to the customer-building

partnerships across the firm between agents, agent members and the staff
members."

"I offer top-notch services in making the organization work well and get
permission to work on what will create its future. You gain your credibility by
making things work. Having done that, you are allowed to take the Opportunity
to make the kinds of changes the organization needs to undergo. You can’t
be a spectator. You have to be vested in making the organization work. While
you do that, you also have to keep taking the pulse of the organization, so
you know what buttons need to be pressed, in order to achieve the next level
ofchangefl

In reviewing how the “change work” has affected him, and how he's
changed his thinking over the last four and a half years, Bert said "I'm
probably a lot more empathetic. a better listener, better at understanding,
better at delving into what people really mean and in taking that into account.
In the past, I was a lot more push oriented. I would have liked to work more
with people in creating the story of what we were becoming together.

122

0- “ It“

 

Perhaps, in hindsight, it was more pushing, but it was the only way I could do
it."

"I think now I would be more inclined to tell the story, by weaving in
peoples’ responses, to create the story that people can rally around and feel
excited about. That is probably the biggest development that I've gone
through in the last four and a half years."

In addition to guiding people in the organization through several major
change initiatives, Bert has also made a point of linking and leveraging their
efforts along the way. "Overall, I tend to see things as multi-pronged and all
related to one another," Bert explained." ‘

"For instance, one exercise we did was three and a half years of very
applied work, on understanding the values of the organization. Observations
that the company's leadership was "uneven" and certain units were "operating
differently from others" had triggered the beginning of the "values exercise”.
Bert believed the best way to understand the situation would be to work from
a "values platform."

’We brought in values work and surveyed 5,000 employees in terms of
values. From that work, we identified the common strands that existed in the
organization, and identified the core values that this organization needed to
stand for. In fact, these values served to offer a foundation for the branding,
and the name of the company. I used that issue (leadership "unevenness"
and business unit "differences") as an opportunity to bring in work that would
resolve that issue."

"But, in fact, it addressed a whole number of issues at the same time.

For instance, I worked individually with the key business leaders in clarifying

their own business unit issues. They started to say it was important to talk as

123

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a team. So, we brought them together as a team for three full-day meetings
over a period Of about six months. These meetings were extremely
demanding, with people working on their own values, and the values of the
membership. They were defining values for the organization and input the
“key values”.

"There was a kind of anxiety produced in those meetings, because as
we declared certain things to be “values of the organization”, managers were
unaccustomed to living against those values. It was like being asked to open
up and show everyone your personal scorecard. We were able to plod
through that, and the values work has been extremely important to this
company. In a lot of ways, it continues to be used.”

“As a matter of fact, now we do a quarterly web-enabled survey of a
structured sample of the organization, to monitor the evolution of the values of
our people, and how well our organization is meeting our core “organizational
values”. What’s interesting now is that nobody’s queStioning the existence of
the values. Nobody’s questioning the significance Of this work, although a
year ago there would have been a lot Of questioning."

The most significant factor in the movement from resistance to
acceptance was seeing where the values were applied, used and leveraged,
Bert said. While people initially may have thought he was "going through the
motions of some kind of intellectual exercise," he believes they now
understand what he's doing. "Since I’m now talking about the next generation
of things, people are beginning to realize there must be something behind it."

A key example of people seeing the values applied, used and
leveraged was in the decision to demutualize and change the company’s
name. The senior management team made these decisions, with help from
an external advisor "to sharpen up some of the strategic thinking."

124

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Implementation of the demutualization also included external advisors
such as investment bankers, said Bert. ’We did have quite a few external
advisors. But this partnership aspect, the whole partnering value, is also
about opening this company to a whole number of different partnerships, to
acquire and link into capabilities that we don’t have internally, and to
compliment the capabilities that we have with those other people bring by
being good partners."

"Today I was having lunch with someone who is an outstanding partner
and has worked very closely with us. We probably pay less for his services
than anyone else in North America does, and yet he values this relationship
probably more highly than any other partnership, because we work with him
to develop his material. He gets a great deal of innovation coming out of here
and our name is good in the marketplace, so he can use us as a “marquee”
customer and those kinds of things. We do quite a bit of this."

Another example where people saw the values applied, used and
leveraged was when the reorganization occurred. This was about six months
after Bert joined the company. Rather than a product-based structure, the
company has adopted a front-end, back-end organizational model that
Galbraith talks about, said Bert.

The company has been evolving a structure that has a clear line of sight to
the customer and responsibility by lines of business.

Line Of business councils, such as retail, health and group insurance
councils, were created to bring together people from various parts of the front
and back ends of the overall structure, to look at the profitability and the
issues that affect the profitability, of each business line. "Results are tabulated
by business line and yet the structure is on a process flow basis to the

125

 

 

customer. The council concept is very much a value-added kind of process to
the customer, Bert concluded."

126

Appendix D

Leadership Case Narrative #6

Leading Change in the Public Service during economic down
turns

Background

During the widespread deficit cutting and downsizing of the early
’1 9905, one of Canada’s provincial governments appointed a new deputy
minister (DM), equivalent to a chief executive officer (CEO) in the private
8 ector, to consolidate its five education and training ministries into one new
m i nistry. Senior management affected by the consolidation included four
0 1: her deputy ministers and 15 assistant deputy ministers (ADMs), equivalent
to vice presidents. In all, this major change initiative involved a series of re-
e r1 Qineering projects, an $11 billion budget, a massive reorganization of

a D proximately 12,000 government employees and, ultimately, the elimination
0‘: about 500 positions.

Combined responsibilities of the new ministry included elementary,
Se condary and post-secondary (college and university) education, skills
d QVelopment (workplace training), a project that involved public and private
$1Zakeholders determining the province’s training needs, and a project that
9 9 Vs welfare recipients support in finding work. While a huge challenge,
CQ nsolidation Of the five ministries also Offered a unique opportunity for
Oh ange and new learning within the provincial government. Change is what
g Erning organizations are about and the task was to turn the ministry
r3 Sponsible for education and training (the province's learning) into a learning

0 t‘Qanization itself, explained Paul, the DM who was responsible for creating
th % new ministry.

127

 

Executive Leader’s Background

Currently, Paul is executive director of a mid-sized "activist" charitable
foundation and a permanent part-time university professor. Prior to that, he
was DM in three different provincial government portfolios, including
education and community and social services, with budgets of over $12 billion
and workforces numbering 3,500 to 11,000 employees. Previously, he was

chair of the governing body of the province's colleges, and a college
president.

Executive Leader’s Role

In discussing his current role, Paul recounted a recent experience as a
co nsultant coach, helping people in South Africa work on their educational
S y stem. He was visiting a township school with no textbooks and found a
te echer with 115 children in a classroom that had been designed for 30. "The
te acher, not succumbing to the culture of blame, had involved the children in
ir"iteractive, small-group learning, a curriculum that he invented. He believed
th at it was up to him. There was real learning going on, and hope for 115 kids.
' Qancelled my schedule for the rest of the day to spend time with that
ta acher. Here were conditions that are not conducive to proper change and
in Ifiovation, and do not reward the efforts, yet this teacher was doing it

a n way. I wanted to bring it (the learning method) back and see whether it
a D plied here.”

Paul also recounted the story of his arrival, a number of years earlier,
0 "I the scene of a different experiment in learning. "On February 3, 1993, I
a Qtually replaced four deputy ministers and inherited the staff and
TS Sponsibilities of five different entities. The task was to develop a brand new
h i histry that was seamless, and to build a new culture." Setting out to carve a

“gm culture from five different sub-cultures was no small feat at a time of

128

increasing job insecurity, when downsizing was prevalent both in the public
and private sectors. In addition, recalled Paul, "Expectations were that the
exercise was going to require very little time. We were going to be afforded
very little time to get the new organization working effectively."

It took about eight months from the day Paul was sworn in, replacing
the previous four DMs, to initiate the first re-engineering project. "I could have
truncated that to about three months, but would not have had the involvement

of everybody in the ministry. Everybody in the ministry had access, to
participating in the design, vision, mission and values." An advocate of
' 'democratic administration," Paul said he believes in clear responsibilities and
s hared vision. "I am a big believer — have been for twenty-five years — that
being effective requires reciprocal opportunities for influence, and
o p portunities for the vision and direction of the organization to be a shared

0 h e that is understood by every single person who works there."

T—he Nature of Change

In this case, however, people knew their jobs were at stake, so they
jL-J St wanted answers quickly. Said Paul, "Of course, in the context of job
in Security, the issue was how much involvement is appropriate, because
in Volvement requires time. The number one question was ‘What’s my job,
Where do I fit, and do I have a job?’ Now, that’s not true of everybody. There
W$re people who were virtually secure, but a very large number of people
K "I ew what I had been asked to do." For example, from the beginning, the
8% nior team of 15 ADMs, inherited from all the different ministries, was among
u.“ Q most insecure. "I assumed that no matter what structure we came up with,
th Qre would be room for probably five or six at most."

Making the necessary ADM and other adjustments presented Paul with
a Significant time challenge. "During this major change project, my external

129

 

time escalated. I guess I gave 200 per cent instead of 100 %. In terms of the
amount of time spent during my initial six months on the job, I probably was
up to more like 18 or 20 hours a day. I don’t get a lot of sleep anyway."

Paul believes that, even at the best of times, 50 per cent of a CEO's
time should be spent "outside, representing the organization, doing on-going
environmental scanning, conveying information to external people, and
bringing back information about the future and contextual information about

t he organization's situation. That includes supervising and developing direct
reports, and carrying out the organization's interest and directions through

t hem, as well as wandering about, and being involved in the organization's
a ctivities."

External work has stories that are frequently attached to it. Also, by
rr'l caving around the organization, there is an opportunity to get information.
1- h at will make anyone a more effective communicator about the nature of the
0 f‘ganization's work. It's also an opportunity to circulate information from the
0 U tside for people to consider, such as aspects of the global economy and
potential opportunities. It's an opportunity for a CEO to act strategically by
9 i Ving and getting information on a constant basis."

Paul made a point of ensuring his direct reports, above everyone else,
f% I i personally secure from the outset of the change. He started by selecting
a Change leader to plan and implement Ieaming initiatives and change
D "chsses, while he focussed on individuals and their careers. Paul knew
S Q me of the senior people would no longer be there, once the new
0 I‘ganizational design was completed. He wanted to make sure that the new
8 S nior team "reflected far more around all of the dimensions of equity", so he

8 D ent a considerable amount of time discussing with people their individual
ca reer aspirations.

130

 

Before he had arrived, Paul had researched all the senior people and
chose one as the senior in charge of transformation. "The change leader has
incredible talent, in terms of her communication skills, leadership
development and technology. She was key to the transformation. Along with
my executive assistant and secretary, we formed a team of four to plan all of

the processes, with input from all the other senior people who were actively
i nvolved."

After about three months, Paul had a draft design that included internal
1' rtput from both the senior team and others in the ministry who, through
consultation and collaboration, contributed ideas about the new entity. The
d raft also included external input from a reference group of about a dozen
"cl ients," including college and university presidents and private sector
tr-a iners. Paul explained that the external group "kept us honest with respect

to customer service" and helped identify potential opportunities, based on
th eir experience with the five former entities.

In ternal Input

In considering the value of the internal input, Paul observed that some
8 k4 ggestions about design and direction were obviously self-serving. For
example, implementing one particular suggestion would have required
ex pertise that only one particular ADM had. On the other hand, said Paul,
m Qny of those close to retirement, with no vested interest, viewed the draft
C] Q sign as an exit exercise. "They said they thought it would be a disaster to
C. Q the same old thing, because it didn’t work. So, I had kind of a unique
C‘Q mbination. Since I believed in putting everybody together, we had folks with
Ii 1:1: Ie vested interest, and others whose suggestions were obviously a little
h Qre personally motivated. I held a combination of group and one-on-one
d i scussions where I would provide feedback."

131

Paul recalled the feedback he gave one "notoriously manipulative"
participant, who also happened to be extremely bright. "I had dealt with him
before, and knew how he behaved with his peers He was ruthless. Since he
manages down and up pretty well, but destroys everybody else, I knew from
the start he wasn’t going to be on the team and told him why. I was probably
the first person who ever gave him this feedback. I also told him I was going
to work very hard to get him a job, because he was brilliant. I was straight

with him from day one. I worked very hard on the one-on-one meetings to
make sure that there was as much personal security as possible."

Overall, much of the initial change work was accomplished in
collaboration with internal and external clients. Paul said “A search
(:0 mmittee was established that included the transformational (change)
leader, one of the outgoing ADMs and some subordinates. We went through
th e entire process, changed the senior team, and set in motion the
a s signment and/or interview process for all of the key jobs under the new

0 r‘Qanizationf'

However, there was one gap. Paul recalled “no one had the required
ca pability for the new organization's anti-racism, access and equity division.
H 3 had inherited 15 talented senior people, with three near retirement, and
s Q the ready to do something else outside the ministry. That left three who
v"Qre placed elsewhere and one who moved on to a successful school board
cg reer. Still, there was no one available for the role in anti-racism, access and
a q uity. "There was a high need for someone special and I didn’t have that.
I: Qr everything else, I had enough talent to mix and match."

‘ §«Ez-engineering

According to Paul, the new senior team immediately began an
‘r‘tensive re-engineering course, taught by an IBM trainer contracted by the

132

 

change leader. "The first thing we did was go to school for three hours a day,
for three weeks, and then we got into the re-engineering work. We really
learned how to do it, and were using what we had learned. This was at the
time when IBM was about to go under, and just didn’t see it coming. In order
to sustain the company, they basically invented the re-engineering processes.
Then, after they had saved themselves, they decided to sell this re-

engineering course they had developed."

During the entire process, all of the senior team's activities were
t ransparent. "I told the whole organization about this course. I also told the
whole organization that while we were going to sch00l, we were also
i r—iterested in sending anybody else who wanted to take the course. I made it
we ry clear to the union that when they heard the word “re-engineering” they
r! e eded to understand that our context was different from other organizations,
vvh ere “re-engineering” meant not just eliminating steps but eliminating
P e Cple. So, I never had any problem with the unions throughout all of this.

'I‘ h ey were extremely helpful; they retained their important roles."

"We asked if anyone in the ministry wanted to learn the re-engineering
p r(Doess, so that when re-engineering was applied to certain procedures and
fu fictions in the new divisions, they could be “seconded” as part of the
E>><Iz>ertise to do the work. They could mentor others. We got something like
1 '1 () applications from people wishing to be trained. The transformational
QQ ach (change leader) set up a process to interview everybody and
St "sategically chose a team of about 30, who all got training in re-engineering,

a "I (1 then the work started cascading."

Developing internal re-engineering expertise enabled the ministry to do
h uch of the change work without external support, beyond the initial training
S S ssions and an IBM advisor. 'We also had enough self-confidence, mainly
b3 cause of the transformational coach. I eventually became confident enough

133

to know what we needed and when we were insecure. That's why we retained
somebody to act as a sounding board. The whole ministry got to understand
what was going on, such as, how you remove steps from processes and
reduce our time. Of the two re-engineering projects that we chose to begin
with, one involved how we treat each other inside the ministry, and the other
involved the time we take getting something to a client outside."

Value of Communication

Throughout the change process, Paul continued to place great
i r'nportance on involving people and communicating honestly and candidly. "I
took the biggest risk by remaining a democrat, because even those affected
by change often will say, 'Don’t involve us. Just tell us whether we’ve got a

jo b or not. Get it over with.’ While I think that's a nice thing to do, I also think
it ’ S a dumb thing to do."

"If you rush the values and principles process, or the design process, it
h eans that you cannot involve people in a meaningful discussion about what
th 6 structure ought to be, and what the outcomes that are served by that
St"Licture ought to be. So, the process of determining the new structure,
V i sion, operating principles and values took six months. Throughout, we said

t9 people that we were going to do everything we could to ensure nobody was
(:1 i Sadvantaged in terms of employability."

When asked for guarantees of employability, Paul told employees that
h Q could not make any, but his track record was "real good in terms of where
I. V e been before. If you feel that you have to do something to reduce your
8‘ r‘I xiety, then call those organizations. Phone my previous organization and
ta I k to people who were there when we had difficult financial times."

134

 

Fox mim

In his previous role, Paul had also led a major change initiative that
focussed first on job security, in order to eliminate the need for resistance
through strike or work stoppage. "See for your self if what I said matched our
actions," he challenged ministry employees. "What you will hear is that, as we
eliminated programs, we retrained people for emerging programs. We did it
with a three-year horizon so we did not jeopardize people’s employability. So,

my track record is sound."

Skepticism was understandable, he told them. "But we are
pathologically dedicated to ensuring that your employability is something you
can count on. We will do everything possible. As we begin to redesign the
organization, take five areas and meld them into one, culturally and
functionally, we will have new jobs for those who require them. The manner in

which we train you for those new jobs will be leading-edge."

In addition, Paul told employees outright that, in the final analysis,
there would be 500 fewer roles, with half disappearing through attrition. The
remainder would be placed in new opportunities, other parts of the
government, or outplacement. Any employees experiencing serious
challenges to re-employability would have individualized teams dedicated to
helping them find another job. "I had to keep repeating all this," Paul said.
"We put it in writing. While I could never put in writing or say publicly that
everybody will get a job, I could say face-to-face what we were going to be

doing, and people could look into my eyeballs when I said it."

The focus

Focussing on job security at the outset was meant to make people feel
personally secure. "If a large part of the organization feels that you do not
have their interest at heart, it will be impossible to get them involved and

creatively participating in any change effort," Paul said. "Our reputation for

135

 

acting out the (employability) principal was enhanced by early stories of
success. People saw opportunities and saw how hard the employability teams
worked. They saw people preparing for job interviews. Early on, people began

seeing the up side of this opportunity."

Reflecting on how people became inspired and involved, Paul
continued to emphasize the need for communications during change. He
referred to communications as a necessary organizational process that is "the
most important element in any activity, not just during change, but in normal
times as well. The number one element that has to be part of any
organization at any time is communications. Ask any employee in any public
or private company in North America what their biggest need is. Nine out of

ten will say they need more effective communications."

A communications process, set up at the beginning, was maintained
throughout the change and after the major amount of change was
accomplished. This included a newsletter called “Metamorphose”, published
almost daily early on. "But there is no substitute for face-to-face
communications," claimed Paul. "So, I was available probably every other day
for two or three hours during my first six months there. I was also available
online and by teleconference, because the ministry was all over the province.
l was available for a completely open forum every Wednesday morning for
about two hours throughout the change process, a practice I continued

throughout my tenure."

Lessons Learned

Paul discussed some important lessons Ieamed in leading earlier
change initiatives. As a CEO joining the ministry from outside government,
Paul had Ieamed the importance of presenting "certain core values, which are
not up for grabs." For Paul, such values included "doing fewer things better,

136

 

 

rather than all things less well." His commitment to "democratic
administration" is also not up for grabs, because participation breeds
creativity and commitment. "If I am the CEO, although it may sound like a
contradiction in terms, I will mandate that participation is the order of the day.
The transparency about what we’re doing is the order of the day. The budget
processes have to be completely transparent to allow everybody in the

organization to participate, to understand."

Core Values

"I only have two core values. If you interview somebody with more than
four, you're talking to somebody who has none. My two core values are equity
and authenticity. Everything I do is informed by equity. Authenticity is also
hugely important to me. Transparency, in terms of what I am about and
everything I do, is designed to produce more equitable outcomes. Therefore,
it is not an accident that in my current job we fund research on the gap
between the rich and the poor. Everything the foundation does is about social
and economic justice. It is not an accident that mine was the first ministry in
the country to have a division called anti racism, access and equity. I also try
to live my life in an equitable way, in terms of how I share power, both in my
family and workplace. My work is about equity and my own development is

informed by it."

For years, Paul has written in his "leadership development diary" every
morning. His jottings focus on how he measured up the day before to the four
ideal words that define leadership for him. Everybody should have his or her
own definition, he said. "I am really excited about what I don’t know, so each
day is an opportunity to Ieam how to be a better leader." Together with an
annual 360-degree assessment, he uses the diary reflections to self-evaluate

and to determine his progress in leadership.

137

 

Paul recalled valuable lessons Ieamed as a college president, his first
major management position. "I thought that I had done my research in
deciding to stand for the position, and that everything was relatively tidy. In
fact, the college was a mess. I inherited something that was kept quite
secret; I inherited a fairly major deficit." While deficits are common in
corporations, this was a crown corporation, where deficits were illegal. After
about six months at the college, Paul led a major reorganization, during which
he became committed to "openness" in both his words and actions, and did a
lot of "walking around." He also developed a 360-degree feedback process to
evaluate his leadership. He has since written a self-instructional module for a
university, which enables organizational leaders to do similar self-evaluations.
The management practice of 360 feedback became widespread and

continued after he left the college.

Half of the college's managers understood how to involve people, and
believed in the new leader's style, which differed radically from his
predecessor's "top down administration." However, the others were
"autocratic" managers, "faking allegiance to the new administration." Daily
work experiences hadn't changed a bit for their front line staff. Once aware of
the situation, Paul launched leadership and other training initiatives, and
unmasked managers who eschewed employee participation. "This democratic
administration is no way to run anything," they said. "You can’t involve
caretakers and teachers in the budget process." Paul now believes "selection
is 90% of it" and there is little point in trying to retrain anyone uncomfortable
with the change. The fact is you may need to retire or replace some people.

In creating the new government ministry, Paul developed selection
criteria to help find managers who would support participation and
involvement of employees. Once all of the managers were in place, everyone,
including Paul participated in a leadership development program. They met
on the first Friday of each month to consider various aspects of leadership.

138

 

 

"This is all about cultural transformation. We tried to select for core values
and ongoing development. This wasn’t something that was going to have a

beginning and an end."

"There’s got to be an ongoing leadership development program. I
believe very strongly that the best thing a leader can do is to participate in the
program, not just chair it. The transformational leader ran our program and
set up “Lead Net”. We now had an organization where people were actually
online, not only talking about how to meet budget targets, but also discussing
the works of Peter Senge, Stephen Covey and Margaret Wheatley."

Role Modeling

"Having modeled 360 behavior, I eventually decided to talk less about
core values and employability. The less you talk about involvement and the
more you do it, the better off you are. Jacking expectations up will only
disappoint those who want to believe it. Even in the healthiest of
organizations, it will take a year or so before the behaviors and values line up.
If you’re lucky it will take a year. The experiment at the ministry was still going

on when I left."

"When things were really ticking, we regularly shared information on
tactics and behaviors, and by this time, I was already into my first 360
processes. We also had the ministry completely wired and people got news
and notes from me online at least once a week." For example, many of Paul's
notes updated people on the minister's activities and explained the
implications. "Sometimes I would give them a bit of an advance, but I had to

be careful about pre-empting a minister's announcement. Still, we were very

timely."

139

 

 

Brown bag lunches, hosted by Paul, were open to any ministry
employee who wished to sign up. Each employee was allowed to attend one
meeting. "We talked about anything (except personnel) around the quality of
work life, as long as they weren’t going to dump on anybody, that was the
only ground rule." This kind of "open communication" continued after Paul left
the ministry, as did the practice of 360-degree feedback. In modeling 360-
degree feedback, Paul had legitimized the change and demonstrated it was

acceptable feedback.

Paul believes there are daily rewards for being an open, and more
strategic, administrator. "This isn’t all about participatory leadership. "It's also
about thinking and acting strategically, not just worrying about quarter over
quarter, but looking well beyond. There is a huge amount of quarter over
quarter culture in this country that is destroying public and private activities."

Still, Paul maintained, "I am not perfect, this stuff is never done
perfectly and there will be hiccups. For example, selecting for core values can
be tricky, and sometimes you just have to play with the cards you are dealt."
He said that many managers had "grown up" in government, which is "top-
down city," and had never before worked collaboratively. However, he had
observed some "wonderful examples" of those who had transformed into
change champions, with help from others, such as the designated change

leaden

140

 

 

Leading by Learning

"There were hiccups. There were people who just couldn’t do it. But we
also had a far more proactive approach around making sure that everybody
had support through the leadership development process. Each of us had
mentors, we had buddies, and we set up an intricate array of Ieaming
supports. The leadership was leading by learning, showing it off, so it was
obvious to employees that professional development had become embedded

into the organization."

Good news/Bad news

"That's the good news. The bad news is I left after two and half years,
about two months after the new government came in. The DM who replaced
me was old style, thought the leadership program was worthless, and
cancelled it immediately." Since cultural transformation takes time, especially
with five sub-cultures, Paul thinks the ministry was still about two years away
from reaching a point where it wouldn't matter who came in.

About 70 per cent of the employees had been with the ministry for a
long time. "There is always 20 per cent who will resist change. You never try
to get resistors. What you try to do is deal with the 20 per cent who are
excited about the change, and then that massive middle that you are trying to
convert. These are the people who actually want to believe that they can do
things more effectively. But there is also this big wash of skepticism, because
they have seen rhetoric come and go. They know the average tenure of a DM
is relatively short."

"This is the problem of CEOs in Canadian government. It's probably
true in the US. as well, but is well documented in Canada. The average
tenure of a governmental CEO or DM is about 18 months. For example, after

141

‘1‘

 

two years, I was the senior DM of education in the country. So, deep, lasting,
sustainable culture change in government is inhibited. The private sector
would never, ever change CEOs every 18 months; the investment in chaos is

obvious. The cost is huge."

The worst part of it reverting to the "old style" of ministry management
was that every indicator Paul's team had chosen to measure (morale, the 360
results, non-defensiveness, efficiency, cost effectiveness) showed they were
"just sailing along." Upon the arrival of the new CEO, everyone watched for
the signal, to see which direction he would take. "To his credit, he did it real
quick," said Paul. "Any deputy can carry on with the policy and improvement
work. But organizational change is another story. We came so close to
actually developing at least one government entity in Canada that was truly a
learning organization. We were one or two years away from something very

special."

Shortly after the new minister's arrival, he was discussing change with
Paul in similar terms to those Paul used in workshops. For instance,
improvement is the enemy of change. Paul explained, "Sometimes it's really a
paradigm shift you are looking for. You have to totally re-engineer what you
are doing. You can’t just improve things. You have to be fundamental and
systemic. The new minister was saying those kinds of things, too. He said he
would like to join our team and I gave him an open invitation to our leadership
sessions, which we normally teleconferenced and videotaped for managers

who could not attend in person."

The minister accepted the invitation, and agreed to talk about
leadership and change. During the session, he discussed the notion that,
since people aren't compelled to understand the importance of change unless
they think there is a crisis, sometimes you have to invent a crisis, or label
current events as a crisis. He also indicated that management was probably

142

 

EH;

 

going to have to do something most of them would find distasteful. Paul's
team had believed the minister was simply discussing change in hypothetical
terms. They were mistaken. Shortly afterwards, the province was thrust into a

"crisis" in the education system that has yet to be resolved.

143

 

Appendix E
Leadership Case Narrative #3

Change expert questions unrealistic expectations

Evolving expectations of the new economy have reshaped
perspectives on business in the new millennium. Massive organizational
changes brought into place during the past decade, through downsizing, re-
engineering and renewal may have been achieved at considerable cost and
with questionable results. "I have struggled with a lot of these changes
myself,” mused Edward, Vice President of a consulting firm. As a change
management practitioner in his early forties, Edward has done plenty of re-

engineering work for major clients.

The Environment

Currently, Edward is in the midst of huge upheaval in his own
organization, created a year ago when two organizations, each with over
4,000 employees, merged. "I think people thought the merger would be a
relatively straightforward exercise, but it has proven very difficult. In fact, I’m
not sure the organization will survive," he said. One of the companies, a 15-
year-old re-engineering firm with 4,500 people, had a visionary and
charismatic leader. The other was a conglomerate of small technology firms,

many of which serve dot-com companies.

"On the face of it, our company doesn’t seem that bad of a mix," said
Edward. But the merger has not gone well, despite all attempts to manage it
in classical change management ways. 'We have divisional leaders saying
change is hard to do. We have local managers who are quite committed to
the business. Still, the whole thing is coming unglued. Sometimes I think it’s

144

 

just not going to work." When people claim they want the merger to work,
Edward challenges them to "find a way." In exploring and analyzing the root
causes of the merger's issues, he often wonders what had kept each
company together in the first place and if anyone had thought to examine
whether the two cultures could ever co-exist.

"Today the notion of cultural audits “before” you do mergers is
becoming more commonplace," observed Edward "In our practice, we help
other people figure out change through fairly standard change management
techniques. We will do cultural audits, but typically our approach is to help
organizations manage change by focusing on communications, in order to
communicate change better. I haven’t found anything else that works very

well."

"Typically, I think mergers and acquisitions have been based on
spreadsheets and evaluation of assets. There was little thought given to
cultures and how organizations might fit. In our case, had we done a cultural
audit, we would have discovered that there weren’t two organizations at all.
There were probably 50." The numerous small companies acquired by the
conglomerate had remained separate and never integrated.

Time

Edward believes lack of time is another factor that has made his firm's
merger so difficult. "If we weren’t living in a publicly-traded dot-com-frenzied
world, I think these changes would evolve as most changes do — naturally,
over the course of several years. But, we were not given the luxury of time.
We were told to bring the two organizations together and make it work in six
months. You can’t change 10,000 people in six months."

145

 

'We’ve deluded ourselves into thinking we can pull this off in six
months by using our sophisticated management techniques and becoming
really good communicators. When it doesn’t happen, we'll say the change
effort failed and ask ourselves why. Then we'll get into this cycle of analysis.
The reality is, I’m coming to the conclusion that some of this just takes time,
more time than anybody would like."

"Fundamentally, if you believe Senge (as I do) when he says change is
a very personal thing, you have to consider how much change an individual
can undertake on a personal level in a three- or six-month period. How much
psychic or mental energy does one have to devote? For example, I’m 41
years old with four children. How much change can I accommodate in a six-
month period? I don’t know the answer. But if you extend this thinking, you
realize that all change happens on a personal basis, on a personal level."

Many organizational change efforts “push the envelope” for people and
ask them to accommodate more change than they can possibly handle. "All of
the change management techniques in the world are not going to help,
because people have to make the changes at their own pace anyway. As a
change leader, what you can do is examine what it will take to prepare people
to go through rapid change, and maybe optimize the situation as best you
can. I think people are using this as a form of coping."

As people have tried adjusting to the rate of change in their lives,
Edward has noticed a "blurring of work and recreational life." He has
observed that some people are adapting while others are not. "In the real big
scope of world change, I have often heard it said that seeing more
psychological misfits and more psychological illness in society is part and
parcel of the societal upheaval of rapid change. You can't make it safe for

everyone, so you deal with the ones you can."

146

"In our society, a growing number of people, incapable of dealing with
change, are just cast out." Edward has also noticed an increasing number of
financially secure people in their 403 and 50s are choosing early retirement to
escape high stress jobs. Many organizations, believing that employees are
incapable of deciding for themselves within the allowed timeframe, will make

the decision for them.
Cycle of Change

"There seems to be a wicked cycle. If there’s a big change coming, we
prepare for it, using all the change management techniques we know. We
comb through everything available to see what we can use. Believe me, I
comb a lot. I'm always looking for ways to make change happen better, more

functionally, in a way that appeals to everyone."

"We embark on the change with the very bestof intentions. Then
people get a little strange and start to resist. We dig our heels in and tell them
to get with the program, or we’re going to have to figure things out. Inevitably,
some people go and we feel the change didn't work. We were supposed to be
able to save those people, and be one big happy family. We beat ourselves
up for our ineffective change efforts. I really wonder whether this whole cycle

in which we set ourselves up is just wrong."

"In a strange way, it seems to me political parties actually have it right.
In every election, there is a bunch of people who are totally with the party.
You could run Satan and they would vote for you. There is also a bunch
sitting on the fence, and a bunch that would never vote for your party, even if
you ran God. What the smart political strategists do is focus on converting as
many people in the middle as possible, not the people who won’t ever vote for

the party."

147

Edward sees organizations as types of organisms that work in
somewhat mysterious ways. "All our attempts to quantify how organizations
work probably reflect the kind of society we live in. We try to quantify
everything. In some ways, organizations can’t be quantified, because they
are like organisms and have symbiotic relationships that exist within them.
Sometimes you wonder why organizations exist at all, or what they are there
for. But they seem to do something to make them work better. As with most
organisms, we can't always fully understand or appreciate the points of
leverage within organizations that make them work better or change."

Edward’s Change Model

Edward's change model includes a "cultural survey Instrument" he has
developed over the years to measure several dimensions of change. Edward
admits that, while very passionate about leadership and change, he's also
totally mystified by it. "It’s hard to even articulate how mystified I am about it.
We want it all so desperately to work, and so often it fails, or it’s perceived to
fail. I wonder if the expectations we set, as managers, are just wildly out of
line with reality?"

"I think we incorrectly focus a lot of our change management efforts on
the people who just don’t want to change, can’t change, or can’t cope with
any more change. We forget about all the people who have justifiable,
legitimate concerns about direction and what’s happening. But because

they're less vocal, they slip through the cracks, just drift off, and we lose them.

We need to focus our efforts more on those in the middle. Since we can’t
save everybody, we use a coping strategy of working on the most influential
or most easily influenced. That's why some organizations are trying to
determine who they need to work on (those who can bring value as they

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move forward) versus the people they can afford to let slip through the cracks
or even consciously choose not to bring along."

Edward suggests that his baby boom generation of managers is fairly
altruistic and may have "unholy expectations" about how change is supposed
to work. 'We like to think people will follow us anywhere, if we’re sufficiently
keen, persuasive and inspiring leaders. If we make it our personal mission or
responsibility, everybody will get it. When that doesn’t happen, we feel we've
failed, or the change effort has failed."

"I have come to believe that some people won’t ever get it and are
happier not being part of the change, especially if allowed to come to that
conclusion themselves. As a generation, we didn’t respond very well to
command and control, and we like to think there are better ways. But
eventually you have to get on with business. People'have to decide whether
they can get with the change or not. While it may sound harsh, practically
speaking, I think that's what change comes down to."

Making Change Work

In a desperate search for ways to make change work, people will often
resort to the “tried and true”, noted Edward. "While there really isn’t a lot of
literature out there that says how to do it well, there is plenty of literature
about how badly it can go. I don’t find a lot of really helpful, practical advice
for management people who are faced with the task of organizational change.

 

So, you end up going back to what you know works and, when it doesn't, you

resort to more drastic measures."

Edward recalled a company that had handled one individual badly
when letting some people go. Nine months later, the person still hadn't figured
out why, hadn't moved on, and was stuck in a personal dilemma. The

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Iii

company handled rather well the personal situations of four others let go at
the same time. "These people have all moved on and are happy to be out of

the organization."

"Drilling deeper, how much post-employment responsibility does an
organization have for each individual? Suppose someone did something
awful and ended up sick and permanently disabled (psychologically not
physically). Does the company let them go? Do they have responsibility?
Some courts may soon tell us about that. Over time, I think companies will be
held more responsible, but not totally responsible."

"Philosophically, I believe that companies have a responsibility for
people. I also believe that what goes on in your life is, to a large extent, your
own personal responsibility. You have to take some responsibility for your
actions and their outcomes. Eventually, I think the courts will intercede, and
over the next 10 to 15 years a company's responsibilities and an employee's
rights will be much the same, regardless of the size of the company."

Edward considered the example of a newly merged brokerage firm,
whose new chair proudly announced the merger was a good deal, because it
would enable the company to eliminate 5,000 jobs. Apparently, the merger
was based on a financial equation, with no thought to society, employees or
customers. If you believe organizations are organic, then their structures and
processes, by nature, need to be more relationship-driven. Taking that view,
financially driven equations are only partial assessments of a company's total
value. The total value of knowledge-based organizations will increasingly
include the people. If half of those people leave, value walks out the door.

Feedback within his own firm has indicated to Edward that some

people think the company isn't working hard enough at the change itself.
While working at other things, the company is not spending enough time and

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m
, .

r, ‘-

 

 

energy on the change process. The leaders are not communicating enough,
not being visionary enough. 'We’re going to lose some people," he admits. "I
recommend that we make sure they’re the right people to lose, and that we
focus on keeping the right ones. But I don't see that happening. People say
they're too busy to do that. It’s the whole nature of their world. It’s all about
being really busy, and they don’t want to break the cycle at all."

Barriers to Change

Some will get it, others won't, Edward insists. "The funny thing is, how
this recommendation is received depends on what stage of the change
process you’re in. At the outset, you're full of that idealistic, altrUistic attitude
and not very receptive. As you proceed more deeply into the change process
and start to encounter resistance, you become more receptive. Half way into
the change, your eyes start to open and you realize the change is a lot
messier and harder than you wanted it to be. For instance, you really like
Fred in accounting. He's a miserable old coot who's been here 25 years.
Fred happens to be one of the guys at the pointy end of the stick who’s not
going to get it, never will, doesn’t want to, and you know if you leave him
there he'll influence other people to not get it. Fred is an impediment to your

efforts to evolve the organization. It’s a terrible thing."

Typically management consultants change people by changing the
metrics used to measure and guide them in their job, said Edward. "For
example, I told someone yesterday that we were changing the metrics for a
particular part of the organization on January 1. But we all know that
changing the metrics is the easy part. The behavior will continue for at least
six to nine months beyond the change in the metrics. So, again we’re stuck
with the issue of the time it takes to change. You have to go through at least

one evaluation cycle before you can see you’re not aligning yourself with your

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new metrics. You have to go through at least another one to see if you're on
track. That could be six months, or even two years in some organizations."

"Although, I have seen many situations wheremanagers, sponsors in
particular, have taken action as soon as they saw certain signals, they didn’t
wait for the evaluation to come back. Sometimes they invited people to take
their own action, and said: 'if you don’t like the changes going on, why don’t
you come and see me. We’ll help you find a new role within the organization
or leave outright.‘ A constant part of the change cycle is aligning people.
They're either on your side or not. It’s not like a purge, where you lead people
out "en masse”. It’s very selective, and follows the review cycles from years,

down to months, down to weeks."

Edward talked about a company that had changed its annual
leadership review to a quarterly one, for succession purposes, using simpler
paperwork and discussions. "They constantly call on the management team,
but only take action on people obviously out of step. ,As part of its annual
succession plan, (__) set a goal to identify at least ten per cent of the
management team who were not performing and not changing at the required
pace needed by the organization. Those people were selected for departure."

'While this process may sound cold and calculating, it may be more
humane than letting people thrash around, feeling very uncomfortable in the
changing organization. Sometimes, it’s more about “fit“ than performance.
The person may have been performing in their role, the numbers may have
been there, but they just didn’t “fit” the new management culture. Having said
that, "fit” can also be very subjective. If you keep changing the requirements
for “fit”, you'll end up with a constant churn of senior management."

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Successful Change

Another factor that may contribute to successful change is having
people under the gun, so they have to change or everybody perishes, said
Edward. "I think it somehow leads to an environment where success is more
likely." Edward said he wished for a way to quantify success achieved while
under the gun. As an example, Edward compared General Electric and
Xerox. 'What did Jack Welsh do differently from the person who came into
Xerox, attempted to make some changes, failed, and is now gone."

"The fact is, while GE may not have performed really well, it was so big
it would have continued under any circumstances. By all accounts, over the
last decade, Jack Welch has done monumental things with GE. He has
turned the company around and created a substantially different culture. By
all accounts, GE is better off. But objectively I think it would be unfair to say

that the company is better off for Jack Welch having been there."

"Several organizations have dramatically increased their profitability in
hundreds of percents like GE. The opportunity or seeds for growth were
already planted at GE and Jackjust made it happen. Sustainability was not a
problem. Look at other organizations and you'll see that the underlying seeds
of destruction were already sown. While some poor person may have done all
the right things, none of them worked because the premise for success wasn’t
there in the first place." Edward said he occasionally recommends
"lifejackets" for clients starting jobs in companies that, in his view, will not last
ten years.

"Today, management talent is being treated more like athletic talent.
We bring in very talented executives and give them 36 months to get the ship
going in the right direction and increase profitability. There’s a culture, a North
American notion (I don't know about Europe) that executives are very short
term, like football coaches. If you don’t win you’re out, and you only have a

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certain amount of time to win. To some extent I think-this time equation,
where you have a year or preferably a quarter, is a built-in flaw of this
capitalist system. The expectation that you can do something with 10,000

people in a quarter is just unrealistic."

"The ways we expect organizations to be run today, both in the form of
legislation and current business practice, also puts constraints on
organizational change. To use a war analogy, everything else stopped while
warriors got in line with organizations producing goods for the war.
Organizations were allowed to break all the rules. You can’t do that today."

Edward thought about Chrysler losing roughly half a billion dollars and
having its stock drop 76 cents that quarter, and about Nortel meeting its
profitability numbers but missing its top line by 3 per cent. When a company
loses $66 billion in valuation over 48 hours, you know something is out of

whack.

"You have to look at the greater view of what organizations are worth
in our society today and how we value that. Optical cabling and everything
Nortel does is not going away. The TV stock analysts were talking about it all
day. One said he couldn't understand why people were selling off tech stocks
like Nortel and Cisco, and then going across the road to buy companies like
BCE, who rely on all those tech products in order to make money. This isn’t
making sense, especially with large swings in valuation. So, somehow we
have different expectations, and the market has different expectations of the
technology and dot-com players than of Chrysler. Huge pressures are put on

these organizations."

'WelI-organized companies with management infrastructures and job
descriptions know what they're supposed to do. The infrastructure manages
their performance and what they do, which may make it easier to change the

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organization. They know what they're changing from. Smaller, disorganized
companies are so chaotic that making changes is like nailing jelly to a wall. If
you asked anyone to describe their job and the six critical activities that make
a difference, they probably couldn't. If you asked their boss, you could see if

there was any alignment."

”I think the whole change thing becomes easier in organizations that
have both the from and to ends of the change spectrum pretty much nailed.
Even if you're unclear about where you're headed, knowing where you are
tells you what you’re evolving from. In our merger, both the from and to ends
are not all that clear and so we will muddle, which is part of the problem."

"I think the vision issue is very important, even if it's not an agreed
upon vision. The whole notion of the CEO or somebody saying they know
where we're going may not be totally sound, because they might lack details
or be very limited in their views. You need the next level of players to look at
the organization's functional parts. Since they're clear on what needs to
happen, you'll get to the generic vision. Alignment is important, but it’s not
necessarily about having a singular clear vision," Edward concluded.

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APPENDIX F

The Composite Case: Leader unites clashing cultures to build
global high-tech organization

The Contextual Situation

Amid the whirlwind of high-tech start-ups and spin-offs that marked the
19905 and new millennium, the new economy became the powerhouse for
globalization. With the astonishing pace of technological advances, changes
to the old order occurred with unprecedented speed and force. Many big
companies were either wiped out or completely reconfigured. Compelled to
reconsider and reshape their organizations, executive leaders sought new
business models and relationships that would enable their companies to
survive and prosper in the wired world.

The company

One long-established and conservative multinational corporation,
based in the United States, had the foresight to create the conditions that
enabled two of its divisions to transform from a piece of the old blue-chip into
a high-tech organization in its own right. Previously, as part of its venerable
and widely held parent, these divisions had been content to dominate the
market in current generation products.

Now, threatened with extinction, these divisions needed to take a
different tack. To do so, its leaders had to undertake a fast turnaround in their
thinking. Recognizing the potential for explosive growth through
developments in Internet-based technology, the leaders of these divisions
opted for inspiring innovation instead of maintaining the status quo. In

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evolving their vision and strategy, they aggressively pursued new
opportunities and new ways of working, still owned by the parent yet free to
operate as a separate company.

Executive leader’s role

Ann is Divisional Executive Vice President (EVP) of the corporation,
and Chief Executive Officer (CEO) of the newly formed organization
(hereinafter called the company). Ann works together with another 30 senior
officers on the Executive Committee to set the corporation's overall strategy
and direction. The committee is responsible for making difficult decisions that
may include divesting under-performing assets or divisions and acquiring new
ones. Ann also participates on the strategic vision team that meets twice a
year to consider the prospects for the high-tech industry and the corporation
over the next five to 25 years. The corporation employs a total of 138,000
people worldwide.

While the corporation's many divisions work in partnership (and
sometimes in competition), Ann runs her division of 3,800 employees like an
independent company. With operations in France, Canada, Australia and the
United States. Ann's company develops and markets educational software
products, known as distributed Ieaming systems, and services globally.
Responsible for the company's strategic direction and overall success, Ann
leads a team of seven other executives, responsible for seven functional
areas, including Manufacturing, Product Research and Development,
Business Development, Sales and Marketing, Logistics, Finance and General
Administration.

Ann holds a systemic view of the organization, and believes she is

effective because she has an ability to maintain a balance between thinking
and doing:

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'While I'm fairly action-oriented, I prefer to function on the basis of
thorough analysis, frameworks, and teams that actually deliver these
things. In a sense, it’s difficult to speak of the change experience
separately from the work I do, since it really describes my life. What
drives me most is the idea of building an organization that is both high
performing and fulfilling for the human beings who work here."

The change initiative

Ann's company was created in 1999 when three operations were

combined. As CEO accountable for the new company, Ann's mandate

included the following major change initiatives and ambitious goals:

Merge three organizations. Under Ann's leadership, the executive team
was responsible for merging an existing division with two other companies
acquired by the corporation some time ago for their existing products and
product development capabilities. Each of the three was an independent
organization with a distinct culture and mission.

Create a new organization. When, combined, the three organizations
had competing visions and clashing cultures. Evolving a single culture,
with teams capable of quickly developing and globally marketing a new set
of products and services, was an undertaking of major proportions.
Develop talent and build capability. People in the new organization had
to learn to work together fast. In order to meet the market's expectations
and keep up with the rapid pace of innovation, especially in Internet
platforms and applications, Ann's company needed the talent and
capability to develop, with quality and speed, new generations of products.
The company and its competitors were under pressure to introduce new
products about every six months.

Hit high sales targets. Ann and her new team were also challenged to

achieve sales of $280 million US. within 24 months of the company's
incepfion.

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Examining the elements that were combined to create the new company,
Ann said, "the acquired businesses had been competing successfully with
products designed to operate on mainframe and local or wide area nets. New
business opportunities however, coincided with the growth of the Internet and
development of related software and capacity. These conditions create some
exciting possibilities for the new company, in leveraging the distribution of its
learning services over the lntemet.

One of the organizations involved in the merger was a former competitor.
It had developed a new generation of desktop management software that
quickly achieved a dominant market position, in second place behind Ann's
corporation. After acquiring this competitor in the late 19803, the corporation
continued running it as an independent operation. Even after the merger, the
old competitive rivalry continued among the employees. The new employees
came from a young, entrepreneurial, customer-focused and innovative
organization. Existing employees were from an older, staid organization,
focused on maintaining the dominant market position with current generation
products and services. No one had communicated with the employees and
no one had the time to understand why these highly successful employees
continued to work as if they were still in the former competing organizations.
More importantly, no one had given the employees sufficient reason for
changing their behavior.

Building one culture and sustaining momentum

Once the formation of the new company was announced, Ann's first
challenge was to take a leadership stance that demonstrated to everyone she
was acting above any politics or bias for one group over the other. So, on the
first day, Ann made a visible and symbolic gesture to effectively show her
support for the entire group. She walked in and got a company badge. 'With
this gesture, I declared that it's nice to come from the corporation, but I'm

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really one of you—I'm not from outside—and we're in this together." Right
from the outset, it was "too hairy" a time for Arm to conduct any highly
structured team building exercises:

"I was thinking more about individuals, and didn't necessarily consider
large group activities to facilitate the large-scale transition or
transformation. In retrospect, we probably could have done much better
at realizing the personal and cultural impacts, and helping employees
make the necessary changes. The merger may have been accomplished
in a somewhat haphazard manner, rather than by well-managed change.
Although by deliberately not favoring one organizational style and culture
over the other I knew that some people would not feel comfortable. I had
hoped this would reduce the amount of time needed to build a new
organizational culture. One of the negative impacts of this haphazard
approach was the unnecessary loss of some good talented people. I think

we knew some people were going to leave for reasons other than
attrition."

The merger gave some people new responsibilities that were unavailable
before, and excluded others. Ann and her colleagues discovered that people
had different backgrounds and used different language and terminology, but
shared similar values and systems approaches. In assembling her leadership
team, Ann was careful to promote and hire people who fit the following values
and behaviors:

o Honesty, integrity, respect - do what is right

. Challenge for performance

. Encourage the freedom to disagree

0 Recognize and reward performance

. Take action, show initiative and learn from mistakes

. Build mutually supportive teams with decisive leadership
0 Commit to continuously learn and share knowledge

. Communicate candidly and in a direct manner

0 Have self-confidence to operate without boundaries

0 Make vision and plans clear to stakeholders

. Be customer focused

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Without this values fit, Ann believed people would have been out of
step. Before long, they would have felt uncomfortable, and would have been

unable to perform effectively on the new team.

The learning processes

To monitor early progress in unifying the culture, Ann brought people
together for full-day team meetings to discuss evolving values. The meetings
produced a high level of anxiety because, as the group declared certain
values of the new organization, some managers realized they were
unaccustomed to living up to those particular values, Although this was
difficult work, it has proven extremely important. Ann believes the company’s

values orientation has been most helpful in developing consistent behavior
and a unified culture:

"In communicating these concepts and ideas, the frameworks and models
we used really helped people process the decisions we made along the
way. This discipline around trying to match our actions and attitudes to our
values has guided people in their critical thinking and reflection about the
changes we've had to make."

The company has continued monitoring its cultural progress. Quarterly
web-based surveys help gauge how well managers and employees
understand the company's core values of stewardship, innovation and
partnership, and how consistently people are living up to those values.

Initially, Ann spent ”a considerable amount of time talking about what
the company ought to be and facilitating the concepts. While there was some
push back in terms of the language she had introduced to the organization
external changes in technology and in the marketplace soon began to ease
her task:

"As these external changes continued to hit and erode the
success of our existing business lines, people began realizing that

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some of the changes they at first questioned, in fact, had a business
rationale. In hindsight, I would have woven my story better and
differently, by creating with them the story of what we were becoming
together."

To succeed in her role of melding three cultures to create a global
leader in the Internet technology sector, it was essential for Ann to be in the
line (operational management) and completely committed to the change. "I
mean heart and soul commitment, through thick and thin," she stressed.
Sponsors of change need to be prepared to fly air cover, and be coaches and
mentors to project teams. As ambassadors for the change, sponsors need to
focus both within the team and externally.

Leaders must be catalysts for positive organizational change, and
develop the capability of individuals, particularly those leading teams
responsible for initiatives to improve organizational performance. Ann and
her senior team focussed most of their attention on the people appointed to
leadership roles. They coached and worked with the” new leaders to help
them overcome their fears and loss of the old organization's ways and
identity. Eventually, they came to accept the new ways, by building hope and
confidence that the future would be full of potential for success and personal
reward. In times of stressful change, Ann believes there is never enough
coaching and communication:

"Everything I do should contribute to helping people be the best
they can be. My role is to smash the barriers that prevent people from
realizing their potential. I accomplish this at a very tactical level, day in,
day out, meeting after meeting, discussion after discussion, phone call
after phone call. If people perform better, the organization will perform
better."

To help smash any barriers to information, such as hoarding or
sabotage, Ann formed a working coalition with the executive team and held
the team accountable for taking immediate action on offenders. The team

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introduced simple tools through distributed Ieaming sessions to help
accelerate the rate of adaptation and change. New structures and practices
enabled information to flow more easily among work groups and teams, and
rewarded people for sharing knowledge and working more cooperatively.

Building capacity through new learning capabilities

Employees used the very technology that was being developed for the
company’s customers to share knowledge, communicate and learn new skills.
This technology is known as distributed learning systems enables users to
access information, learn new skills and participate in live learning programs
through the internet. Employees used the distributed learning systems to
participate in information-sharing network skill development programs and
interactive workshops and to focus on performance outcomes. By painting
their own vision of the future for distributed Ieaming, employees gained
confidence in their skills and the future of the new company. The
performance focus also leveraged a healthy rather than destructive form of
competition between and among working teams.

Geography and language further complicated the situation. With the
merger, teams from offices in France, Canada, and the United States had to
work together for the first time, in order to develop new products. The
corporation’s organizational development team facilitated many meetings and
work group sessions to support the newly formed product development
teams. "Amazingly, we transformed into a global company quickly,” Ann said.

Employees readily acquired new skills such as dialogue, negotiation,
analytical systems thinking and conceptual model building. To communicate
and manage business changes, they developed the capability of working with
the same distributed technologies they were developing for customers
creating knowledge networks and communities of expertise to share new

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learning rapidly. In one case, a systems engineer in 'Califomia needed to
increase his project team’s capacity to create a new application system. He
added two groups of systems experts who were located in Sydney and
Toronto. To facilitate knowledge sharing and innovative learning, they set up
bi-weekly learning sessions and took turns leading the sessions.

The organizations involved in the merger were aligned in values and
systems approaches to managing project work and any change requirements.
Also, the employees were well educated, and often recognized as leaders in
their field. Once they overcame their natural defensiveness towards their
former competitors and stopped resisting, they started sharing information.
While the process took root, a form of competitive cooperation eventually took
root, and within 18 months cooperative behaviours were visibly emerging.

Once the culture started to solidify and common work practices
prevailed, the company refocused people on performance. Employees
received rewards and incentives through new variable pay and recognition
programs, since Ann believes that what gets rewarded gets done. "Our theme
was how to be better at getting better by learning from each other."

In building its capabilities, the company also looked externally for input
to establish benchmarks and performance standards for executing and
improving key processes, including programming and testing methods. The
teams in France, Australia and the United States created shared networks to
learn from each other, as they improved a process or test. These diffuse
informal networks, which used the same technology they were developing for
customers, spurred innovation. As a result, the teams were soon developing
and marketing new applications for the technology almost simultaneously,
Ann observed:

"As a senior management team, we had challenged any passive
resistance to our new practices by insisting that communication be as

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informal, transparent, candid, open-minded and fact-based as

possible. We challenged people to gather their facts and develop their

analysis to present constructive ideas or objections. To prove we
meant it, we modeled the process ourselves. We also endorsed the
approach in a learning program that reinforced the notion of doing it
right, with respect and integrity."

In performing her leadership role, Ann thinks in the future and acts in
the present. "I spend 25 per cent of my time talking about where we are,
where we want to be, by when." Ann and her team articulated the new
company's strategy in practical steps or actions to help people make sense of
their work, and align their thinking and desires with the organization's vision.
In seeking alignment, they focussed less on purpose and vision and more on

asking, 'What have you done for me lately?'

Rather than, 'We need to get the stock price up,‘ Ann would explain,
'We need to get the stock price up and, by doing so, we will be providing more
investment funds to your businesses’. Employees may accept the first
statement, but will commit wholeheartedly to the second one, because it
explains how the process works and what's in it for them. With this approach,
people gain a better understanding of the context of their work and how it
aligns with the broader business goals. It provides a clearer line of sight and
aligns their work with others to improve the organization's overall
performance.

In attempting to transform any business, leaders face a common
challenge in addressing the WIIFM factor (What’s in it for me?) "You have to
work one-on-one to influence and persuade your team members and other
informal leaders," said Ann. "Through candid dialogue, you try to get them to
reflect, and see for themselves the benefits of changing and the
consequences of not changing.”

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Once people understand that the benefits of changing outweigh the
benefits of not changing, they tend to become more supportive and
committed. In the case Ann’s company, the benefits of not changing were
shortsighted and focused on winning or losing internal battles for position and
power. Ann claimed she had little choice but to rem0ve anyone who chose to
stay this course. Removing such people from their roles sent a clear message
that resistance was unacceptable.

Uncovering the common will by examining the assumptions

Ann described the change-related work in which she has been
involved as "changing the way the organization sees'it, and sees itself in the
marketplace. It's about redefining the fundamental assumptions about what it
means to be an organization in order to be successful. To help validate some
of those assumptions, Ann’s company has a corporate role that is responsible
for strategic capabilities. The person in that role analyzes the marketplace
and builds the bridges between what the company intends to do in the
marketplace, as an organization, and its ability to actually realize those things
internally, given the capabilities of individuals and teams within the
organization.

In essence, the strategic capability team is responsible for individual
and organizational capability. Their job is to help the company understand
the strengths, weaknesses, opportunities and threats that affect its
performance. They focus on improving the effectiveness of all the systems,
practices and programs that support the company's human capital. An
organization's intangible assets consist of human, structural and customer
capital. Human capital is individual capability. Structural capital is
organizational capability. Customer capital is the strategic positioning taken.
Ann’s senior management team has the inter-cultural mandate to create
changes that will make the intangible assets all add up and perform:

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“In our case, we have stated that we value sharing knowledge,
continuously learning from each other through our work and education. We
have encouraged the development of new capabilities such as personal
effectiveness in dialogue, analytical systems thinking, model building and
leadership. We have also aligned our recruitment, Ieaming, and reward
systems to support these capabilities. "

The biggest change for Ann personally has been learning to think
globally. Early in the process, she realized that she could not expect things to
get done without talking to people in the company’s various locations around
the world. She had to treat them like the intelligent people they are and get
their input. When setting out to make changes, it is important to talk to the
people who will be affected, and get them involved. “It's unrealistic to expect
people to go ahead and do something, simply because you've mentioned it in
a note, memo or speech," said Ann:

“A leader needs to be on the ground and in the field, helping to get and
incorporate input, because the people out there have better ideas than
you do. Establishing and maintaining communication through
continuous dialogue is very hard but important and worthwhile work.
To help keep the channels open, I distribute a weekly e-Ietter to inform
people of my activities and learnings, and ask questions that require
immediate feedback or input."

Most recommendations for change in Ann’s company now come from
the line. Each line group has a team of senior managers working on strategy
to sort things out and bring better ideas to the table. The biggest struggle in a
large matrix company is uncovering the ‘common will’ between the lines of
business. It is very difficult for one line to get another to make a business
change. Said Ann, “often, you have to work up, down and across the lines to
get agreement on a change initiative. I spend much of my time influencing my
peers and sponsoring change work across our lines of business."

167

Through her experience in leading the company's change initiatives,
Ann has developed stronger leadership skills. To track her progress, she has
started keeping a journal, containing daily self-assessments of her leadership
practice, performance and lessons. "It helps me reflect, and to generate ideas
and opportunities." Ann also solicits annual 360-degree feedback to help
assess her leadership performance. The 360 instrument contains questions
designed to elicit feedback on her ability to consistently and optimally interpret
the company values through her decisions and actions. She expects all the
company's leaders to follow her example and seek similar feedback. This
exercise has a significant experiential learning effect. The time taken to
reflect on the feedback and seek coaching support to interpret the findings
and make decisions about improving personal performance is both
regenerative and personally rewarding.

"Overall, I think I've achieved a level of maturity that enables me to
handle a tremendous number of things that are not going well, or not going
exactly the way I want them to go, and still keep many balls in the air. In
order to get where I need to go, I've developed a laser-like focus and
resistance to distractions. I've learned to better discern the things I can safely
set aside for the moment, and those needing my immediate attention. I've
also consciously developed my external awareness level. I'm continuously
networking, scanning the environment, remaining open to new ideas,
listening, observing and reflecting. I try to see beyond the current reality or
paradigm and incorporate this knowledge into my behavior as soon as
possible."

In conclusion, Ann expressed her admiration for the incredible fortitude
and self-belief demonstrated by the corporation's CEO when he insisted that
all the other executives were misguided in thinking the company could be
more profitable as separate divisions than as a single entity. "He told nine out
of 10 of our division managers that they were absolutely wrong. How did he
know he was right? How do you achieve a balance between getting feedback

from others and staying with your sense of direction? I would say that, at this
point in my career, I have yet to master that capability.

168

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