Become Truly a Great Change Agent

JWI 555 Organizational Change & Culture, week10 notes, 6/10/13

I find the last week of learning about change leadership to be among the finest of the JWMI MBA program. They teach leaders how to think creatively, use intuition to complement analytics and become outstanding change agents. One gets a great deal of respect for Jack Welch for his willingness to teach these skills.

Clearly, Jack Welch is one of the finest teachers on the planet
Dr DP

I. Igniting Change JWI 555 Wk10 Podcast
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How can a low level employee initiate change from status quo in an org ?
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99% you can't. You'll get killed trying.
Companies want change in fast moving environment.
Low level employees have to face too many levels and people in the middle.
It just doesn't work.

Earn your stripes - Gain more responsibility, credibility, authority, ability to make a change.
Get to a position where you have your own team.
Then Run it the way you want then.

Work and Wait.
Or stop being frustrated and move on.

2. The new manager and candor (JWI 555, WK10, podcast)
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Does candor work with old people - when direct reports are twice your age?
Everyone wants candor - some are afraid of it
Candor accelerates business - it is a viagra for business
It Drives business, gets it moving faster, stronger
Old or young - You want it straight; stop the BS
Done with generic ambiguity and platitudes

When first introduced, for a period, candor gets reaction of shock:
Head on fire screaming hysteria - whole new way of talking

Candor has to become a company value
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Candor - say this is the way this company is going to operate
this is the way we are going to operate
we are going to measure,  reward and promote those who have it
Like any other behavior
you get the behavior you want when you measure it and reward it
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you can get it !
Candor speeds up business, makes people know where they stand, creates an atmosphere
Rule#1 of business - if you are a manager, tell your people exactly where they stand
You owe it to them, it is your responsibility
Fruits of candor: more effective, shorter meetings, increased productivity
There is no substitute for the speed that candor gives you

3. Candid Appraisals (JWI 555, WK10, video)
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If people are candid
And people know where they stand (leader's obligation is to tell people all the time where they stand)
When a manager calls and says:
"Look Jack, things are not working out
Time to wrap it up
I say, "I know it, I did not deliver". "Because I have known what the ground rules were".
Less than 5% of people get straightforward candid appraisals.
Everybody winks. This is a winking corporate society - nice appraisals are written end of year.
Appraisals are daily events, monthly events - constantly giving feedback.
So everyone in team knows where they stand.
So when it is time they have to go, they know they did not deliver.

4. Differentiation (JWI 555, WK10, video)
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Differentiation is identifying the top people, valuable middle and getting rid of bottom weak performers
You told them where they are, told them how to improve, what to expect
4 times a year appraise - here is what I like about what you are doing, here is what you need to improve
12-18 months, come to an agreement, time to move on, what's the deal - work it out, soft landing, go somewhere else to work
Biggest gripe about business - no one should be a manager that have people working for them not knowing where they stand
It is an obligation of management- to tell people where they stand and not leave them guessing
None should work for a boss who has not told you where you stand

5. Knowing where you stand (JWI 555, wk10, video)
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The idea that your people dont know where they stand because you are a kind manager - is the cruelest thing to do.
Top20 - they should know you love them, take care of them,pay em, reward em, let them know they are top20
Middle70 - tell them they are the valuable middle, give them reward, show them how to get to Top20
Bottom10 - tell em they are in bottom10; 70-80% will move on to another company - will go elsewhere, find a job and grow
Football & Baseball Teams - every year grade and upgrade the team; they tell people where they stand
rank and yank is cruel and stupid; differentiation before a candid appraisal system is in place is cruel and stupid
Put a candid appraisal system in place first, then differentiate 20/70/10, then tell people where they stand, how to improve
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takes 2-3 years to put this system in place
Don't surprise people


6. Week10, Lecture1
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(i) Productive organizational change needs the energy & passion of a change leader
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- see opportunities and threats
- create a shared sense of urgency
- develop a vision
- commmunicate
- empower
- drive focused action
(ii) Culture & Future - Two Responsibilities of the senior-most leaders
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- identify challenges and opportunities of the future; stay several steps ahead of everyone else
- manage and change organizational culture
(iii) Culture
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- norms of behavior and shared values among a group of people in a company
valuing stability, hierarchical structure, resistance or punishment to change initiative
- woven into the fabric of the organization through
thousands of approval and disapproval
reward and censure
hirings, promotions, firings
coversations, symbols, language
clothing
formal and informal power structures
- exerts itself through subconscious actions of hundreds or thousands of people (Kotter)
- powerfully influences human behavior
- difficult to change
- nearly invisible: ubiquitoes like air people breathe, yet so integral that people dont see it anymore
- Some elements support change and some block change
- Change tools can be used to modulate it


(iv) How to Diagnose Culture in a firm
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Know where to look. Evidence shows up in many places.
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- is structure hierarchical or flat?
eg. military is hierarchical with command and control => shows up in org structure, titles, decision making rules, uniforms
universities have flat structures => shows up in professor's independence, collegiality, research publications, academic excellence, conferences, cross-university partners, tenure
- Are decisions made by a single person, few senior managers, with participation from a broad group?
- boss's office more luxurious than workspaces of frontline people ?
- how quickly are decisions made ?
- which function ultimately runs the show - R&D, Sales, Accounting?
- Do people speak up with questions and concerns or is there superficial agreement and a lot of underground complaining?
- Are people rewarded for individual entrepreneurship or team work ?
- Who gets promoted?
- Who makes the most money ?
- Where has the company invested money, imagination, time?
- Who gets invited to meetings? What is discussed? How long do they take ?
- Are employees referred to as associates, resources or FTEs?

(v) Culture Traits that support change
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(a) Candor (ideas, speed, cost reduction)
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be willing to be open about what you think, speak up - an unnatural act
criticise without sugarcoating bad news
don't avoid conflict
Candor generates
- richer ideas (more people get into the conversation)
- speed (ideas are debated and acted upon more quickly)
- cost reduction (elimination of meaningless meetings and reports)
(b) Differentiation (performance recognition, resource allocation)
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Identify company's top businesses and top talent
Act on this distinction to invest in top performers
Rigorously identify top 20% - shower them with love, recognition, money, training, opportunities
Middle 70% - manage differently, focus on developing and motivating them
Bottom 10% - ask them to leave the company
Fill the company with top performers who can thrive in fast-changing environments.
Provide a structure for rewarding people who achieve results in the desired new ways.
Let go of people who cannot keep up.

(c) Voice
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Get every brain in the game
If hiring was done correctly, then everyone in the room is smarter than you
You need their input
Hear all people's ideas, opinions, feelings
Work-Out gives every employee a voice.

(d) Dignity
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Respect everyone's work and effort
Having a voice and feeling respect for your effort encourages employees to give their best change effort.

(e) Flat structures
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Reinforces culture of personal empowerment and accountability.
voice, candor => invite individual's best ideas
empowerment, accountability => translate ideas into effective action

(vi) Anchor change in the culture
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(a) Futile to change culture independent of changing behavior
- layers of socialization and history oppose change
- cannot change culture magically at beginning of a change initiative
must be addressed toward the end of the change process after people see and feel the results of change and as they experience desired new behaviors
(b) Need deliberate ongoing efforts to anchor changes in culture
Else old ways of doing things will smother change and reassert their dominance
(c) needs patience & skill
(d) needs a lot of communication
(e) needs strategic hiring and promotion
(f) needs consistent effort

7. Week10 Lecture2
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Change is Never Over
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Change is a Continuous Process
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I. Why organizations should change and improve?
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When orgs improve, many people win
Employees - enjoy satisfactions of success, productivity, creativity, better reputation, greater compensation
Consumers - get innovative products and services at better prices
Communities - prosper

II. Change agents make change possible
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Personal Qualities of Change Leaders
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Strong leaders
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- step up when required; give best effort for years
- help bring org through a big change event eg. restructuring, acquisition integration

Great leaders are a rarer kind of change agents
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- they don't just navigate orgs through a major change
they identify, lead, embed change after change after change
- have vision and courage to improve things
- have skills to see their vision through
- create an innovative, flexible, forward-looking organization that learns
- comfortable in a world of continuous transformation; drive one major change initiative after another
- at home with high levels of uncertainty
- restless, curious, always looking for ways to get better
- love a good challenge.
- show up with infectious enthusiasm, passion and conviction for each new wave of change
- continuously learn and grow at a rate associated with children; in a totally different league
They stay ahead of change as old behaviors and assumptions get outdated
follow their interests and passions even if unrelated to job
master new avenues for development and use these as lens to see business challenges and opportunities in new and creative ways
- multifaceted, variety of rich experiences, depth of judgment to face world's increasing complexity

"be the change you want to see in the world" Gandhi

III. How to Look Ahead to Stay Ahead
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Ability to see around corners is one of the most important characteristics of a leader
Every leader must have - Vision, ability to predict future
Good leaders - anticipate the radically unexpected
Best leaders - sixth sense for market changes in a brutally competitive environment, moves by competitors and new entrants

To develop this skill:
(i) Become ridiculously well-informed about the business, environment
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Follow a wide range of emerging trends
Be passionately interested in the future
Talk and listen to all kinds of people
be a sponge; soak in knowledge, ideas
(ii) See things others don't see; think things others don't think
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think creatively - view a problem from a different angle
Discern patterns others have missed
this is how you develop the sixth sense
(iii) Cultivate and be open to follow you intuition
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Analytic, fact-centric business environment
Complement this with intuition - recognize patterns

IV. Ten Trends Driving Change (Beinhocker et al, 2009 HBR, McKinsey)
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Accelerating Trends
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(1) Loss of trust in business - boycotts, negative publicity, added regulation
(2) Bigger government - stimulus packages, regulatory reforms, direct and indirect decision making in business
(3) Consumption pattern shifts away from US to China, India and other emerging markets
(4) Industry restructuring - financial collapses, M&A
(5) Destabilizing price environments - deflation & inflation emerging as potential threats
Steady Trends
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(6) Global demand increases for oil, water; price increases, volatility, shortages
(7) Big Data - data driven decision making; mathematical models; computing power
(8) Asian economy grows
(9) Innovation in IT, BioTech, Clean Energy, Nanotech
Decelerating Trends
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(10) Slowing globalization of goods, services, talent
Governments become restrictive and protective in face of threats to economic recoveries

IV. Participate in change efforts
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Business environment is shifting rapidly
Watch trends. Look also at car wrecks - financial crises, bankruptcies, tragedies.
Seize every opportunity, even those wrought by adversity.
Become truly a great agent of change