Michael Beer Harvard Business School & Center for Organizational Fitness

1. Why Transformations to Total Quality Do Not Persist?Managers are not accountable to their people for the quality of their leadership/management Michael Beer Harvard Business School & Center for Organizational Fitness

2. The Fallacy of Programmatic ChangeA seed can only grow in fertile soil • Organizations are socio-technical systems • Most change efforts focus on the technical and ignore the social system – attitudes, skills and behavior of management at all levels • One size does not fit all • Business challenges differ across units as does readiness • Training a large number of managers provides knowledge but does not change the quality of management within sub-units • Top down programs go around sub-unit management teams • Create dependency on consultants and corporate staff • Prevent thinking, ownership, passion and leadership to to be developed at the unit level • By not demanding leadership of unit managers we are prevented from assessing sub-unit quality of management

3. Programs Often Arise From A Tacit Collusion Among Senior Executives, Staff Groups, and Consultants Short term Benefits Long Term Costs For executives: The appearance of quick, painless, measurable results • Lost time, energy & dollars • Increased cynicism • Change inoculation For Internal Staff: Increased responsibility & visibility For Consultants: A steady income stream

4. The Silent Killers Undiscussible Barriers to Strategy Implementation • Unclear strategy and conflicting priorities • Leadership style - tops down or laissez faire • An Ineffective top team • Poor coordination • Closed vertical communication/low trust • Inadequate leadership/management skills and development in organization

5. The Dynamics of Ineffective (Low Quality) Management Quality of Direction Ineffective Top Team Top Down or Laissez-faireSenior Management Style Unclear Strategy, Values & Priorities Poor Vertical Communication Learning Quality of Quality of Implementation Poor Coordination Across Functions& Businesses Inadequate Down the Line Leadership Skills & Development

6. CEO Staff Heads of Business Units Transformation Depends on a a Top Management that Demands and Supports Change in the Quality of Management in each Sub-Unit • Top Management • Orchestrates Diffusion • Applies change to itself Unit top teams Must lead change In their unit Adapted from the Beer et al. “The Critical Path to Corporate Renewal”

7. Top Management’s Role • Articulate need for change and renewal • What are competitive realities? • Develop corporate strategy, values and policies that support the new culture • Create a phased plan for change • Encourage/demand that unit managers lead a change process • Create a risk free environment • Focus on a small set of leading edge sub-units whose leaders develop a new way to work and a new culture/DNA that “fits” their strategy • Spread through conferences, visits and transfer of leaders with the “right” DNA • An ever larger circle of managers who can lead other organizations to greater effectiveness is developed • Lead Change in Corporate Unit • Corporate renewal is a long march over time - not a quick fix • Do corporate and unit leaders “fit” the values and skills required for high quality management/leadership • Replace those that don’t meet the test • Allow for units managers to redefine the meaning of quality and how to implement it

8. Quality of Management In Each Unit is the Key A quality culture occurs when leaders have the willand skillto engage their organization in an inquiry process about how well their organization and leadership fits their espoused strategy and values. An Honest Conversation is Needed!