Larry Hirschhorn (HBR, 2002)

1. Larry Hirschhorn (HBR, 2002) Many executives try to change organizations. Few succeed. And as most executives who have lived through change initiatives will admit, fewer still want to try again. Who can blame them for their reluctance? The process is terribly painful, the logistics are enormously complex, the organization wants deeply not to change—and the success rate is abysmal. Yet most organizations must change, and change profoundly, if they’re to stay alive.

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

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

4. Three Lenses to “see” Organizational Change Political: interests coalitions resources/power Cultural: artifacts values assumptions Strategic: leadership timing process alignment

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

6. Processes in strategic design Assess environment (Threats and opportunities Industry analysis, etc.) Strategic Organizational Design (grouping, Linking, Alignments) Strategic Intent Assess organization (Core competences, Organizational capacities)

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

8. The Stakeholder Model Professional Community Shareholders Top Managers Researchers Customers FIRM Local Community Middle Managers Workers Suppliers Unions Public interest groups (e.g., environmental groups) Banks/Creditors

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

10. Why difficult to produce change? • Strategic design • Alignment between technology, structure, incentives. • Cycles of self-reinforcement • The political model • Changes implies resource/interest reallocation • Vested interests in existing technologies, structures • The cultural model • Norms & expectations about appropriateness • Interpretation of history • The confidence trap

11. Organizational change in a loosely coupled systemWeick 1982 • What is a loosely-coupled system? • Why is it difficult to change in a loosely-coupled system? • Strategies of change in a loosely-coupled system • Implications for the “Motorola and Galvin” case

12. Tight coupling among units within an organization A B C

13. Loose coupling among units within an organization A B C

14. What is loose coupling in organizations? • Loose coupling — the disconnectedness, or lack of response between A & B • Between an organization and its environment • Between structure and behavior • Between units within an organization • Loose coupling is pervasive (during periods of time) in most organizations.

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

16. Loose coupling: Sources • Presumption of logic • The IBM way, the 3M way, … • Socialization processes • Professional, within team, within company • Differential participation in decision making • Monday meetings – information, pooling of experience • Constant variables that disconnect units • Routinization—creating constant ‘variables’ • Corruption of feedback loops • Inspection, annual review, reporting line

17. Loose coupling: Good or bad? • Question: How do you evaluate the loose-coupling phenomenon? • Advantages • Adaptation to local environments • Adaptation to own technology • minimizing disturbance to the whole system • Problems of loose coupling • Unresponsiveness to global changes • Difficult to initiate ‘purposive change’

18. Case study: Motorola and Galvin

19. Background: Motorola in 1983 • Environment • Motorola weathered the recession in industry • Positioned to lead competitive edge • Cyclical nature of the semiconductor/computer industries • Growing threats on the international scene • Structural • Conflicts between functional manager and product-line managers • Prolonged product development cycles • Growing managerial layers • Programs like periodic technology review become merely a formality • Different voices in the tripartite structure • Personal: Bob Galvin, 61, is near retirement.

20. The Biennial Officers’ Meeting, 1983 • What was expected by the audience? • What did Galvin do? • What are the responses from the audience? • How do you assess the initiation of change in this episode? • What to do next?

21. Further Questions • How do you evaluate Bob Galvin’s style of initiating change? • What impact do you think Galvin’s speech will have? • What should Galvin do next? What should Human Resources do next? • Is Galvin’s leadership philosophy and practice a model for “Visionary Leadership”? • What are the advantages and difficulties of initiating change in a good time?

22. Debate: Change from strength or weakness? • From “strength” • Resources • Margin of errors • What are the challenges? • From “weakness” • A sense of urgency • Challenges of presumptions • What are the difficulties?

23. The Paradox of strategies:Exploration versus exploitationMarch 1991 • “Exploitation” or “exploration:” The strategic choice • Examples • IBM in the 1980s: PC or Mainframe? • 3M: competing through new niche or existing markets? • The trade-off between the two strategies • “Exploitation”: the temptation • Political • Cultural • The need for strategic vision—the trade-off • Reinterpreting 3M and Motorola

24. Why Transformation Efforts FailJohn P. Kotter • A sense of urgency • A guiding coalition • Creating a vision • Communicating the vision • Removing obstacles • Planning for short-term wins • Not declaring victories too early • Aiming at cultural changes

25. Campaigning for Change Larry Hirschhorn • Three distinct but linked campaigns • A political campaign • Forming alliances at different stages • Changing structures to realign interests • A marketing campaign • Listening in • Working with lead customers • Developing a theme • A military campaign • Getting attention • Choosing beachheads • Creating a war room

26. “Motorola and Galvin” Case Revisited • What is the impact of Galvin’s speech? • A challenge to the presumed logic • Activation of attention • Question: Is this enough? • Question: What is next?

27. Summary and takeaways • Organizations evolve to become stable, predictable, and loosely coupled • Vision, Anticipatory leadership are critical for organizational change • Strategies of initiating organizational change • “Well begun, half done”?

28. How to Initiate Organizational Change • Recognize and articulate an “extremely • compelling need to change. • Start with and maintain executive-level • support. • Understand the organization’s “readiness • to change.” • Communicate effectively to create buy-in. • Carr and Johansson 1995. Best Practices in Reengineering.

29. 5 targets in managing change in a loosely coupled system • SourcesSolutionStrategy • Presumptions of logic Doubt produces change Attention management • Socialization processes Re-socialization produces Training programs • change • Differential participation Equalization produces Decision structure • rates change • Constant variables that Distraction produces Organizational slack • disconnect units change • Corruption of feedback Dependability produces Consultant, persistent • loops change expert sources