Leading Successful Change

Gregory P. Shea, Cassie A. Solomon

• Publisher: Wharton Digital Press
• Year: 2016
• eBook ISBN: 9781613630242

Chapter One: So, You Say You Want a Revolution? Focus on Behavior and Change the Work Environment

Halloran, a US-based specialty chemical manufacturer, had a Big Problem. The company had manufacturing facilities all over the world—Asia, Latin America, North America, and Europe—and sourced its raw materials from thousands of small global suppliers. Management had created a global supply chain so complicated that it all but precluded lowering raw material costs. To remain competitive, Halloran needed to change.¹

Tom Keating served as the Halloran executive in charge of purchasing, and he had a Big Solution to the Big Problem. Halloran would henceforth outsource logistics completely to independent contractor Straight Arrow, and Straight Arrow would create warehouses in various regions to serve Halloran’s scattered manufacturing zones, transport raw materials to be held in those warehouses, centralize their purchase as much as possible to China, and carry the cost of holding the inventory close to the local manufacturing need. The consultants would manage the planning forecasts and maintain a three-month pipeline of materials. Halloran would gain a great supply chain, and Straight Arrow would get a new business model.

“No question about it,” Keating confidently told his bosses and direct reports, “this arrangement will eliminate the long lead times for material coming from Asia, increase supply chain predictability, and decrease cost by leveraging world-class supply chain expertise.” In fact, many of the ingredients for a successful change initiative looked to be in place, and there was no question about the urgency, given global competition. Keating and the senior consultant from Straight Arrow went on a global “road show” to explain the concept to operations leaders in every region. They believed that if they showed leadership commitment to the program, brought a quality plan to the field, and communicated it effectively, then one and all would see its merits and a smooth implementation would follow. Eighteen months after launch, in the spring of 2008, Keating’s supply chain leadership team held a retreat to evaluate the initiative’s success. People agreed: it was not a pretty sight. Halloran operations people thought the Straight Arrow consultants arrogant, often mistaken, and far too expensive. Allocation of the cost of the program went to the plant manager’s P&L, but allocation of raw materials savings went to the corporate scorecard. In other words, program cost and program reward went to different stakeholders. In addition, local purchasing agents didn’t want to give up their decision-making authority or relationships with local suppliers they had nurtured for years.

The Straight Arrow execs couldn’t understand Halloran’s foot-dragging. And Keating couldn’t jawbone or intimidate either side into cooperating. Six months later he was gone. His replacement struggled mightily to overhaul the initiative, but to no avail. A year on, with the global economy in a sharp downturn, Halloran’s executive committee canceled the Straight Arrow contract and the global sourcing program. In the end, after 36 months of struggle, Halloran’s competitors had leapfrogged it, and Halloran had little positive to show for the considerable money, time, and effort expended.

“There was nothing wrong with this idea,” one of the principals on the operation side told us when we sat down to do a postmortem with him. “The execution was a disaster.” Why? Simply stated, the change leaders did not articulate what they wanted, so they could not design to achieve it. The change process was, in the end, not about software or inventory protocols. It was about behavior, but it did not include identifying the desired behavioral changes within operations or at the plant level. This lack of a clear behavioral end state inevitably meant a lack of focus. A fine conceptualization of a supply chain at corporate came to less than naught because people on the ground didn’t use it. Why? Because local realities argued against it.

We’re Only Human

The human being is a midsize omnivorous mammal that has invested large amounts of evolutionary energy developing a particularly large and complex brain. This brain enables us to scan our world in both simple and sophisticated ways and to fashion responses to it. We can work in the concrete and in the abstract, and we can construct complex social systems that allow us to gain the power born of large, coordinated groupings or organizations. We study and experiment and learn precisely so we can alter our behavior and adjust to new circumstances. In fact, much of our conscious mind apparently exists to perceive and to manage social reality.

All these qualities enable us to adapt proactively to our environment. No, we are not the equal of cockroaches or retroviruses in this regard, but any creature that can prosper in tropical, temperate, and frigid climates, in arid environs, and in land dominated by water surely deserves the description “adaptable.”

To understand just how “adaptable” we are, take a look around you. The average workplace is filled with people sitting in cubicles or bent over laptops, trying to figure out what to do next. Precious few of us set out to demonstrate our incompetence, to fail. Motivational and behavioral theorists might differ on various counts, but virtually everyone agrees that human beings try to impact their environment and make it work for them. Even the smallest of children demonstrate this tendency to reach out (literally) and shape their world. Adapting and overcoming are central parts of who and what we are.

Why, then, is organizational change so difficult? Why do leaders fret so much about it and management gurus roll out new theories, seemingly on the hour, about how to accomplish it? The answer is fairly simple: far too often, we forget that we are, in fact, big-brained mammals attending to our environment, especially our social environment, in order to make it work for us. Like Halloran’s Tom Keating, we design change to accomplish great goals, to make sweeping organizational reforms, to seize expansive new markets, and to survive in old, shrinking ones. But in doing so, we ignore the reality that until we have changed individual behavior, we have changed little or nothing at all.

Change Is All About the Lead Dog, Right?

So contends a host of renowned experts. If a leader walks the talk and manages by walking around, if he or she communicates by crafting poignant elevator speeches and relentlessly delivering the message of change, then successful change itself is sure to come. After all, just look at the lead dog—or ape, or penguin, depending on the theory of the day: yelp, bark, and whine enough, and the others are sure to follow.

That is all well and good for animal packs, and it helps with humans, too. But by itself, the lead-animal theory is woefully insufficient for changing large organizations or large parts of organizations. Leaders modeling behavior and talking the case for change can indeed help enterprises transform. But the corporate alpha dog doesn’t sit among the pack. He appears only briefly, via dispatch or WebEx or the rare visit—something like Tom Keating’s “road show.” Soon, the appearance fades and the banners droop. The workers, the managers, and even the executives look around to see if their environment has changed, if the tried-and-true behaviors that made their world work will continue to do so. If they won’t, fine; it’s time to adapt. If they will, really, why bother to change?

How, then, does one change an organization—be it a company, business unit, service line, department, or work unit? By changing the work environment around the people whose behavior you seek to change. Therein lies the key to successful, embedded, and sustained change: alter the environment, and people will adapt to it. Call it a species strength. We behave based on the reality we perceive. Therefore, design a work environment that requires different behaviors. Then concentrate on helping people do what they do so well: namely, adapt. Design work environments that inspire desired behaviors, and you have already won a large part of the change battle. This amounts to “pulling” versus “pushing” organizational change.

Think Environment

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Behavior at work is “overdetermined.” This amounts to a fancy way of saying that people generally do what they do for a variety of reasons. Changing what people do, then, must address multiple influences. Anyone who has tried to begin or sustain an exercise regimen knows that those simple, straightforward, and unarguably beneficial behavioral changes require other changes. The challenge here isn’t in achieving clarity about the desired behavior—e.g., exercising for at least 30 minutes four times per week. Nor is it in understanding the benefits, such as lower blood pressure and a healthier and probably longer life. The challenge is constructing a world around the individual trying to change: changes in relationships, work, eating patterns, schedules, lifestyle, feedback or information, measurement, rewards, skills, and support systems. For example, join a gym close to your home to increase the likelihood that you will use it. Ante up, make the investment, and buy the right clothing and gear, including a bag to carry it in. Set an alarm that reminds you when to go to the gym. Log and measure your progress on a regular basis, posting it in full view. Invent small rewards as you reach various milestones in the process (number of trips to the gym) and outcome (duration of your exercise or decrease in blood pressure). Create social rewards, too: post your progress online for your friends to see, organize a group of people who are committed to the same goals, or send texts to your primary care physician. According to John Tierney, coauthor of Willpower: Rediscovering the Greatest Human Strength, one-third of people who make New Year’s resolutions will have dropped them by the end of January, and by July more than half of those original resolutions will have lapsed.² Depend on your willpower alone, and you will probably slenderize only your odds of success.

Simply put, a desired behavior or set or pattern of behaviors must make sense to people, not abstractly and not for a moment of inspiration, but each day, every day. To make sense at work, the desired behaviors need to fit the work environment. They need to help people get what they want from the world around them. They need to work.

If you know what you want people to do, then how might you design their world to help them to do it? The question seems straightforward, even obvious, and examples abound of successful efforts to do just that, and not only in the business world. Let’s return to the world of fitness. Fitbit has developed a successful business by offering an approach to weight loss and fitness consistent with the approach just described. Fitbit is a lightweight device that monitors your physical activity, calorie intake, weight, and sleep. It continuously measures and updates. It also provides easy access to measurement information and the ability to download the data. Users earn rewards (merit badges) as they use the information to make healthier decisions. A user can readily acquire the necessary skills to use the device. The manufacturer provides online support, and communities of users have sprung up, providing both competition and support. In other words, a modest technological innovation provides the occasion for altering the user’s behavior through a coordinated altering of his environment.

But (witness Halloran) altering the ground-level environment is rarely the first thing that comes to the mind of organizational change implementers. As in the case of Tom Keating, they envision strategic shifts that will be game changers, or at least company savers. Next, they fill in the mechanics that will get them where they want to be (holding warehouses, strategic partners, and so on). And finally, maybe, they give some thought to the on-the-ground agents of change (i.e., the workers) who actually hold success or failure in their very hands. It’s only when the promised benefits don’t materialize that those involved come to see that the entire change process began at the wrong end.

As one Halloran exe...

Table of contents

• Leading Successful Change
• Contents
• Ex Libris
• Introduction: Why Change Initiatives Fail
• Chapter One: So, You Say You Want a Revolution? Focus on Behavior and Change the Work Environment
• Chapter Two: Make a Scene: Envision What You Want
• Chapter Three: The 8 Levers of Change: Design the Work Environment
• Chapter Four: It’s Not Just One and Done: The Work Systems Model in Action
• Chapter Five: When to Use the Work Systems Model
• Conclusion
• Acknowledgments
• About the Authors
• About Wharton Digital Press
• About The Wharton School
• Notes
• Ex Libris