Reframing Organizations

Artistry, Choice, and Leadership

Lee G. Bolman, Terrence E. Deal

• Publisher: Jossey-Bass
• Year: 2017
• ISBN:
  9781119281849
• Edition: 6
• Topic: Business
• Subtopic: Leadership
• Index: Business

Set aside trends to focus on the fundamentals of great leadership

Reframing Organizations provides time-tested guidance for more effective organizational leadership. Rooted in decades of social science research across multiple disciplines, Bolman and Deal's four-frame model has continued to evolve since its conception over 25 years ago; this new sixth edition has been updated to include coverage of cross-sector collaboration, generational differences, virtual environments, globalization, sustainability, and communication across cultures. The Instructor's guide has been expanded to provide additional tools for the classroom, including chapter summary tip sheets, mini-assessments, Bolman & Deal podcasts, and more. These recent revisions reflect the intersection of reader recommendations and the current leadership environment, resulting in a renewed practicality and even greater alignment with everyday application.

Combining the latest research from organizational theory, organizational behavior, psychology, sociology, political science and more, the model detailed here provides real guidance for real leaders. Guide, motivate, and inspire your team's best performance as you learn to:

• Optimize group, team, and organizational structure
• Build a positive, collaborative dynamic across generations, teams, and sectors
• Understand power and conflict amidst the internal and external political landscape
• Shape your organization's culture and build a cohesive sense of spirit

Bolman and Deal's four-frame model has withstood the test of time because it offers an accessible, compact, and powerful set of ideas for navigating complexity and turbulence. In today's business climate, leadership trends come and go; today's flash in the pan is tomorrow's obsolete strategy, but a leadership framework built on a solid foundation will serve your organization well no matter what the future holds. Reframing Organizations provides clear guidance and up-to-date insight for anyone facing the challenges of contemporary leadership.

Part One
Making Sense of Organizations

Sit no longer at your dusty window

I urge you to break the gaze

from your oh so cherished glass

—Gian Torrano Jacobs
Journeys through the Windows of Perception
Reprinted by permission of the poet, Gian Torrano Jacobs.

Chapter 1
Introduction
The Power of Reframing

By the second decade of the twenty-first century, the German carmaker Volkswagen and the U.S. bank Wells Fargo were among the world's largest, most successful, and most admired firms. Then both trashed their own brand by following the same script. It's a drama in three acts:

1. Act I: Set daunting standards for employees to improve performance.
2. Act II: Look the other way when employees cheat because they think it's the only way to meet the targets.
3. Act III: When the cheating leads to a media firestorm and public outrage, blame the workers and paint top managers as blameless.

In Wells Fargo's case, the bank fired more than 5,000 lower-level employees but offered an exit bonus of $125 million to the executive who oversaw them (Sorkin, 2016).

Volkswagen CEO Martin Winterkorn was known as an eagle-eyed micromanager but pleaded ignorance when his company admitted in 2015 that it had been cheating for years on emissions tests of its “clean” diesels. He was quickly replaced by Matthias Müller, who claimed that he didn't know anything about VW's cheating either. Müller also explained why VW wasn't exactly guilty: “It was a technical problem. We had not the interpretation of the American law…We didn't lie. We didn't understand the question first” (Smith and Parloff, 2016). Apparently VW was smart enough to design clever software to fudge emissions tests but not smart enough to know that cheating might be illegal.

The smokescreen worked for years—VW sold a lot of diesels to consumers who wanted just what Volkswagen claimed to offer, a car at the sweet spot of low emissions, high performance, and great fuel economy. The cheating apparently began around 2008, seven years before it became public, when Volkswagen engineers realized they could not make good on the company's public, clean-diesel promises (Ewing, 2015). Bob Lutz, an industry insider, described VW's management system as “a reign of terror and a culture where performance was driven by fear and intimidation” (Lutz, 2015). VW engineers faced a tough choice. Should they tell the truth and lose their jobs now or cheat and maybe lose their jobs later? The engineers chose option B. The story did not end happily. In January, 2017, VW pleaded guilty to cheating on emissions tests and agreed to pay a fine of $4.3 billion. In the same week, six VW executives were indicted for conspiring to defraud the United States.¹ In Spring of 2017, VW's legal troubles appeared to be winding down in the United States, at a total cost of more than $20 billion, but were still ramping up in Germany, where authorities had launched criminal investigations (Ewing, 2017).

The story at Wells Fargo was similar. For years, it had successfully billed itself as the friendly, community bank. It ran warm and fuzzy ads around themes of working together and caring about people. The ads did not mention that in 2010 a federal judge ruled that the bank had cheated customers by deliberately manipulating customer transactions to increase overdraft fees (Randall, 2010), nor that in August, 2016, the bank agreed to pay a $4.1 million penalty for cheating student borrowers. But no amount of advertising would have helped in September, 2016, when the news broke that employees in Wells Fargo branches, under pressure from their bosses to sell more “solutions,” had opened some two million accounts that customers didn't want and usually didn't know about, at least not until they received an unexpected credit card in the mail or got hit with fees on an account they didn't know they had.

None of it should have been news to Wells Fargo's leadership. Back in 2005, employees began to call the firm's human resources department and ethics hotline to report that some of their coworkers were cheating (Cowley, 2016). The bank sometimes solved that problem by firing the whistleblowers. Take the case of a branch manager in Arizona. While covering for a colleague at another branch, he found that employees were opening accounts for fake businesses. He called HR, which told him to call the ethics hotline. Ethics asked him for specific data to support the allegations. He pulled data from the system and reported it. A month later, he was fired for improperly looking up account information.

In 2013, the Los Angeles Times ran a story about phony accounts in some local branches. Wells Fargo's solution was not to lower the flame under the pot but to try and screw down the lid even tighter. They kept up the intense push for cross-selling but sent employees to ethics seminars where they were instructed not to open accounts customers didn't want. CEO John Stumpf achieved plausible deniability by proclaiming that he didn't want “want anyone ever offering a product to someone when they don't know what the benefit is, or the customer doesn't understand it, or doesn't want it, or doesn't need it” (Sorkin, 2016, p. B1). But despite his public assurances, the incentives up and down the line still rewarded sales rather than ethical squeamishness. Many employees felt they were in a bind: they'd been told not to cheat, but that was the best way to keep their jobs (Corkery and Cowley, 2016). Like the VW engineers, many decided to cheat now and hope that later never came.

Maybe leaders at Volkswagen and Wells Fargo knew about the cheating and hoped it would never come to light. Maybe they were just out of touch. Either way, they were clueless—failing to see that their companies were headed for costly public-relations nightmares. But they are far from alone. Cluelessness is a pervasive affliction for leaders, even the best and brightest. Often it leads to personal and institutional disaster. But, sometimes there are second chances.

Consider Steve Jobs. He had to fail before he could succeed. Fail he did. He was fired from Apple Computer, the company he founded, and then spent 11 years “in the wilderness” (Schlender, 2004). During this time of reflection he discovered capacities as a leader—and human being—that set the stage for his triumphant second act at Apple.

He failed initially for the same reason that countless managers stumble: like the executives at VW and Wells Fargo, Jobs was operating on a limited understanding of leadership and organizations. He was always a brilliant and charismatic product visionary. That enabled him to take Apple from startup to major computer vendor, but didn't equip him to lead Apple to its next phase. Being fired was painful, but Jobs later concluded that it was the best thing that ever happened to him. “It freed me to enter one of the most creative periods of my life. I'm pretty sure none of this would have happened if I hadn't been fired from Apple. It was awful-tasting medicine, but I guess the patient needed it.”

During his period of self-reflection, Jobs kept busy. He focused on Pixar, a computer graphics company he bought for $10 million, and on NeXT, a new computer company that he founded. One succeeded and the other didn't, but he learned from both. Pixar became so successful it made Jobs a billionaire. NeXT never made money, but it developed technology that proved vital when Jobs was recalled from the wilderness to save Apple from a death spiral.

His experiences at NeXT and Pixar provided two vital lessons. One was the importance of aligning an organization with its strategy and mission. He understood more clearly that he needed a great company to build great products. Lesson two was about people. Jobs had always understood the importance of talent, but now he had a better appreciation for the importance of relationships and teamwork.

Jobs's basic character did not change during his wilderness years. The Steve Jobs who returned to Apple in 1997 was much like the human paradox fired 12 years earlier—demanding and charismatic, charming and infuriating, erratic and focused, opinionated and curious. The difference was in how he interpreted what was going on around him and how he led. To his long-time gifts as a magician and warrior, he had added newfound capacities as an organizational architect and team builder.

Shortly after his return, he radically simplified Apple's product line, built a loyal and talented leadership team, and turned his old company into a hit-making machine as reliable as Pixar. The iMac, iPod, iPhone, and iPad made Jobs the world's most admired chief executive, and Apple passed ExxonMobil to become the world's most valuable company. His success in building an organization and a leadership team was validated as Apple's business results continued to impress after his death in October 2011. Like many other executives, Steve Jobs seemed to have it all until he lost it—but most never get it back.

Martin Winterkorn had seemed to be on track to make Volkswagen the world's biggest car company, and Wells Fargo CEO John Stumpf was one of America's most admired bankers. But both became so cocooned in imperfect worldviews that they misread their circumstances and couldn't see other options. That's what it means to be clueless. You don't know what's going on, but you think you do, and you don't see better choices. So you do more of what you know, even though it's not working. You hope in vain that steady on course will get you where you want to go.

How do leaders become clueless? That is what we explore next. Then we introduce reframing—the conceptual core of the book and our basic prescription for sizing things up. Reframing requires an ability to think about situations from more than one angle, which lets you develop alternative diagnoses and strategies. We introduce four distinct frames—structural, human resource, political, and symbolic—each logical and powerful in capturing a detailed snapshot. Together, they help to paint a more comprehensive picture of what's going on and what to do.

Virtues and Drawbacks of Organized Activity

There was little need for professional managers when individuals mostly managed their own affairs, drawing goods and services from family farms and small local businesses. Since the dawn of the industrial revolution some 200 years ago, explosive technological and social changes have produced a world that is far more interconnected, frantic, and complicated. Humans struggle to avoid drowning in complexity that continually threatens to pull them in over their heads (Kegan, 1998). Forms of management and organization effective a few years ago are now obsolete. Sérieyx (1993) calls it the organizational big bang: “The information revolution, the globalization of econo...