managing_change - the art of balancing by peterzhangonline

VIEWS: 102 PAGES: 13



     Anger, alarm, and
 confusion can derail your
                                   Managing Change:
  change initiative. Here’s        The Art of Balancing
    how to build trust—            by Jeanie Daniel Duck
   and get everyone back
          on board.

      New sections to
     guide you through
         the article:
     • The Idea in Brief
     • The Idea at Work
  • Exploring Further . . .

                                   PRODUCT NUMBER 5416
T H E   I D E A   I N     B R I E F                                                               Managing Change: The Art of Balancing

                  Y    ’  just announced a major change
                  initiative that will catapult your company
                                                                                   rately, balance that mobile so all the pieces
                                                                                   move in concert.
                  ahead of your aggressive competitors. Your
                                                                                   Successful balancing requires:
                  employees’ response? Anger, alarm, alienation,
                  and confusion. Why?                                                 • Employee trust, which you build through
                                                                                        predictability—clarifying the company’s
                  Change is intensely personal, requiring each
                                                                                        intentions and ground rules and “walking
                  individual to think, feel, and do things differ-
                                                                                        your talk”—and capability—articulating
                  ently. Change is about managing emotions
                                                                                        the role each person will play in the change
                  traditionally banned from the workplace. Trust
                  is particularly critical to successful change—
                  and particularly difficult to establish in the                      • Employee empowerment—genuinely invit-
                  midst of change. So how do you win your fol-                          ing everyone to co-create the company’s
                  lowers, one trusting employee at a time?                              desired future.
                  Picture your change effort as a delicate mobile                  To create this environment of trust and empow-
                  made up of content, processes, and employees’                    erment, you need a powerful support structure:
                  emotions and behaviors. Instead of breaking the                  a Transition Management Team.
                  mobile into pieces, trying to manage each sepa-

T H E   I D E A   AT       W O R K

                  T    Transition Management Team (TMT)
                  has these responsibilities:
                                                                                      • Ensure congruence of messages and
                                                                                        behaviors. To protect the change effort’s
                                                                                        credibility, the TMT watches for—and
                    • Establish context for change. Via organized
                                                                                        addresses—inconsistencies among
                      discussions throughout the company, the
                                                                                        management’s policies, success measures,
                      TMT spreads word of the organization’s
                                                                                        and rewards (e.g., redirecting managers
                      vision and competitive situation. Individu-
                                                                                        who espouse empowerment but then shoot
                      als and teams can then align their activities
                                                                                        down new ideas).
                      with the company’s new direction.
                    • Stimulate conversation. The TMT orches-                         • Provide opportunities for joint creation.
                      trates early, open-ended conversations                            To provide true opportunity for employees
                      about the change among all parts of the                           to create the company’s future together,
                      company. The pay-off? Breakthrough think-                         the TMT coordinates and supports the
                      ing and new insights—from everyone.                               exchange of information employees need to
                                                                                        make smart decisions and take effective
                    • Provide resources. The TMT assigns specific                       action.
                      authority to individuals, and gives them the
                      resources to do the job properly. The team                      • Anticipate and address people problems.
                      also can kill off projects not contributing to                    Since people issues are at the heart of
                      the larger effort.                                                change, the TMT gathers and distributes
                                                                                        information, horizontally and vertically, to
                    • Coordinate projects. As companies shift                           address concerns about the change effort.
                      into fast-paced change programs, teams and
                      projects proliferate—as does confusion. The                     • Prepare the critical mass. The TMT ensures
                      TMT aligns teams and projects to support                          availability of the resources and strategies
                      the larger change effort, and explains to the                     necessary to replicate and transfer the
                      organization how the pieces fit together.                         learning gained from the change effort.
                  HBR OnPoint © 2000 President and Fellows of Harvard College. All rights reserved.
   T H E            M A N A G E M E N T                                      O F              C H A N G E

                                                                              The Art of
                                                                                               by Jeanie Daniel Duck

        hange is intensely personal. For change to oc-       person’s in charge of the root-canal job, someone
        cur in any organization, each individual must        else is setting the broken foot, another person is
        think, feel, or do something different. Even in      working on the displaced shoulder, and still anoth-
large organizations, which depend on thousands of            er is getting rid of the gallstone. Each operation is
employees understanding company strategies well              a success, but the patient dies of shock.”
enough to translate them into appropriate actions,              The problem is simple: we are using a mechanis-
leaders must win their followers one by one. Think           tic model, first applied to managing physical work,
of this as 25,000 people having conversion experi-           and superimposing it onto the new mental model of
ences and ending up at a predetermined place at              today’s knowledge organization. We keep breaking
approximately the same time. Small wonder that               change into small pieces and then managing the
corporate change is such a difficult and frustrating         pieces. This is the legacy of Frederick Winslow Tay-
item on virtually every company’s agenda.                    lor and scientific management. But with change,
   The problem for most executives is that manag-            the task is to manage the dynamic, not the pieces.
ing change is unlike any other managerial task they          The challenge is to innovate mental work, not to
have ever confronted. One COO at a large corpora-            replicate physical work. The goal is to teach thou-
tion told me that when it comes to handling even
                                                             Jeanie Daniel Duck joined the Boston Consulting Group
the most complex operational problem, he has all             as a vice president in the Chicago office in 1988. She pre-
the skills he needs. But when it comes to managing           viously ran her own consulting firm, focusing on the
change, the model he uses for operational issues             emotional and behavioral impact of change on corporate
doesn’t work.                                                performance. She was trained as a transactional analyst
   “It’s like the company is undergoing five medical         for business and industry and has a master’s degree in
procedures at the same time,” he told me. “One               sculpture from Pratt Institute.

DRAWINGS BY KURT VARGO                         Copyright   1993 by the President and Fellows of Harvard College. All rights reserved.
                                                         MANAGING CHANGE

sands of people how to think strategically, recog-         This approach virtually guarantees that the
nize patterns, and anticipate problems and opportu-      change effort will fail. The assumption of the CEO
nities before they occur.                                and the task force is, “We haven’t said anything
   Managing change isn’t like operating a machine        yet, so we’re not really communicating. We haven’t
or treating the human body one ailment at a time.        sent any messages.”
Both of these activities involve working with a            But the opposite is true. Everything that is or is
fixed set of relationships. The proper
metaphor for managing change is
balancing a mobile. Most organiza-
tions today find themselves under-
                                             Task-force members usually
taking a number of projects as part of
their change effort. An organization
                                           agree: keeping everyone in the
may simultaneously be working on
TQM, process reengineering, em-
                                         company informed is a diversion,
ployee empowerment, and several
other programs designed to improve
                                                a luxury they can’t afford.
performance. But the key to the
change effort is not attending to each piece in isola-   not done sends a message. The original announce-
tion; it’s connecting and balancing all the pieces. In   ment that change is on its way sends a message. De-
managing change, the critical task is understanding      pending on the company’s recent past, the organiza-
how pieces balance off one another, how changing         tion may feel only a mild ripple – or an alarm may
one element changes the rest, how sequencing and         go off. Even the appointment of the task force by
pace affect the whole structure.                         the CEO sends an important message. In any orga-
   One tool that companies can use to provide that       nization, where information is power and access to
critical balance is the Transition Management            information is determined by who attends certain
Team, a group of company leaders, reporting to the       meetings, a task force identifies who does and does-
CEO, who commit all their time and energy to             n’t have power.
managing the change process. When that process              When the task force chooses not to inform the
has stabilized, the TMT disbands; until then, it         rest of the organization about its work, it is saying,
oversees the corporate change effort. Managing           “We’re busy figuring out your future – we’ll tell you
change means managing the conversation between           what it is when we’re ready.” Of course, people ab-
the people leading the change effort and those who       hor information vacuums; when there is no on-go-
are expected to implement the new strategies, man-       ing conversation as part of the change process, gos-
aging the organizational context in which change         sip fills the vacuum. Usually the rumors are much
can occur, and managing the emotional connec-            worse and more negative than anything that is ac-
tions that are essential for any transformation.         tually going on.
                                                            When task-force members put off communicat-

      ere’s the way most companies approach              ing with the rest of the organization, they prevent
      change: the CEO or division head announces,        people from understanding the design principles
      “We have to make some changes around here.         that guided them, the lessons they learned from
The following people are appointed to a task force       previous experience, the trade-offs they had to
to come up with our new design. The task force will      make. They unwittingly prevent the people who
report back to me in 90 days.”                           are expected to implement the change from partic-
   What happens next is predictable. The task force      ipating or buying in. As a consequence, no matter
goes to work, closeting itself away in a meeting         how good the new design turns out to be, it doesn’t
room, putting in long hours to meet the deadline.        produce the expected results.
The members don’t talk with anyone else in the or-          This scenario is common. I saw it played out at
ganization. They’re involved in trying to work out       a large company that was considering restructuring
their own group dynamics and testing a lot of what-      its organization and relocating its headquarters.
ifs. Among themselves, they agree: trying to keep        The executive group working on the project never
everybody else informed is a diversion, a luxury         put out a formal announcement. But that didn’t
they can’t afford. Once the 90 days are up, and it’s     mean that other people in the organization didn’t
time to report to the boss, then the task force will     know something was going on. The words, “Re-
figure out a way to let everyone else know what it       structuring Committee Meeting” appeared regular-
accomplished.                                            ly on the calendars the committee members’ secre-

110                                                              HARVARD BUSINESS REVIEW   November-December 1993
taries kept for them. People noticed that they were        This is particularly true during a change effort,
spending more time on this project than on any oth-      when rumors run rampant. It is important for the
er. And the rumor mill reported that when the com-       messages to be consistent, clear, and endlessly re-
mittee members came out of their meetings, they          peated. If there is a single rule of communications
looked worried.                                          for leaders, it is this: when you are so sick of talking
   The people in the organization had their own in-      about something that you can hardly stand it, your
terpretation: something big is going on because          message is finally starting to get through.
they’re having to spend a lot of time on it. And it        People in the organization may need to hear a
must be horrible because they don’t want to tell us      message over and over before they believe that this
about it.                                                time, the call for change is not just a whim or a
   At the end of nine months, the executive com-         passing fancy. It takes time for people to hear, un-
mittee made its formal announcement – and even           derstand, and believe the message. And if they don’t
that was done in a way that minimized the chance         particularly like what they hear, then it takes even
for conversation. Each member of the committee           more time for them to come to terms with the con-
went to a different location and read from the same      cept of change.
script at a one-hour, companywide meeting held on          From the point of view of the leaders, who have
a Thursday. The announcement was hardly awful:           been working on the change program for months,
the committee had decided to restructure the com-        the message is already stale. But what counts is the
pany and move its headquarters to another city.          point of view of everyone else in the organization.
There were no layoffs, but those people who want-        Have they heard the message? Do they believe it?
ed a job at headquarters would have to relocate. Out     Do they know what it means? Have they interpret-
of a company of 35,000, only about 1,500 employ-         ed it for themselves, and have they internalized it?
ees were directly affected by the decision.                Until managers have listened, watched, and
   After the announcement, there was no time al-         talked enough to know that the answer to all these
lotted for questions and answers, and there was no       questions is yes, they haven’t communicated at all.
discussion about the transition. The executives

didn’t think it was necessary because they were                 ccording to conventional wisdom, change
sending a binder filled with the details to managers            works like this: You start by getting people to
in affected areas the following Monday. They fig-               buy into a new corporate vision, thereby
ured it would be better to wait until all the informa-   changing their attitudes. They will then automati-
tion was available than to try to answer questions       cally change their behavior, which will result in
immediately after the announcement.                      improved corporate performance. After seeing this
   When it came time to implement the decision,          improvement, they will confirm their commit-
the company paid the price for its communications        ment to the corporate change program, and the suc-
mistakes. Managers and workers felt alienated and        cess spiral will continue.
devalued. Their opinions had never been sought;            This may have occurred in some company some-
their concerns and feelings had never been consid-       where. But more typically, managers launching a
ered. Managers did not feel prepared to handle the       change program want the troops to get excited; they
barrage of questions they encountered that Mon-          want their team to have “a winning attitude.” So
day, and no one was comforted by a
binder. Some people voted with their
feet and simply did not make the
move to the new headquarters. Oth-
                                                By now, the troops have been
ers were even more destructive: they
disengaged from any real effort to
                                                    through so many change
make the company successful but
stayed on the payroll.
                                              programs that they’re skeptical.
   The crucial lesson here is that
management is the message. Everything managers           when announcing the program, they “go for love,”
say – or don’t say – delivers a message. Too many        seeking to get people to believe in the new vision.
managers assume that communications is a staff             Unfortunately, it’s not realistic to expect that
function, something for human resources or public        kind of response in most companies these days.
relations to take care of. In fact, communications       By now, the troops have been through so many of
must be a priority for every manager at every level      these programs that they’re skeptical. Companies
of the company.                                          today are full of “change survivors,” cynical people

HARVARD BUSINESS REVIEW   November-December 1993                                                             111
                                                         MANAGING CHANGE

who’ve learned how to live through change pro-              The worker who had asked the question was im-
grams without really changing at all. Their reaction     pressed. The CEO was elated. The plant manager
is the opposite of commitment. They say things           was terrified. What had he learned that morning
like, “I’ll believe it when I see it,” or, “Sure, this   that was worth $995,000? Who was going to help
sounds great, but what happens when we don’t             him make decisions involving that much money?
make the numbers?” Of course, there are always           Could he expect any mercy when he made his first
some enthusiastic people. All they need is permis-       $250,000 mistake? The CEO had made the dramat-
sion to go off and try the new approach. But for the     ic gesture of going for love, but he’d neglected the
others, the new program is just another manage-          crucial element: he had not prepared the plant man-
ment fad in an endless series of management fads.        ager to handle so much responsibility.
   This reaction from so many employees illus-              Empowerment does not mean abandonment.
trates the real reason so many change programs fail:     Giving people permission to do something differ-
                                                                         ently is not helpful if they are unable
                                                                         to do it. That permission just sets
Empowerment doesn’t mean                                                 them up to fail. Setting the context
                                                                         for change means preparing the play-
abandonment. Setting the context                                         ers, understanding what they do and
                                                                         don’t know, working with them,
for change means understanding                                           watching their performance, giving
                                                                         them feedback, creating an ongoing
what employees do anddon’tknow.                                          dialogue with them.
                                                                           Compare this CEO’s behavior to
                                                                         that of a sales vice president who de-
this model of change doesn’t correspond to reality.      cided that her regional directors should run their
In most companies, the real context for change is        operations independently, as long as business objec-
exactly the opposite. Top management should start        tives were met and corporate values honored. She
by requiring a change of behavior, and when that         discussed this at length with all the directors, who
yields improved performance, the excitement and          were quite happy with her decision. But on reflec-
belief will follow.                                      tion, she realized that some directors were more ex-
  The first change in behavior should be that of the     perienced than others and that she would need to
top executives. Leaders need to ask themselves, “If      work with each one differently. She then set up
we were managing the way we say we want to man-          one-on-one meetings with each director to find out
age, how would we act? How would we attack our           what his plans were and how he wanted to interact
problems? What kind of meetings and conversa-            with her. During this round of conversations, she
tions would we have? Who would be involved?              reached explicit agreements with each director
How would we define, recognize, compensate, and          about what kinds of decisions or problems he
reward appropriate behavior?” As leaders and fol-        would like help with, how he would update her, and
lowers work side by side to develop the answers to       how the directors would keep each other informed.
these questions, they create their future together.      As a result, her role as coach was tailor-made to
  For example, one popular management tech-              each person on her team; each plan took into con-
nique is to push decision making down to the low-        sideration her comfort with each director’s abilities
est appropriate level. It sounds simple, deceptively     as well as each director’s desires and preferred man-
simple. I was present one morning when a newly           agement relationship.
enlightened CEO went to a factory for an all-em-            Over and over, I’ve witnessed the same hard
ployee meeting. He talked about empowerment              truth: When it comes to change, people don’t be-
and candor and the need to put all the issues on the     lieve in a new direction because they suspend their
table. He then invited questions from all present        disbelief. They believe because they’re actually see-
about whatever was on their minds. One brave             ing behavior, action, and results that lead them to
worker raised his hand and asked why it was that         conclude that the program works.
the plant manager could be responsible for equip-           Companies cannot legislate their employees’
ment worth millions of dollars but only have sign-       feelings, but companies do rent their behavior. It
off authority of $5,000.                                 sounds crass, but it’s true. “Winning attitudes” do
  “Good question!” the CEO instantly responded.          make a difference, and it is important to market
“I believe in empowerment so much that I’ll make         new ideas and approaches within an organization
his sign-off authority $1 million.”                      very carefully. But even that kind of approach to

112                                                              HARVARD BUSINESS REVIEW   November-December 1993
change won’t convert the hardened change sur-
vivors. With all employees, managers have more
leverage over what they do than how they feel.

    or decades, managers and workers have been
    told to check their feelings at the door. And
    that’s a big mistake. It’s one thing to say that
behavior is more accessible to managers than feel-
ings are; it’s another thing altogether to say that
feelings have no place at work.
  Change is fundamentally about feelings; compa-
nies that want their workers to contribute with
their heads and hearts have to accept that emotions
are essential to the new management style. The old
management paradigm said that at work people are
only permitted to feel emotions that are easily con-
trollable, emotions that can be categorized as “posi-
tive.” The new management paradigm says that
managing people is managing feelings. The issue is-
n’t whether or not people have “negative” emo-
tions; it’s how they deal with them. In fact, the
most successful change programs reveal that large
organizations connect with their people most di-
rectly through values – and that values, ultimately,
are about beliefs and feelings.
  I saw a classic example of this at a large company
with over 100,000 employees worldwide, seeking
to develop a values statement as a way to bring its
people together. The executive team had made an
intellectual commitment to the notion of values
but had shown little progress over several months –
until an accidental breakthrough one day moved
them to a different level. The executive team was
gathering for a meeting, but the official agenda was
delayed. To fill the time, they got into an informal
conversation, asking each other the questions,
“What helped you form your values? How did you
come to realize that you had particular values?”
  What started as an informal discussion gradually           Out of that discussion came a wider conversation
took over as the agenda for the meeting. As they          that touched on what they had learned growing up
went around the table, one of the men told a story        about emotions, human connections, and values
about his youth in another country and about his          and how these qualities shaped their leadership
grandfather, who had been an important person in          style and behavior within the corporation. Even the
his life. The more he talked, the more he remem-          men who had looked to affectionate and emotional
bered what the relationship had meant to him. As          role models growing up came to realize that in cor-
he told the story, he started to cry.                     porate life they steered clear of emotions – because
  In most corporate settings, it is strictly taboo for    that was the operating norm. Changing that norm
a senior executive to cry, to show tenderness or          became one of the group’s explicit targets.
grief. This behavior is something that executives            When an organization either denies the validity
avoid at all costs. But at that meeting, when the         of emotions in the workplace or seeks to permit on-
man started to cry, all the others felt a stronger con-   ly certain kinds of emotions, two things happen.
nection to him. They acknowledged their own feel-         The first is that managers cut themselves off from
ings toward someone who had played a similar role         their own emotional lives. Even more important,
in their lives. Or they realized that they had missed     they cut off the ideas, solutions, and new perspec-
out by not having had such a relationship.                tives that other people can contribute.

HARVARD BUSINESS REVIEW   November-December 1993                                                          113
                                                          MANAGING CHANGE

   The corollary is when managers are unwilling to        mates and her willingness to ask for help. The team
let themselves or their employees experience “neg-        came to realize that the conversion program was
ative” emotions, no matter how upsetting or diffi-        hard for everyone. Moreover, from listening to the
cult the situation may be. It’s true that getting a       complaints, they began to give each other ideas
group of people together and allowing them to vent        about ways to handle tough situations. Finally, as
their emotions can initiate a negative spiral. But it’s   they told each other of the little victories, they be-
also true that there are simple and effective ways to     gan to feel like they were part of a winning team.
tell people, “You can visit Pity City, but you aren’t     When the project was over, they felt even better
allowed to move there.”                                   about themselves and their organization than they
   I saw this process at work in an information           had at the beginning.
systems department of a company that was under-

going a large and complex computer conversion.                     ne of the paradoxes of change is that trust is
Rather than denying that the rest of the organiza-                 hardest to establish when you need it the
tion was making huge demands on the department                     most. There are some companies that em-
and that everyone was under enormous stress, the          ployees trust. But if a company is in trouble, or if
project director decided to acknowledge just how          it is in the middle of a change effort, lack of trust
difficult the conversion really was. The first thing      automatically emerges as a serious barrier.
he did was to have t-shirts made, large enough to fit        This is explained in part by Maslow’s Pyramid,
over people’s work clothes. On the front were the         the hierarchy of human needs that was identified
words, “Yes, it’s hard.” On the back it said, “But we     by the psychologist Abraham Maslow. At the top of
can do it.”                                               the pyramid, where people would like to be focus-
   The project director also scheduled meetings on        ing, is our need to be self-actualized, to realize and
Tuesday and Friday afternoons with the team and           integrate our talents, intellect, values, and physical
their primary users. For the first 15 minutes, the        and emotional needs. In the new work environ-
group would visit Pity City. People would go on and       ments, where companies are offering to empower
on with the usual gripes that come up at a difficult      employees, self-actualization is being promoted.
time. As a group, they could acknowledge just how            At the bottom of the pyramid, Maslow put physi-
horrible all this really was – but only for 15 min-       cal security, the need everyone has to feel safe from
utes. Then for the next 15 minutes, the meeting be-       danger, harm, or risk. In the new competitive envi-
came a brag session, where people would showcase          ronment, this kind of security is exactly what man-
all the little victories – the things that had worked,    agement cannot offer. With heightened competition,
ways they had delighted their customers, problems         downsizings, and new demands from customers,
they had turned into successes. The one rule was          there is virtually no job security.
that everyone had to participate at least once every         In effect, then, managers are sending their em-
week in both the griping and the bragging.                ployees conflicting messages. On the one hand,
                                                                           they are encouraging them to go for
                                                                           the top of Maslow’s Pyramid, to real-
Once a week, people could visit                                            ize their greatest aspirations. On the
                                                                           other hand, managers are telling
Pity City. But they weren’t                                                their employees that their most ba-
                                                                           sic needs for safety and security are
allowed to move there.                                                     not guaranteed. No wonder, in such
                                                                           a climate, that trust becomes a criti-
                                                                           cal issue.
  Over the ten months of the project, these ses-             Trust in a time of change is based on two things:
sions built up a remarkable degree of camaraderie         predictability and capability. In any organization,
among the team members. One woman, in particu-            people want to know what to expect; they want pre-
lar, illustrated why it was important to admit feel-      dictability. That’s why, in the middle of change,
ings in the workplace. When the sessions started,         trust is eroded when the ground rules change. This
this woman told the project director that she didn’t      is particularly true in large, previously successful
want to participate. She thought that others may          corporations. Under the old psychological contract
need an emotional crutch, but she didn’t. The su-         between the company and its employees, predict-
pervisor told her that she still had to participate.      ability consisted of an implicit agreement: in return
  The woman discovered that these meetings did            for years of service, tenure, and loyalty, the employ-
make a difference in how she felt about her team-         ees could count on employment. The career path

114                                                               HARVARD BUSINESS REVIEW   November-December 1993
was also predictable. For example, an engineer knew     ing; and each side has to believe that the other is
that his or her work life would progress with a cer-    capable of playing the new role. In the old organiza-
tain regularity, starting by working on a small proj-   tion, capability was defined in terms of deliver-
ect, then a larger project, leading to an assignment    ables. Bosses would say, “I don’t care how you get it
as an assistant manager, then on to being a man-        done; just produce the results I want.” Now man-
ager. There was a map that people could follow to       agers realize that if their processes are aligned and
rise within the organization. With
layoffs and downsizing, the old con-
tract has been broken. Not only is
the guaranteed career path gone, but
                                            How the team performs, whether
so is the guarantee of employment.
   In this new context, people are still
                                                 or not it wins, and what the
looking for predictability. But pre-
dictability has to take a different
                                              future holds is as much in the
form and apply to different situa-
tions. Predictability consists of in-
                                             hands of employees as leaders.
tention and ground rules: what are
our general goals and how will we make decisions?       in control, the desired results will follow. To make
The more leaders clarify the company’s intentions       this happen, managers and employees must identi-
and ground rules, the more people will be able to       fy needed capabilities and negotiate the roles and
predict and influence what happens to them – even       responsibilities of those involved in the process be-
in the middle of a constantly shifting situation.       fore each will trust the situation.
   An example of a manager establishing predictabil-       Rather than just checking on milestones and
ity occurred at a large electronics company when        timetables, managers should ask how the work will
the head of a division announced his determina-         get done. They may occasionally attend cross-func-
tion to adopt a new style of management. At the         tional team meetings to listen to the participants
start of the program, he talked with all the man-       talk about how the project is going, or they may
agers and supervisors to explain the new direction.     talk with others across the different functions to
He told them, “If you believe you cannot manage in      get feedback on the project. And, by the same to-
this new way, and you come and tell me, I will find     ken, those undertaking the project may want to ne-
a useful job for you somewhere in the company. But      gotiate with the manager or others to access dif-
if I discover that you aren’t managing within the       ferent capabilities, perspectives, and experiences.
new plan, there’s no such guarantee.”                   When each side understands the needs, capabilities,
   When he started the program, one or two people       and objectives of the other, trust can be built.
came forward to say they couldn’t manage in the            One of the consequences of this new approach is
new style, and he found them new jobs. Several oth-     a shift to interdependency. Employees are no longer
ers didn’t come forward but were identified as non-     dependent on the company in a hierarchical rela-
performers. As promised, he got rid of them. Then,      tionship. Now the company and its employees are
one year later, the division head spoke to the group    interdependent; and the employees themselves are
again. This time, he said, “We’ve been at it for a      interdependent. In essence, the company is creating
year. Now everyone knows what we’re talking             a new team and offering its people a fair shot at
about, and we’re starting to gain momentum. Be-         playing on the team. How the team performs,
cause we have some responsibility for your being        whether or not it wins, and what the future holds is
the kind of manager you are, and we have changed        as much in the hands of the players as the leaders.
the rules in the middle of your career, I’m going to    The only real security the company has to offer is
reissue my invitation. If you don’t think you can       a chance for people to work together to create the
manage in this new way, come and see me.”               future and to achieve their goals.
   As a result of this second invitation, more people

came forward. The program picked up even more                  n organization, like a mobile, is a web of in-
momentum, and managers and employees felt that                 terconnections; a change in one area throws
they understood both the company’s intentions and              a different part off balance. Managing these
its ground rules for creating change.                   ripple effects is what makes managing change a dy-
   The second part of the equation is capability. To    namic proposition with unexpected challenges.
trust an organization, both managers and their re-         Consider, for example, what typically happens
ports must define the capability that each is provid-   when companies undertake process reengineering.

HARVARD BUSINESS REVIEW   November-December 1993                                                         115
                                                          MANAGING CHANGE

For the sake of simplicity, let’s consider the best of    zational system are not considered in concert, they
circumstances. The cross-functional team has met          will inevitably clash. In the case of process re-
its objectives for cutting cycle time and costs while     design, when the entire mobile is not balanced,
increasing productivity and customer satisfaction.        reengineering is reduced to a mapping exercise.
Functional chimneys are turning into pipelines.

Wasted time and unnecessary activities are a thing                 anaging change means balancing the mo-
of the past. Decisions are based on what’s best for                bile; the question is how to do it. One
the overall business. The pilot projects proved it                 way is to depend on managers scattered
can work; the executive champions are thrilled; it        throughout the organization to have a shared
looks like it’s time to institutionalize the new pro-     awareness of how the various parts need to interact
cess. Teams that get this far should be both com-         and for everyone to trust that this general percep-
mended and forewarned.                                    tion will ultimately pull the organization together.
   Getting through the pilot stage of a change pro-       Of course, that’s assuming an awful lot. Another
gram is a long way from a companywide scale-up.           option that has worked well in a number of compa-
A “not-invented-here” mentality is often more in-         nies is a Transition Management Team.
tense within companies than it is with outsiders.            What the TMT is not is as important as what it is.
But the issues surrounding process reengineering          It is not a new layer of bureaucracy or a permanent
are not just a matter of internal competition;            job for fading executives. It is not a steering com-
they involve a complex set of questions that affect       mittee, which is usually a body that convenes peri-
systems as well as individuals.                           odically to guide those who are actually doing the
   Functional managers find themselves wondering,         work of the organization.
“What happens to me now? Is there a job for me? Is           The TMT oversees the large-scale corporate
it one I want? How do I prove my value in this new        change effort; it makes sure that all the change ini-
environment?” People who are accustomed to                tiatives fit together. It is made up of 8 to 12 highly
managing budgets, allocating resources, and being         talented leaders who commit all their time to mak-
actively involved in projects are likely                  ing the transition a reality. The team members and
to take a dim view of redesigned processes that           what they are trying to accomplish must be accept-
give cross-functional teams the decision-making           ed by the power structure of the organization. For
authority they had previously enjoyed. The transi-        the duration of the change process, they are the
tion from being a hands-on leader to a talent bro-        CEO’s version of the national guard. The CEO
ker is not easy.                                          should be able to say, “I can sleep well tonight; the
   Meanwhile, team members have questions of              transition team is managing this.”
their own: “If we take all the risks, what are the re-       The CEO’s job is to be a visible champion for the
wards? What happens when the project is over?             transformation, articulating the context and ratio-
What does my career path look like if I go in and out     nale for the new corporate direction. Working out
of a functional organization depending on which           the guidelines and ensuring that they are under-
project I’m working on?” Evaluation, compensa-            stood and used is the TMT’s task. This means that
tion, and career development all need to be re-           the team captain is essentially the transition COO.
                                                                          As such, he or she must have proven
                                                                          talent and credibility, understand
A Transition Management Team                                              the long-term vision of the company,
                                                                          have a complete knowledge of the
is not a new layer of bureaucracy                                         business, and have the confidence of
                                                                          the CEO.
or a job for fading executives.                                             When the change process has sta-
                                                                          bilized and moved to a phase of
                                                                          continuous improvement, the TMT
designed in light of new process requirements. If         disbands. Until then, the team has the overall
they are not, there is little incentive for individuals   responsibility for the transition. It reports to the
to use the new processes even if they do work.            CEO regularly, but the CEO doesn’t run the team
   Human resources is not the only support system         on a day-to-day basis. The TMT has funding author-
that must be reevaluated. The organizational mo-          ity, the power to stop projects that are out of sync
bile has many dimensions – culture, strategy, edu-        with the overall direction of the change effort, and
cation, information systems, technology – and they        input into evaluations of projects and the individu-
all need to hang together. If the parts of the organi-    als or teams who perform them.

116                                                               HARVARD BUSINESS REVIEW   November-December 1993
   In addition to the overall captain, the TMT must      will be necessary to make it happen. For example,
include a person who pays particular attention to        if the company has always thought of itself as an
the emotional and behavioral issues raised by            engineering-driven, product-focused organization,
change, making sure that they are neither ignored        and the early strategy work makes clear that the
nor compromised; team captains of the major ini-         company must become a customer-focused service
tiatives, such as information technology, process        organization, the responsibility of the guide is to
redesign, and compensation; and the team captains        ensure that the TMT carries this paradigm shift
of human resources and communications. All teams,        deep into the organization.
including the human resources and communications            The TMT has eight primary responsibilities.
teams, are cross-functional and drawn from differ-       This team is not, however, solely accountable for
ent levels in the organization.                          fulfilling these tasks.
   The TMT manages the operational issues of the            Establish context for change and provide guid-
change effort. In addition, it needs to anticipate and   ance. The CEO and other executives establish the
manage the reactions, questions, and concerns that       company’s strategic vision. The TMT makes sure
change generates. The TMT must be sure that the          that everyone in the organization shares a common
coordination and communication are congruent             understanding of that vision and understands the
and ample. Ideally, the TMT captain could oversee        company’s competitive situation. By organizing
all these elements, making sure that the opera-          discussions throughout the organization, the TMT
                                                                         spreads the company’s vision and
                                                                         competitive situation so that indi-
Most corporate change efforts                                            viduals and teams can accurately
                                                                         align their own activities with the
are fundamentally about moving                                           company’s new overall direction.
                                                                            Stimulate conversation. Most old-
information across old and                                               er, larger companies have formalized
                                                                         their operations in such functional
obsolete boundaries.                                                     isolation that conversations across
                                                                         levels or functions rarely take place.
                                                                         Instead, people have grown accus-
tional pieces fit together and that the emotional is-    tomed to presentations followed by inquisitions.
sues are addressed openly and clearly. But practical     Moreover, when resources are scarce and time pres-
experience suggests that in most large change pro-       sures are severe, conversation often seems a luxury.
grams, the emotional issues are likely to get short      Yet most change efforts are fundamentally about
shrift. In setting up a TMT, companies should adopt      moving information across old and obsolete bound-
a fail-safe approach: create a position to oversee the   aries. Consequently, organizing early conversations
emotional and behavioral issues unless you can           between different parts of the company and making
prove with confidence that you don’t need one. The       those conversations an important, sanctioned part
point is not to make operational changes hostage to      of the change process is a critical task for the TMT.
some emotional ideal; the point is to acknowledge        Early, open-ended conversations often result in the
the importance of the emotional issues and to rec-       most productive outcomes; conversely, project
ognize that unless someone owns an issue, no one         leaders who press for early results and close off con-
is responsible for it.                                   versation inside the company usually get to the end
   For that reason, creating the position of a guide     of a project with little to show in the way of new in-
can be an important safeguard. While the TMT cap-        sight or real breakthrough thinking.
tain and the captains of the cross-functional teams         Provide appropriate resources. The TMT has two
are still responsible for identifying and addressing     types of significant power: the power to allocate re-
the emotional and behavioral issues that they see        sources to make things happen and the power to
emerging, the guide makes sure that these issues         kill projects that are no longer needed. In the first
are identified and discussed. This individual must       category, the TMT does command time and bud-
not only understand the business but also be sensi-      gets. Frequently, change efforts falter because the
tive to people issues and be both well respected and     people who are drafted to play important roles in
well connected within the organization. He or she        leading teams work only on the margins. As a re-
must think strategically about the transformation        sult, the team never has a real process owner or
that the company must undergo and the underlying         receives adequate attention. The TMT can change
beliefs, behaviors, skills, and support systems that     that; it can designate individuals who take on the

HARVARD BUSINESS REVIEW   November-December 1993                                                           117
                                                          MANAGING CHANGE

authority and are given the time and resources to do      information they need to make correct decisions
the job properly.                                         and take appropriate actions. Clearly, the TMT can-
   The TMT can also kill off old projects that no         not do all the communicating and teaching; it is the
longer have a high priority. In many organizations,       designer, coordinator, and support source for that
the operating maxim is, “Old projects never die,          learning and creation.
they just get underfunded.” Nobody is willing to            Anticipate, identify, and address people prob-
make the tough decision to cut a project that has         lems. There is a reason why the guide and the com-
outlived its usefulness. The result is a lot of proj-     munications and human resources teams are all
ects that are more dead than alive but still distract-    represented on the TMT: people issues are at the
ing people and using resources. The TMT needs to          heart of change. For example, a change that in-
be the tough-minded terminator of these projects.         volves delayering, changing job descriptions, or
   Coordinate and align projects. As company’s            compensation also requires advance notification
shift into fast-paced change programs, task forces,       and long lead time. Communications and human
teams, and projects proliferate. One result is a great    resources are critical to success, yet there are rou-
deal of enthusiasm, energy, and activity. Another is      tine shortages of talent, diversity of perspective,
confusion. Even if every activity is valid and neces-     dollars, and share of mind. Cross-functional teams
sary, the problem is that they don’t seem to fit to-      in communications and human resources represent
gether. The TMT has two tasks: coordinating and           an opportunity for gathering and distributing infor-
aligning the projects into building blocks that fit to-   mation, both horizontally and vertically, through-
gether; and communicating to the whole organiza-          out the organization.
tion how the pieces align so that others can see the        Prepare the critical mass. Given the complexity
larger picture and appreciate that there is a coher-      of scale-up from creating the pilot to making it the
ent plan.                                                 norm, it is important to design into the work from
   Ensure congruence of messages, activities, poli-       the very beginning the resources and strategy nec-
cies, and behaviors. One of the major complaints of       essary for replication and learning transfer. Most
people in organizations undergoing a transition is        teams will need guidance on how to do this as well
that management doesn’t “walk the talk.” They             as help to make sure that what they are doing fits
say “empowerment” – and then shoot down every             with other activities.
new idea that comes from their employees. The               The organizing element of all these activities is
TMT’s job is to be on the lookout for inconsisten-        the hard work of educating, training, and preparing
cies that undermine the credibility of the change ef-     the organization to think, feel, and act differently.
fort. The message, the measures, the behaviors, and       In companies where change is successful, the lead-
the rewards must match.                                   ers look at the whole mobile and the congruence
   Provide opportunities for joint creation. Most         of operations and emotions. It is far too easy to
change programs today embrace the concept of em-          equate change with specific tasks. When the TMT
powerment but never get around to defining it. In         manages both the content and the process, the oper-
some companies, empowerment essentially is, “Do           ations and the emotions, it provides a powerful
what I say and act as if you like it.” In others, it is   lever for change.
interpreted to mean, “Everybody gets to vote on ev-         The real contribution of leadership in a time of
erything.” My working definition of empowerment           change lies in managing the dynamics, not the
is a true opportunity for employees throughout the        pieces. The fundamental job of leadership is to deal
company to create the future together. That means         with the dynamics of change, the confluence and
ensuring that all employees, whether managers, di-        congruence of the forces that change unleashes, so
rectors, factory workers, or technical staff, have the    that the company is better prepared to compete.
                                                          Product no. 5416

118                                                               HARVARD BUSINESS REVIEW   November-December 1993
E X P L O R I N G   F U R T H E R . . .                                         Managing Change: The Art of Balancing

                    “Leading Change: Why Transformation              may require companies to jettison formulas
                    Efforts Fail” by John P. Kotter (Harvard Busi-   that proved successful in the past, putting
                    ness Review, March–April 1995, Product no.       enormous stress on the organization. The
                    4231)                                            authors caution managers against trying to
                                                                     solve all problems for employees and offer
                    Whereas Duck describes eight core responsi-
                                                                     ideas for tapping into the organization’s col-
                    bilities of a Transition Management Team,
                                                                     lective intelligence. Practical advice for lead-
                    Kotter maps these responsibilities onto a
                                                                     ers engaged in this kind of effort includes
                    chronological model that members of any
                                                                     watching for signs of work avoidance, expos-
                    TMT will find helpful. In Kotter’s view, all
                                                                     ing conflict, and building employees’ collec-
                    transformation efforts require attention to
                                                                     tive self-confidence.
                    these key stages: 1) establishing a sense of
                    urgency, 2) forming a powerful guiding coali-
                                                                     Creating Followers: Framing Change Initiatives
                    tion, 3) creating a vision, 4) communicating
                                                                     to Maximize Employee Participation, HBR
                    the vision, 5) empowering others to act on the
                                                                     OnPoint Collection (Harvard Business Review,
                    vision, 6) planning for and creating short-
                                                                     February 2000, Product no. 4029)
                    term wins, 7) consolidating gains and further-
                    ing change, and 8) institutionalizing new        This Harvard Business Review OnPoint
                    approaches. Skipping any of these steps to try   Collection builds on Duck’s themes of why
                    to accelerate the process, or making critical    successful change hinges on broad and deep
                    mistakes at any stage, will hamstring the        employee empowerment and innovative
                    change effort. Typical pitfalls that leaders     management of emotions in the workplace.
                    may face during any of the stages include        The collection includes the following three
                    lacking a clear, compelling vision and declar-   articles from HBR: “Changing the Way We
                    ing victory too soon.                            Change” by Richard Pascale, Mark Millemann,
                                                                     and Linda Gioja, “Why Do Employees Resist
                    “The Work of Leadership” by Ronald A.            Change?” by Paul Strebel, and “Reaching and
                    Heifetz and Donald L. Laurie (Harvard Busi-      Changing Frontline Employees” by T. J. Larkin
                    ness Review, January–February 1997, Product      and Sandar Larkin.
                    no. 4150)
                                                                     This collection’s articles describe three
                    “Managing Change: The Art of Balancing”          major ways to motivate everyone to mobilize
                    emphasizes the importance of employee trust      for change: 1) Look for leadership from lower
                    and accountability for successful change.        levels of your company, rather than issuing
                    “The Work of Leadership” takes a closer look     all directives from the executive suite;
                    at employee accountability, providing six        2) overhaul the way you communicate in new
                    suggestions for encouraging it throughout        ways with frontline employees—they are your
                    your organization. In particular, Heifetz and    company’s most important change agents;
                    Laurie point out the need for organizations      and 3) ensure that your change initiative
                    to engage everyone in radically new ways of      addresses the often hidden psychological and
                    thinking and acting when faced with prob-        social issues that shape workers’ relationships
                    lems requiring profound change. This process     with employers.

                                    HARVARD BUSINESS SCHOOL PUBLISHING
                                                      U.S. and Canada: 800-988-0886
                                                    617-783-7500 • Fax: 617-783-7555

                                      To learn about other products from HBR OnPoint, please visit:

To top