Leading Change: Nine Keys to Success

Posted on Posted in Corporate Culture, Leadership, Organization Design and Process Improvement

Leading change is not show-and-tell! There are plenty of books that hold up Toyota or other great companies as a model and essentially say “Be like that!” But for many companies this is a bit like holding up a picture of a bare chested Arnold Schwarzenegger or a bikini clad model and saying “There it is. Be like that!” It should only be so easy. Having a model of a great culture or great body is fine, but getting there is something entirely different.

Virtually every management team is leading some change process. But, if we are honest, we must admit that most are not very good at it. I would like to share a few of the keys that I have seen produce positive results.

1. A Goal to Focus the Mind

Most significant change efforts require many different changes – training, process improvements, new technology, etc. Despite their complexity it is a powerful motivating force to have one critical goal on which to focus.

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The Mars Deep Water Drilling Platform

When I worked with Shell Oil Company in Houston we assisted in the design of the deep water exploration and production organization in New Orleans. At that time it required, on average, eight years from the time property was leased until oil flowed to market from that property. The senior management team assigned a design team the goal of cutting that time in half. This was a highly complex process involving geological research, economic analysis, engineering of exploration and then production platforms, etc. The design teams initial reaction was predictable: “That’s impossible! We bust our butts now!” What they really meant was that the goal was impossible the way we do things today. They couldn’t get there by working harder or running faster. They were right. So, they had to completely redesign the process, the organization of people, job definitions, who made decisions, and dozens of other factors that impacted the cycle time. The result was that they reduce the cycle time by more than fifty percent!

Sometimes exceedingly simple goals can result in both complex and dramatic change.

2. A Champion on the Senior Team

Significant change requires significant leadership. If your goal is simply to improve the performance of one work cell or team in a manufacturing plant it is adequate to have someone train the team and its leader in the PDCA cycle and make small improvements. However, if the goal is to change the culture of a company, or to change the performance of the core processes that impact economic performance, you need a champion at the senior management level who can cut through organizational boundaries and represent the interests of the senior management team, not simply an operating or functional team.

It is important that folks down in the organization see that the change initiative is being led by a senior manager who can bring problems and share results with the senior management team. This individual must educate him or her self in lean management and change management methodologies. This is the person who should be the key partner with an external consultant or adviser.

3. The Habitat for Humanity Principle

The first rule of change management is that we will implement and be committed to that which we helped to create. The more people are involved in the design of change, the more commitment there will be to that change and the more likely that it will be sustained and continuously improved.

habitat-wall-raising WORLD HABITAT DAYThere is what I call the Habitat for Humanity principle. Habitat for Humanity builds homes for the disadvantaged. They learned an important lesson about sustainability. They do not just build a home and give it to a family. It is a requirement that members of the family must participate in the building of the house. They hammer nails, carry wood and use the paint brush. By doing this they are far more likely to care for and maintain that home. Their participation makes the home and the community more sustainable. The exact same thing is true of change within organizations. Habitats mission statement says “We view our work as successful when it transforms lives and promotes positive and lasting social, economic and spiritual change within a community; when it is based on mutual trust and fully shared accomplishment; and when it demonstrates responsible stewardship of all resources entrusted to us.”  This would be a good mission statement for almost any corporate change process. It must not only move equipment around and speed a production process. It must transform the lives of those within the organization. It must promote positive and lasting social, as well as economic change. And, those who live in the house, the organization, must participate in creating the design of their own organization. Then you will have commitment.

The organization design should be done by the “world’s greatest experts” and those who design should implement that which they have designed. Enlarge the circle of involvement as you implement but do not lose the understanding of those who did the analysis and design of the new system. Those on the design teams must be involved in the implementation of that which they designed.

4. Use Whole-System Thinking versus Reductionism

The quote from Habitat above reflects another key learning: they understand whole-systems. They view their work as promoting lasting social, economic and spiritual change within the community. That sounds a lot different than “we build houses for poor folks.” It reminds me of the story about the two stone masons working side by side. One complains that he is just putting in place one more piece of stone. The second proclaims that he is building a cathedral that will lift souls toward heaven and glorify God. Whole-systems thinking begins with an understanding of the worthy purpose that connects the mere pieces of stone.

The understanding that Habitat impacts social, economic and spiritual change in the community is a good lesson for anyone managing change. You are more likely to succeed if you understand the larger social, technical and economic system of the organization and understand how interdependent they are. You cannot just improve the work process or value stream in a sustainable way without changing the social system (skills, decision making, organization of people, etc.) and the financial system is dependent on those changes.

The so-called “modern management” of Alfred Sloan and Peter Drucker employed reductionist reasoning that assumed the whole was simply the sum of its parts. In other words, the total performance of an organization could be understood and improved by improving manufacturing, engineering, marketing or finance by independently focusing on each. Based on this reasoning you have a vice president of each function on the senior management team and each was independently accountable for their department. This made sense if the theory of reductionism, that the whole was simply the sum of its parts, was true. Unfortunately, it is not true.

The human body and a corporation are similar in that the successful operation of each is determined not only by the effective functioning of their parts, but by the complex interaction of those parts that result in something far greater than the sum of the parts. In fact, remove the parts of the human body and they are essentially useless. Similarly, the value of manufacturing is completely dependent on the performance of sales and marketing; and the sales and marketing can and should greatly influence the nature of what is manufactured. They are sub-systems of the whole.

Whole-system thinking is essentially simple. The microprocessor is a technical thing. It stands alone. Or, does it? Your smart phone, your television, your computer and every other device that has forever altered human relationships, human connections, are all based on the microprocessor. Technical and social changes move together and all have economic consequences. The exact same thing is true in the inner workings of a corporation, just as it is in the larger society. Understanding these relationships is essential to managing change in the organization. Too many change management processes fail to make the connection.

5. Optimize Self-Control and Teamwork

It is a law: The degree to which self-control and teamwork are optimized at the first level of work, the greater will be the motivation to improve, solve problems, and the work will flow with few interruptions. In the world of socio-technical systems this principle states that you should design for variance control at the point closest to the origin of deviation.

There is intimacy between individuals, social bonds; and, there is intimacy with the product. The craftsman working with his hands, creating a musical instrument or piece of furniture, has an intimate feel or connection to the product of his craft. That intimacy equals motivation and a desire to improve.

Some believe that we are living in the Golden Age of luthiers. Tony Klassen makes custom, handmaid guitars. With every guitar he makes he posts a YouTube video of his playing of that instrument. It is obvious that he has an intimate relationship with each guitar he crafts. He has that relationship because he has control of each step in the process. How many of your employees have a similar relationship to their work? How can you design the work system to optimize control at the point of deviation?

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Anthony R. Klassen of ARK New Era Guitars

On the family farm and in the craft shop workers worked in small family units and they controlled their own work. This basic form of teamwork, social organization, survived for millions of years until the industrial revolution when it was interrupted by Ford’s model of mass production. In mass production the work was controlled by engineers or managers and that went to the extreme when Harry Bennett hired convicts and thugs to beat workers into submission. Isolation and removing control results in helplessness, depression, and the sane response is to rebel for the sake of one’s sanity. That was the root cause of the union movement.

The miracle of lean manufacturing, when implemented properly, is that control is restored to the workers and they are organized into teams to control their own work and seek improvement. That should be the goal of any workplace design.

6. Create a Learning Community

If you have a design team that designs the ideal future work process and the social support systems, you have created the beginning of significant improvement. But, it is just the beginning! It is a certainty that as you begin to implement the new process you will discover steps that need to be changed, added, decisions that need to be assigned to different teams, additional training that is required, or any of a hundred other possible improvements. It is sort of like implementing a new health care law!!! As you implement you discover errors.

Every successful and sustainable change process in which I have been involved creates an internal learning community, the managers and change agents who are implementing the new design. They engage in weekly debriefs to share what is working and what they are learning. This community, free of guilt or punishment, but seeking continuous improvement, will be essential to gaining the maximum value of any change process.

7. Practice Four to One: Reinforce Success!

Toyota practices four-to-one. Where does this come from and what does it mean?

Dr. Ogden Lindsley studied the use of positive reinforcement in classrooms. He wanted to know the ratio of positive to negative comments by teachers that resulted in the highest rate of student performance. His research found that 3.57 to 1 was the ideal ratio. I have no idea how valid this research was, nor how well it translates to the workplace. However, for many years we used the research to promote the “Four-to-One Principle” and even had supervisors carry “four to one cards” to record their positive and negative interactions with employees.

Without debating the validity of 3.57 to 1, it is nevertheless a sound principle that you will achieve the highest rate of learning – whether of your children or your work associates – by employing the four-to-one principle. When you go on your gemba walk through the work area, have your four-to-one radar on, scanning for the things that people are doing well, the problems they are solving and improvements they are making. This is guaranteed to result in great encouragement, engagement, and creativity. Change is frightening to many people and they need to hear the positive recognition from their leaders.

8. Be The Change! They are Watching You!

If you want a change in the culture of your organization you must be that change. If you are seeking to eliminate waste, how are you eliminating waste from the work of senior managers? If you are seeking to improve teamwork, how are you improving teamwork at the senior management level? If you are seeking to improve work processes, how are you improving the processes that are owned by the senior management team?

There is no more powerful leadership principle than the principle of modeling or example. There is no more powerful message that you can send to your employees than to say “Here is how we have eliminated waste from our strategic planning process (or budgeting, etc) and here is how we did it. Now tell me what you have discovered?”

9. Communicate, Again, and Again!

One day I was meeting with the CEO of a major railroad and the subject of vision and values came up. He said, “I am sick and tired of communicating our values! Every year I send out a message and give talks about our values. If they don’t get it by now, they never will!”

In a moment of uncontrolled stupidity I immediately asked him, “So, how often do you go to church?” The moment it came out of my mouth I realized it was an absurd question to ask a CEO and he looked at me as if to ask “Are you kidding?” And then I realized why I asked the question.

There are only Ten Commandments. How long would it take you to learn them? How complicated are the teachings of the Four Gospels? Do unto others…, turn the other cheek, and so forth. It really isn’t rocket science. Yet, every religion, in every part of the world, has a “Sunday.” A repetitious drumbeat to remind us every week of some very simple principles. Why every week? Why not once a month or even once a year? The answer is because God knows you! He knows just how easily we fall into behavior that contradicts our principles and He knows just how often we need to be reminded.

Not to compare the CEO to God, but there is a similar idea. The people in your organization need to be reminded frequently about the basic values and principles that should guide their behavior. Doubts, fears, misunderstandings and distractions will all cause employees to loose focus on the principles that should guide them in their pursuit of improvement. This is the job of every leader in every organization.

While none of these nine principles are difficult to understand, they require effort and discipline to practice. They are principles and practices that will maximize the likelihood of successful change.

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