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The Strategic Management Collection

Mason A. Carpenter, Editor

Successful Organizational Transformation
The Five Critical Elements

Marvin Washington Stephen Hacker Marla Hacker

www.businessexpertpress.com

Contents
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix Acknowledgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 What Is Transformation? . . . . . . . . . . . . . . . . . . . . . . . . 5 Why Is Transformation Hard? . . . . . . . . . . . . . . . . . . . 15 Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 The Technical Plan: Identify the Gaps and Methodologies to Transform . . . . . . . . . . . . . . . . . . . . 43 The Performance Management System: A Way to See and Execute the Technical Plan . . . . . . . 53 The Social Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 The Burning Platform . . . . . . . . . . . . . . . . . . . . . . . . . 73

Chapter 10 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Preface
Collectively, we have been working on understanding organizational change for almost  years. What started for all of us while we were working as managers and leaders of a large consumer products company continued as a dissertation project and through our days as organizational and leadership consultants. In short, we have been engaged with the struggle to understand organizational change and transformation for what seems like our entire lives. The immediate motivation for this project began nearly 9 years ago while we were helping the government of Botswana through a major transformation. After working with them for 2 years, one person within the government asked us what some generic lessons about organizational change are. He was looking for lessons that could apply not only to government organizations but also to for-profit organizations, churches, groups as large as a 60,000-person company, and groups as small as a -person work team. This seemed like such an easy question; surely there are some general principles of organizational change. However, after reading dozens of books (some of which were our own) and hundreds of academic articles on the subject, a general answer to our question was not found. This question was so intriguing that it was part of the motivation for two books that we wrote. Transformational Leadership was an effort to understand the required skills needed to lead transformation.1 A second book we wrote was directly inspired by our experiences in Botswana. Leading Peak Performance: Lessons From the Wild Dogs of Africa was an effort to understand what seemed to be the conflict between leadership and teams.2 Drawing directly from our many game rides in Africa and our experiences working with teams and leaders, we argued that successful organizations are led by packs with wild dog traits (as opposed to leaders with lion or cheetah traits). While both books were worthy pursuits, we still did not have an answer to the government worker’s question. Then it hit us: One of the authors remembered when he first moved out of his parents’ house and was living on his own. He wanted to bake

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PREFACE

a cake one day, probably out of boredom. So like most boys would do, he called his mother for help. She told him that before he started baking, he needed to have some key ingredients (sugar, flour, milk, salt, etc.). He remembered asking her how she knew what he needed; he didn’t even tell her what type of cake he was going to bake. She replied that it didn’t matter what type of cake it was: There were some generic ingredients that all cakes share. From that government employee’s question and Marvin’s mother’s advice, this book was born. This book is about the generic ingredients found in all successful organizational change efforts. From our combined 35 years of experience inside a Fortune  company, graduate research studies at the top business and engineering schools in America and Canada, consulting experience with numerous public and nonprofit organizations (ranging from the U.S. Postal Service, Novartis, Lamar University, COLA, a clinical laboratory accreditation organization to the public sector of the country of Botswana), and our extensive reading of both individual and organizational change books and articles, we have developed these five key ingredients that produce successful change. While writing this book primarily for leaders of organizations (forprofit, governmental, or nonprofit), the lessons from this book can also apply at the team level, the community level, and even at the individual level. As you will quickly see from reading this book, because transformation is ultimately an individual issue (in addition to a team or organizational issue), we feel that all individuals can benefit from understanding the ingredients necessary for transformation to occur. Good luck on your transformation journey.

Acknowledgments
As with most projects, many people helped to shape this work. We would like to acknowledge their contribution here. As this project started from a question posed to the authors almost 1 decade ago, there were many people who shaped our thinking on this subject along the way. As such, we would like to thank Tammy Roberts for allowing us to clarify our concepts out loud and Laura Iturbide with IDEA at Anahuac University in Mexico and Dori Maynard at the Maynard Institute, who allowed us the space to deliver early versions of this book to live audiences. We would like to say thank you to the thought leaders of the Performance Center and Transformational Systems International for their listening skills and contributions. We also thank Mike Mahon, Dru Marshall, Dan Syrotuik at the University of Alberta, and Kim Boal at Texas Tech, as well as Oregon State University, Virginia Tech, and Portland State University for providing research and teaching opportunities to investigate and form the concepts contained in the text. Last, we thank our family members—Erika, Miles, Marvin, Jessica, and Mark—who gave us the nurture, support, and space to do what we love: examine and understand transformation change.

CHAPTER 1

Introduction
Change is everywhere; it is in every corner of our lives. From people wanting to lose weight and eat healthy; to families wanting to increase the quality of their interactions; to companies trying to become global, more responsive to customers, and include social networking in their business plans; to governments trying to reinvent themselves, we are becoming a world focused on change. Formally, change is defined as “to cause to be different.”1 Transformation, a similar word that people use to describe major changes, is defined as “a change or alternation especially a radical one.”2 It is the concept of producing a different and often radical result that is the focus of not only this book but also so many others that have come before and will probably come after. However, with all this focus on change, there is a lot of confusion about how to create successful change. Because change is so difficult, we find it useful to think of an analogy to help us understand change. For example, when a child asks a parent what love is, the parent begins an extended philosophical discussion over the origin, emotion, and meaning of love. On the other hand, the parent could use an analogy: The feeling of love is like the feeling you get when you are getting ready to listen to your favorite song; even though you know the song, it never gets boring. Or love is like the joy you get from seeing your favorite painting. We are using the analogy of a recipe to understand change, and more specifically, organizational change. The power of an analogy can also be grounds for weakness. The topic of change, and organizational change more specifically, is complex, and we admit that transforming a 100,000-person workforce might be a bit more difficult than baking cakes and cupcakes (no matter how the reality television shows try to make baking seem like an extremely complicated task). We advise readers to take the applicable lessons, and we refrain from conducting an exhaustive analysis of the analogy. Look forward to gaining personal insights to increase your skills in creating and leading

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organizational transformation, even if it isn’t always exactly like baking a cake. This book details five key ingredients for successful transformation programs. We say there is a recipe for change: When baking a cake, sugar is necessary, but so too are flour, eggs, milk, and butter. Before you start baking a cake, you want to make sure you have all the ingredients. We suggest the same thing for your change journey. Before you venture out on the path of major change, this book will make sure you have all the ingredients. So how were these ingredients for successful change developed? These ingredients represent information gathered from an ongoing study of personal, relational, and organizational change that has lasted almost  years. We bring firsthand insights from our combined leadership experience inside a Fortune 100 company, university research centers at the top business and engineering schools in America and Canada, and consulting experience with numerous public and nonprofit organizations. We have worked with organizations ranging from HP, IBM, Intel, and Corning to the public sector of countries in Europe, North America, Africa, and Asia. Based on our extensive research on individual, relational, and organizational change methodologies, we have developed these five key ingredients that produce successful change. Our intention is for you to embed these ingredients into your change initiatives as foundation elements. In the midst of a complex and detailed plan, losing sight of the essential ingredients spells disaster. The five ingredients for successful organizational change are the following: 1. 2. 3. 4. 5. Vision. Where do you want to go? Leadership. Who is going to take you there? The technical plan. How will you get there? The social plan. How will you enroll others? The burning platform. Why leave where you are? What is compelling you to make any change at all? Or said another way, why are you leaving your current situation?

In chapter 2, we describe how transformation is different from other types of change efforts. In chapter 3, we describe why transformation is

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difficult. We also discuss how transformation needs to be approached systemically so that it addresses individuals, relationships, stakeholders, and tools and techniques. In chapter 4, we discuss not only the importance of having a vision for transformation efforts but also how vision statements relate to mission statements and organizational values. We then provide some suggestions for how vision statements should be developed. In chapter 5, we argue that transformational leaders need sufficient managerial and leadership skills. We do not view leadership as more important than management; instead, we argue that they are both complementary skills needed to be successful. In our chapters on technical plans, we identify three key issues in developing a plan. Chapter 6 describes the need to identify the organizational gap between its current reality and its desired vision. This chapter also suggests how organizational leaders can decide which transformation technique, tool, or methodology to use to execute transformation. Chapter 7 provides a performance management system to manage transformational change efforts. Chapter 8 describes the importance of having a social plan in place to support your technical plan. Chapter 9 describes the purpose of having a sense of urgency, or burning platform, to provide both internal and external motivation for executing major transformation. We conclude the book by describing “the wall” as a tool to help leaders develop and communicate their transformation efforts. At the end of each chapter, we provide a summary of the key lessons from the chapter, our key takeaways, and some action opportunities that you can take as you start your transformation journey.