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Too many managers have experienced this scenario: The chief executive announces a bold new corporate initiative aimed at generating dramatic performance improvements. The initiative calls for sweeping changes in the company’s processes, systems and culture. The launch proceeds with great fanfare and a substantial investment of the company’s resources. Several years later, however, managers look back and wonder what went wrong.
In some cases, the initiative never produces positive economic benefits; in others, hard-working employees squeeze out some short-term improvements. Management heralds the results. Yet the organization soon slips back into its old ways of doing things. Performance regresses, process improvements do not stick and dysfunctional behaviors return. The initiative fails to produce sustainable changes in processes, behavior or performance. In short, it does not alter the essential nature of the organization. Employees dismiss it as just another “flavor of the month,” and senior management loses credibility. Future initiatives are met with widespread skepticism.
That, in much-simplified and condensed form, is still what happens all too often despite decades of study of change-management disciplines, the writings of leading scholars and the legions of consultants and their change methodologies. Studies note that more than two-thirds of change initiatives fail.1 It is no surprise, then, that change-management programs are decreasing in popularity.2
Our research focused on understanding how managers can design and implement corporate initiatives in ways that produce lasting change in the architecture and fabric of the organization. (See “About the Research,”) We began this line of study by trying to apply models of programmatic change to our examination of those initiatives. The dominant view suggests that change processes unfold in three phases, typically described as “unfreeze-change-freeze.”3 First, leaders create a sense of urgency and seriously challenge existing ways of doing things. Then new processes and systems are introduced. Last, those changes are institutionalized. Our research findings generally conform to the conventional model of a programmatic change process, with one critical caveat: The seeds of effective institutionalization — the process of embedding procedural and behavioral changes in the organization’s fabric — must be planted long before the rollout of the initiative gets under way.
About the Research
We studied six strategic initiatives undertaken over the past decade at Apparelizm Corp. — a pseudonym for one of the nation’s largest and most successful clothing retailers.
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1. M. Beer and N. Nohria, “Cracking the Code of Change,” Harvard Business Review 78 (May–June 2000): 133–141.
2. D. Rigby, “Management Tools 2005,” Bain & Company Inc. (2005).
3. For a detailed description of Lewin’s classic “unfreeze-change-freeze” model, see K. Lewin, “Field Theory in Social Science: Selected Theoretical Papers” (New York: Harper & Brothers, 1951). Building on Lewin’s work, many researchers have developed three-stage models of the change process. For a discussion of other three-stage models of organizational change, see R.M. Kanter, B.A. Stein and T.D. Jick, “The Challenge of Organizational Change: How Companies Experience It and Leaders Guide It” (New York: Free Press, 1992).
4. J. Welch and J.A. Byrne, “Jack: Straight From the Gut” (New York: Warner Business Books, 2001), 298.
5. J. Darragh and A. Campbell, “Why Corporate Initiatives Get Stuck?” Long Range Planning 34, no. 1 (2001): 33–52.
6. J.R. Hackman, “The Design of Work Teams,” in “Handbook of Organizational Behavior,” ed. J. Lorsch (Englewood Cliffs, New Jersey: Prentice-Hall, 1987), 315–342.
7. S. Finkelstein and D. Hambrick, “Strategic Leadership: Top Executives and Their Effects on Organizations” (Minneapolis, Minnesota: West Publishing Co., 1996).
8. For more on conflict management during the decision-making process, see D. Garvin and M. Roberto, “What You Don’t Know About Making Decisions,” Harvard Business Review 79 (September 2001): 108–116.
9. Amy Edmondson argues that candid dialogue within teams stimulates learning and enhances their ability to accomplish tasks effectively. See A. Edmondson, “Psychological Safety and Learning Behavior in Work Teams,” Administrative Science Quarterly 44 (1999): 350–383.
10. For more on experimentation as a mechanism for learning and innovation, see D. Garvin, “Learning in Action: A Guide to Putting the Learning Organization to Work,” (Boston: Harvard Business School Press, 2000); and S. Thomke, “Experimentation Matters: Unlocking the Potential of New Technologies for Innovation” (Boston: Harvard Business School Press, 2003).
11. For more on the use of metaphors in organizations, see H. Tsoukas, “The Missing Link: A Transformational View of Metaphors in Organizational Science,” Academy of Management Review, 16, no. 3 (1991): 566–585.
12. Many researchers have emphasized the importance of symbolic action. For instance, see J. Pfeffer, “Management as Symbolic Action: The Creation and Maintenance of Organizational Paradigms,” in “Research in Organizational Behavior,” ed. L.L. Cummings and B. Staw (Greenwich, Connecticut: JAI Press, 1981), 3: 1–52.
13. J.E. Russo and P.J.H. Schoemaker, “Winning Decisions: Getting It Right the First Time” (New York: Currency, 2002).
14. For more on small wins in the change process, see K. Weick, “Small Wins: Redefining the Scale of Social Problems,” American Psychologist, 39, no. 1 (1984): 40–49; J. Kotter and D. Cohen, “The Heart of Change: Real-Life Stories of How People Change Their Organizations” (Boston: Harvard Business School Press, 2002); and D. Ciampa and M. Watkins, “Right From the Start: Taking Charge in a New Leadership Role” (Boston: Harvard Business School Press, 1999).
15. R.M. Kanter, “Managing the Human Side of Change,” Management Review 74 (April 1985): 52–56.
16. J. Bower, “Managing the Resource Allocation Process: A Study of Corporate Planning and Investment” (Boston: Harvard Business School Press, 1970); R.A. Burgelman, “A Process Model of Internal Corporate Venturing in the Diversified Major Firm,” Administrative Science Quarterly 28 (1983): 223–244.
17. M. Korsgaard, H. Sapienza and D. Schweiger, “Beaten Before Begun: The Role of Procedural Justice in Planning Change,” Journal of Management, 28, no. 4 (2002): 497–516.
18. For more on procedural justice, see J. Thibault and L. Walker, “Procedural Justice: A Psychological Analysis” (Hillsdale, New Jersey: Lawrence Erlbaum Associates, 1975); and W.C. Kim and R. Mauborgne, “Fair Process: Managing in the Knowledge Economy,” Harvard Business Review 75 (July–August 1997): 65–75.
19. M.C. Suchman,“Managing Legitimacy: Strategic and Institutional Approaches,” Academy of Management Review 20, no. 3 (1995): 571––610.
20. Author and consultant Michael Watkins has coined this wonderful phrase to describe managers who have made up their mind but ask for advice anyway, simply to try to demonstrate that they value subordinate input.
21. Edgar Schein describes how stories and myths about an organization’s founders are used to sustain and transmit a company’s culture over time. See E.H. Schein, “Organizational Culture and Leadership: A Dynamic View” (San Francisco: Jossey-Bass, 1985).
22. For more on the role of emotion in organizational change processes, see Q.N. Huy, “Emotional Balancing of Organizational Continuity and Radical Change: The Contribution of Middle Managers,” Administrative Science Quarterly 47 (2002): 31–69.
23. For more on the notion of balancing hope and fear during successful change efforts, see J. Collins, “Good to Great: Why Some Companies Make the Leap … and Others Don’t” (New York: Harper-Business, 2001).