Perhaps there is an element of self-protection at work — the comfort of being able to hold someone else (namely, top management) responsible for the lack of effective leadership. There is no doubt that a CEO who is opposed to fundamental change can make life difficult for internal innovators, but this hardly proves that only the CEO can bring about significant change.

Two Views on Leadership

Let’s consider some different statements about leadership and change: “Little significant change can occur if it is driven from the top.” “CEO proclamations and programs rolled out from corporate headquarters are a good way to undermine deeper changes.” “Top-management ‘buy-in’ is a poor substitute for genuine commitment at many levels in an organization.”

These statements are supported by the experiences of two innovative leaders, Phil Carroll of Shell Oil and Rich Teerlink of Harley-Davidson.

Phil Carroll recalls, “When I first came in as CEO, everyone thought, ‘Phil will tell us what he wants us to do.’ But I didn’t have a clue, and if I had, it would have been a disaster.” Likewise, Rich Teerlink says, “Anyone who thinks the CEO can drive this kind of change is wrong.”

There are several reasons why leaders like Carroll and Teerlink have come to a more humble view of the power of top management. First is the cynicism that exists in most organizations after years of management fads. When the CEO preaches about “becoming a learning organization,” people roll their eyes and think to themselves, “Here we go again. I wonder what seminar s/he went to last weekend.” Most corporations have had so many “flavor-of-the-month” initiatives from management that people immediately discount any new pronouncement as more “executive cheer-leading” or, as they say at Harley-Davidson, “another fine program.”

A second reason has to do with the difference between compliance and commitment. Hierarchical authority is much more effective at securing compliance than it is in fostering genuine commitment. “It seemed that every year someone pressured us to change our promotion review process to incorporate our values,” reflects former Hanover Insurance CEO Bill O’Brien. “But we never caved in to this pressure. A value is only a value if it is voluntarily chosen. No reward system has ever been invented that people in an organization haven’t learned how to ‘game.’ We didn’t want just new behaviors. We wanted new behaviors for the right reasons” (“Moral Formation for Managers: Closing the Gap Between Intention and Practice,” in Character and the Corporation, MIT Center for Organizational Learning Research Monograph, 1994). There is simply no substitute for commitment in bringing about deep change. No one can force another person to learn, especially if that learning involves deep changes in beliefs and attitudes or fundamentally new ways of thinking and acting.

A third reason a different type of leadership is needed is that top-management initiatives often end up moving organizations backward, not forward. This can occur in obvious ways, such as top-management downsizings and reorganizations that have the side-effect of increasing internal competitiveness, which ends up undermining collaboration and, ultimately, economic performance. But it can also occur more subtly, even in changes explicitly designed to improve learning. For example, a mandated “360-degree feedback” process not only reinforces a compliance mentality, but it also lessens the likelihood of people surfacing what Harvard’s Chris Argyris calls the “potentially embarrassing information” that might “produce real change” (“Good Communication That Blocks Real Learning,” Harvard Business Review, July/August 1994). This kind of information will come into the open only when people have genuine trust, curiosity, and shared responsibility — conditions not usually fostered by mandated programs.

Even so, it must be acknowledged that many large-scale change programs — reorganizations, downsizing, corporate-wide cost reduction programs, or re-engineering programs — can be implemented only from top-management levels. But such changes will not affect the corporate culture if it is based on fear and defensiveness. Nor will they unleash people’s imagination and passions and enhance their ability to form genuinely shared visions. They will not change the quality of thinking in the organization, or increase intelligence at the front lines, where people con-front increasingly complex and dynamic business environments. And they will do nothing to foster the trust and skills needed by teams at all levels if they are to reflect on hidden assumptions and to inquire into the reasoning behind their own actions.

Types of Leadership

For the past 20 years, many colleagues and I have been working with managers and teams to develop enhanced learning capabilities that center around five related disciplines: systems thinking, surfacing and improving mental models, fostering dialogue, nurturing personal vision, and building shared visions. Four years ago, a group of us at MIT began to form a consortium of corporations with two main objectives: to advance the theory and method underlying this work; and to demonstrate what is possible when organizations begin working together toward integrating new learning capabilities into important work settings. The MIT Center for Organizational Learning currently involves about 20 corporations, mostly Fortune 100 firms.

Within these companies, we regularly confront the dilemmas posed by the conflicting views of leadership described above. Resolving these dilemmas requires fundamental shifts in our traditional thinking about leadership.

These shifts start with the simple view of leaders as those people who “walk ahead,” people who are genuinely committed to deep change in themselves and in their organizations and who demonstrate their commitment through their actions. They lead through developing new understandings, new skills, and new capabilities for individual and collective learning. And they come from many places within an organization.

In particular, we have identified three essential types of leaders in building learning organizations, roughly corresponding to three different organizational positions:

1. Local line leaders, who can undertake meaningful experiments to test whether new learning capabilities actually lead to improved business results.

2. Executive leaders, who provide support for line leaders, develop learning infrastructures, and lead by example in the gradual process of evolving the norms and behaviors of a learning culture.

3. Internal networkers, or community builders, who can move freely about the organization to find those who are predisposed to bringing about change, to help out in organizational experiments, and to aid in the diffusion of new learning.

Local Line Leaders

Nothing can start without committed local line leaders: individuals with significant business responsibility and “bottom-line” focus. They head organizational units that are microcosms of the larger organization, and yet have enough autonomy to be able to undertake meaningful change independent of the larger organization. To create useful experiments, they must confront the same issues and business challenges that are occurring within the larger organization. For example, a unique cross-functional task force may be less useful for a learning experiment than a team that manages a process that is ongoing, generic, and vital for future competitiveness, such as a product development team, a sales team, or a business division.

The key role played by local line leaders is to sanction significant practical experiments and to lead through active participation in those experiments. Without serious experiments aimed at connecting new learning capabilities to business results, there is no way to assess whether enhancing learning capabilities is just an intellectually appealing idea or if it can really make a difference. Typically, a Learning Center project will begin with a core team composed of line leaders who might initially work together for six to twelve months. During this time, they work on developing their own skills in systems thinking, collaborative inquiry, and building shared vision, and then begin applying those skills to their own issues. Only then will they be able to begin designing learning processes that might spread such skills throughout their organization and become embedded in how work is done.

For example, a team of sales managers and sales representatives at Federal Express worked together for over a year before they began to develop what eventually became the Global Customer Learning Laboratory “We felt we needed new tools for working with our key corporate customers as learning partners,” says Cathy Stopcynski of Federal Express. “That’s why the Global Customer Learning Laboratory is important. It gives us a whole new way to work together with customers to improve our collective thinking and come up with completely new solutions to complex logistics problems. “At Electronic Data Systems (EDS), a growing network of local line leaders is bringing learning organization principles and methods into work with customers through EDS’s “Leading Learning Communities” program.

Most corporations have had so many “flavor-of-the-month” initiatives from management that people immediately discount any new pronouncement as more “executive cheerleading” or, as they say at Harley-Davidson, “another fine program.”

In addition to playing a key role in the design and implementation of new learning processes, local line leaders often become teachers once these learning processes become established. In fact, the most effective facilitators in learning processes such as the Global Customer Learning Laboratory are usually not professional trainers but the line managers themselves. Their substantive knowledge and practical experience give them unique credibility. Facilitating others’ learning also becomes a powerful, ongoing way for line leaders to deepen their own understanding and capabilities.

However, engaging local line leaders may be difficult. As pragmatists, they often find ideas like systems thinking, mental models, and dialogue intangible and “hard to get their hands around.” “When I was first exposed to the MIT work,” says Fred Simon, former head of the Lincoln Continental program at Ford Motor Company, “I was highly skeptical. I had heard so many ‘academic’ theories that made sense but never produced for us. But I was also not happy with our team’s ability to work together. I knew there must be a better way, and my business planning manager was convinced this could make a difference’

Simon’s view is typical of many line leaders at the outset: he was skeptical, but he recognized that he had problems that he could not solve. He also had a trusted colleague who was willing to engage with him. Again and again, we have found that healthy, open-minded skeptics can become the most effective leaders and, eventually, champions of this work. They keep the horse in front of the cart by focusing first and foremost on business results. Such people invariably have more staying power than the “fans” who get excited about new ideas but whose excitement wanes once the newness wears off.

Because line leaders are focused primarily on their business unit, however, they may not think much about learning within the larger organization, and typically they have little time to devote to diffusion of their efforts. They may also be unaware of—and relatively inept at dealing with—the anti-learning forces in the larger organization. They become impatient when the larger organization does not change to match their new ideas, and may start to feel misunderstood and unappreciated. They can easily develop an “us against the world” mentality, which will make them especially ineffective in communicating their ideas to others.

Innovative local line managers are often more at risk than they realize. They typically believe, “My bosses will leave me alone as long as I produce results, regardless of the methods I use.” But the “better mousetrap” theory may not apply in large institutions. Improved results are often threatening to others, and the more dramatic the improvement, the greater the threat. Large organizations have complex forces that maintain the status quo and inhibit the spread of new ideas. Often, even the most effective local line leaders fail to understand these forces or know how to work with them.

Despite these limitations, committed local line leadership is essential. At least half of the Learning Center companies that have made significant strides in improving business results and developing internal learning capabilities have had little or no executive leadership. But we have seen no examples where significant progress has been made in an organization without leadership from local line managers, and many examples where sincerely committed CEOs have failed to generate any significant momentum.

Executive Leaders

At the Learning Center, our excitement around the practical experiments led by local line managers has frequently made us blind to the necessary and complementary roles played by executive leaders. Local line leaders can benefit significantly from “executive champions” who can be protectors, mentors, and thinking partners. When dramatic improvements achieved in one line organization threaten others, executive partners can help manage the threat. Alternatively, executive partners can make sure that new innovative practices are not ignored because people are too busy to take the time to understand what the innovators are doing. By working in concert with internal networkers, executives can help connect innovative local line leaders with other like-minded people. They also play a mentoring role in helping the local line leaders understand complex political cross-currents and communicate their ideas and accomplishments to those who have not been involved.

In one company, a local line organization had achieved what it regarded as dramatic improvements in the product development process, but its efforts lacked credibility when judged by more traditional metrics. For instance, at critical checkpoints the team had record numbers of engineering change orders. The team interpreted this as evidence that people were more willing to surface and fix problems early in the development process. But outside the team, these same orders were seen as evidence that the group was “out of control:’

Eventually, executives in the company commissioned an independent audit, which showed that the team was indeed highly effective. The executives also supported the development of a “learning history” to help others understand how the team had accomplished its results.

But the “better mousetrap” theory may not apply in large institutions. Improved results are often threatening to others, and the more dramatic the improvement, the greater the threat.

Part of our difficulty with appreciating the role that effective executive leadership can play in learning is that all of us are used to the “captain of the ship” image of traditional hierarchical leaders. However, when executives act as teachers, stewards, and designers, they fill roles that are much more subtle, contextual, and long term than the traditional model of the power-wielding hierarchical leader.

“We in top management are responsible for creating an operating environment that can allow continual learning,” says Harley-Davidson’s Teerlink. Although executive leadership has traditionally focused on structure and strategy, Teerlink and other executives are increasingly thinking about the operating environment in less tangible ways.

Effective executive leaders can build an environment that is conducive to learning in several ways. The first is by articulating guiding ideas. “I have always believed that good ideas will drive out bad ideas,” says Hanover’s O’Brien. “One of the basic problems with business today is that our organizations are guided by too many mediocre ideas — ideas which do not foster aspirations worthy of people’s commitment.” Guiding ideas are different from slogans or management buzzwords. They are developed gradually, often over many years, through reflection on an organization’s history and traditions and on its long-term growth and opportunities.

A second way to build operating environments for learning is through conscious attention to learning infrastructure. In a world of rapid change and increasing interdependence, learning is too important to be left to chance. “We have plenty of infrastructure for decision making within AT&T,” says Chairman Bob Allen. “What we lack is infrastructure for learning” (Peter M. Senge, et al., The Fifth Discipline Field-hook, 1994, p. 34).

I have met many CEOs in recent years who have lamented that “we can’t learn from ourselves” or “we are better at learning from competitors than from our own people.” But with little or no infrastructure to support ongoing learning, one might ask, “Why should successful new practices spread in organizations?” Who studies these innovations to document why they worked? Where are the learning processes that will enable others to follow in the footsteps of successful innovators? Who is responsible for creating these learning processes?

There can be little doubt of the long-term business impact of executive leadership in developing learning infrastructure. When the Royal Dutch/Shell Group’s central group planning leaders became convinced that “scenario thinking” was a vital survival skill in turbulent, unpredictable world oil markets, they didn’t initiate a set of scenario-planning courses for Shell’s management. Instead, they redesigned the planning infrastructure so that management teams regularly were asked not just for their budget and their “plan,” but for several plans describing how they would manage under multiple possible futures. “Planning as learning” has gradually become a way of life within Shell — a change to which many attribute Shell’s rise to preeminence in the world oil business.

A third way to build operating environments for learning lies within the executive’s own domain for taking action — namely, the executive team itself. It is important that executives recognize that they, too, must change, and that many of the skills that have made them successful in the past can actually inhibit learning.

I think these ideas will eventually lead to a very different mindset and, ultimately, a different skill-set among executives. “Gradually, I have come to see a whole new model for my role as a CEO,” says Shell Oil’s Carroll. “Perhaps my real job is to be the ecologist for the organization. We must learn how to see the company as a living system and to see it as a system within the context of the larger systems of which it is a part. Only then will our vision reliably include return for our shareholders, a productive environment for our employees, and a social vision for the company as a whole.”

Internal Networkers

The most unappreciated leadership role is that of the internal networkers, or what we often call internal community builders. Internal networkers are effective for the very reasons that top-management efforts to initiate change can backfire — oftentimes, no power is power. Precisely because they have no positional authority, internal networkers are free to move about a large organization relatively unnoticed.

When the CEO visits someone, everyone knows. When the CEO says, “We need to become a learning organization,” everyone nods. But when someone with little or no positional authority begins asking which people are genuinely interested in changing the way they and their teams work, the only ones likely to respond are those who are genuinely interested. And if the internal networker finds one person who is interested and asks, “Who else do you think really cares about these things?” he or she is likely to receive an honest response. The only authority possessed by internal networkers comes from the strength of their convictions and the clarity of their ideas.

It is very difficult to identify the internal networkers because they can be people in many different organizational positions. They might be internal consultants, trainers, or personnel staff in organization development or human resources. They might be front-line workers like engineers, sales representatives, or shop stewards. They might, under some circumstances, be in senior staff positions. What is important is that they are able to move around the organization freely, with high accessibility to many parts of the organization. They understand the informal networks through which information and stories flow and how innovative practices naturally diffuse within organizations.

Internal networkers are effective for the very reasons that top-management efforts to initiate change can backfire—oftentimes, no power is power….The only authority possessed by internal networkers comes from the strength of their convictions and the clarity of their ideas.

The first vital function played by internal networkers is to identify local line managers who have the power to take action and who are predisposed to developing new learning capabilities. Much time and energy can be wasted by working with the wrong people, especially in the early stages of a change process. Convincing people that they should be interested in systems thinking or learning is inherently a low-leverage strategy. Even if they are persuaded initially, they are unlikely to persevere.

When the Liaison Officers from the Learning Center companies were asked how they each got started in this work, they responded, virtually unanimously, that they were “predisposed.” All of them had something in their backgrounds — perhaps an especially influential college course, a particular work experience, or just lifelong interest — that made them more open to the systems perspective. They each had a deep curiosity about learning, or mental models, or the mystery of profound teamwork. In turn, they felt attuned to others they met who shared this predisposition.

In ongoing experiments within line organizations, we have found that internal networkers can help in many ways. In our own Learning Center projects, they serve as project managers, as co-facilitators, or as “learning historians” — people trained to track a major change process and to help those who are involved to better reflect on what they are learning (see “Learning Histories: ‘Assessing’ the Learning Organization,” May 1995). As practical knowledge is built, internal networkers continue to serve as organizational “seed carriers,” connecting like-minded people from diverse settings and making them aware of each other’s learning efforts. Gradually, they may help in developing the more formal coordination and steering mechanisms needed to move from local experiments to broader, organization-wide learning. At Ford, for example, an informal “Leaders of Learning” group was formed by local line leaders and internal networkers who wanted to share leanings and serve as a strategic leadership body. They saw their work as supporting continuing experiments, connecting those experiments with the interests of top management, and wrestling with organization-wide capacity building and learning.

As with local line managers and executive leaders, the limitations of internal networkers are likewise counterparts to their strengths. Because they do not have a great deal of formal authority, they can do little to counter hierarchical authority directly. If a local line leader becomes a threat to peers or supervisors, they may be powerless to help him or her. Internal networkers have no authority to institute changes in organizational structures or processes. So, even though they are essential, internal networkers are most effective when working in concert with local line leaders and executive leaders.

The Leadership Challenges

The leadership challenges inherent in building learning organizations are a microcosm of the leadership issue of our times: how human communities can productively confront complex issues where hierarchical authority is inadequate to bring about change. None of today’s most pressing issues — deterioration of the natural environment, the international arms race, erosion of the public education system, or the breakdown of the family and increasing social fragmentation — will be resolved through hierarchical authority.

In all these issues, there are no single causes, no simple “fixes” There is no one villain to blame. There will be no magic pill. Significant change will require imagination, perseverance, dialogue, deep caring, and a willingness to change on the part of millions of people. I believe these same challenges exist in the work of building learning organizations.

Recently, a group of CEOs from the Learning Center companies spent a half-day with Karl-Henrik Rob rt, the founder of Sweden’s path-breaking Natural Step process for helping societies become ecologically sustainable. The next day, Rich Teerlink of Harley-Davidson came in and said, “I don’t know why I stay awake at night trying to figure out how to transform a six-thousand person company. Yesterday, we talked with someone who is transforming a country of four million people.”

The necessity of creating systemic change where hierarchy is inadequate will, I believe, push us to new views of leadership based on new principles. These challenges cannot be met by isolated heroic leaders. They will require a unique mix of different people, in different positions, who lead in different ways. Although the picture sketched above is tentative and will certainly evolve over time, I doubt that it understates the changes that will be required in our traditional leadership models.

This article is an edited version of P Senge, “Leading Learning Organizations” (Cambridge, MA: MIT Center for Organizational Learning Research Monograph, 1995). Copyright © 1995 by Peter M. Senge. It has also appeared in the Peter F Drucker Foundation book The Leader of the Future, M Goldsmith, F Hesselbein, and R. Beckhard, eds. (San Francisco: Jossey-Bass, 1995).

Peter M. Senge is director of the Center for Organizational Learning at MIT’s Sloan School of Management. He is the author of The Fifth Discipline: The Art and Practice of the Learning Organization and co-author of The Fifth Discipline Fieldbook: Strategies and Tools for Building a Learning Organization.

Edited by Colleen P Lannon. Illustrations by Nancy Margulies of Mindscapes (St Louis, MO).

The post Rethinking Leadership in the Learning Organization appeared first on The Systems Thinker.

Seeking answers to this conundrum, we have studied successful interventions by asking participants what made the difference. On one level, their answers reveal little. They say they just did it, or they tried hard. They cite relatively minor suggestions and offhand comments that they took for wisdom. The people we interviewed describe being influenced by experiences outside the work situation: the influence of a book they had read, a lesson learned at home, something a friend said. While leaders and consultants had been working steadily and systematically to help facilitate change, credit is given to what seems like peripheral, almost random events.

The logic beneath these explanations seems unavoidable: People and organizations change — rapidly, strongly, thoroughly — when ready to change. When ready, they will pick up almost anything from the environment and make use of it. Even the slightest nudge from a manager can act as a powerful catalyst. Conversely, when people are not ready to change, they will ignore or resist the best efforts of others to change them. As anyone who has repeatedly tried to act less defensively or more assertively knows, we resist even our own plans to change.

It appears there are deep, underground currents of readiness that, once tapped, serve as powerful catalysts for change (see “A New Theory of Readiness and Change” on p. 3). While this statement may appear mysterious, in fact it reflects two of the most basic premises of science and systems theory. First, physicists have shown that systems outside their normal constraints, systems far from equilibrium, are vulnerable to change triggered by random experience, just as an avalanche can be set off by a loud noise. Second, during periods of disequilibrium, there are many potential paths of growth and development — what biologists call bundles of opportunity. Like new sprouts in spring, these bundles are quietly waiting to be watered and fertilized. By supporting these preexisting bundles, we can fuel and guide change.

People and organizations change — rapidly, strongly, thoroughly — when ready to change.

Readiness takes many forms. Sometimes, people and organizations are in so much pain that they believe they must change. At other times, systems are so out of kilter, so uncertain or disorganized, that they can’t help but change in their efforts to regain their balance. At still other times, people are so open, curious, and receptive to the influence of a new leader that they see every new idea or program as pointing the path to successful action. There is much variety but the core principle seems clear: Organizations change when they are ready.

Readiness is derived from the Greek word, arariskein, which means “fitting” or “joining” or “being arranged for use.” So it is that certain kinds of interventions fit best in particular organizational climates at particular times — and not in others. A system can be entered at any point, because all of its elements are interconnected. This is the nub of it —  when interactions are aligned according to both timing and fit, there is readiness.

Three States of Readiness

Our research identifies readiness as existing in three different states. Each requires its own specific kinds of interventions. The first of the three states we call forays, which are changes that either have not come to fruition or do not yet exert a strong influence on the whole organization. They are best served in the style of martial arts, by pushing them from behind. In effect, we support and augment forces for alignment that are already in motion. The second type we name responsive states of readiness, such as curiosity, receptiveness, urgency, and determination. They are best served by leaders who provide information, advice, and guidance — a mentoring kind of support. The third type we call unstable states of readiness, like confusion, anxiety, and crisis. They need to be reframed so that people view them as integral aspects of change and cultivated as seedbeds of creative thought.

The idea is to have options, to identify whether and how groups are ready for change, and then to design interventions with those states of readiness in mind. If the intervention targeted to one form of readiness shows signs of failure, we can look elsewhere to intervene. This approach transforms the development of change strategies from guesswork into an empirical process.

Forays

No matter how rigidly or bureaucratically organized systems are or may appear, there are always changes afoot — people are constantly trying to improve things. Leaders and other change agents must learn to see these forays for what they are: tentative, incomplete moves that people and organizations make to improve their organization. Their efforts are forays from one way of doing or thinking about things into another.

Individually, forays look like this: You resolve to work with your staff in a collaborative fashion and succeed for a few days but then fall back into a more autocratic approach. Organizationally, forays look like this: Within a school in which many teachers and departments plod through their days in a bored, lethargic manner, several instructors come together informally, excited by their challenge, and push each other to innovative work with children. Creative strategies and new work processes that build strength but then get ignored or voted down are forays. Successful projects and teams whose learnings do not spread to the general culture of the corporation — these, too, are forays.

Forays are present in all organizations, all of the time. It is essential for leaders to learn to spot them. If we can identify and support forays to help them grow and use the momentum of people’s own energies, then we have access to the most powerful change agent possible (see “Capturing Forays”). Nevertheless, we may not always succeed in identifying and supporting forays, or our support during stable times may prove inadequate. We may have to wait for unstable times, when patterns of thought and behavior loosen, to push forays into lasting change.

Responsive States of Readiness

Responsive states include curiosity, receptiveness, urgency, and determination. As they approach the task of implementing a change effort, leaders frequently assume responsive states are in play, particularly because they are the easiest stage of readiness to manage. While these states are familiar enough, it’s useful to review the variations to discover when to provide information, planning, advice, or guidance.

Curiosity. Early on in planning and change efforts, staff, board members, volunteer workers, and others are often curious. They are willing to look at and keep an open mind about what leaders have in store for them.

Preferred Intervention Style. Leaders should offer information and suggest alternatives, but avoid pushing. Moving too fast can alienate potentially open-minded people. Scenario planning can be ideal for this state of readiness.

Receptivity. When receptive, people are actively open-minded. They are exploring and not locked into a solution. They have identified a problem but don’t yet have a solution, and they are asking to be told what can be done. New leaders who follow on the heels of organizational difficulties are often met with this kind of receptivity; the early days of their tenure are marked by a honeymoon period.

Preferred Intervention Style. When the organization is receptive, leaders have room to present their own approach to organizational success, or, better still, two or three approaches for the staff to choose from.

Urgency. With urgency, people feel a strong need to do something and, often enough, a strong need for help. Time is of the essence. “Are we too late?”, “Can we fix what is clearly broken?”, “Will our organization survive?”, “Will we let down our clients?”, “Will our jobs be preserved?” Urgency can occur during a sudden downturn in organizational life — funding is declining or unclear; clients are diminishing; the community does not feel well served and says so; a clear opportunity is missed and a competitor takes it.

Preferred Intervention Style. During states of urgency, leaders can and should make clear, decisive suggestions. They can emphasize the type of structure, processes, and working methods that will lead to success.

Determination. When determined, people have identified a problem and believe they must solve it. A private school has been losing enrollment to another local school and knows that it must fund the construction of a new building in order to compete; a state agency says it will only fund larger community-based organizations, leading a smaller organization to acquire or merge with a partner; a board feels its executive director is taking the organization down the wrong road and must step in. When events are dramatic and their consequences are well understood, the determination to get on with things closes down the psychological space available for alternative solutions.

Preferred Intervention Style. The will and energy for change are in place; leaders have only to provide a credible way to move forward and demonstrate self-confidence and belief in their staffs.

There is a limit to responsive states of readiness. In general, people and organizations in responsive states do not feel threatened. They do not anticipate radical change, either in the form of a dramatic restructuring or of a paradigm shift in the way the organization’s mission, strategies, or operations are conceived. Transformational experiences grow from instability or from small powerful new forces in an organization’s life that, with support, have the capacity to pull the organization into entirely different ways to perform their work. Therefore, when the utilization of responsive states proves either ineffectual or not helpful enough, leaders may turn to unstable states of readiness.

Using Instability

Physical scientists have demonstrated that systems in disequilibrium are vulnerable to change. This observation is equally true for people and organizations. Individuals, groups, and organizations, when disrupted, can find themselves confused, anxious, sometimes feeling helpless, and ready for relief. When confusion exceeds our ability to cope with even ordinary matters, we reach out for almost any way to get oriented — even if what we find is new and unfamiliar. We become alert for people who can help us. We pay attention to thoughts, strategies, and feelings that had been buried and forgotten during stable times. Or we take risks and behave in uncharacteristic ways, as when crisis brings out the best in some individuals and organizations. Unstable states provide the soil in which forays grow.

Physical scientists have demonstrated that systems in disequilibrium are vulnerable to change.

Where, you may ask, do unstable states come from, and do they come frequently enough for impatient planners to make use of in designing interventions? They do. Leadership changes, reorganizations, and challenges from the marketplace, for example, periodically throw people into states of confusion, anxiety, panic, and crisis — and get them wondering if their way of doing business is viable, or even if they are in the right business. During the course of a given three-year period, every organization is likely to question itself at a basic level.

Like responsive states, unstable states range from mild to very intense:

Confusion and Disorientation. Leaders and staff become confused and disoriented at work more often than they let on. Rapid growth, for example, may render informal management incompetent. Funding agencies may insist on better financial controls and more sophisticated information systems. As details fall between the cracks, as they often do when grassroots and entrepreneurial organizations grow, staff may lose confidence in themselves and their leaders. They are no longer new and able to get by on enthusiasm, effort, and innovation, but they don’t yet know how to reorganize in a more professional way. At such junctures, leaders are often unclear how to lead, and staff do not know how or who to follow. Confusion reigns.

Preferred Intervention. It is often helpful to name and affirm the confusion, framing it as a natural consequence of organizational change and growth and noting that it can be a source of energy and creativity. People will feel a strong desire to reestablish order. If the new order can incorporate adaptive ideas and if the urge for order helps the organization push towards a more coherent way to work, then the confusion will have served a great purpose.

Anxiety. Anxiety combines confusion with worry. Organizational problems are personalized, and we take them home. Problems remain somewhat vague, unfocused. The nature of anxiety is that it lacks a clear object. Anxiety draws people inward, away from colleagues, realistic evaluation, and collaboration.

Preferred Intervention. First, acknowledge the anxiety and name it. Second, encourage creative management that breaks the rules of business-as-usual. Third, work toward clearly defining the problem and potential solutions. Coming up with a rough version of a new strategic plan, one that people believe will lead them out of their troubles, is among the best ways to alleviate anxiety and realign the organization.

Panic and Crisis. There are times in organizational life when people panic, become fearful and frenetic, grow irrational, and lose their capacity for practical problem solving. Panic can be contagious. It can begin with one or two people, with one team or unit, and spread to others like grassfire while leaders — if they haven’t initiated the panic or been contaminated themselves — look on helplessly. Similarly, organizations can go through an identity crisis. They are changing so rapidly — through growth, change of services, change of location, change of leadership — that they no longer know who they are, and they cannot utilize their accustomed responses to situations. They feel awkward, inept — and, as a result, they act that way.

Preferred Intervention. Leadership needs to step forward and normalize the process. The challenge for leaders is to remain calm, to share both practical and impractical thoughts that can become the seeds of creative solutions. Besides normalizing and stating the potential in such moments, they must contain the panic. Strong leadership is required from someone who is not overwhelmed, who has perspective, who has watched groups and organizations enter — and leave — such crises several times before and come out better for it. The benefit is that organizations can become transformed, because the extreme disorganization created by panic loosens all patterns and opens the door to radical new patterns of experience.

Readiness in the System

Readiness is not a character trait or a quality that resides in others. A person can be ready to change in one situation or with one particular person and not with others. Context determines readiness as much as any particular quality of determination, urgency, openness, or vulnerability. If two people are joined in their urgency, for instance, they are more likely to move than if one is urgent for change while the other is bored, or if the other feels compelled to defend the status quo.

We have to be prepared to meet the readiness of others when and where it emerges. There’s no point in asking advice from someone who is prepared only for resistance. There isn’t much value in taking chances to leave familiar shores if others are made nervous by risk, instability, heated discussion, or intimacy. We have to engage and encourage the potential inherent in the readiness of others to change.

Creating Readiness

While we generally can find at least one of the three states of readiness in an organization, this is not always the case. Yet even in these situations, an opportunity remains. The patterns that hold a system in place and make it resistant to change can be disrupted. By disrupting ingrained patterns, we can generate states of readiness.

LEVERAGING READINESS

This chart is designed to help leaders decide how to move from utilizing one type of readiness to others. The order is based on (1) moving from the least to most intrusive and (2) emphasizing change that is invited or native to a system we intend to change.

For example, leaders can disrupt patterns of thinking. They can demand new levels of performance and can challenge assumptions. Similarly, dialogue groups and T-groups frustrate easy, rational modes of thought and push participants, first toward confusion (unstable states) and then toward more creative modes of thinking (forays). A similar experience occasionally takes place with particularly compelling speakers or inspiring leaders, who first connect with their audiences through shared ideas and experiences and, once the audience is rapt, lead them to entirely unexpected conclusions.

Further, leaders can disrupt the behavioral field. By asking a group of employees to rotate through each other’s roles, for example, a leader can create confusion (unstable states) as well as help workers broaden their appreciation of each other’s activities. The confusion then sets the stage for creative thinking about roles and collaboration. In some firms, the process is called “walking a mile” (in someone else’s shoes). When we restructure teams, committees, departments, and work processes, old patterns of behavior and cognition are similarly disrupted.

A Decision Sequence

We have developed a thought sequence to help leaders decide how to move from utilizing one type of readiness to others. The order is based on two principles: (1) moving from the least to the most intrusive; (2) emphasizing change that is invited or native to a system we intend to change (see “Leveraging Readiness”).

1. Identify and Support Forays. Forays are the most natural to people, so they offer the best chance of long-term success (see “Forays: A Case Study”). If, for some reason, you can’t find forays to support or your support doesn’t bring about substantial change, turn to responsive states.
2. Address Responsive States. The interventions here are straight-forward and simple: generally, provide information and guidance. Because people are curious or receptive, you have been invited to intervene; there is little to lose. If worst comes to worst, you will be ineffective. Don’t push. Pushing will create resentment and control struggles.
3. Sustain Unstable States. Remember, you don’t have to create crises. The natural ups and downs of organizational life often create small and large experiences of instability and confusion.
4. Disrupt Patterns of Thought, Behavior, and Feelings That Inhibit Change. The purpose of such disruption is not to force change — you can’t impose beliefs or behaviors — but to open gaps in patterns that permit people to learn and grow.

Changing Ourselves

Changing organizations always requires changing the people who work in them. Leaders, like others, have become integral parts of an organization’s stable patterns of thought, behavior, and feelings. Being part of the patterns presents both a challenge and an opportunity. The challenge is in the difficulty in personal change — gaining the perspective to see oneself in behavior and having the will to utilize that perspective to change oneself.

Changing oneself represents one of the most powerful tools available to the leader as an agent of organizational change. Leaders are obviously important in organizations, particularly because everyone observes their activities. When the leader’s action is out of character or a little unusual, people try to interpret it. The interpretation goes on internally — “What does this mean for me?” — and externally, as people talk in corridors, at lunch, in meetings.

When leaders change, there is often a ripple effect. One person changes, and that influences another and yet another. Observing these changes, the leader may adjust again. In other words, the leader’s initial change represents a foray. When others change in response and new patterns are built, then the foray has pulled the organizational system into a significant transformation.

Whenever leaders find themselves at an impasse with their staffs, changing their own behavior can set in motion such chains of events. A leader’s changes tend to destabilize the culture and processes of work, unfreezing stuck patterns and making reorganization possible. At the point where the organization grows unstable, each of the interventions we have discussed above becomes workable. Forays can be supported. Curiosity, receptivity, and even determination to change will emerge, presenting opportunities for leaders to introduce or reinforce the strategic directions around which alignment is built.

Many leaders plan and implement change efforts with hardly a thought to the readiness of their employees. They may assume that persuasion and reason will win the day. Or rather than picking their moments, leaders may try to create a permanent state of readiness for change in a negative way, by declaring that “only the paranoid survive,” or in a positive way, by striving to create a “learning organization.” But these approaches are likely to encounter resistance, either open or more subversive forms. By becoming aware of the different states of readiness and leveraging them, leaders widen their options and enhance their chances. Holding to the simplistic notion that “organizations are either ready or not ready for change” is to miss the truth — leaders can leverage readiness that exists everywhere.

Barry Dym is an organization development consultant and executive coach, with an emphasis on change management, strategy development and implementation, and leadership and management development. He is the author of four books: Leadership in Nonprofit Organizations (coauthored with Harry Hutson), Leadership Transitions, Couples, and Readiness and Change in Couple Therapy. Barry was the founder and executive director of two organizations.

Harry Hutson is a leadership and organization consultant whose practice focuses on the human side of strategic change. He designs and leads systemwide planning events, results-focused workshops, and team-building exercises; in addition, he provides individual coaching for executives. Harry has served for many years on the board of directors of the New England Center for Children.

An expanded version of this article appears in Leadership in Nonprofit Organizations (Sage Publications, Inc., forthcoming).

The post Leveraging Organizational Readiness for Change appeared first on The Systems Thinker.

It was a long day of heated discussions with little agreement or progress against an ambitious agenda. Sam asked how I thought it had gone. I recall saying, “It depends on your desired outcome. If success meant getting through the agenda and getting resolution on the issues, you did not meet that objective. If, however, you wanted to get a view of the team dynamics, I believe you had a very successful meeting.” He laughed and said, “What should I do about this situation? I need a team of VPs who can work together to create uniform standards of manufacturing that are necessary for us to achieve our revenue and profitability targets. Can you help me?”

The Team’s Current State

In the meeting I attended, I observed a team that was ill equipped to work in a collaborative and productive manner. Some of the behaviors I saw included:

• An inability to focus on an agenda and make decisions
• A lack of willingness to engage in dialogue
• Poor capacity to listen to one another
• An apparent lack of respect for one another’s ideas
• A tendency to personalize the conversation and get defensive

These observations led to some preliminary hypotheses — that the group lacked trust and the willingness to operate as a team; that they were focused on furthering their individual agendas; and that they would be unsuccessful in creating a standardized manufacturing platform for the company unless they were able to come together and operate with mutual respect, trust, and a willingness to listen to and learn from each other.

In the meeting I attended, I observed a team that was ill equipped to work in a collaborative and productive manner.

During conversations concerning Sam’s 360-review, I had developed a rapport with each member of the team. I leveraged this to have open and honest discussions on what I’d observed during their business meeting. One of them commented, “It was embarrassing to have you witness that meeting. That is so typical of the way we operate. It’s a challenge to get through an agenda with this group.” These one-on-one conversations helped validate my hypotheses around specific concerns and enlisted the executives in Sam’s overall objective — of creating a cohesive team who could work well together in executing an aggressive and critical element of the organization’s strategy.

I also used a team effectiveness questionnaire from Edgar Schein (from Process Consultation: Its Role in Organization Development, Addison-Wesley, 1988, p. 57–58) to get the team to self-assess and have a structured view of their current effectiveness. When I shared the results of this assessment, one of the executives commented, “I had no idea we were so disruptive in the way we operated.”

Based on the assessments, and with Sam’s agreement, my mandate for a 12-month engagement was to create a team that:

• Made sound business decisions in a considered and timely manner
• Had the ability to work together to solve critical production and quality issues
• Engaged in meetings that were productive, energetic, and constructive
• Showed evidence of listening, collaboration, and mutual respect
• Set aside personal agendas and depersonalized the conversation
• Collaborated to develop and implement a world-class manufacturing strategy

The Design of Interventions

I saw this as an amazing opportunity to delve into territory that is typically not explored. I based the design of my interventions on a model of human structural dynamics derived from the work of David Kantor (see “Human Structural Dynamics Model”). This model suggests that human interactions are a function of the social context in which they take place and of what goes on in people’s hearts and minds (Ober, Kantor, Yanowitz, “Creating Business Results Through Team Learning, The Systems Thinker, V6N5, June/July, 1995, pp.1–5). I chose to focus on two aspects of this model—the team or what is described as the face-to-face structure, and the deeper individual structures and how they might influence the team’s interactions, either one-on-one or in the team.

I chose to include individual-level interventions because they cover ground that is typically less acknowledged and yet significantly impacts behavior — what we see at the face-to-face level. It also meshed well with my belief as an OD practitioner that all change starts with individual change, and that our behavior as adults is strongly influenced by our mental models, core beliefs, and stories — many of these arising from experiences in our formative years. I had a sense that if I was able to allow for the surfacing and at some point sharing of deep imagery from each individual, it would help this team coalesce and begin the process of trusting each other.

The Team Interventions

At the team level, the interventions were designed to help develop trust and connection, and start to develop the capacity for listening. The following models, beliefs, and assumptions influenced the choice of interventions:

• A high-performing team is characterized in part by strong personal commitments to the growth and success of each team member (Katzenbach and Smith, The Wisdom of Teams: Creating the High Performance Organization, Harper Business, 1993).
• Appreciation of individual experiences and gifts is a powerful foundation for transformation and allows for creation of powerful outcomes (Cooperrider and Whitney, Appreciative Inquiry, Berrett Koehler, 1999; Elliott, Locating the Energy for Change: An Introduction to Appreciative Inquiry, International Institute for Sustainable Development, 1999).
• The ability to listen deeply allows for connection and a foundation for collaboration and “thinking together” — the essence of dialogue (Isaacs, Dialogue and the Art of Thinking Together, Currency/Doubleday, 1999).
• Dialogue fosters and maintains the high levels of openness and trust that are present in healthy teams.

“Progress Toward Trust and Cohesiveness” demonstrates how the different elements were integrated to guide the team’s progress toward trust and cohesion. In addition to determining the current state, five other building blocks contributed toward creating a team that was able to sustain behavioral changes that enabled an environment of trust, collaboration, and cohesiveness:

Establishing Structural Elements. Sam wanted the team to own and follow basic housekeeping guidelines. This set of interventions was aimed at establishing a process by which the team could focus its discussions and deliberations and make decisions in an effective manner. It involved clarifying roles and responsibilities, delineating decision rights, and setting up operating guidelines between Sam and his team, as well as within the team.

PROGRESS TOWARD TRUST AND COHESIVENESS

The interventions were integrated to guide the team’s progress toward trust and cohesion.

Developing the Capacity for Deep Listening and Dialogue. The more challenging aspects of this engagement were around creating a safe container for the team to have strong dialogue. To achieve this, I introduced the principles and intentions of council to structure the meetings (Zimmerman and Coyle, The Way of Council, Bramble Books, 1996; Baldwin, Calling the Circle: The First and Future Culture, Bantam, 1998). These principles included always being seated in a circle and using a talking piece that the team co-created. The intentions of council are speaking from the heart or being honest and authentic; listening from the heart or being deeply present and attentive when another speaks; being “lean of expression” and learning to be succinct; and allowing for silence as well as spontaneous expression.

To facilitate their interactions within this structure and to help them make the distinctions that would allow them to realize the intentions of council, I introduced the four behaviors of dialogue as described by Bill Isaacs — voicing, listening, respecting, and suspending (see “Developing the Capacity for New Behaviors”). At one level, the intention was to help the team develop a capacity for listening without judgment and reaction, and at another it was aimed at helping them experience how deep listening could result in more powerful outcomes and decisions. Above all, it was aimed at building trust within the team.

DEVELOPING THE CAPACITY FOR NEW BEHAVIORS

The four behaviors of dialogue as described by Bill Isaacs are voicing, listening, respecting, and suspending.

Over the course of my engagement (and subsequently), the team adopted sitting in a circle as part of their meeting protocol. Initially they struggled with the some of the practices of council — in particular with holding a silence. They tended to reach for the talking stick before the person who was speaking had finished. Over time, as they became more comfortable with the practices, the use of the talking stick as a mechanism to allow “one voice at a time” and to help “hold the silence” evolved from a forced behavior to a more natural and comfortable one. Their discussions went from individuals fighting to say their piece to comments that were more indicative of listening and building on what has been said. The reaction to silence went from a rush to fill it to actually asking for a moment of reflection during the course of a conversation. Although there was evidence of progress, it was more of an iterative process than a linear progression. The awareness and reinforcement of dialogic behaviors was one that continued throughout my 12-month engagement with this team and continues to be a core part of the team’s operating model.

Appreciating the Diversity of Skills and Capabilities. While most of Sam’s team had been at this company for many years and had deep roots in the industry, some of the more recent additions were brought in with different industry experience, including experience in creating world-class manufacturing organizations. The input of these individuals was often not considered and valued by their colleagues. As Sam put it, “I hired Joel and Charisse for their expertise in Lean Manufacturing. I am concerned the rest of the team is shutting them out. I suppose I could be more directive by simply telling people we have to rely on their experience, but I don’t want to add to the resistance.”

The team needed to operate in an environment of respect and appreciation for the diversity of style, skills, experiences, and contributions. They also needed to understand how to work effectively with this diversity and leverage the strengths of each other. To create this culture and capacity, I used interventions derived from Appreciative Inquiry, team role preference (Margerison and McCann, “Team Management Profiles: Their Use in Managerial Development,” Journal of Management Development, Vol 4, No 2, pp 34–37, 1985), and individual assessments such as DiSC as building blocks on the foundation of dialogue.

These interventions had the desired impact. For instance, the Appreciative Inquiry exercise used in the first session allowed for a breaking of the ice in the team. The team found many points of connection — shared experiences, interests, hopes, and desires. After that session, some of the sources of tension dissipated, such as the resentment of the role an individual played or the lack of industry experience. In addition, the resistance to being seen as and operating as a team started to fall away as they worked through their stories of positive team experiences.

In using the Team Management Profiles, the team was able to appreciate the different work preferences and styles that were present in the room. It allowed them to identify strategies that would be most effective in interacting with this group of individuals and to value the different roles each member of the team tended to prefer in a team setting. It also gave them a snapshot of what might be missing and how they could develop those roles as a collective.

Becoming an Observer of the Self. As I worked with the team, I felt it was important to facilitate the development of their capacity for diagnosis and action in order to make them self-correcting and self-sustaining after I had transitioned out of the process. I also wanted them to have a greater awareness of how to facilitate a dialogue by understanding the roles they tended to gravitate to in a conversation. I introduced another element of structural dynamics — that of boundary profiles and, more specifically, David Kantor’s “four-player system” (Kantor and Lonstein, “Reframing Team Relationships: How the Principles of ‘Structural Dynamics’ Can Help Teams Come to Terms with Their Dark Side,” The Fifth Discipline Field book, Currency/ Doubleday, 1994).

My intention was to get this team of individuals to see their patterns of interaction. I believed if they were conscious of their operating tendencies, how these impacted their effectiveness, and what roles were being played out in their team interactions, they might be able to shift the roles they played and engage in more productive and effective dialogue. It would help them notice whether their conversations were dialogic in nature or at the level of discussion and debate. At a minimum, it would increase their self-awareness of how they showed up and help them develop a capacity to become observers of their own behavior. To facilitate their learning, I videotaped some of their meetings and had them analyze their interactions afterward.

One of the insights that emerged was the difference in expectations of how the team should operate. For instance, Sam expected his team to be his equal partners in the decisions they made. There were some members who would defer to Sam’s decisions. Another insight came from seeing two members of the team frequently engaging in a move-oppose dynamic and how it stymied the progression of the conversation.

Creating Sustainability of Change. The emphasis of each intervention was to help them not only become familiar with the skills but also to practice and develop a level of mastery with that skill. Each session built on the previous ones. The final intervention was a visual image storytelling process (Reeve, Creating a Catalyst for Change via Collage Inspired Conversations, unpublished Master’s thesis, Fielding Graduate University, 2005) where the team incorporated the various building blocks (i.e., practices of dialogue, appreciation and knowledge of self and other, and observation) to co-create their vision for their team. It required them to collaboratively create the guiding principles and core values of the team, and the behaviors that would govern their interactions going forward, by building on the values and vision of each individual. I chose a visual process to shift the context from the verbal, left-brain activities that this team was facile with to a process that would invite them to activate in a positive way some of the drivers of their behavior — their beliefs, values, and mental models. As the team moved from sharing individual values and beliefs to co-creating a shared set of guiding principles and vision, they exhibited respect for individual ideas and the diversity of opinions. There was a remarkable absence of the heated arguments that had characterized the first meeting I’d attended. In its place was an energy of collaboration and partnership, resulting in the creation of a shared vision that each individual had contributed to, owned, and had personalized through the storytelling process.

The Individual Interventions

While working with the team as an entity, I was also coaching individual members. A core outcome for the coaching sessions was to help the individual become an observer of the self and understand what drove behavior so they were able to choose how to act, rather than acting from a place of habitual tendency. The ultimate goal for the “Human Structural Dynamics Model” is authenticity; insight, mastery, and alignment are intermediate stages that lead to authenticity. In an effort to be pragmatic (and recognizing the journey toward authenticity is a lifelong one), I focused on a realistic goal of building the capacity for insight through self-awareness and inquiry into the underlying causes of behaviors, along with varying degrees of mastery.

Using a subset of the human structural dynamics model as a base, I worked to help each individual become aware of their feelings, mental models, belief systems, and deeper stories that governed their behavior in the team context. Specifically, the intent was to make visible those factors that were invisible or less visible and enable the individual to act in an authentic manner.

As I used this model to guide the individual coaching sessions with each executive, my role evolved in the following manner:

• Help the individual become aware of feelings, mental models, belief systems, and deeper stories
• Create and strengthen their capacity for embracing these deeper structures
• Facilitate their understanding of how these structures impact their behavior and how to recognize the shadow aspects
• Help them develop the ability to reframe and choose the internal structures that influence behavior

Interplay Between Individual and Team Interventions

Having simultaneous interventions at the individual and team levels and playing a dual role as facilitator for the team and as personal coach allowed me to observe shifts that occurred as individuals gained insight into their behavior and changed how they interacted with the team. The team meetings also provided me with direction on how to intervene at the individual level with different executives.

The Results

Over the 12-month period, there were many visible changes at both the team level and with individuals. For instance, the team’s interactions were much less fractious and chaotic. Their discussions resulted in key decisions being made in a timely manner with each individual feeling heard even if their idea was not included. They had greater appreciation and respect for what their colleagues brought to the team, “I had no idea Charisse had such wide-ranging experience. It is quite refreshing to have someone who hasn’t grown up in this industry.”

They were able to appreciate silence and the quality of reflection and insight that came from it, “I realized how much of my time is filled with doing things — meetings, conference calls. I never get time to think. I was actually able to think about and find a solution to this problem.” There was a greater sense of camaraderie and trust among them. In self-assessing their progress on the team effectiveness instrument used at the beginning of the process, on all measures, the team had moved from a “below average” score to an “above average” rating.

When I started my work with the team, I would have described members as exhibiting behaviors characteristic of “breakdown.” Probably one of the more profound changes I saw was their ability to maintain a quality of inquiry. At rare moments, particularly in our last session together, there were moments when their interactions had elements of flow.

At the individual level, the changes varied depending on the person. Certainly some of them moved more than others. As their capacity to observe their own behavior grew, it created greater awareness and ownership of their own issues, and led to more courage and honesty in their communications. As they stepped in to appreciate and value their own contributions and role on the team, their insecurities went down; they developed more confidence and demonstrated a greater sense of presence as leaders. The awareness and legitimizing of their individual stories allowed them to have respect for and appreciation of the same in others. By practicing compassion for themselves, they developed the capacity for compassion toward others. This in turn allowed for a level of trust and a commitment to each other’s success, which provided a strong basis for collaboration.

Critical Success Factors

I was operating at two levels of the system simultaneously and addressed not only the behaviors that emerged in team interactions but also the underlying triggers of these behaviors. One reason I was able to successfully take this path was Sam’s uncompromising sponsorship and support, as well as the trust we had built as a result of our long-standing relationship and my candor in the early stages of the engagement. Over the course of the 12 months, he allowed me tremendous creative freedom to introduce the ideas behind council practices and dialogue. He’d been exposed to the practices and was a great believer in the notion of “going slow to go fast.”

Although some members of the team were initially resistant to the team process, because of my work with them individually, they grew to trust me with their inner stories and thus trust the process I was taking the team through. Their cynicism and resistance started to wear down as they experienced having a voice in the conversation and being heard as a result of using council and dialogue practices.

One of the other unexpected contributors to the success of the engagement was my knowledge of the organization, its business, and the dynamics within the industry. It allowed me to connect the interventions aimed at strengthening team effectiveness to core business issues the team was dealing with, rather than have “stand-alone” team-building sessions. By integrating business issues into the design of the interventions, the team had an immediate context for applying and practicing their new skills, which enhanced the capacity for retention and recall of new behaviors.

Challenges Encountered

There were some challenges during the course of this engagement. Even as they saw the value of the practices of council and dialogue, the team didn’t readily embrace some aspects. It took a while for them to honor silence and not jump into the fray. “I find it so difficult to sit still and not say something when no one is speaking. It makes me wonder if I did something wrong,” said one of the executives early in our sessions. While this reflected the challenge of holding silence, it was also a powerful example of how our inner story shows up in our behavior. Over time, and with the help of reflective practices in their individual coaching as well as in their team sessions, they started to see the value of having silence and silent time in their process.

Another difficulty that was more present in earlier sessions than in later ones was a desire to be “in action.” This is reflected in the comment from a team member that “we talk a lot and I enjoy our sessions, but when do we make decisions for the business?” Fortunately, given Sam’s experience with dialogue, he was able to support me and provide a context of “We are making decisions. By talking about and resolving the issues, our decisions are becoming clearer.” It took them a while to realize that by being in dialogue, they were “in action” around decisions.

In creating the experience of being an observer of the self and using the four-player model, there were some unintended consequences. During the debrief, one of the team commented,

The human structural dynamics model provided a valuable set of lenses to examine this team’s issues.

“We sure were on our best behavior today. I suppose we knew we were being watched.” Had I anticipated this better, I might have introduced a disturbance to the system to raise the stakes, because when the stakes are high, people tend to revert to “default” or typical behaviors, especially in early stages of behavioral change.

Summary

The human structural dynamics model provided a valuable set of lenses to examine this team’s issues. At the same time, it allowed for improvisation in the choice of interventions used to address different team issues. The occasion to work with an intact team over an extended period of time helped create a robust foundation wherein the skills introduced had a chance of taking hold. It helped build trust with each individual and created a space for personal growth. This systemic approach presented a powerful learning opportunity for all of us engaged in the process.

A longer version of this article appears in Reflections: The SoL Journal on Knowledge, Learning, and Change, Volume 9 Number 1. For more information, go to www.solonline.org/reflections.

Deepika Nath (dnath@indicaconsulting.com) is the founder and principal of Indica Consulting, where her focus is on bridging strategy and organizational development to bring about growth and lasting transformation. She is a trusted advisor and coach to senior executives seeking to define an authentic and effective leadership style. Her experience spans 15 years of strategy and organizational consulting with leading firms such as the Boston Consulting Group and Ernst &Young. A member of SoL, she holds a PhD in Management and an MA in Organizational Development.

The post Building Trust and Cohesiveness in a Leadership Team appeared first on The Systems Thinker.

Over the last century, people such as Ford, Rockefeller, and Carnegie have been our entrepreneurial icons. Today, Gates, Bezos, and the founders of many thousands of dot.com startups fill the newspapers and our imagination. This dream of creating something new and, in the process, engendering wealth, power, and prestige has spread around the globe. New businesses are proliferating in the Pacific Rim, South America, the Middle East, and Europe — places that, not so long ago, were marked by rigid class and economic systems that discouraged entrepreneurial effort.

The entrepreneurial journey, however, is rarely straight or easy. And success, once achieved, is not always what the company’s founders anticipated. As a business grows in size and complexity, it becomes harder for them to manage in the informal, family-like ways that led to early success. Leaders face a paradox: In order to manage and continue growth, more effective control requires letting go. That is, entrepreneurs need to entrust others to manage much of the organization and to institute systems, such as budgets and quality control, that partly replace or supplement their vigilance. Then, once effective business processes have been introduced, the organization must find ways to reinfuse itself with the spontaneous, creative energies of the start-up days to avoid growing stagnant and dry. In the most successful companies, this cycle, from entrepreneurial to professional and back to entrepreneurial, may repeat many times over.

The entrepreneurial journey is rarely straight or easy. Leaders face a paradox: In order to manage and continue growth, more effective control requires letting go.

In other words, successful entrepreneurs — those who build, sustain, and continuously renew their businesses — must learn to balance risk taking, hard work, and self-reliance with forethought, delegating authority, and trusting their staff. The same is true for entrepreneurial endeavors in large, otherwise bureaucratic organizations. This uncommon balance of entrepreneurial and professional leadership is hard to achieve. No wonder so many entrepreneurs cannot complete their journey: 50 percent of start-ups are out of business after the first year; 80 percent close by their third year.

For all but the most talented (and lucky), the tricky process of integrating entrepreneurial with professional leadership requires meeting certain challenges and acquiring new practices. It means a major shift in “business as usual” for everyone in the company. Although no single approach to change can accommodate every entrepreneurial culture, most entrepreneurs — and those who work for them — will recognize their own experiences and the efficacy of many of the recommended action steps in the transition process outlined below.

The Entrepreneurial Personality

The entrepreneurs’ personality drives and shapes the organizations that they build. On the upside, people who launch start-ups generally possess high energy and enthusiasm, enjoy building things, have enormous reserves of creativity and intuition, and live for excitement and challenges. They are visionaries who rarely stay focused on the small things in life but try to change the world in some substantial way. And they are willing to assume responsibility for almost everything that happens in their organization; take frequent, calculated risks; and persevere in the face of great odds and almost constant pressure. Through their actions, drive, purposefulness, and decisiveness, entrepreneurs inspire effort and loyalty in others.

On the downside, entrepreneurs can be arrogant, impulsive, distrustful, and controlling. They often think they can do the job better than anybody else, yet they dislike doing routine tasks. Entrepreneurs prefer initiating and developing projects, not running them — but they want to be in charge of every aspect of the organization. These contrary qualities, left unchecked, eventually isolate the company’s founders, cutting them off from the information and people who have been the organization’s lifeblood.

In the early days of most startups, profit often takes a backseat to growth. Planning tends to be ad hoc.

Budgets and financial controls are almost absent. Training takes place on the job. Roles and responsibilities are defined by the tasks at hand, often shifting and overlapping one another.

In the short term, when organizations are small, they benefit from entrepreneurial qualities. For one thing, informality makes businesses agile and adaptive to market demands. For another, because the founders are clearly in charge — with power and prestige flowing directly from them and from those in close relationship with them — workers know who they’re accountable to. Plus, many employees, themselves caught up in the excitement and often given strong incentives, are willing to do whatever it takes to fulfill the entrepreneurs’ vision.

In the long term, however, problems tend to arise. The tight hierarchical structure of most start-ups inhibits the development and retention of strong managers and people’s capacity for autonomous action — especially when the entrepreneurial leaders can no longer devote time to the organization’s internal operations because they must work to position the company in the market. In addition, burnout and disillusionment run high in many employees, who sincerely try, but frequently fail, to maintain the entrepreneurs’ feverish pace and sense of unwavering commitment.

A Developmental Crisis

At some point in the life of every growing organization, ad hoc planning and determined, centralized leadership become inadequate for dealing with the complex tasks at hand. Signs of this inadequacy become evident when, for example, the company’s capacity to handle customer demands decreases, employees start missing key details such as order fulfillment, and the company burns venture capital faster than it builds products. Despite these clear warning signs, entrepreneurs and their management teams may not be ready to implement the processes that characterize professional management: careful planning; clearly defined roles and responsibilities; monitored budgets, financial performance, and product quality; and the entrusting of major responsibilities to someone other than the leadership team.

For a time chaos seems to reign. People feel confused and anxious about the company’s direction. Managers may be overwhelmed by the volume of work and the magnitude of their duties, but they feel they don’t have the time, budget, or expertise to hire the right support staff. So they fall into “fire-fighting” mode, trying to do everything themselves, partly because they don’t think their subordinates have the expertise or knowledge to do so, and partly because the company’s founders have modeled this kind of controlling behavior. This approach creates a “Limits to Success” scenario, in which the company’s incapacity to handle complexity limits its ability to grow (see “The Limits to Entrepreneurship”).

Even as they flounder, the leaders struggle to create an infrastructure that will help them meet the challenge of growth. But attempts to install processes such as information systems or budgets frequently fail: The entrepreneurs don’t yet have the skills to make them work or the habit of depending on them. Nor do they have the time — the demands of the present seem to conspire against their own long-term interests.

So just as the founders build the infrastructure, they tear it down again, relying on guts, determination, intuition, and even harder work. This method doesn’t succeed either, so they renew their efforts to institute policies and procedures. The entrepreneurs may go back and forth several times, in a maddening effort to escape their dilemma. Morale drops, and employee skepticism about the capacity of the management team to lead them through the crisis grows.

Here, then, is the fulcrum on which the developmental crisis turns: The organization must undergo fundamental change in order to survive, but few current employees are prepared or qualified to make the shift to a new operating mode — including the entrepreneurs. More often than not, only when the organization brings in a more professionally oriented leadership team does it survive — and, all too often, this move stems not from the entrepreneurs but, partly or entirely against their wishes, from a board of directors or venture capitalist.

Professional Leadership Organizations

In contrast with entrepreneurs, professional managers tend to be consistent, cautious, detail-oriented, and conservative in their personal styles. Yet, in their own way, they are far-seeing. Long-term planning, for instance, comprises a central part of their activity, as does the training and retention of able managers to guarantee the organization’s future. These leaders emphasize financial and product-quality controls that allow for course corrections when performance varies from goals. They also work to develop and maintain strong relationships with customers and suppliers. In short, professional managers create formal organizational structures, in which goals, operational processes, and roles and responsibilities are explicitly articulated, implemented, and monitored.

To begin to incorporate professional leadership into their organizations, entrepreneurial leaders must execute the following practices:

1. Delegate responsibility and authority. As organizations grow in size and complexity, the entrepreneurs must hire effective managers and trust them to do their jobs. To ensure a smooth transition, leaders should put this management team in place before launching major new initiatives.

2. Behave consistently. To some degree, entrepreneurs must curb their impulsive tendencies. Employees work better when they know what to expect in their jobs, what tasks they are responsible for, and how their performance will be evaluated. If entrepreneurs cannot limit their impulsiveness, they should hire an intermediary, such as a COO.

3. Plan and prioritize. Entrepreneurs, with input from managers and employees, need to set clear goals and priorities, even if it means letting go of some alluring tasks and opportunities. With this guidance, managers can effectively marshal organizational resources to accomplish the goals.

4. Communicate openly and effectively. Instead of keeping plans and financial data close to their vests, entrepreneurs need to share vital information with their staffs. Managers need this information to help plan and execute projects well.

5. Institute controls. Entrepreneurs must recognize the need to monitor key organizational processes, such as budgets and performance, and trust other people to do much of the oversight.

As crucial as it is for entrepreneurs to implement these professional practices in order for their companies to survive, most initially resist doing so. As we’ll see below, they and their staff are ill-equipped to handle the turbulence that arises as the company moves toward a new mode of operation.

Characteristics of Transition Periods

One of the major reasons that organizational transitions falter is that leaders do not anticipate and account for the uncertainty and difficulty that change brings to the entrepreneurial journey. Change rarely, if ever, follows a straight line, from conception to planning to realization. The process of managing change involves negotiating unexpected twists and turns, stops and starts, frustrating regressions and forward leaps of breathtaking speed and magnitude.

We can attribute this inability to navigate the change process in large part to the failure of our business culture to create an image of the journey that is both positive and realistic. So we continue to cling to the old idea that we can plan change step by step, and we become bewildered by the contradiction between this seductive myth and the tumultuous reality that we actually encounter.

The transition from entrepreneurial to professional leadership involves more than simply the development — or importation — of new skills and new processes. It also requires considerable physical, emotional, and intellectual stamina, as well as a capacity to move ahead with clear thinking and action in the face of inevitable uncertainty. Entrepreneurs who are leading their businesses to a mature level of development must be able to both fly with the waves of progress and endure stagnant times, and to let go of cherished ideas and often valued people, while promoting others who have not yet proven trustworthy.

We know that an entrepreneurial organization has completed the passage from old to new when it achieves a stable synthesis of its entrepreneurial origins and its professional future that fits its own distinctive purposes. This synthesis — merging creativity with controls — represents a new paradigm; that is, a new way for people in the organization to think, act, and feel that balances the best of the past and the promise of the future.

Developing a New Organizational Infrastructure

To integrate entrepreneurial leadership with professional management successfully, entrepreneurs and their organizations must move through four developmental stages.

1. Recognize the need for basic change. To begin the transition, the entrepreneurs, and then everyone else in the company, must perceive the need for change. Entrepreneurs generally understand why the organization must transform itself, but they often fail to act on this insight. Still believing that survival is paramount, they insist that they don’t have the time or resources to build a new infrastructure, hoping that small adjustments combined with determination and hard work — virtues that led to early success — will carry the day.

Entrepreneurs and their closest employees often cling to a culture that feels to some like family and to others like comrades waging war together against a hostile, uncomprehending world. At this stage discord may arise between the core group and formerly trusted lieutenants, who understand the risks to the organization if it doesn’t adopt a more professional infrastructure. It usually takes the financially oriented people, such as accountants and venture capitalists, to hammer home the need for implementing new systems and policies.

Once the entrepreneurs accept the inevitability of organizational transformation, the most effective way to convince other people in the company about the need for change is to create an environment where they can talk honestly about the challenges the organization is facing.

Action Items:

• Assemble a small transition management team that includes at least one employee who is not part of the entrepreneurs’ inner circle, one outsider (preferably a board member or an organizational development consultant), and the entrepreneurial leaders. Launching this process with a facilitated retreat can be helpful.
• Write a diagnosis that indicates current problems and reasons why the organization needs to change. Be sure to gather input from throughout the organization. You may want to introduce tools to support open discussion, especially if the organization’s culture has discouraged candid feedback in the past.
• • Identify areas of the company that have already changed or have been moving toward a professionally managed style and support these developments. You might want to provide workers in these areas with financial incentives, broaden their managerial roles, or publicize their accomplishments within the organization.
• Create informal dialogues at all levels of the organization about the company’s challenges and people’s fears around the change process. For example, at one company a manager instituted “Bagels with Steven,” a weekly meeting at which employees were allowed to vent frustration and confusion about the changes. Once employees felt their concerns were being taken seriously, they began to offer suggestions about the organization’s future path.
• Articulate a vision of what the organization might look like — and accomplish — in its new form.

2. Commit to and plan for change. Once the organization as a whole recognizes the need for transforming the company, everyone must commit to implementing a plan of action — even when present demands and financial risks are daunting.

Again, obstacles abound. In entrepreneurial organizations, the act of planning itself is problematic; it often violates the cultural norm. In response, leaders tend to hedge their bets: “Let’s do it, but I reserve the right to change course when I think it necessary.” Or they may languish in indecision, perhaps initiating change several times in small ways, then pulling back. Or the entrepreneurs may do an inadequate job of planning, saying “An hour or two should do the job. I know where we need to go, anyway.”

Entrepreneurs may also delegate the planning process to others and then override or limit their authority to implement the plan. This interference generally upsets the managers, who may engage in a struggle with the entrepreneurs for power. This process could have a positive outcome, by bringing the entrepreneurs’ ambivalence about the change process out in the open. Or it could cause the entrepreneurs to halt change efforts or alienate staff members.

Action Items:

• In consultation with the rest of the staff, identify any obstacles to change, including constraints on employees’ time, lack of material resources, and internal resistance to the initiative.
• Develop a plan to overcome these obstacles, and move the organization in the desired direction.
• Continue to support the people, teams, and processes in the organization that are already moving toward professional management, rather than focusing on correcting problems.
• Continue to hold dialogues, particularly with key personnel, to head off polarized situations. Bring ambivalence about change into the open by having people acknowledge their own doubts.

3. Implement the plan while tolerating instability. Once the organization is committed to the change process, everyone must execute the plan of action confidently, leaving little doubt about which direction the company is headed. For example, one key indicator of commitment is the entrepreneurs’ willingness to go outside of their circle of loyalists to hire and empower professional managers. These new leaders must possess the requisite skills to meet the organization’s needs — and may require higher levels of compensation than the existing pay scale supports.

Developing a new organizational infrastructure requires considerable time, energy, and skill. As change proceeds, anxiety in the organization will reach new heights, because key measures might get worse before they get better — customer complaints may jump, business may flag, and financial concerns may grow. These challenges will test everybody’s commitment to the plan. The leaders will probably spend many sleepless nights wondering what happened to their organization. Intense power struggles may emerge between the old and new guard of managers, or among members of each.

Initially, some employees may leave the company. Long-time workers may wonder if they will retain their jobs; others will develop a bunker mentality, determined to wait out the change “fad.” Many may feel betrayed by the entrepreneurs, who seem to have gone over to the “other side.” The professional managers, on the other hand, may feel the entrepreneurs are moving too slowly and sporadically.

In such trying times, the leaders and their close managers may be tempted to revert to old ways, once again seeking to micromanage every detail of the operation. Entrepreneurs may in fact respond to the instability by becoming dictatorial, uncertain, and indecisive, or by becoming dependent on a newly hired professional. Depending on their behavior at this time, the founders’ credibility might be seriously jeopardized.

The challenge for all is to tolerate the instability and the identity crisis — both the actual work disruptions and the mental and emotional responses to these disruptions. To do so, all employees must focus on maintaining a clear vision of what the changes can eventually do to help the company achieve it goals and appreciate the disruptions as natural “growing pains.”

Action Items:

• Develop a timeline that indicates when the company hopes to complete each aspect of the strategic plan. This timeline will help orient and reassure all the players that there is a solid plan for the future.
• Solicit the help of a coach or mentor — perhaps a board member who has successfully gone through the entrepreneurial process or a consultant—for moving through the transition.
• Provide guidance and training for loyal, long-time employees. Interview those outside the inner circle to see what they think of the changes. Reiterate and revise the change plan, making sure that each person can actually visualize their potential career path in the new structure.
• Continue to converse with employees, recognizing how change brings loss and regrets, and help make these feelings acceptable. Identify and discuss areas of instability, doubt, and tension until they are resolved or modulated.

4. Integrate the old and the new.

The final developmental challenge is to retain the entrepreneurial spirit in the new and improved organization. Often, in the name of efficiency and order, organizations kill off the sense of adventure that built them. But that energy is what allows companies to remain innovative and stay on the cutting edge of their industries. After the transition, the business must still compete in fast and constantly changing markets and technologies; if it grows sluggish, officious, and conservative — in short, bureaucratic — it will fail to remain competitive.

To that end, the new management systems need to act in the service of the entrepreneurial spirit. The organization needs to continually find ways to integrate the best of the old and the new, and to stabilize itself around this integrated way of doing business. For the leaders, the challenge is giving the management team room to exercise their skills and stabilize the organization while, at the same time, providing them with vision and support.

The organization needs to continually find ways to integrate the best of the old and the new.

The alternative to integration is both conflict — between those who represent the entrepreneurial style and those who advocate planning and controls — and fragmentation — in which various departments and people operate in contradictory, disjointed ways. Each group believes it understands more fully than others the strategy that the company needs to follow. Factions can fall into a kind of cold war, an unstable form of stability that creates constant tension and undermines performance.

Action Items:

• Identify and measure the value of what is “old” (flexibility, creativity) and what is “new” (infrastructure, controls). Outline how the company will synthesize the best of both to create something more effective than either style.
• Continue to define and redefine how the organizational plan will allow the company to move forward to meet the demands of growth, competition, quality, and so forth. In order to adapt all employees and tasks into the new organization, the plan needs to be flexible and responsive to new ideas and unintended consequences.
• Introduce methods to sustain openness, flexibility, and creativity, such as continuous learning and scenario planning. Create or maintain entrepreneurial aspects of the organization through equity and profit-sharing practices and spinning off new products into new companies or divisions.
• Create new roles for entrepreneurs who want to remain engaged with their companies in a different capacity, so they can still provide overarching vision and leadership. In order to satisfy their need for action, create opportunities for entrepreneurs to take on special projects, such as leading a major product development process.

Realizing the Dream

In summary, if entrepreneurs want to create a lasting enterprise that impacts their industries well into the future, they need to lead their organizations in making the transition from a startup to a professional culture. By integrating professional leadership (effective planning, budgets, and quality control) with the entrepreneurial spirit (openness, flexibility, and the ability to think “outside of the box”), organizations can continuously renew themselves and achieve long-term, sustained success.

Barry Dym, Ph. D., is president of WorkWise Research & Consulting. He has 30 years of experience as an entrepreneur, organizational development consultant, author, teacher and psychotherapist.

The post Integrating Entrepreneurship with Professional Leadership appeared first on The Systems Thinker.

Sometimes the mechanics of managing change overshadow relationships and compromise people’s dignity, respect, and trust. The manager in this vignette was insensitive to the needs of his employees. He was going to rush into informing them that they were losing their jobs and then send them immediately into a workshop about résumé writing.

Organizational change doesn’t have to happen this way. The betrayal people often experience is a result not of change itself but of how it is managed. Employees want to be a part of the process, not apart from the process. They want to hear the truth and have an opportunity to ask questions and become informed. How leaders manage change affects whether trust will be built or broken and desired outcomes achieved. Fortunately, most leaders are conscientious, trying to do the right thing in the face of all odds. How do they preserve or rebuild trust within their organizations, given the changing business landscape?

Change as Loss

People may experience change as a loss the loss of relationships with those laid off or the dissolution of the “family” company environment that once existed. They may resent that they are doing more work for the same pay with fewer benefits. Often the organization is no longer the same place employees “signed on for.”

In a world where everything is changing rapidly, many people who previously looked to their workplace as a source of stability now regard it as out of control. It frightens them.

Sometimes the mechanics of managing change overshadow relationships and compromise people’s dignity, respect, and trust.

On the other hand, the people initiating the changes often gain from them. If I am the one gaining, it can be hard for me to see how the other person loses. Many leaders are uncomfortable watching people experience the pain of change and are uncomfortable experiencing their own pain. They often consider this to be touchy feely stuff, not the stuff of “real business.” During times of change, leaders tend to retreat to the “hard side” of business for many reasons: It is where they are most comfortable, where their role is more tangibly defined, where they are skilled, and where they are the safest. But in their retreat to the safe side, they fail to honor themselves, their relationships, and the real needs of the people they serve. Their search for safety results in a betrayal of themselves, their role, and those they serve.

Such betrayal damages individuals, relationships, and performance. It robs people of their ability to believe in themselves and diminishes their capacity to contribute wholeheartedly to the organization. When people feel betrayed, they pull back. Morale declines, as does productivity.

Effective leaders acknowledge their employees’ feelings of fear and loss and work to restore their confidence. Otherwise, the betrayal continues, and people’s trust in their leaders and their organization further plummets. Survivors go into a state of resignation: They take fewer risks, blame others, go through the motions, and are not as productive as they once were. If employees have been burned before, they are less willing to give their all and come through when needed. If leaders do not deal with feelings of betrayal, they will unwittingly destroy two of the very qualities they need to be competitive: their employees’ trust and their performance.

Healing from Betrayal

Healing from betrayal — whether intentional or not begins when we observe and acknowledge that betrayal has occurred and that we understand its impact on others. As a leader, you can take certain actions that can have a positive impact on people, as outlined below. These seven steps will help you and others remain aware of the behaviors essential to healing and provide a common language and perspective that engages people in rebuilding trust (see “Seven Steps for Healing” from The Reina Trust & Betrayal Model®).

Step 1: Observe and Acknowledge What Has Happened

“Mr. Smith needs to effectively address the ‘pay package’ issue at the organizational level. If benefits or merit pay are going to be negatively affected, he needs to manage the message through an effective and timely information program. I think he underestimates the level of awareness and impact this change will have on employees.”

• Acknowledge the Negative Impact of Change. Aware leaders realize that employees are whole human beings with feelings. They know that people who do not feel supported in dealing with their feelings and concerns are less able to heal from their experience of betrayal. As a first step, these leaders acknowledge the potential downside of the change process.
• Start with Awareness. One of the greatest mistakes leaders make in challenging times is to assume that, once a major change has taken place, trust will return on its own. This view is both unrealistic and irresponsible. Similar to healing at the individual level, the next step to healing at the organizational level is awareness that trust has been eroded.
• Assess the Health of Your Organization. Leaders can learn a lot by observing and assessing the climate within the organization. Notice what your people are experiencing and acknowledge it. Pay attention to what is building and breaking trust. Find out what is important to people. Listen to what they are saying at the water cooler, in the break rooms, and on the shop floor. When witnessing anger, don’t just notice it; listen to it. Quite often, anger represents deeper feelings of hurt and disappointment. Remember, people in pain need to be listened to. They need someone they can trust to turn to for support and understanding. They need help to understand their own experience.
• Acknowledge Feelings. Effective leaders consciously acknowledge their employees’ feelings of frustration, disappointment, and betrayal. It is only after acknowledging the feelings of betrayal that leaders are able to respond to them. Leaders must work very hard not to get defensive or try to justify or rationalize what happened. They must remember that people are entitled to their feelings. It is the role of a leader to listen, observe, and acknowledge.

SEVEN STEPS FOR HEALING

These seven steps will help you and others remain aware of the behaviors essential to healing and provide a common language and perspective that engages people in rebuilding trust.

Step 2: Allow Feelings to Surface

“I don’t always feel heard — that I can address my concerns directly with certain managers and be taken seriously. It is important to me that I am able to do so. There are occasions when my supervisor has to address issues with a particular manager on my behalf, because I wasn’t deemed ‘important’ enough by him to talk to. This attitude discourages me and other employees from addressing serious concerns in the future.”

• Give People Permission to Express Their Concerns, Issues, and Feelings in a Constructive Manner. Create safe forums, staffed by skilled facilitators, that support the expression of fear, anger, and frustration. Giving your employees a constructive way to discuss their feelings and experiences helps them let go of the negativity they are holding, freeing up that energy for rebuilding relationships and returning their focus to performance
• Help People Verbalize. Help employees give voice to their pain — pain they are afraid or unable to share. When you give your attention to understanding your employees, you let them know that you respect their pain. This is difficult work for leaders, but it is important and necessary for facilitating healing and navigating change. Your employees don’t care how much you know until they know how much you care — about them and their well-being. People in pain need to have their feelings heard. They need to know that you are able to relate to what they are saying and feeling. When you do not acknowledge your employees’ emotions, they feel unheard, resentful, and distrusting toward you. Another layer of betrayal occurs.

Step 3: Give Employees Support

“Our leader took the time to hear our story. She really listened and asked us questions. It helped to tell her how we felt. She heard how frightened we were about what was happening around us. It feels good to know that she understands our needs. When she shared her views, I was able to see things in a much different way. I am beginning to have hope for the future.”

• Recognize Your Employees’ Transitional Needs. People have needs that must be met before they can adapt to change. They have informational needs regarding the new direction the organization is taking and the strategies it proposes to get there. They have relationship needs associated with belonging and their role in the new organization. And they need their skills and abilities to be valued. When leaders expect people to embrace change without having these fundamental needs addressed, people feel betrayed.
• Back Your Employees. Your leader-ship position allows you to be your employees’ advocate. Represent their interests, defend them from unwarranted criticism, and lobby for resources critical to their jobs. By backing your people, you are building contractual trust and meeting the implicit expectations people have of leaders. Furthermore, you demonstrate that you can be trusted to fulfill future commitments and that people can count on you to do what you say you will do.

Step 4: Reframe the Experience

“Our president, Mr. Allen, took the time to visit every field office in our region to explain the business reasons for GNP Industries’ downsizing the eastern division. This helped us put the change into perspective. It lessened the communication gap between the headquarters and the field branches. His actions let us employees know that he cared. We believed he was going to do everything he could to lessen the impact the changes were having on our jobs, our families, and our lives. We understood the direction the company was taking and knew our leader would continue to tell us the truth.”

• Put the Experience into a Larger Context. Helping your employees work through their emotions makes it possible for them to begin to heal.This movement gives you an opportunity to rebuild trust and helps employees reframe their experience by discussing the bigger picture: the business reasons for change. Honestly acknowledge the changes the organization went through and why. In doing so, you must continue to acknowledge what people have experienced. Only then will employees be in a position to accept the new direction in which the organization is headed and to see their role in it.
• Engage in Inquiry. The questions that people ask will guide their journey. Responding to their questions honestly will provide employees with understanding, awareness, truth, and renewed hope for a trusting relationship with you and the organization.Something quite powerful occurs when we tell the impeccable truth — with no exceptions, no justifications, no rationalizations.
• Help Employees Realize There Are Choices. Experiencing betrayal leaves employees feeling very vulnerable and at the mercy of the forces of change.They may need help seeing that they have choices regarding how they react to their circumstances. The more people are aware that they can choose their actions, the more they are able to take responsibility for those actions. Employees may need help in examining their assumptions, breaking out of their self-limiting beliefs, and exploring options and possibilities.
• Embrace Mistakes. Some of the behaviors discussed that aid in healing may be new for you, and you may not trust your competence in exercising them. It may take some practice to develop these skills and become comfortable using them. During this time, you may make some mistakes. That does not automatically make you a failure. Embrace these mistakes as opportunities for learning, thereby turning them to your own benefit.

After all, they provide valuable feed-back regarding what works and what does not.

Just as leaders must be sensitive to employees’ needs, employees need to be sensitive to leaders’ needs. This may mean having some patience and understanding that the leader is grappling with change as well. Therefore, if a leader makes a mistake, it is not necessarily evidence that the leader can’t be trusted. It is evidence that the leader is stretching, growing, and learning. When someone is practicing new ways of relating, people need to be supportive and understanding of his or her learning.

To gain support and understanding, you might find it helpful to share with people that you are learning new skills. Sharing this aspect of yourself demonstrates your trust in them and further extends the invitation to rebuild your relationship with them.

It is possible that you as the leader feel betrayed as well. It is as important that your feelings of betrayal be acknowledged and that you get support to help people see that.

Step 5: Take Responsibility

“Leaders need to take responsibility for how change was implemented. The restructurings took people by surprise and left departments with minimal coverage to do the work. Questions were not answered and needs not addressed. It’s difficult to imagine the distress this has caused. Employees were in great distress and felt quite isolated.”

• Take Responsibility for Your Role in the Process. It is not helpful to try to spin the truth or cover mistakes. It does not serve you or the relationship. Something quite powerful occurs when we tell the impeccable truth with no exceptions, no justifications, no rationalizations. Telling the truth is the fundamental basis for trust in workplace relationships. It demonstrates one’s trustworthiness. We take responsibility when we acknowledge our mistakes. Three simple words, I am sorry, reflect taking responsibility and go a long way to rebuilding trust.
• Help Others Take Responsibility for Their Part. When people are in pain, they tend to blame leaders and behave in ways that contribute to betrayal. We support others in taking responsibility when we help them see their role in creating the climate of betrayal. Employees may not have control over change, but they do have control over how they choose to respond. Even though people may feel betrayed, those feelings do not make betraying in return acceptable.
• Make Amends and Return with Dividends. It is the leader’s role to break the chain of betrayal and reverse the spiral of distrust. Because actions speak louder than words, it is important that you take the first step in mending fences with your employees. Remember that rebuilding trust does not simply mean giving back what was taken away. It means returning something in better shape than it was originally in. You must not only replace but also make things better. If this is not possible, be honest about the realities of the situation and what you can do to make amends.
• Manage Expectations. To safeguard you and your employees against future betrayals, keenly manage expectations. Employees want to know what is expected of them and what they can expect in return. Emphasize the need to negotiate with them when their expectations cannot be fulfilled. Doing so strengthens contractual trust between you and your employees.
• Keep Your Promises. Managing promises is important in relationships. Trust is the result of promises kept. Don’t make promises that you know you can’t keep; doing so just sets up you and everyone with whom you have a relationship for a downfall. When you realize that you cannot keep promises, renegotiate them; don’t break them.

Be careful of what you promise and what you appear to promise. When you are attempting to rebuild trust, it is essential that you not try to justify past actions and that you address the perceptions of those who feel betrayed. According to Frank Navran in Truth and Trust: The First Two Victims of Downsizing, “It is enough for an employee to have believed that a promise was broken for trust to be violated.”

Step 6: Forgive

“Many employees feel that they have been intentionally misinformed and lied to. They do not trust management. It will take time for forgiveness to happen. We need to bring in support to help us understand the surrounding circumstances and allow us to say what needs to be said, to ‘get this off our chests.’ This will help us shift from blaming management to focusing on problem-solving the issues, so we can begin to forgive.”

• Recognize That Forgiveness Is Freedom. Forgiveness is a gift we give ourselves. It is about freeing ourselves and others from the anger, bitterness, and resentment that can deplete our individual and collective energy and spirit and interfere with relationships and performance. When we help people forgive others, we help them free themselves. With forgiveness, they heal for their future by changing their attitude about the past. We help them see new possibilities.For most people, forgiveness takes time, and it happens a little at a time. Over time, employees may be willing to forgive, but you cannot expect them to forget. You can help them heal from the pain they felt, but you cannot erase the events of the past. Occasionally, employees may still be a bit angry after they forgive. It is natural that they may experience lingering feelings of anger for the perceived wrongs they experienced.

  Occasionally, you as a leader may need to forgive yourself. You did the best you could, and for whatever reason, it still wasn’t enough. Beating yourself up mentally and emotionally is worthless and self-defeating.

  Acknowledge for yourself what needs to be said or done to put your mind and this issue to rest. Then just do it! Be compassionate and cut yourself some slack during the healing process!

• Shift from Blaming to Focusing on Needs. Because forgiveness is a personal matter, it is difficult for people to forgive a system. However, leaders can work to cultivate a more personal and trusting climate where healing and forgiveness can take place. They can begin to do this by helping people shift from blaming the organization or its leaders to focusing on their personal needs as they relate to the business.It is important to address persistent resentment and blame in an organization, as they are toxic to the individuals involved and to the whole system. They undermine trust, morale, productivity, creativity, and innovation. People continue to blame when they perceive that those who are responsible have failed to take responsibility. At the same time, they feel that they do not have to take action and are therefore not responsible.

  It is essential for leaders to help people shift from a blaming mode to a problem solving focus. What do employees need to resolve the issues, concerns, fears, and pain they are feeling? What conversations need to take place? What still needs to be said? What needs to happen for healing to occur? What will make a difference right now?

Step 7: Let Go and Move On

“Our leader brought in outside skilled facilitators to provide the needed support through the transition. During the small group discussions, they were neutral and made sure we were all heard. They held a tough line, helping us see our leader’s point of view. The facilitators really drove home the responsibility we all shared. We had painful but powerful discussions. What a relief it was when we were able to forgive ourselves, because we were no angels. But things really shifted when we also forgave our leader. Wow — we have moved on and are all on board with our organization’s new direction.”

• Accept What’s So. Leaders can help people accept what has happened. Acceptance is not condoning what was done but experiencing the reality of what happened without denying, disowning, or resenting it. It is facing the truth without blame. It is helping employees separate themselves from their preoccupation with the past and helping them invest their emotional energies in the present and in creating a different future.
• Realize That You Won’t Always Accomplish Your Goal. Although you may not always accomplish your goal, it is important that you make a good faith effort and that your intentions are honorable. It is quite acceptable for leaders to disagree with their employees or not support a particular cause. Effective leaders do so with honesty and integrity.
• Take the Time and Make the Commitment. Building trust takes time and commitment. When trust is lost, it is regained only by a sincere dedication to the key behaviors and practices that earned it in the first place. The road back is not easy. However, by listening, telling the truth, keeping your promises, and backing your employees, you will play an instrumental role in assisting your employees and organization to heal from betrayal, rebuild trust, and renew relationships.
• Give Support! Providing support is a sign of your dedication to the healing and rebuilding process. The number one mistake leaders make is expecting people to immediately move from step 1 (observing and acknowledging what has happened) to step 7 (letting go and moving on) without doing the necessary work of the other steps. We aren’t built to work this way. People in pain cannot simply move on. They need to fully go through the healing process. When people are willing and able to do the work, it will lead to renewal!Your commitment to practicing these seven steps, and engaging your people in the same, will lead to transformation. Imagine the possibilities!

The post Rebuilding Trust Within Organizations appeared first on The Systems Thinker.

The decision-making styles that evolve in the fast-paced setting in which potentially life-threatening clinical outcomes are at stake have significant value. They let team members assess large amounts of data in a rigorous manner while acting quickly. But when transferred to other settings, such as hospital boards and committees, this particular approach to conversation and decision-making can be problematic.

Given their backgrounds, healthcare professionals generally expect that their roles in meetings of teams, boards, or committees will involve advocating for their constituencies and mandating solutions to problems. While more directive approaches play an important role when decisions must be made or actions taken, in other contexts, they can undermine team learning. In addressing issues of organizational strategy, long-term planning, and creative problem solving, generative dialogue has proven more effective than one-way communication. Failure to shift to dialogue-based forms of communication will ultimately have a negative impact on an organization’s ability to rapidly adapt to changing market trends and to truly explore the questions involved in reducing medical errors and improving outcomes.

One Organization’s Challenges

In addressing issues of organizational strategy, long-term planning, and creative problem solving, generative dialogue has proven more effective than one-way communication.

The governing board of one healthcare organization was typical of many in the industry. Physicians attended meetings with the expectation of advocating for their constituencies. Managers learned to fear these meetings, as interactions often focused on criticism of the existing situation or proposed solution. The group rarely explored the challenges through healthy dialogue.

To help determine the board’s future role, board members and other stakeholders participated in a retreat. The following perceptions surfaced:

• Physicians and managers believed that there was value in meeting together regularly.
• Both groups felt that the organization needed to address certain strategic themes.
• Managers understood that they needed to collaborate with physicians to elicit the full range of possible approaches to these issues.
• Physicians wanted to help create ways to approach these themes, but wondered if they would have the power and control to make policies and decisions.
• Both groups had difficulty seeing beyond the current board structure, envisioning that the same struggles and limitations would continue to arise.
• Others in the organization were passionate about participating in the process, although they had not previously been invited to do so.

The Compass Group

The consensus from the retreat was that merely tweaking the existing board structure would be inadequate; nothing short of a complete destruction of the structure, norms, and paradigms would provide the organization with the freedom to explore new paths to achieve its stated goals. With this understanding in mind, the board dissolved its existing structure in favor of a dialogue-based forum that was organized around the stated organizational imperatives of customer service, employee satisfaction, strong physician relationships, and financial stewardship.

This forum came to be called the “Compass Group,” because the group felt that these strategic themes were analogous to the directions on a compass. The Compass Group was seen as a risky endeavor. Much of this fear was based on the uncertainty of where dialogue around these concepts might lead. The organization, however, was able to understand that any learning involves some degree of risk.

“Uncoupling” Old Norms

Cultural and conversational norms had been a major barrier to true learning within the organization. Many feared that the old ways would carry forward into the current efforts. A number of important steps were needed to ultimately “uncouple” the organization from existing ways of interacting, thus allowing for new ways to emerge and thrive.

Associating Pain with the Status Quo. A critical event during the retreat involved discussing aspects of the meetings that board members disliked. Surfacing these feelings markedly raised the group’s level of discomfort with the status quo. This discomfort created a compelling need to move the initiative forward.

Incorporating New Perspectives. The group felt strongly that the constancy of the board’s membership over the past several years had contributed to some degree of stagnation. Understanding that many others in the medical group had expressed an interest in participating, members agreed to open the group up to others who possessed fresh perspectives.

Eliciting Desired Norms and Expectations. During the retreat, board members mentioned rewarding and fulfilling experiences that they had enjoyed in other meetings and committees. Common among these experiences were being heard, contributing proactively, understanding one another, practicing mutual respect, and building upon collective contributions to generate creative approaches. By listing these desired norms and expectations, the group was eventually able to develop momentum for change.

Generating “Buzz.” Through reports from the retreat, others in the organization became aware that the Compass Group was no ordinary board or committee. The communications were lively, genuine, and informal; they carried with them a feeling of realism, openness, and innovation that was not typical of standard emails and memoranda. This “buzz” was instrumental in generating interest among others who might not have been comfortable in the traditional board setting, and in creating expectations that helped to overturn the norms of the past.

Setting the Stage for Dialogue

Because of the risk inherent in any team process, a great deal of planning went into the initial dialogue session. The goal was for people to relax, engage in collaborative dialogue, and explore creative possibilities for action. The Compass Group followed some of the principles used in developing a World Café (see “Framing Questions and Guidelines”).

Establish a Clear Purpose. Unless the group had a clearly defined purpose and objectives, along with concrete outcomes, participants wouldn’t perceive significant value. For the first of the Compass Group sessions, the management team chose to focus on the strategic theme of customer service. With this theme in mind, participants addressed a series of questions that ultimately led to greater insight and collective shared knowledge on the topic (see “First Compass Group Session” on p. 9).

Invite Great Guests. The management team decided to invite all interested physicians, nurse practitioners, and physician assistants. In doing so, they conveyed the sense that the Compass Group was “no ordinary board meeting”; this innovative forum would truly make a difference.

Plan for a Safe and Welcoming Environment. In planning the session, organizers paid close attention to creating a physical space that would be perceived as inviting, hospitable, and intimate. The goal was for participants to feel a high degree of psychological safety. The creation of a welcoming environment began with the invitations themselves. Rather than relying on email, organizers selected stationary and fonts with earth tones to convey the message that this experience would be different.

Form Powerful Questions. Well-structured, open-ended questions hold tremendous value. These questions are the most important determinant of a successful dialogue session. Because the theme of the first Compass Group session centered on customer service, questions related to service and to recent internal efforts in measuring service perceptions were developed in a logical progression of discovery.

Facilitate for Success. The facilitator’s role was (1) to model the process for internal facilitators in the future, (2) to provide a structure for the evening by facilitating between rounds of dialogue, and (3) to provide some training around the skills involved in dialogue, with a heavy emphasis on inquiry. Members of the management team had already received some training in hosting a dialogue session and in facilitating smaller conversations, mainly by encouraging a balance of inquiry and advocacy. To leverage these skills, one management team member served as a facilitator at each table. The other members at each table were carefully distributed to ensure sufficient diversity of conversations.

The session opened with a time for attendees to arrive, get oriented, and enjoy food and beverages while conversing with colleagues. Participants wrote the answer to the question, “What is the location of your most memorable service experience?” on their name tags. They were encouraged to use this memory as a starting point for conversation with others.

The session began with an overview of the evening and a brief session on dialogue. Each round of dialogue was structured around a series of questions. In this particular case, a review of the organization’s patient satisfaction data and video reenactments of actual patient experiences were used as the starting point for forming questions. During the rounds of dialogue, the facilitators at each table helped to encourage effective inquiry and to surface hidden or underlying assumptions. In addition, they recorded the predominant themes that emerged.

Between each round, the tables shared their discoveries and insights with the larger group. In addition, they commented on their success with using dialogue skills. As one of the goals of the Compass Group was to provide an opportunity to share best practices, the group used a separate flip chart to capture these ideas. In addition, items that warranted action, follow-up, or future dialogue were documented on another flip chart.

After the Session

The feedback from post-session surveys was overwhelmingly positive. Participants reported that they had achieved a high level of shared understanding and accomplished a great deal. They also felt passionate about continuing the conversations.

The themes and best practices that emerged from the table dialogues were distributed to all members of the organization, along with a clear plan for future dialogue sessions on the other strategic directions defined by the compass. In addition, efforts to continue the discussion around service were implemented by providing weekly questions for each manager, physician, and department to use with their staff.

As in other industries, healthcare organizations tend to depend heavily on one-way communication, debate, and criticism. Unfortunately, these dynamics present a barrier to learning and to developing organizations that are able to innovate and adapt effectively to tumultuous market conditions, a necessity in today’s marketplace. Dialogue, specifically the skills of understanding mental models and balancing advocacy with inquiry, is essential for building organizations that learn effectively. By challenging the assumption that committees and boards must always be structured in the traditional manner, organizations may be more likely to explore formats that are more conducive to dialogue. Shifting to dialogue-based forums focused on strategic imperatives can be one approach that fosters learning in all kinds of organizations.

Manoj Pawar, MD, MMM, is a managing partner with Nivek Consulting and is the chief medical officer for the Exempla Physician Network. He is committed to developing high-performing teams and organizations in healthcare. He can be reached at pawarm@exempla.org.

Special thanks to Gene Beyt, MD, Richard Hays, DBA, Charles Jacobson, MD, and Bob Myrtle, DBA, for their wisdom, and for their gracious and insightful contributions in the development of this article.

The post Dialogue-Based Forums for Healthcare Organizations appeared first on The Systems Thinker.

About six years ago, Colonial Pipeline had a defining moment: One million gallons of diesel fuel spilled from a ruptured pipeline into Reedy River in South Carolina. This accident damaged the company’s reputation with both the public and regulators. Forced to scrutinize how we conducted business and maintained the pipeline, we discovered that human factors are as important to the operation of the pipeline as mechanical, electrical, and computer systems. In response, our leaders worked with employees to begin making changes in the ways we did things. Relying on our frontline workers to provide answers and to become change agents has proven invaluable in the journey to operational excellence.

Conduct of Operations Guide

Over the past several years, all employees from the executive offices to the pipeline facilities have become involved in continuous improvement and learning. One of our first realizations in the aftermath of the Reedy River accident was that we didn’t have a set of administrative policies that guided the performance of daily operations tasks. In 1998, by working with people in field operations such as maintenance, quality assurance, and engineering, we developed a “Conduct of Operations” document that specifies the proper use of procedures, communication techniques, written information in logs, control of equipment, professional behaviors in operations areas, verification techniques, and so on. Operations employees recently updated the document, which had been based on a model from the nuclear industry.

Compiling the Conduct of Operations reflected a shift toward involving the people who do the work in setting policies and solving problems. At the same time, we adopted a guideline that any person has the authority to shut down the pipeline if he or she thinks there’s a problem. Although ceasing operation is undesirable from a business perspective, we would rather shut down and lose revenue while we investigate the cause of the unusual indicator than take the chance that there’s a leak or spill. Protecting the public, the environment, and our employees needs to be the top priority.

STAR. One of the elements of the Conduct of Operations is STAR, which is an acronym for Stop, Think, Act, and Review. This tool has proven to be a simple but powerful way to avoid errors. When a person does a task, he or she stops before doing the first step, thinks about the correct action, acts by doing the step, and reviews to ensure the actual result matches the expected result. For example, if I’m going to open a valve to start gasoline flowing through the pipeline, I’ll stop, think about what I’m going to do, push the correct button, and then look to see that the valve for gasoline is open. If there’s a problem, I can immediately recognize and correct it. Through our voluntary near-miss reporting system, we receive regular accounts of how STAR has prevented errors or other problems.

We introduce and reinforce the use of STAR in a number of ways. The most effective is a yellow foam star similar to that shown in “The STAR Process.” These stars or small signs with the acronym are visible at all facilities as a constant reminder that this simple tool can prevent errors. Some people have even adopted the STAR process at home.

The Power of Teams

Each of Colonial Pipeline’s four districts, which span the entire pipeline, and its operating control center in Atlanta now has an OPEX team. The teams have between 7 and 12 members and include operators, technicians, project team personnel, and an operations manager. Individuals are chosen based on their experience and expressed interest in representing their local units as operational excellence “champions.” Team members regularly communicate with each other through quarterly meetings, conference calls, and e-mails. All teams have similar charters and goals that are linked to corporate, district, and individual goals.

The members of the OPEX teams have been invaluable in leading change initiatives at their locations. With the support of local and corporate management, they have conversations with their coworkers about ways to achieve “spill-free, error-free performance.” In many cases, the OPEX team members have received training as on-the-job coaches or procedure writers. One individual has led an effort to develop operating procedures that are task-specific, designed with the user in mind, and focused on mitigating risks. After five years, these procedures are used at all facilities. They have played a large part in ensuring safer operations and are used as training tools for new employees.

To increase team effectiveness, we’ve used The Team Memory Jogger, a publication of Goal/QPC. OPEX team members regularly evaluate their meetings and use the ideas in the book to solve problems. They also use the “personal skills checklists” in the book to improve their own performance.

At the end of the year, all 50 team members are invited to a two-day Operational Excellence Summit. One manager calls this event “a family reunion, celebration, info-mercial, tent revival, cheerleading clinic, and time of learning.” Participants take advantage of the time together to share learnings. So team members can share their experiences with their coworkers back home, we have a graphic recorder document the event in evocative words and images. Reproductions of the illustrations are still being passed from location to location nine months after the last Summit, providing a rich source of discussion topics.

New Approaches

Based on our success with these kinds of tools, we have tried other things that we would not have attempted several years ago. Last year, all technicians who had been with the company less than five years participated in technical training. The training involved studies of electrical and mechanical principles, basic math, print reading, and assembling and disassembling valves and pumps. It also included storytelling. If someone had told me 10 years ago that our technicians would be involved in telling stories to one another as a part of their training, I would have laughed.

In any case, we know that people learn best when they are sharing meaningful experiences. At the different sessions of the technician course, participants were required to think of a story about their work. At each class meeting, one individual shared his or her story. This approach proved very successful in helping attendees understand what being a technician at Colonial means. It also aided people from different locations and backgrounds in creating a network of support.

I recently used another technique with the Operations Leadership team, which includes those leaders in all areas of the organization who are involved in strategic initiatives and decisions. They were dealing with a complex issue about organization redesign that required a common understanding of all the challenges and mutual agreement about the path forward. I adapted a tool called “Visual Explorer” for the group. As I travel around the pipeline system, I habitually buy postcards that convey metaphors or show local scenes. For example, last year I purchased postcards with images of Amish agriculture and people working together building barns in Lancaster, Pennsylvania, the setting for a technicians’ meeting.

At the meeting, I spread lots of the postcards on a table. After listening to a presentation, participants wrote down their thoughts about what was important to them regarding the redesign. They then went to the table and looked at the postcards until they found one or several that “connected” with both them personally and their thoughts about organization redesign. Finally, they went back to their seats and wrote about the meaning the cards had for them in this context.

I didn’t know what to expect when the time came to discuss the images. What occurred was a thoughtful conversation about many aspects of the issues involved in organization redesign. Although participants didn’t come to a final conclusion about how to approach the task, they agreed on the need to work together to build new capabilities in the organization’s workforce.

Writing this article has made me realize that our mission statement about delivering energy solutions and linking folks who need one another doesn’t just apply to transporting petroleum products from suppliers to consumers. We can supply energy for learning to one another, and we can continue to link employees with learning tools that develop individuals, teams, and the organization. Linking, conversing, developing, working together—these practices energize our workforce and lead to more systemic learning.

The post Systems Learning for “Error-Free” Performance at Colonial Pipeline appeared first on The Systems Thinker.

As founder and CEO Carol McCarthy tells it, “For the first 12 years, we worked very successfully with healthcare clients to grow their businesses. Both agency staff and client retention was high, and we made a record profit. But when the leadership team met to plan the next 12 months, we could think of few projects that had truly excited us the previous year. I thought, this is depressing – especially because, as the leader of the organization, I felt the same way. That was the defining moment when we said, ‘We’ve got to do something differently.’”

Financially, there was little incentive to change. For the previous 10 years, everyone in the company had received significant year-end bonuses. Creatively, however, the leadership team wanted to feel energized, to use their best ideas and engage with the best clients — and to have a greater impact on public health.

The leader’s role is to tap into the collective wisdom of the organization and provide the boundaries within which creativity can happen.

Intrigued by this challenge, McCarthy decided to hire Carolyn Hendrickson, founder of Tandem Group Consulting, to help the agency become a learning organization.

McCarthy wanted learning to become a constant part of what people were expected to do in their work every day. Despite her initial apprehension about the costs involved, she believed that, if her staff could habitually share ideas and learnings, they could maximize their creativity, increase profitability, and attract clients more aligned with their work.

Key Tensions

When Hendrickson began to interview the agency’s staff, she discovered two key tensions typical of small companies: (1) How to apply some big company approaches without losing the benefits of a small-company culture and (2) How to grow revenues over the next 5 to 10 years without growing the size of the company.

In terms of the culture, Hendrickson was struck by the staff’s tremendous commitment to health and creating a better world. Particularly important to people was the company’s intimate culture, nurtured by its two well-loved top leaders. Because the small size allowed them to think creatively and behave nimbly, some staff even felt ambiguous about the need for a leadership team.

In terms of work processes, the agency had an incredibly fluid structure. Everybody was involved on every project. If you worked on seven client campaigns, you were on seven different client teams. This organizational design meant numerous meetings, constant communication, and enormous accountability. Although things often fell through the cracks, people were attached to that way of doing things.

Like many small companies, McCarroll Marketing had become lulled into planning on a year-to-year basis and lacked a clear understanding of the role of leadership in building a company for the longer term. Furthermore, people didn’t have a strong sense of ownership. They believed it was Carol’s company and, although they could provide input into decisions, she had the prerogative to do whatever she wanted.

Learning for What?

What Hendrickson realized was that she had to help the leadership team, and the rest of the company, shift their mental models around shared vision, leadership, and work processes. The approach she used was based on a core belief that organizations are complex adaptive systems — living, interconnected, dynamic systems in which change emerges if the right set of conditions exists. At times, an organization needs to be brought to the “edge of chaos” for new order and innovation to emerge. This approach differs greatly from traditional, mechanical ways of managing or driving change. The leader’s role is to tap into the collective wisdom of the organization and provide the boundaries within which creativity and change can happen relatively easily and naturally.

According to Hendrickson, McCarroll Marketing already had a number of these “conditions for emergence” in place: People had a great deal of discretion to decide what action to take and when to take it. They also felt comfortable saying what was on their minds, and only a few topics were “undiscussable.” Work was also delivered through a flexible structure that allowed information and people to flow across organizational boundaries. What was missing was a shared vision for the future and an understanding of how all their work fit together to deliver value to their customers.

Shared Vision. To get a sense of the larger whole, Hendrickson asked the leadership team to consider what they were learning for. This question helped the group link learning to business results and became the ongoing topic of their strategic planning meetings, as well as several company-wide, full-day offsite sessions. It soon became clear that McCarroll Marketing wanted to “learn for growth” — to establish a thriving learning culture that creates an invigorating place to work, develops extraordinary people, and fuels long-term growth.

This idea was linked to the staff’s vision to achieve a dramatic positive cultural shift in people’s attitudes and behaviors about health. In this vision, the future might look like:

• We help a life-saving technology gain global acceptance.
• Veggies become as popular as McDonald’s.
• For the first time in 50 years, childhood obesity is on the decline.
• We are a national mecca for outstanding talent.

Recognizing that the agency’s strength lay in the services it offered — advertising and communicating effectively – the leadership team came to terms with the fact that, in order to make a difference, they had to find clients, be it hospitals and health systems, medical technology manufacturers, public health initiatives, or healthy foods advocates, who had big ideas similar to theirs.

Leadership. The decision to pursue the shared vision raised the bar of expectation for the entire leadership team. If they were to achieve this ambitious goal, they needed to strengthen their ability to work together. To that end, they spent time exploring what leadership meant and how to model it. Underpinning their current thinking was the CEO’s own philosophy of leadership. As the owner of a service business, she placed high importance on sincerely attending to her employees’ needs every day. For example, when her receptionist lost significant weight on a diet, Carol gave her money to buy a new suit for the staff’s holiday party.

Senior managers are rediscovering excitement and a deeper sense of purpose.

That level of attention created an environment in which people felt personally taken care of. Yet it also made it hard for McCarthy to address difficult personnel issues, including the fact that a key leader who had been at the company for 10 years had not been performing effectively for a while. With the new initiative, she finally addressed the issue and moved her valued friend and colleague out of the organization.

Even more important, McCarthy had to address what she wanted her legacy to be. Did she see her company eventually being sold off or enduring for a long time? To pursue the shared vision, she would have to empower the organization with a sense of shared ownership and leadership. It took her a year to make the inner shift from “it’s my company” to “it’s our company.” With tremendous courage, she has begun the slow process of shifting her role from principal leader to mentor-teacher. This means continuing to loosen the reins on some critical decisions and expand the leadership team’s roles in the company.

Work Process. The question that remained was: How were they going to achieve the desired impact, increase revenues, and keep the company small? To do so, they had to find different, more effective ways to do their work and build capacity.

First, they had to address “undiscussable” organizational culture issues. For example, people believed it was industry standard to work late and felt guilty if they didn’t. They were also uncomfortable with the company’s open-door policy, in which they were expected to be responsive to others, even if they were very busy. The group addressed these challenges by simply airing them and by creating fun signs for people’s doors to indicate their level of busyness.

In terms of building capacity, Hendrickson put together a team to analyze the company’s workflow process from beginning to end, a task that had never been done before. They discovered that marketing took up 70 percent of the process, crunching the creative team’s time on the back end. They also found that 45 percent of the problems happened during that back end. So the team redesigned the flow to give more time to the creative conceptualization of the work.

The redesign had significant implications. A longer creative process meant it took longer to close the job, which affected finances. It also meant reeducating clients, who were accustomed to getting ideas in two weeks but now had to wait four. The group is still refining the process by exploring the question, How do we get back to a course of profitability and moving jobs along while still allowing enough time in the work process for the best ideas to emerge?

Rough Spots

An awkward transition followed the dramatic shift in work processes. For McCarthy, the biggest challenge lay in where to delegate decision-making. As she empowered her staff to do more creative work, take more risks, and push the clients’ boundaries, she struggled with the concept of shared leadership.

For example, one of the leadership team’s goals was to have the “ideal client roster” in five years. “Ideal” meant companies that were involved in the best technologies or public health initiatives and that approached their work with an entrepreneurial spirit. The creative staff wanted to work on campaigns that would allow the most creative risks – a significant modification of the company’s business growth formula. Almost 80 percent of the existing clients did not meet the ideal profile, and McCarthy made the gutsy decision to stop working with a few old clients and pass up some offers to work with new ones.

The company’s revenue and bottom line temporarily took a hit, a deeply unsettling situation for the CEO. But when no one got bonuses last year, and Carol asked her staff, “What do you think of the ideal client now?” they all seemed okay. They expressed strong conviction that McCarroll Marketing can take its expertise and work with the best clients to achieve its vision. Their response has made McCarthy confident that letting go of some difficult clients freed up an opportunity to focus on getting the ones that share their vision of making a positive impact on health.

Another way McCarthy struggled was in empowering the creative team with more freedom and flexibility. In one instance, she found an idea her creative staff was going to pitch to a client to be inappropriate and said as much. At that moment, she asked herself whether she was really going to follow through with her commitment to shared leadership. Reluctantly, she allowed the staff member to present the concept. When the client visibly cringed during the presentation, McCarthy thought, “This is where the learning begins. If I impose my ideas, not only will my own credibility be diminished, but, more importantly, so will my staff’s learning.” So she put the responsibility for the result on that employee’s shoulders.

High Points

What’s different and better at the company today? Their bold vision has inspired and attracted like-minded clients. The life science division of a major telecommunications company has engaged McCarroll Marketing to help them introduce a genetic chip that promises to accelerate drug discovery. The agency is also helping a company that produces a device that facilitates the treatment of brain tumors. And they’re looking at fitness and how to help people commit to exercising.

The agency is also aligned with strategic partners, locally and nationally, who will expand their pipeline of “ideal” clients. For instance, the staff decided to engage with the Brady Campaign to Prevent Gun Violence – Million Mom March partnership on a pro bono basis in support of legislation to prevent weapons from being sold on the streets. Although the bill did not pass, working on the project excited the staff and appealed to prospective clients who have since hired the agency.

Another difference is the tremendous sense of pride in the firm. Senior managers are rediscovering excitement and a deeper sense of purpose, and everyone feels they’re doing important work. The company is currently repositioning itself with a new name and identity (soon to be announced) that reflects their bold vision. Additionally, the agency has begun recruiting exceptional talent who want to be part of a progressive organization. And the staff feels they have laid the foundation to take their company from $5M to $10M in four years — with a client roster that shares their values. McCarthy believes that the organization is now in the perfect position to achieve the desired levels of profit and growth while making a difference in the world.

Kali Saposnick is publications editor at Pegasus Communications.

The post Small Company Big Impact! Powerfully Engaging Your Employees to Change the World appeared first on The Systems Thinker.

We live in an age of paradox, with every trend seemingly matched by a counter-trend.

These dynamics have helped to reshape the world well beyond the sphere of commerce alone. Our newspapers today are filled with momentous and as yet unanswered questions. Are we facing a terrifying “clash of civilizations”? Can China maintain its extraordinary growth as a major global power or will its internal political, social, economic, and environmental tensions lead to implosion? Is aging, polarizing Europe in terminal decline or on the brink of its next renaissance? Will technology standards globalize and converge, or regionalize and fragment? Will free trade continue to override growing protectionist instincts? Are we on the brink of a new flu pandemic and, if so, how severe will it be? How fast, and how dramatic, will climate change prove? With entirely new business models being forged by mighty upstarts like Google and eBay, do we even know where our competition lies? There are two additional twists that can be thrown into this mix. First, we live in an age of paradox, with every trend seemingly matched by a counter-trend. For example, the economy is becoming increasingly intangible as we sharpen our focus on services, experiences, and virtualization, yet the physical economy matters more and more with the need to update critical infrastructure. The Nobel prize-winning physicist Niels Bohr summed up this tension well when he wrote:, “The opposite of a correct statement is a false statement. The opposite of a profound truth may well be another profound truth.”

Second, information is ubiquitous and instantaneous. What is “known” is a diminishing source of competitive advantage, so successful futures will increasingly be forged through mastery of the unknown.

Yet paradox and the unknown are uncomfortable. Most of us have learned to present our bosses with answers and solutions, not questions and problems. But by adopting this approach and sticking to certain tried and tested strategies, we run the risk of using counterproductive coping mechanisms and ultimately moving backwards, rather than forwards. For example, we might try to:

• • Increase Control Through Centralization and Bureaucracy. Yet, was it really hard to predict that the formation of the U. S. Department of Homeland Security was unlikely to improve the effectiveness of any of the agencies swept under its monolithic umbrella?
  • Escape into “Busyness.”Are we becoming addicted to endless, relentless activity – empowered by the ubiquitous “Crackberries” and reinforced through constant, often unproductive meetings?All this motion seems to stem, at least in part, from a subconscious desire to avoid the discomfort of sitting in the mess and ambiguity of our times.
  • Rely on Metrics.But does boiling down the complexity of business realities into a few key numbers sometimes end up driving rather than measuring performance? As Einstein observed:, “Not everything that can be counted counts, and not everything that counts can be counted.”

• Look for Scapegoats. Do we too often apportion blame and punish others for failures that may have been inevitable?The highest-level victims of this syndrome have been CEOs – turnover at the top has never been higher as executives face intense pressure to achieve guaranteed short-term results in a volatile, uncertain world.

  The effect of all this is that uncertainty can prevent the very learning that it so profoundly requires. The western ideals of secular modernity are based upon core concepts of certainty, such as empiricism, rationality, objectivity, analysis, and measurement. These remain critical values, but they are only part of our future and must be integrated with ways of thinking that rely as heavily on intuition, collective insight, emotional and spiritual intelligence, morality, and wisdom. This will be a difficult journey, especially for the traditionally hard-headed world of business. But, provided they can embrace and understand uncertainty, corporations are well positioned to establish new paradigms of human organization and learning.

How might we proceed? Following are six concepts that every business should consider. Each requires consistent effort and commitment, but none involves rocket science or prohibitive expense.

Create a Dialogue Between Risk and Opportunity

Thirty years ago, it was commonplace for a company’s product development activity to be housed in silos that were insulated from sales and marketing groups. How could we have been so misguided? Yet most businesses replicate this error today by separating the functions of risk management from business innovation and development. Both activities are at the forefront of exploring uncertainty. Great opportunity can be found in the most “risky” areas, while new risks emerge from every innovative corporate endeavor. Bringing together the skills and focus of each of these disciplines in a new dialogue can help turn risk and uncertainty into a powerful source of advantage.

Forge External Networks and Internal Communities of Practice

Most companies acknowledge the need for better processes to make sense of situations and more powerful antennae extracting critical signals from external noise. It is difficult, however, to develop such a function inhouse because we quickly become captives of our organization’s acceptable boundaries.” To achieve the necessary multiplicity of perspectives and insights, organizations are increasingly nurturing external networks of thought partners and sensors – people who are attuned to the deep trends they see in the world around them and can help translate them for specific organizations.

Informal, self-organizing “communities of practice” housed within organizations can also be powerful sources of knowledge and learning in the face of uncertainty. These communities perform much the same function as guilds did for craftsmen 500 years ago or open source communities do for software developers today. Provided the organization can support, nurture, and empower these “communities of practice” without destroying their vitality and integrity by over-formalizing them, these communities can help to ensure that unexpected issues encountered (and successful adaptations made) are socialized and adopted as widely and quickly as possible.

Test Strategies and Decisions Against Critical Uncertainties

Whenever we develop a strategy or make big decisions, we habitually reference our “official future” – an implicit set of beliefs about how the world works today and should in the future. Mounting uncertainty renders this approach increasingly hazardous. There is proven merit in stepping back and considering the critical uncertainties surrounding our choices. One very well established method is to develop a set of alternative “scenarios” of the future – coherent logical stories that set out credible and very different alternative. Through these, we systematically “stress-test” and, hence, improve our decisions. Additionally, we can develop a deeper understanding of critical uncertainties by improving our appreciation of interrelationships, causalities, and potential outcomes, and then contrasting and comparing these against our most important options and choices.

Develop “Masters of Uncertainty”

In the past decade, practitioners of quality management programs, such as Six Sigma, have become acknowledged enablers of the drive toward excellence. In the coming decade, they will be joined by a new and arguably even more powerful force let us call them “masters of uncertainty.” These will be leaders and talented contributors in our organizations who manifest a range of increasingly essential capabilities, which include the ability to:

• Stay relaxed in the face of overwhelming disorder, confusion, and ambiguity
• Seek out multiple and conflicting views, while being aware of one’s biases and blind spots
• Focus on the future, the emergent as well as the planned
• Embrace risk taking
• Learn rapidly from failure
• Be open, flexible, and even, on occasion, playful

These are not necessarily the attributes we associate with our current generation of leaders – but they will characterize the next generation. The good news is that the capabilities required for these leaders can be developed in our existing high-potential talent using a range of tools and techniques, such as learning journeys, simulations, scenario and systems training, job rotations, cross functional and even cross-company mentoring, storytelling experiences, and uncertainty coaching. Uncertain times will demand and reward untraditional talents – and we must invest in the next generation as soon as possible.

Intentionally Evolve As an Adaptive Organization Just like the elusive “learning organization,” no one has ever seen a truly “adaptive organization” in the wild. But we can certainly identify the hazy outlines of some vital characteristics of the responsive, enduring, and evolving business of the future. It should be:

• Externally oriented
• Flexible and nimble
• Patient but opportunistic
• Capable of balancing exploitation of the known with exploration of the unknown
• Visionary but open to corrective feedback
• Attentive to stakeholders
• Capable of balancing both economic and moral wisdom

The question today is not whether we can see this vision on the horizon – we all can – but whether we decide to move toward it with conviction and sustained attention, or hold back in fear that we may only be glimpsing a mirage.

Add an “Uncertainty Mapping” Dimension to Strategic Decision-Making

We should also learn to explicitly acknowledge uncertainty as a matter of habit. In every conversation of consequence, we should acquire the discipline of asking what important uncertainties are in play and challenge our beliefs and default positions.

Over time, we can also learn about our deeply embedded assumptions, and come to understand better and improve our decision-making habits. This is a readily achievable and remarkably important tool; indeed, there is probably no single greater contribution to the mastery of uncertainty. Finally, we must appreciate that there are very different forms and sources of uncertainty. In business, as in life, every important decision is actually a bet that we understand the context of our choice and that our sense of the future is reasonably accurate. In an increasingly uncertain world, the odds are lengthening against each and every bet, and the need for new thinking and better decision-making processes is growing. The ability to rise to this challenge will be the defining characteristic of the successful, adaptive organization of the future.

Eamonn Kelly is the CEO of Global Business Network (GBN) and a partner in the Monitor Group. He is also the author of Powerful Times: Rising to the Challenge of our Uncertain World (Wharton School Publishing, 2005). Eamonn will be a keynote speaker at this year’s Pegasus Conference.

The post The Tall Order of Taming Change appeared first on The Systems Thinker.

The reactions to the report by solid waste industry constituents varied widely. This mixed response convinced MN OEA leaders that, in order to decide how to move ahead, they needed to conduct a participative forum. They felt that systems thinking and related organizational learning practices could help a group of representatives from different sectors identify leverage points for change and address the social and dynamic complexity inherent in such an intricate system.

Systems thinking tools can provide a vital and sorely missed perspective on the complex matters with which our legislators grapple.

That spring, MN OEA gathered 27 participants, representing citizens, businesses, government, recycling centers, and solid waste processing industries statewide, to think together about Minnesota’s solid waste system. A Blue Ribbon Panel of legislators, industry officials, and community representatives would then recommend legislation based on this group’s suggestions. Participants were asked to be leaders and experimenters, to look beyond their familiar areas of expertise in order to understand the whole system, to adopt a view with a longer time horizon than their organization generally used, and perhaps to reach conclusions that would not necessarily be in their organizations’ best short term interests.

A Historic Opportunity

Systems thinking tools can provide a vital and sorely missed perspective on the complex matters with which our legislators grapple. Although there have been many systemic analyses of public sector issues, the challenge is to discover innovative methods for encouraging public policy making institutions to accept and implement the conclusions that arise from these analyses. At least initially, there may have to be trade offs between being right from a systemic perspective and being effective from a political standpoint.

MN OEA employed a highly participative process to help the working group come to adopt as their own the findings of the solid waste policy report. The facilitators and MNOEA did not direct the participants’work; they simply brought together a capable group of people and provided them with tools for dealing with the complexity of the issues they were asked to address. This “hands-off approach, new for public policy discussions, was a critical factor in the project’s success.

MN OEA also carefully selected participants, identifying the various sectors for representation and soliciting nominations for people “in the trenches” who really understand their industries. The agency excluded registered lobbyists to try to minimize the political element in the process. Final participants were chosen through a voting procedure, based on their potential to see beyond themselves, their knowledge, and their work ethic.

The Participative Process in Action

The process began with an introduction to systems thinking and organizational learning (see “Tools for Change” on p. 8). The facilitator also told participants how different this work would be from their previous experiences, defined the notion of respect, and made explicit expectations about respectful behaviors.

In the nine days the group met, participants engaged in the following activities:

• They used the hexagon technique (see “From Ideas to Variables” by David Kreutzer, THE SYSTEMS THINKER V8N9, November 1997) to identify issues and concerns regarding the solid waste disposal system. Writing their observations on sticky notes and posting them at the front of the room allowed participants to be fully present, incorporate emotional responses as relevant data, separate issues from the individuals who articulated them, and create a complete picture of the system.
• The participants then identified variables and learned the language of causal loops. They worked in small teams to explore the issues represented on the hexagons, using systems archetypes, free form causal looping, and stock and flow diagrams.
• They began and finished each day with a dialogue style check-in/check-out (see “Check-in, Check-out: A Tool for ‘Real’ Conversations” by Fred Kofman, THE SYSTEMS THINKER V5N4, May 1994).Through this process, each participant could voice his or her state of mind, thoughts, and concerns. Sometimes supportive, sometime divisive, check-ins/check-outs and shared luncheons were critical to building trust.
• The participants synthesized the smaller causal loop diagrams into one large causal map, making the relationships across the entire solid waste system visible at a high level.
• They developed options and strategies for moving forward. The group tested these strategies using causal loops and stocks and flows by identifying and considering the unintended side effects of proposed actions.
• Lastly, the group developed recommendations for the Blue Ribbon Panel. As they did so, they identified guiding principles for themselves as well as for the state, such as “We must protect the environment and public health,” “We must reduce waste generation,” and “We must collect better data over time.” They also employed a six-level agreement model to discern how much support each recommendation received from members.

In previous participative processes, this was the point where some participants sat back and waited to see what would happen; others, who disagreed with the majority, worked to undermine the final results; and still others voiced their distrust of the political system to carry out the suggestions. This time, all concerns were considered openly. Most participants came to realize that if they didn’t give the process their best effort, they would be contributing to the self fulfilling prophecy that real change cannot be created within the political system.

Outcomes

In the end, the group made 10 recommendations to the Blue Ribbon Panel, with some suggestions about funding sources. The final report included several causal loop diagrams for explanatory purposes. The group elected representatives to provide context for the report during the presentation to the panel. The panel unanimously accepted most of the recommendations are substantial achievement. A major reason for this consensus was that there commendations were intentionally worded at a fairly high level, with little specificity. Nonetheless, the groundwork for this level of agreement was laid during the time the working group had spent together, talking about their assumptions and concerns, from their vantage points within the system.

Interestingly, one of the group’s recommendations was that they continue to meet periodically to assess how the system has changed and whether the actions taken on the recommendations worked the way they had anticipated, and to tackle some of the more difficult issues. Participants felt it was important to build on the foundation they had created, both from the content of their work and the relationships they had established.

They also expressed cautious optimism about the ability of the political system to act on these recommendations while preserving their original intent. As the participants move forward, their exposure to and growing understanding of systemic processes and group learning tools should contribute to improving the political process.

Governmental bodies like MNOEA play a vital role in protecting vulnerable resources, and yet they face staggering levels of complexity. Ultimately, we hope to see an increasing use of these tools in the areas where they have the most value in the stewardship of our societal systems.

The post Minnesota Takes the Long View of Its Solid Waste System appeared first on The Systems Thinker.