6th in a Series on Change: Economic vs. Organizational Approaches to Change by Beer & Nohria

Continuing my exploration of HBR’s Change Management Must Reads, I relished the taoistic a-ha of Beer & Nohria’s article, Cracking the Code of Change which introduces this idea of Theory (E)conomic and (O)rganizational approaches to change and a discussion of how to best manage this tension. 

Theory E change is hard approach driven by shareholder returns and characterized by economic incentives and organizational restructuring. 

Theory O change is a soft approach driven by cultural & capability development through learning, teamwork and communication. When this approach is used it is usually out of a long held commitment to employees. 

The US favors E while the EU and Asia tend to favor O, or so generalizes the authors. 

In the case of entrepreneurs, the authors suggest that entrepreneurs can be classified as driven by cash out (E) or culture building (O). 

You see the taoistic interplay of opposing forces here already, yes? You also discern the tension between the needs to be loyal to shareholders and employees.

In reality, all companies must use a mix of these approaches. The trick is to balance these to fit the context leadership teams finds themselves in, and to do so avoiding the confusing perception of being "nurturing cutthroats”. 

The authors suggests two approaches to E/O execution, sequencing and simultaneous. 

Sequencing is an approach for mixing these approaches over time, and with requisite storytelling to assure that all affected are aware of where in the E/O cycle the organizational culture is operating towards a longer term change objective. It seems that such sequencing would allow a critical mass of focus on one approach to another at any given time with out sacrificing the benefits of either approach over time. The authors suggest that E be sequenced before O as the reverse carries too great a price of employee disaffection. This said, sequencing has the disadvantages of taking a long time and possibly across multiple leadership regimes.

Given these disadvantages of sequencing, the authors offer a faster but riskier and potentially more successful, approach of simultaneous E/O action which requires:

1. embracing this paradox in goal setting
2. setting direction from above while engaging from below so that command and control play well with the grassroots. (Sounds like a Battle of the Bands.)
3. focusing simultaneously on the hard and soft elements of change though in proper sequence
4. allowing & rewarding experimentation & evolution
5. rewarding people to reinforce, not drive, change

These simultaneous dynamics, managed well, result in an environment of candor, listening, debating and learning which has a better chance of building trust & commitment to change. 

This article so resonated with me as it described this tension of opposites, and management of a middle way, which has often been hidden in plain sight throughout my career as a change leader. It provides an orderly paradigm to so many seemingly chaotic regimes I have witnessed and been a part of. Fortunately, such blindness has not killed all success and leave me looking forward to even more success in the future now I am educated. 

As an after note, I see how these approaches are applicable not only to organizations but also to individuals having applications for my leadership development as well as that of my leadership coaching. 

I hope this "taoistic" a-ha is as helpful to you and your ongoing change activities as it was for me. 

4th in a Series on Change: Survival Guide for Leaders by Heifetz & Linsky

This article especially resonated as the right leaders must survive if we are to survive.  Our survival is threatened when too many shy away from leadership because they are afraid they cannot, or will not survive. 

The author talks about leadership as “living dangerously”. The leader is always subject to being taken out, removed or set aside, thus the need for such a guide. 

The author asks us to remember that the hazard of leadership which is leaders are asking followers to give up what is dear to them. This was a slap in the side of the head for me! Though true, I had never thought about it this way. As a result, I cultivate new compassion for those we are asking to lead change. I cultivate like compassion for those who undercut change in the name of order, familiarity, security and protection. The author admonishes leaders to pay close attention to the losses, dashed expectations and feelings of incompetence and disloyalty their staff struggle with as part of change. This attention is critical to empathic leadership which balances tough calls with acknowledgment of pain and loss.

I really dug the distinction the author makes between technical change (involving objects and processes) and adaptive change (involving people and their mindsets & practices). The latter is the more challenging and that most change projects fail as they mistake adaptive, for technical, change. We go for the easier task of changing the technical and paying too little attention to how the more challenging human element.
The author goes on to talk about the common hazards change leaders face, and must be equipped to address if they are to survive. They are:

1. Character or style attacks as these are often effective (for the opposition)  as a distraction from the issue or opportunity at hand

2. Marginalization where the leader is so identified with a narrow set of issues that their broader authority is undermined  

3. Seduction by need for approval which causes the leader to hedge on asking for sufficient sacrifice and accountability from their followers and stakeholders

4. Diversion due to overwhelm with too many, or too disparate, priorities which is effective in diluting focus and critical mass of effort.

As leaders we all struggle with these hazards and have or are being threatened by them all the time. 

The author contends that resisting sabotage requires environmental management and self management. One might term these the outer and the inner game.

Environmental Management, or the outer game, involves:

1. Operating in and above the fray where the leader is both able to be in the situation as participant, and apart from it as observer, providing the ability to simultaneously act in and upon the change situation. 

2. Courting the uncommitted where the leader is influential in bring people along and around to the change they envision. I especially like the authors suggestion that leader have coffee weekly with their detractors. Talk about jumping into the lion’s jaws rather than avoiding it.

3. Cooking the conflict where the leader wisely gauges the organization’s need for turned up heat to get action, versus a cool down period to avoid burn out or burn up

4. Placing work where it belongs where the leader leaves problem resolution and opportunity capitalization to the troops, and avoids an over-reliance on leadership and the corresponding contempt it can engender. Ultimately, the leader has to move people to take up the message without being the assassinated messenger. 

Self Management, or the inner game, involves:
1. Restraining the need for control and importance in order to avoid ego trip(up)s and instead facilitate structure and process that channel energy into change.

2. Self-anchoring with:
     a) psychological repair & moral recalibration which acknowledged that the leadership game by its nature inflicts wounds and erodes one’s moral compass, the effects of which we see regularly in the news.
     b) a confidant to maintain external perspective and accountability, and
     c) role detachment so that the leader understands that the role of leader is just that, and not one’s true self.

The author asserts that leadership tempts one to become insulated from life with cynicism, arrogance and callousness, and that observing these points of management are ways to engage as a leader while avoiding this latter fate. I love the author's rubric which encourages daily reflection, repair, renewal and recalibration in every leader.

Upon reading this article, one might be tempted to avoid leadership because of its multiple risks but the author asserts that the risk is worth it for the reward of the positive difference that leaders stand to bring into the world. In other words, “no pain, no joy”.

May we all survive well as leaders, and support our leader's survival as followers.

Passionate Detachment: A Paradox Worth Practicing

This paradoxical idea of “passionate detachment” was introduced to me years ago in my readings of Carlson’s “Don’t Sweat The Small Stuff”. I call it paradoxical because I had been raised to understand that being passionate required being overwrought and stressed out as a sign of caring. I am so glad to be rescued from this approach. With time and consistent practice at cultivating this approach, I have learned to be driven with less (dis)stress, and to be committed without being bound or feeling put upon.

In a nutshell, passionate detachment is an approach to life, indeed work, which focuses on “right execution” of the process more than the outcome. One learns to enjoy the journey confident that the journey, pursued with the right spirit, will get us to the right destination, even when that destination is different than what we had originally envisioned at the outset.

I find that in this “state of grace”, I have more energy for coming up with creative solutions as less of it is tied up in negative emotions and speculations. I find that even when I do not get the outcome I envisioned (which is never guaranteed), I am more aware of the learnings the experience yields and I can take solace in a process well executed. Either outcome, these learnings make for continuous improvement and self-development, less of a negative emotional, psychological and relational toll on myself and those I lead.

Getting Good at Being In A Bad Mood

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