Hamlet's Vision, by Pedro Américo, 1893,The Pinacoteca do Estado de São Paulo (Source: Wikimedia Commons)
Ideas for Leaders #213

The Surprising Reality of the Leadership of Change

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Key Concept

Linear ‘step-by-step’ guides and standardised solutions are of limited use in the management of change. Organizations, by their very nature, defy prescription. Leaders who want to turn companies round are often better off observing things for themselves and encouraging employees to improvise solutions than trying to follow a generalised model. There are, to paraphrase Hamlet, more things in organizational life than are ‘dreamt of’ in the ‘philosophies’ of academics, business writers and management consultants.

Idea Summary

 

The KSV plastics company is in trouble. A myopic cost control program has created supply chain and production problems and made it difficult to deliver orders on time and to acceptable standards. One of its best customers, Avobus, looks likely to ‘walk’. Managers are working themselves into the ground to keep the business afloat – but in opposing directions. At (increasingly circular) meetings, they fight their own corners rather than the company’s. New managing director James Grader, brought in by holding company EDOS to turn things round, decides Total Productive Maintenance (TPM) could be the answer – mainly because he’s familiar with it and knows it’s worked elsewhere.

Flattered by Grader into thinking he’s the only man up to the job, young operations manager Reg Thornton begins the task of ‘process optimization’ and putting a new workshop system ‘in place’. But TPM has unforeseen consequences. Manufacturing in smaller batches increases costs per unit, and the time taken to re-set machines reduces productivity.

Meanwhile, employees ‘on the floor’ are improvising solutions to manufacturing problems – but, for complicated historical reasons, not sharing them with others. (At the KSV, communication is so poor that the late shift and the night shift aren’t following the new tooling process. General mistrust of new ideas compounds the problems. Staff have seen so many ‘new and improved’ ways of working fail that ‘change fatigue’ has set in.)

As another major customer, Ecotech, threatens to part company with KSV, production manager Derek Huber is at breaking point. After a particularly difficult meeting, during which it becomes clear that overtime costs are spiralling out of control, and Huber angrily blames procurement manager John Winter and his ‘cheapskate suppliers’, Grader decides to bring the consultants in.

Four men (three twenty-somethings and a token ‘eminence grise’) arrive from Best Practice Consulting. Armed with their own ready-made, boil-in-the-bag solution, they quickly cause friction by unceremoniously taking over Huber’s office and deriding Thornton and the production team’s makeshift solutions. After a few ‘Power Workshops’ and a failed ‘flow cell’ production run, they make an ignominious exit. Their intervention achieves something, though: it brings the internal team together.

When quality assurance manager Jacqui Lawless finds out that Grader is thinking of calling in more consultants and that Thornton hasn’t been informed, she decides enough is enough. She asks Huber and Thornton to a meeting, and – over coffee and homemade apple pie – they, entirely independently of Grader, come up with a solution. They’ll replace trouble-shooting by tackling the underlying causes of problems and fixing them in daily meetings – and they’ll get Winter ‘on board’.

The result: KSV improves significantly, and Grader is dispatched by EDOS to work his ‘magic’ on another part of the group.

This fictionalised, prototypical, case study points to uncomfortable truths about organizations and leadership. In the management of change, success often happens by ‘accident’ – and is very rarely the result of a standardised solution. What’s more, it can’t be reliably predicted by the past performance of the CEO or managing director. (Without the aptly named ‘lateral’ leader Lawless, Grader would be lost.)

Textbooks and management models often belie the reality that organizations are social phenomena and, as such, necessarily messy, dynamic and complex. They have their own frames of references and representations and histories – and, thanks to the nature of social relations, are in an almost constant state of flux. (The clue is in the name: they’re organic.)

Standardised solutions, therefore, make limited sense. They have their uses (not least, helping to reduce uncertainties) and can offer valuable insights but, much like medicines, they’re ‘contra-indicated’.

Nor should any ‘medicine’ be seen as a panacea. Solutions, almost inevitably, create more problems (in the short- or medium-term at least) and have to be actively managed.
Leaders who want to transform organizations would do well to pause to observe – both before and during the ‘program’.

Put simply, they have to behave a bit like Hamlet, holding a ‘mirror up to nature’ and seeing the bigger picture. In environments where the pressure for results is intense, this may be difficult – but it’s no less realistic than much of the contemporary theory about the management of change.

Business Application

The story of Grader and the KSV suggests:

  • Leaders need to oscillate between action and reflection – they need to try to ‘sense’ the peculiarities of their organizations and, crucially, respect their histories. (Every solution needs to be seen in the context of what’s happened before – as well as what it means for the future.)
  • You can shorten the odds of success by creating an ‘aptitude for change’. (The starting point might be a review of job descriptions. Narrow definitions of roles will stall change: people need to feel they have the ‘licence’ for ‘lateral’ or ‘informal’ leadership; the system needs to be conducive to ‘happy accidents’ and ‘self-organization’.)
  • As ‘intelligent systems’, organizations have the power to reject the ideas of leaders and their advisers – and this power should not be under-estimated.
  • Consultants can be an important part of the ‘observation exercise’ and can help to identify and unlock ‘energy’ in the company, but they’re rarely a solution in their own right. (See Idea 214 ‘Calling in the Consultants’.) Much like other suppliers, consultants need to be managed. Put another way, observers must be observed.
  • Change management is an extremely difficult and, sometimes, impossible task, and creates a complicated ‘chain reaction’ of solutions and ‘side effects’. But not all the problems are inevitable. Some are avoidable – and the observant leader is more likely to know the difference.
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Authors

Institutions

Source

Idea conceived

  • April 2013

Idea posted

  • September 2013

DOI number

10.13007/213

Subject

Real Time Analytics