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Executive Interviews: Interview with Michael Beer on Change Management
June 2007
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By Dr. Nagendra V Chowdary
Michael Beer
Cahners-Rabb Professor of Business Administration, Emeritus at the Harvard Business School, Chairman and co-founder of TruePoint a research based consultancy.
What happens when the resistance
to change is coming from Federal
Governments (for instance, rigid /
inflexible labor laws in Europe and
few Asian countries)? How should
companies respond to such a
resistance knowing fully well that
their business fortunes are tied up
with those rigid policies?
This is a hard change problem
because the CEO does not have as
much control of situation he or she
has less influence to shape a process
(P) of change that will create D and
M. Nevertheless, the principles
implied by the change formula must
still be enacted.
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The leader must try
to bring government, unions and
external constituencies into a
dialogue that will reveal the reasons
why given regulations and their
underlying assumptions lead to
unintended consequences not
foreseen or sufficiently valued by
regulators. He must work at bringing
these constituencies together and
engage them in framing the problem
as well as work collaboratively to
solutions that will work for all.
Clearly, politics and power can often
interfere with a fact-based problem
solving process because the leader
does not have the authority to ask for
fact-based discussions. Thus, in
these circumstances, leaders must
pay even more attention to the
process of engagement and dialogue.
It is also true that managers often
highlight and blame regulations and
unions for their problems without
looking more closely at how they can
work productively within
constraints. In the US, managers
blame government and labor law
without showing any creativity in
how to work within these constraints
or ease them. It might be relatively easy to
identify the need for a change
initiative/ intervention in the case of
a company, i.e.,there are sufficient
warning signals alerting the
company. However, change
management is required at an
individual level too (in different
capacities; at the highest level he
becomes the initiator; at all the other
levels, he becomes the follower).
What are the signals for an
individual to look at change
management initiatives before he/
she is forced upon to embrace the
change?
Individuals who are concerned
about surviving, learning and
growing need to attend to the
strategic context in which they
operate. What is the competitive
environment in which my firm is
operating? What changes in
technology and management
practices are underway in the world
of business, in my industry or in my
profession? With this information, an
individual can begin to develop a
better understanding of the skills and
attitudes they will need to develop to
learn and prosper. These individuals
are constantly developing their own
"D" and are proactive in developing
their own developmental plan
(career path, education and training).
They must then begin the dialogue
with their boss about their
development rather then waiting for
manage ment to begin that process
when a crisis hits. If you look at companies like Nike,
Southwest Airlines, Bloomberg, etc.,
how difficult is to manage change
(including the transition) when the
founder-CEO is not around?
Leaders who succeed founders have
to find a way to develop legitimacy
with employees who are loyal and
committed to the founders and their
model of management. This means
that they cannot tear up the culture
that founders created. They must be
seen as honoring that culture and
then engaging people in adapting
practices to new circumstances, if
that is needed. Effective successors
embrace the values, but work on
changing the practices that need
change given new circumstances. A
great example of failure to do this is
the story of Carley Fiorina who
became CEO of Hewlett-Packard in
1999 and by 2005 was fired. She
thought the culture was the problem
and took many steps including a
merger with Compaq to break up the
culture. She did not honor the past
(created top-down change and
employed consultants rather than
engaging employees including her
senior team) in the actions she took,
even though she espoused
otherwise. Successor to founders are
best off engaging senior executives
who embrace the historical values
and assumptions. How do you think companies can
make "Change Management" a part
of their "catastrophe culture" (as
Samsung Electronics CEO Jong-Yong
Yun has done) so that the fire is on at
all the times, both good and bad?
It appears that the CEO of Samsung
found ways to create ongoing
dissatisfaction with the status quo.
The primary way for doing this is to
1) Set high performance standards 2)
Engage people in generating and
discussing data from customers and
employees from which a diagnosis
can be developed about what needs
to be changed. Then task forces and
groups working can be engaged
developing new ways. These task
forces are in effect a parallel
organization—one that is focused on
identifying future threats and
opportunities and developing ideas
and methods for coping with them.
1.
Change Management Case Studies
2. ICMR
Case Collection
3.
Case Study Volumes
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