Issue 3, Tuesday July 3, 2000
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You can't manage change. You can only be ahead of it.
Peter Drucker


Welcome to the third issue of EDGE FIRST, an e-zine dedicated to making you a better leader. Our goal is to provide the two key ingredients of effective leadership:
- provocative thinking about what it means to be a leader
- the tools, techniques and best-practices that drive leadership improvement
In this issue
Start - a reprise on Gary Hamel's 'Think context ...' Microsoft!
Against the grain - an occasional series. Contrarian views.
ISO-Buster John Seddon on why targets are such corporate poison
Ten Minute Master Class - Managing change? Think transition
Good citizenship - Ethicist Jeffrey Seglin on ... snooping

The material on ISO-Busting - see "Against the grain" below - is a Portable Document Format (.pdf) file. To access it from our web site you'll need Adobe's® free Acrobat® Reader.
Start
Last issue we championed Gary Hamel's 'Think context .. not content' article in Fortune. If, like us, you think Gary Hamel is THE man when it comes to strategy, you'll have loved this, we said, and: “Order emerges out of deep but simple rules,” we quoted Hamel saying.

“Too many executives try to design flight plans for their far-flung flock rather than work to create conditions that would help their brood get off the ground and on their way to new shores. They spend too much time working on 'the strategy' and not enough working to create the conditions out of which new wealth-creating strategies are likely to emerge.”

And we offered Don Tapscott, David Ticoll, and Alex Lowy's DIGITAL CAPITAL: Harnessing the Power of Business Webs as an example of 'context'.

But here's a much more compelling example: Microsoft.

Betting the firm on a new business model, known as .NET – yes, this is 'the big kahuna' according to CEO Ballmer (Fortune, July 10, p 43) – Microsoft doesn't know where the revenue will come from. Group VP Maritz, point man for the new strategy, says “We don't know precisely whether we'll get paid for everything.”

This is all about context. Get that right, Microsoft is betting, and the 'content' (in this case, a business model that works) will look after itself. Is there a bigger bet anywhere in corporate USA? Or a more compelling example of Hamel's vivid prescription? Don't think so.

Against the grain – contrarian views, an occasional series
We recommend John Seddon's Vanguard newsletter. Long-term subscribers to Award, our companion newsletter, will know that John has a very independent attitude to many of the conventional wisdoms of management and leadership. His robust attack on the ISO standards has unsettled many in the conformance industry.

In Vanguard News of July 2000, John has a go at targets (Targets don't get you what you want). We'll summarize:

Targets may be “normal, common and everywhere,” in management systems, John writes, but that doesn't mean they're right. They shift focus and ingenuity away from method; they are arbitrary; and they introduce perverse incentives that may well be counter-productive.

Here's a story John likes to use to make his point:

“A team was presenting their improvement work to a Toyota sensei - an expert in performance improvement. They described the current process - it took 15 minutes to change over a machine. They had set a target to get to 5 minutes and they got to seven and a half. They had halved the time. At the end of the presentation the sensei asked why they had not achieved their target. The team was surprised, expecting to be praised.

”The team responded to his questions with explanations, issues they could not resolve and so forth.  But the sensei responded to these things with more questions.  He was not suggesting they had failed, he was asking whether they had explored all of the possibilities.

”But more than that he was trying to show them that the target had been established without a method. He showed them that a good knowledge of the work should lead to predictions about what could be achieved.

”And that is the central issue - understanding leads to peoples' ingenuity being engaged in improving the work.”

John asks “Why do managers like targets?” Because:
1. Targets are rational; they are derived from a financial plan. If everything works to plan, the plan is achieved.
2. Targets are assumed to motivate people. Managers believe they give people 'something to go for'.

“What a waste of talent.” He says, “and it is going on everywhere.”

Resources
Partnering is all about attitude, John Seddon says, and from attitude method follows. A four part series on partnering written for Commerce Magazine is available here.

Ten Minute Master Class
Managing change? Think 'transition'

In Leading Transition: A New Model for Change, William Bridges and Susan Mitchell (in Leader to Leader, No. 16, Spring 2000) say that change is nothing new to leaders, or the people they lead. “We understand … that organizations cannot be just endlessly 'managed,' replicating yesterday's practices to achieve success,” they write, “… conditions change and yesterday's assumptions and practices no longer work. There must be innovation, and innovation means change.”

So OK. We all know that. There's a major industry based on that understanding. Ah, but often, Bridges and Mitchell say, the “thousands of books, seminars, and consulting engagements purporting to help manage change” just don't do the job.

Why? Because they ignore the dynamics of personal and organizational transition; they don't deal with the leader's need to coach others through the transition process; and they forget that leaders themselves usually need coaching before they can coach others.

Once, maybe, leaders could simply order up change. Some still try: set up a task force, map out the route, execute. Everyone follows the plan. But do they?

Well no. Bridges and Mitchell set out to explain why people don't 'Just Do It'?

Change gets subverted, they say, because leaders don't deal with transition – the state that change puts people into. Change is external (the different policy, practice, or structure that the leader is trying to bring about), while transition is internal (a psychological reorientation that people have to go through before the change can work). Don't imagine that transition is automatic, they say, because it's not.

And even if – creak, groan – the ship is turning, the transition may be much slower. That's why your ambitious timetable is looking wildly optimistic: it was based on getting the change accomplished, not on getting the people through the transition.

Why does the transition take longer? Because it consists of three separate processes; all of them upsetting:

(1) Saying goodbye. Letting go of the way things, and people, used to be. You can't steal second base with your foot on first. Many people spend their whole lives standing on first base. Real big change often means letting go of what feels like a whole world of experience, a sense of identity, even 'reality' itself.

(2) Shifting into the neutral zone – an in-between state “so full of uncertainty and confusion that simply coping with it takes most of people's energy. “ Particularly acute during mergers or acquisitions, when careers and policy decisions and the very 'rules of the game' are left in limbo while the two leadership groups work out questions of power and decision making.

This is often an uncomfortable place to be, so people hustle to get out of it. Some try to rush ahead into the new (or any) future, while others try to back-pedal into the past. But successful transitioning often means spending quite some time in the neutral zone – because that's where the creativity and energy of transition are found and the real transformation takes place.

A shift to self-managed teams, for instance, is likely to leave people in the neutral zone for six months, and a major merger may take two years to emerge from the neutral zone. The change can continue forward on something close to its own schedule while the transition is being attended to, but if the transition is not dealt with, the change may collapse.

(3) Moving forward requires people to begin behaving in a new way, and that can be disconcerting - it puts one's sense of competence and value at risk. Especially in organizations that have a history of punishing mistakes, people hang back during the final phase of transition, waiting to see how others are going to handle the new beginning.

What about help for the leaders of change? Why might they need it? Because they're so close to what's happening they may fail to:
· Remember that they themselves took some time to come to terms with the necessary change -- and that their followers will need at least as long to do so
· Understand why anyone would not embrace change, and, so believe that their followers are ignorant, rigid, or outright hostile to the new direction
· See that it is the transitions, not necessarily the changes themselves, that are holding people back and threatening to make their change unworkable.

Managing the transition
1. Learn to articulate what's changing and why. Succinctly - in one minute or less. It is amazing how many leaders cannot do that, they say.
2. Get the detail right, make individuals responsible for each bit that matters, establish timelines, set up a communications plan.
3. Understand (with the assistance of others closer to the change) just who is going to have to let go of what - what's ending (and what's not) in people's work lives and careers - and what people (including the leader) should let go of.
4. Help people let go of the past. Think about 'boundary' actions (that demonstrate change has come), a constant stream of information, and understanding and acceptance of the symptoms of grieving, as well as efforts to protect people's interests while they are giving up the status quo.
5. Help people through the neutral zone with communication (more than just information); keep repeating the four Ps:
- purpose: why we have to do this
- picture: what it will look and feel like when we're finished
- plan: step-by-step, how we will get there
- part: as in your part in getting us there
6. Create temporary solutions for transition problems. Include transition monitoring teams that can alert the leader to unforeseen problems
7. Model the new attitudes and behaviours needed to make the change work - providing practice in, and rewarding those behaviours and attitudes.

“Once you understand transition, you begin to see it everywhere,” these writers say. “You realize that many of the issues commonly addressed as leadership, learning, or organizational development challenges are really an inevitable part of transition.”

In today's organizations, without experiencing and successfully managing a difficult transition, no leader can be effective for very long. That suggests reinventing most models of leadership development. The best programs implicitly address the challenge of understanding change. But most could be strengthened by explicit attention to transition management.

The leadership that is appropriate to a modern, fast-moving organization - where work is based on task and mission rather than job description, and is distributed among contributors inside and outside one's organization - takes on a new meaning. It is not the drum-major-at-the-head-of-the-parade leadership appropriate to yesterday's organization; rather it is the give-and-take, person-centered leadership by which the sports coach gets the best effort out of each member of a team.

Good citizenship - ethics
Why is 'ethics' a leadership subject? Because how organizations behave often reflects standards set, and modeled, right at the top. Ethical behavior is part of being a good corporate citizen, and these days, that's increasingly part of being a successful organization.

Interested in keeping up with what's current in business ethics? Email Jeffrey Seglin - business ethics columnist, New York Times, Ethics in Business Mentor, Inc Magazine, Assistant Professor at Boston's Emerson College, and author of The Good, The Bad, and Your Business: Choosing Right When Ethical Dilemmas Pull You Apart, John Wiley & Sons, or at Amazon.com

Seglin on office snooping (from The New York Times, June 18, 2000).
“Except for the shouting,” he says, “it is becoming clear that the debate over employee privacy is over.” Widespread, routine snooping on employees is no longer a threat but a fact.

Nearly three-quarters of the large American companies that responded to a recent American Management Association survey (on electronic monitoring and surveillance in the workplace) said they actively record and review at least one of: employees' phone calls, e-mail, Internet connections and computer files … twice the rate measured in 1997. One in four has fired an employee because of this surveillance.

Fear of sexual harassment litigation, lost employee productivity and theft of proprietary data and software have swamped any hesitations about privacy, Seglin says. The challenge for employers now is setting up a monitoring system that is ethical and fair. And the key issue: Who will do the monitoring?

This, he says, is where things get sticky. Lets say monitoring is a full-time job for one person, or a department somewhere in the hierarchy. There will be incentive to find problems to justify the position or function, and “once the egregious offenders are weeded out, an effective monitoring program can easily devolve into an ethically unjustifiable, self-perpetuating array of witch hunts and speed traps.”

More often the job goes to people or departments that mainly do something else. Typically IT, because that's where the necessary access to hardware and software, and the skill to use it, resides. But the do-it-in-your-spare-time approach is also likely to be dysfunctional, with inconsistent enforcement, which can be worse than none at all.

If full-time snoops are prone to overzealousness and part-timers to inconsistency, what is the right approach? Seglin asks. His answer – none of the above! The ethical approach is to use snooping the way the police are supposed to use searches and telephone taps: only when warranted - only after the organization has good grounds for suspecting that there is abuse. “In other words, Seglin concludes, “he snoops fairest who snoops least, and then only with cause.“
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