Jeanie daniel duck managing change

Who Can Answer This Post For Me? MGMT313 "Complex Change"

1 - Using the article provided entitled Successful Change Programs Begin with Results by Schaffer and Thomson, summarize what you think is the most important aspect of the article. What is the biggest takeaway from the article (and why)?

OR

2 - Using the article provided Managing Change: The Art of Balancing by Duck, summarize what you think is the most important aspect of the article. What is the biggest takeaway from the article (and why)?

The Art of Balancing

by Jeanie Daniel Duck

Change is intensely personal. For change lo oc-cur in any organization, each individual mustthink, feel, or do something different. Even in large organizations, which depend on thousands of employees understanding company strategies well enough to translate them into appropriate actions, leaders must win their followers one by one. Think of this as 25,000 people having conversion experi- ences and ending up at a predetermined place at approximately the same time. Small wonder that corporate change is such a difficult and frustrating item on virtually every company's agenda.

The problem for most executives is that manag- ing change is unlike any other managerial task they have ever confronted. One COO at a large corpora- tion told me that when it comes to handling even the most complex operational problem, he has all tbe skills he needs. But when it comes to managing change, the model he uses for operational issues doesn't work.

"It's like the company is undergoing five medical procedures at the same time," he told me. "One

person's in charge of the root-eanal job, someone else is setting the broken foot, another person is working on the displaced shoulder, and still anoth- er is getting rid of the gallstone. Each operation is a success, but the patient dies of shock."

The problem is simple: we are using a mechanis- tic model, first applied to managing physical work, and superimposing it onto the new mental model of today's knowledge organization. We keep breaking change into small pieces and then managing the pieces. This is the legacy of Frederick Winslow Tay- lor and scientific management. But with change, the task is to manage the dynamie, not the pieces. The challenge is to innovate mental work, not to replicate physical work. The goal is to teaeh thou-

Jeanie Daniel Duck joined the Boston Consulting Group as a vice president in the Chicago office in 1988. She pre- viously ran her ov\m consulting firm, focusing on the emotional and behavioralimpact of change on corporate performance. She was trained as a tiansactional analyst for business and industry and has a master's degree in sculpture from Pratt Institute.

DRAWINGS BY KURT VARGO 109

MANAGING CHANGE

This approach virtually guarantees that the change effort will fail. The assumption of the CEO and the task force is, "We haven't said anything yet, so we're not really communicating. We haven't sent any messages."

But the opposite is true. Everything that is or is

sands of people how to think strategically, recog- nize patterns, and anticipate problems and opportu- nities before they occur.

Managing change isn't like operating a machine or treating the human body one ailment at a time. Both of these activities involve working with a fixed set of relationships. The proper metaphor for managing change is balancing a mobile. Most organiza- tions today find themselves under- i . , ,

taking a numher of projects as part of a g r e e I K e e p i n g e v e r v o n e i n t h e their change effort. An organization ^^ • r 1 ' 1 * •

may simultaneously be working on c o m p a n v l n i o r m e d IS a d i v e r s i o n , TQM, process reengineering, em- 1 1 9 ployee empowerment, and several Q lUXUrV toeV Can t other programs designed to improve "̂ '' performance. But the key to the change effort is not attending to each piece in isola- tion; it's connecting and balancing all the pieces. In managing change, the critical task is understanding how pieces halance off one another, how changing one element changes the rest, how sequencing and pace affect thc whole structure.

One tool that companies can use to provide that critical balance is thc Transition Management Team, a group of company leaders, reporting to the CEO, who commit all their time and energy to managing the change process. When that process has stabilized, the TMT disbands; until then, it oversees the corporate change effort. Managing change means managing the conversation between the people leading the change effort and those who are expected to implement the new strategies, man- aging the organizational context in which change can occur, and managing the emotional connec- tions that are essential for any transformation.

H ere's the way most companies approach change: the CEO or division head announces, "We have to make some changes around here.

The following people are appointed to a task force to come up with our ncw design. The task force will report back to me in 90 days."

What happens next is predictable. The task force goes to work, closeting itself away in a meeting room, putting in long hours to meet the deadline. The members don't talk with anyone else in the or- ganization. They're involved in trying to work out their own group dynamics and testing a lot of what- ifs. Among themselves, they agree: trying to keep everybody else informed is a diversion, a luxury they can't afford. Once the 90 days are up, and it's time to report to the boss, tben the task force will figure out a way to let everyone else know what it accomplished.

not done sends a message. The original announce- ment that change is on its way sends a message. De- pending on the company's recent past, the organiza- tion may feel only a mild ripple-or an alarm may go off. Even the appointment of the task force by the CEO sends an important message. In any orga- nization, where information is power and access to information is determined hy who attends certain meetings, a task force identifies who does and doesn't have power.

When the task force chooses not to inform thc rest of the organization ahout its work, it is saying, "We're busy figuring out your future - we'll tell you what it is when we're ready." Of course, people ab- hor information vacuums; when there is no on-go- ing conversation as part of the change process, gos- sip fills the vacuum. Usually the rumors are much worse and more negative than anything that is ac- tually going on.

When task-force members put off communicat- ing with thc rest of the organization, they prevent people from understanding the design principles that guided them, the lessons they learned from previous experience, the trade-offs they had to make. They unwittingly prevent the people who are expected to implement the change from partici- pating or buying in. As a consequence, no matter how good the new design turns out to be, it doesn't produce the expected results.

This scenario is common. I saw it played out at a large company that was considering restructuring its organization and relocating its headquarters. The executive group working on the project never put out a formal announcement. But that didn't mean that other people in the organization didn't know something was going on. The words, "Re- structuring Committee Meeting" appeared regular- ly on the calendars the committee members' secre-

110 HARVARD BUSINESS REVIEW November-December 1993

taries kept for them. People noticed that they were spending more time on this project than on any oth- er. And the rumor mill reported tbat when the com- mittee members came out of tbeir meetings, they looked worried.

The people in the organization had their own in- terpretation: something big is going on beeause they're having to spend a lot of time on it. And it must be horrible because they don't want to tell us about it.

At the end of nine months, the executive com- mittee made its formal announcement-and even that was done in a way that minimized the chance for conversation. Eaeh member of the eommittee went to a different location and read from the same script at a one-hour, companywide meeting held on a Thursday. The announcement was hardly awful: the committee had decided to restructure the com- pany and move its headquarters to another city. There were no layoffs, but those people who want- ed a job at headquarters would have to relocate. Out of a company of 35,000, only about 1,500 employ- ees were directly affected by the deeision.

After the announcement, there was no time al- lotted for questions and answers, and there was no discussion about the transition. The executives didn't think it was necessary because they were sending a binder filled with the details to managers in affected areas the following Monday. They fig- ured it would be better to wait until all the informa- tion was available than to try to answer questions immediately after the announcement.

When it came time to implement the decision, the company paid the price for its communications mistakes. Managers and workers felt alienated and devalued. Their opinions had never been sought; their concerns and feelings had never been eonsid- ered. Managers did not feel prepared to handle the barrage of questions they encountered that Mon- day, and no one was comforted hy a binder. Some people voted with their feet and simply did not make the move to the new headquarters. Oth- ers were even more destructive: they disengaged from any real effort to make the company successful but stayed un the payroll.

The crucial lesson here is that management is the message. Everything managers s a y - o r don't say-delivers a message. Too many managers assume that communications is a staff function, something for human resources or public relations to take care of. In faet, communications must be a priority for every manager at every level of the company.

HARVARD BUSINESS REVIEW November December 1993

This is particularly true during a change effort, when rumors run rampant. It is important for the messages to be consistent, clear, and endlessly re- peated. If there is a single rule of communications for leaders, it is this: when you are so sick of talking about something that you can hardly stand it, your message is finally starting to get through.

People in the organization may need to hear a message over and over before they believe that this time, the call for ehange is not just a whim or a passing fancy. It takes time for people to hear, un- derstand, and believe tbe message. And if they don't particularly like what they hear, then it takes even more time for them to eome to terms with the con- cept of cbange.

From the point of view of the leaders, who have been working on the change program for months, the message is already stale. But what counts is the point of view of everyone else in the organization. Have they heard the message? Do they believe it? Do they know what it means? Have they interpret- ed it for themselves, and have they internalized it?

Until managers have listened, watched, and talked enough to know that the answer to all these questions is yes, they haven't communicated at all.

A CCOl

wor buy

ccording to conventional wisdom, change works like this: You start by getting people to

into a new corporate vision, thereby changing their attitudes. They will then automati- cally change their behavior, which will result in improved eorporate performance. After seeing this improvement, they will confirm their commit- ment to the corporate change program, and the suc- cess spiral will continue.

This may have occurred in some company some- where. But more typically, managers launching a cbange program want the troops to get excited; they want their team to have "a winning attitude." So

By now, the troops have been through so many change

programs that they're skeptical.

when announcing the program, they "go for love," seeking to get people to believe in the new vision.

Unfortunately, it's not realistic to expect that kind of response in most companies these days. By now, the troops have been through so many of these programs tbat they're skeptical. Companies today are full of "change survivors," cynical people

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MANAGING CHANGE

who've learned how to live through change pro- grams without really changing at all. Their reaction is the opposite of commitment. They say things like, "I'll believe it when I see it," or, "Sure, this sounds great, but what happens when we don't make the numbers?" Of course, there are always some enthusiastic people. All they need is permis- sion to go off and try the new approach. But for the others, the new program is just another manage- ment fad in an endless series of management fads.

This reaction from so many employees illus- trates the real reason so many change programs fail:

Empowerment doesn't mean abandonment. Setting the context for chanee means understanding

, ^ ^ 1 1 1 9 1 what employees do and don t know. this model of change doesn't correspond to reality. In most companies, the real context for change is exactly the opposite. Top management should start by requiring a change of hehavior, and when that yields improved performance, the excitement and belief will follow.

The first change in behavior should be that of the top executives. Leaders need to ask themselves, "If we were managing the way we say we want to man- age, how would we act? How would we attack our problems? What kind of meetings and conversa- tions would we have? Who would be involved? How would we define, recognize, compensate, and reward appropriate behavior?" As leaders and fol- lowers work side by side to develop the answers to these questions, they create their future together.

For example, one popular management tech- nique is to push decision making down to the low- est appropriate level. It sounds simple, deceptively simple. I was present one morning when a newly enlightened CEO went to a factory for an all-em- ployee meeting. He talked about empowerment and candor and the need to put all the issues on the table. He tben invited questions from all present about whatever was on their minds. One brave worker raised his hand and asked why it was that the plant manager could be responsihle for equip- ment worth millions of dollars but only have sign- off authority of $5,000.

"Good question!" the CEO instantly responded. "I believe in empowerment so much that I'll make his sign-off authority $1 million."

The worker who had asked thc question was im- pressed. The CEO was elated. The plant manager was terrified. What had he learned that morning that was worth $995,000? Who was going to help him make decisions involving that much money? Could he expect any mercy when he made his first $250,000 mistake? The CEO had made thc dramat-. ic gesture of going for love, but he'd neglected the crucial element: he had not prepared the plant man- ager to handle so much responsibility.

Empowerment docs not mean abandonment. Giving people permission to do something differ-

ently is not helpful if they arc unable to do it. That permission just sets them up to fail. Setting the context for change means preparing the play- ers, understanding what they do and don't know, working with them, watching their performance, giving them feedback, creating an ongoing

I with them. Compare this CEO's behavior to

that of a sales vice president who de- cided that her regional directors should run their operations independently, as long as business objec- tives were met and corporate values honored. She discussed this at length with all the directors, who were quite happy with her decision. But on reflec- tion, she realized that some directors were more ex- perienced than others and that she would need to work with each one differently. She then set up one-on-one meetings with each director to find out what his plans were and how he wanted to interact with her. During this round of conversations, she reached explicit agreements with each director about what kinds of decisions or problems he would like help with, how he would update her, and how the directors would keep each otber informed. As a result, her role as coach was tailor-made to each person on her team,- each plan took into con- sideration her comfort with each director's abilities as well as each director's desires and preferred man- agement relationship.

Over and over, I've witnessed the same hard truth: When it comes to change, people don't hc- licve in a new direction because they suspend their disbelief. They believe because they're actually see- ing behavior, action, and results that lead them to conclude that the program works.

Companies cannot legislate their employees' feelings, but companies do rent tbeir hehavior. It sounds crass, but it's true. "Winning attitudes" do make a difference, and it is important to market new ideas and approaches within an organization very carefully. But even that kind of approach to

112 HARVARD BUSINESS REVIEW November-December 1993

change won't convert the hardened cbange sur- vivors. With all employees, managers have more leverage over what they do than how they feel.

F or decades, managers and workers have been ttild to cbeck their feelings at the door. And that's a big mistake. It's one thing to say that

behavior is more accessible to managers than feel- ings are; it's another thing altogether to say that feelings have no place at work.

Change is fundamentally about feelings,- compa- nies that want their workers to contribute with their heads and hearts bave to accept that emotions are essential to the new management style. The old management paradigm said that at work people are only permitted to feel emotions that are easily con- trollable, emotions that can be categorized as "posi- tive." Tbe new management paradigm says that managing people is managing feelings. The issue isn't whether or not people have "negative" emo- tions; it's how they deal with them. In fact, the most successful change programs reveal tbat large organizations connect witb their people most di- rectly through values-and that values, ultimately, are about beliefs and feelings.

I saw a classic example of this at a large company with over 100,000 employees worldwide, seeking to develop a values statement as a way to bring its people together. Tbe executive team had made an intellectual commitment to the notion of values hut had shown little progress over several m o n t h s - until an accidental breakthrough one day moved them to a different level. The executive team was gathering for a meeting, but the official agenda was delayed. To fill tbe time, they got into an informal conversation, asking each other the questions, "What helped you form your values? How did you come to realize that you had particular values?"

What started as an informal discussion gradually took over as the agenda for the meeting. As they went around the table, one of the men told a story abtnit his youth in another country and about his grandfather, who had been an important person in his life. The more he talked, the more he remem- bered what the relationship bad meant to him. As he told the story, he started to cry.

In most corporate settings, it is strictly taboo for a senior executive to cry, to show tenderness or grief. This behavior is something that executives avoid at all costs. But at that meeting, when the man started to cry, all the others felt a stronger con- nection to him. They acknowledged tbeir own feel- ings toward sotneone who had played a similar role in tbeir lives. Or tbey realized that they had missed out by not having bad such a relationship.

U ' / .

Out of that discussion eame a wider conversation tbat touched on what they had learned growing up about emotions, human connections, and values and bow these qualities shaped tbeir leadership style and behavior witbin the corporation. Even the men who had looked to affectionate and emotional role models growing up came to realize that in cor- porate life they steered clear of emotions-because that was the operating norm. Changing that norm became one of the group's explicit targets.

When an organization either denies the vahdity of emotions in tbe workplace or seeks to permit on- ly certain kinds of emotions, two things happen. The first is tbat managers cut themselves off from their own emotional lives. Even more important, they cut off the ideas, solutions, and new perspec- tives that other people can contribute.

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MANAGING CHANGE

The corollary is when managers are unwilling to let themselves or their employees experience "neg- ative" emotions, no matter how upsetting or diffi- cult the situation may be. It's true that getting a group of people together and allowing them to vent their emotions can initiate a negative spiral. But it's also true that there are simple and effective ways to tell people, "You can visit Pity City, but you aren't allowed to move there."

I saw this process at work in an information systems department of a company that was under- going a large and complex computer conversion. Rather than denying that the rest of the organiza- tion was making huge demands on the department and that everyone was under enormous stress, the project director decided to acknowledge just how difficult the conversion really was. The first thing he did was to have t-shirts made, large enough to fit over people's work clothes. On the front were the words, "Yes, it's hard." On the back it said, "But we can do it."

The project director also scheduled meetings on Tuesday and Friday afternoons with thc team and their primary users. For the first 15 minutes, the group would visit Pity City. People would go on and on with the usual gripes that come up at a difficult time. As a group, they could acknowledge just how horrible all this really w a s - b u t only for 15 min- utes. Then for the next 15 minutes, the meeting be- came a brag session, where people would showcase all the little victories - the things that had worked, ways they had delighted their customers, problems they had turned into successes. The one rule was that everyone had to participate at least once every week in both the griping and the bragging.

Once a week, people could Pity City. But they weren't allowed to move there.

Over the ten months of the project, these ses- sions built up a remarkable degree of camaraderie among the team members. One woman, in particu- lar, illustrated why it was important to admit feel- ings in the workplace. When the sessions started, this woman told thc project director that she didn't want to participate. She thought that others may need an emotional crutch, but she didn't. The su- pervisor told her that she still had to participate.

The woman discovered that these meetings did make a difference in how she felt about her team-

mates and her willingness to ask for help. The team came to realize that the conversion program was hard for everyone. Moreover, from listening to the complaints, they hegan to give each other ideas ahout ways to handle tough situations. Finally, as they told each other of the little victories, they be- gan to feel like they were part of a winning team. When the project was over, they felt even better about themselves and their organization than they had at the beginning.

O ne of the paradoxes of change is that trust is hardest to establish when you need it the most. There are some companies that em-

ployees trust. But if a company is in trouble, or if it is in the middle of a change effort, lack of trust automatically emerges as a serious barrier.

This is explained in part by Maslow's Pyramid, the hierarchy of human needs that was identified by the psychologist Abraham Maslow, At the top of the pyramid, where people would like to be focus- ing, is our need to be self-actualized, to realize and integrate our talents, intellect, values, and physical and emotional needs. In the new work environ- ments, where companies are offering to empower employees, self-actualization is being promoted.

At the bottom of the pyramid, Maslow put physi- cal security, the need everyone has to feel safe from danger, harm, or risk. In the new competitive envi- ronment, this kind of security is exactly what man- agement cannot offer. With heightened competition, downsizings, and new demands from customers, there is virtually no job security.

In effect, then, managers are sending their em- ployees conflicting messages. On the one hand,

they are encouraging them to go for , . the top of Maslow's Pyramid, to rcal-

V l S l t ^̂ ^ *̂ ^̂ '" greatest aspirations. On the other hand, managers are telling their employees that their most ha- sic needs for safety and security are not guaranteed. No wonder, in such a climate, that trust hecomes a criti- cal issue.

Trust in a time of change is based on two things: predictability and capability. In any organization, people want to know what to expect; they want pre- dictability. That's why, in the middle of change, trust is eroded when the ground rules change. This is particularly true in large, previously successful corporations. Under the old psychological contract hetween the company and its employees, predict- ability consisted of an implicit agreement: in return for years of service, tenure, and loyalty, the employ- ees could count on employment. The career path

114 HARVARD BUSINESS REVIEW November-December 1993

was also predictable. For example, an engineer knew that his or her work Hfe would progress with a cer- tain regularity, starting by working on a small proj- ect, then a larger project, leading to an assignment as an assistant manager, then on to being a man- ager. There was a map that people could follow to rise within tbe organization. With layoffs and downsizing, the old eon- tract has been broken. Not only is the guaranteed career path gone, but so is the guarantee of employment.

In this new context, people are still looking for predictability. But predictability bas to take a different form and apply to different situa- tions. Predictability consists of in- tention and ground rules: wbat are our general goals and how will we make decisions? The more leaders clarify the company's intentions and ground rules, the more people will be ahle to predict and influence what happens to them-even in the middle of a constantly shifting situation.

An example of a manager establishing predictabil- ity occurred at a large electronics company when the head of a division announced his determina- tion to adopt a new style of management. At tbe start of the program, be talked with all the man- agers and supervisors to explain the new direction. He told them, "If you believe you cannot manage in this new way, and you come and tell me, I will find a useful joh for you somewhere in the company. But if I discover that you aren't managing within the new plan, there's no such guarantee."

When he started tbe program, one or two people came forward to say they couldn't manage in the new style, and ho found them new jobs. Several oth- ers didn't come forward but were identified as non- performers. As promised, he got rid of them. Then, one year later, tbe division head spoke to tbe group again. This time, he said, "We've been at it for a year. Now everyone knows what we're talking about, and we're starting to gain momentum. Be- cause we have some responsibility for your being the kind of manager you are, and we have changed the rules in the middle of your career, I'm going to reissue my invitation. If you don't think you can manage in this new way, come and see me."

As a result of this second invitation, more people came forward. The program picked up even more momentum, and managers and employees felt that they understood both the company's intentions and its ground rules for creating change.

The second part of the equation is capability. To trust an organization, both managers and their re- ports must define the capability that each is provid-

ing; and each side has to believe that the other is capable of playing the new role. In the old organiza- tion, capability was defined in terms of deliver- ables. Bosses would say, "I don't care how you get it done; just produce the results I want." Now man- agers realize that if their processes are aligned and

How the team performs, whether or not it wins, and what the

future holds is as much in the hands of employees as leaders.

in control, the desired results will follow. To make this happen, managers and employees must identi- fy needed capabilities and negotiate the roles and responsibilities of those involved in the process be- fore each will trust the situation.

Rather than just checking on milestones and timetables, managers should ask how the work will get done. Tbey may occasionally attend cross-func- tional team meetings to listen to the participants talk about how the project is going, or they may talk with others across the different functions to get feedback on the project. And, by the same to- ken, those undertaking the project may want to ne- gotiate with tbe manager or others to access dif- ferent capabilities, perspectives, and experiences. When each side understands the needs, capabilities, and objectives of the other, trust can be built.

One of the consequences of this new approach is a shift to interdependency. Employees are no longer dependent on the company in a hierarchical rela- tionship. Now the company and its employees are interdependent; and the employees themselves are interdependent. In essence, the company is creating a new team and offering its people a fair shot at playing on the team. How the team performs, whether or not it wins, and wbat the future holds is as much in the hands of the players as the leaders. The only real security the company has to offer is a chance for people to work together to create the future and to achieve their goals.

Ai n organization, like a mobile, is a web of in- terconnections; a change in one area throws

different part off balance. Managing these ripple effects is what makes managing change a dy- namic proposition with unexpeeted challenges.

Consider, for example, what typically happens when companies undertake process reengineering.

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For the sake of simplicity, let's consider the best of circumstances. The cross-functional team has met its objectives for cutting cycle time and costs while increasing productivity and customer satisfaction. Functional chimneys are turning into pipelines. Wasted time and unnecessary activities are a thing of the past. Decisions are based on what's best for the overall business. The pilot projects proved it can work; the executive champions are thrilled; it looks like it's time to institutionalize the new pro- cess. Teams that get this far should be both com- mended and forewarned.

Getting through the pilot stage of a change pro- gram is a long way from a companywide scale-up. A "not-invented-here" mentality is often more in- tense within companies than it is with outsiders. But the issues surrounding process reengineering are not just a matter of internal competition; they involve a complex set of questions that affect systems as well as individuals.

Functional managers find themselves wonder- ing, "What happens to me now? Is there a job for me? Is it one I want? How do I prove my value in this new environment?" People who are accus- tomed to managing budgets, allocating resources, and being actively involved in projects are likely to take a dim view of redesigned processes that give cross-functional teams the decision-making authority they had previously enjoyed. The transi- tion from being a hands-on leader to a talent bro- ker is not easy.

Meanwhile, team members have questions of their own: "If we take all thc risks, what are thc re- wards? What happens when thc project is over? What does my career path look like if I go in and out of a functional organization depending on which project I'm working on?" Evaluation, compensa- tion, and career development all need to be re-

A Transition Management Team

or a job for fading executives.

designed in light of new process requirements. If they are not, there is little incentive for individuals to use the new processes even if they do work.

Human resources is not the only support system that must he reevaluated. The organizational mo- hile has many dimensions-culture, strategy, edu- cation, information systems, technology-and they all need to hang together. If the parts of the organi-

zational system are not considered in concert, they will inevitahly clash. In the case of process re- design, when the entire mobile is not balanced, reengineering is reduced to a mapping exercise.

Managing change means balancing the mo-hilc; the question is how to do it. Oneway is to depend on managers scattered throughout the organization to have a shared awareness of how the various parts need to interact and for everyone to trust that this general percep- tion will ultimately pull the organization together. Of course, that's assuming an awful lot. Another option that has worked weil in a number of compa- nies is a Transition Management Team.

What thc TMT is not is as important as what it is. It is not a new layer of hureaucracy or a permanent joh for fading executives. It is not a steering com- mittee, which is usually a body that convenes peri- odically to guide those who are actually doing thc work of the organization.

The TMT oversees the large-scale corporate change effort; it makes sure that all the cbange ini- tiatives fit together. It is made up of 8 to 12 highly talented leaders who commit all their time to mak- ing the transition a reality. The team members and what they are trying to accomplish must be accept- ed by the power structure of the organization. For the duration of the change process, they are thc CEO's version of the national guard. The CEO should be ahle to say, "I can sleep well tonight; the transition team is managing this."

The CEO's joh is to be a visible champion for thc transformation, articulating the context and ratio- nale for the new corporate direction. Working out the guidelines and ensuring that they are under- stood and used is the TMT's task. This means that the team captain is essentially the transition COO.

As such, he or she must have proven talent and credibility, understand the long-term vision of the company,

, 1 r 1 have a complete knowledge of thc

IS n o t a n e w l a y e r o i b u r e a u c r a c y business, and have the confidence of -^ ^ the CEO.

When the change process has sta- bilized and moved to a phase of continuous improvement, tbe TMT

disbands. Until then, the team has the overall responsibility for the transition. It reports to thc CEO regularly, hut the CEO doesn't run the team on a day-to-day basis. The TMT has funding author- ity, tbe power to stop projects that are out of sync with the overall direction of thc change effort, and input into evaluations of projects and thc individu- als or teams who perform them.

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In addition to tbe overall captain, the TMT must include a person who pays particular attention to the emotional and behavioral issues raised by change, making sure that they are neither ignored nor compromised; team captains of the major ini- tiatives, such as information technology, process redesign, and compensation; and the team captains of human resources and communications. All teams, including the human resources and communications teams, are cross-functional and drawn from differ- ent levels in the organization.

Tbe TMT manages the operational issues of the cbange effort. In addition, it needs to anticipate and manage the reactions, questions, and concerns that change generates. The TMT must be sure that the coordination and communication are congruent and ample. Ideally, the TMT captain could oversee all these elements, making sure that the opera-

Most corporate change efforts are fundamentally about moving information across old and obsolete boundaries.

tional pieces fit together and that the emotional is- sues are addressed openly and clearly. But practical experience suggests that in most large cbange pro- grams, the emotional issues are likely to get short shrift. In setting up a TMT, companies should adopt a fail-safe approach: create a position to oversee tbe emotional and behavioral issues unless you can prove with confidence that you don't need one. Tbe point is not to make operational changes hostage to some emotional ideal; the point is to acknowledge the importance of the emotional issues and to rec- ognize that unless someone owns an issue, no one is responsible for it.

For tbat reason, creating the position of a guide can be an important safeguard. Wbile the TMT cap- tain and the captains of the cross-functional teams are still responsible for identifying and addressing the emotional and behavioral issues that tbey see emerging, the guide makes sure that these issues are identified and discussed. This individual must not only understand the business hut also be sensi- tive to people issues and be both well respected and well connected witbin the organization. He or sbe must think strategically about tbe transformation that the company must undergo and the underlying beliefs, behaviors, skills, and support systems that

will be necessary to make it happen. For example, if the company has always thought of itself as an engineering-driven, product-focused organization, and the early strategy work makes clear that the company must become a customer-focused service organization, the responsibility of the guide is to ensure that the TMT carries this paradigm shift deep into tbe organization.

The TMT has eight primary responsibilities. This team is not, however, solely accountable for fulfilling these tasks.

Establish context for change and provide guid- ance. The CEO and other executives estahlish the company's strategic vision. The TMT makes sure that everyone in the organization shares a common understanding of that vision and understands the company's competitive situation. By organizing discussions throughout the organization, the TMT

spreads the company's vision and competitive situation so that indi- viduals and teams can accurately align their own activities witb the company's new overall direction.

Stimulate conversation. Most old- er, larger companies have formalized their operations in such functional isolation that conversations across levels or functions rarely take place. Instead, people have grown accus-

tomed to presentations followed by inquisitions. Moreover, when resources are scarce and time pres- sures are severe, conversation often seems a luxury. Yet most change efforts are fundamentally about moving information across old and obsolete bound- aries. Consequently, organizing early conversations between different parts of the company and making those conversations an important, sanctioned part of the change process is a critical task for the TMT. Early, open-ended conversations often result in the most productive outcomes; conversely, project leaders who press for early results and close off con- versation inside the company usually get to the end of a project with little to show in the way of new in- sight or real breakthrough thinking.