Woolners 5 stage model

Learning Objectives

After reading this chapter, you should be able to do the following:

1. Identify key traits for successful change leaders. 2. Define empowerment and its role in the change process. 3. Describe how agile organizations approach change and compare this approach to that of

traditional organizations. 4. Identify the characteristics and levels of learning organizations. 5. Identify the five principles of learning organizations. 6. Identify learning disabilities faced by organizations. 7. Describe the relationship between learning and change in organizations. 8. Describe the process of becoming a learning organization. 9. Identify leadership as a critical success factor in learning organizations.

Adapt and Rejuvenate: Agile, Learning Organizations5

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CHAPTER 5Section 5.1 Introduction: The Road Ahead

5.1 Introduction: The Road Ahead

We began this text by defining different types of change and showing how organiza-tional change can be diagnosed, planned, and implemented. In the chapters that fol- lowed, strategies and methods for sustaining change were presented. Here, we examine how organizations can adapt to continuous change by emphasizing innovation, creativity, agility, and learning.

Leading people, in particular, is a crucial part of an organization’s success in adapting to continuous change. While leaders must facilitate and manage change by articulating clear strategies and creating flexible structures within the organization, they must also create the types of cultures that sustain not only the “hard” dimensions of change (like strate- gies, structures, and systems), but also the “soft” dimensions that involve motivating and developing people to higher performance levels. While transformational change happens rapidly and sometimes dramatically, organizations must also continue to make equally dramatic adjustments to survive and succeed (Tan, 2011). At the same time, developing cultures that attract high quality talent involves learning and paying attention to innova- tion and creativity. Motorola’s recent restructuring exemplifies this type of innovation and creativity. The company successfully split from a unified corporate parent into Motorola Solutions that housed its businesses manufacturing wireless devices, selling mainly to

Chapter 5 Outline

5.1 Introduction: The Road Ahead The Leadership Challenge OD Consultants as Empowerment Sources Developing Employees for Change

5.2 Developing Agile Organizatons Agile Organizations Agile Businesses Don’t Predict,

They Respond Agile organizational capabilities

5.3 Learning Organizations Learning versus Training Levels of Learning Organizations Learning Cultures and Visions Primary Principles and Disciplines

5.4 Change and Learning Organizations Becoming a Learning Organization:

Woolner’s Five-Stage Model Examples of Learning Organizations Leadership

5.5 Agile and Learning Organizations in the Twenty-First Century

“The future belongs to those who see

possibilities before they become

obvious.” —John Sculley, Former CEO of Pepsi

and Apple Computer

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CHAPTER 5Section 5.1 Introduction: The Road Ahead

enterprises and governments, and Motorola Mobility, which sells cell phones and set-top boxes to consumers (Cryan & Cole, 2010). Organizations that plan, implement, and strive to sustain change must, as we have shown in this book, continually adapt to unforeseen global competition, casino-like economic shifts, new technologies, and the rapid increase of available data. Other challenges may be indirect and less dramatic, such as learning how best to incorporate recent graduates into the workforce, who may arrive lacking some skills because educational systems can’t keep pace with changes in the workplace (Marquardt, 2002). Looking ahead, it’s nearly impossible to predict the types of adapta- tions individuals, leaders, and entire organizations will need to make in order to stay competitive.

In Chapter 4, we discussed strategies and practices that organizations use to sustain imple- mented changes and embed best practices for the future. To be more successful, many large corporations still choose to restructure, sell off businesses and groups, and fire and hire new executives who don’t meet quarterly or annual performance targets. But some of the leading corporations, as discussed previously, make proactive decisions that are genuinely inspired by a desire for improvement rather than a reaction to an external threat that compels reorganization. In order to meet the demands of a constantly evolving global marketplace, leaders must work with all stakeholders—including global constituencies— as they too continually learn and adapt. Although the threat of change can be daunting to executives and employees alike, these challenges also present exciting opportunities for innovation and growth.

The Leadership Challenge

Different leadership styles and strategies relevant to guiding change have been discussed throughout the text. In these discussions, we have found that one of the principle chal- lenges boards of directors, trustees, and owners face is finding and developing leaders who can guide their organizations through uncertainty. Effective change leaders must fill new roles, many of which have yet to be defined. Over the past decade, business lead- ers and psychologists have attempted to identify the qualities successful change leaders share. In a study of their constituents conducted by the Center for Creative Leadership, 76 percent of respondents believed the definition of leadership had already changed, and 91 percent believed leaders faced increasingly complex challenges. They ranked key traits for leaders who would be successful in these new conditions. Forty-nine percent believed in the importance of collaboration. They also highlighted change leadership, the ability to build effective teams, and the ability to influence employees without exerting authority as important qualities. More traditional traits such as decisiveness, composure, and finding ways to get results were ranked low on this list (Martin, 2007).

IBM’s Global Business Services group interviewed more than 1,500 CEOs to analyze the traits they valued in leaders managing complex environments. Overall, they cited creativity as the most important skill for a CEO. Digging deeper, they identified seven approaches exemplified by creative CEOs (see Table 5.1). In other words, these new CEOs adapt to change and steer their organizations rather than clinging to “tried and true” methods of management.

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CHAPTER 5Section 5.1 Introduction: The Road Ahead

Table 5.1: Creative solutions of creative CEOs

Creative Solutions

1. a willingness to change business models to meet goals

2. encouragement of risk-taking

3. openness to out-of-the-box solutions

4. comfort with ambiguity and experimentation

5. valuing innovation

6. decisiveness

7. inventiveness with new business models

Source: ChiefExecutive.net. (2011). IBM Global CEO study: Fewer than half can handle increased complexity. CEO Briefing Newsletter. Retrieved from

http://chiefexecutive.net/ibm-global-ceo-study-fewer-than-half-can-handle-increased-complexity

Another innovative change leader is Vineet Nayar, vice chairman and CEO of HCL Tech- nologies Ltd. (HCLT), a $3.5 billion global information technology services company based in India. Nayar joined HCLT in 1985 and became president in 2005. He led a com- plete turnaround of the company over the following five years—expanding from 30,000 to 75,000 employees, tripling revenues, and doubling market share (HLC Technologies, 2001). Along with Apple, Google, Lenovo and Cognizant, HCLT was one of five global technol- ogy firms to hit revenues above $2 billion with a compound annual growth rate over 30 percent. In his book, Employees First, Customers Second: Turning Conventional Management

Upside Down (Nayar, 2010), Nayar explains his leadership approach that involves con- verting an organizational structure and company into a transparent, accountable, and value-driven culture. Under Nayar’s leadership, HCLT has been recognized as one of the best employers, most innova- tive, and most democratic workplaces.

But why redefine leadership away from authority and “doing whatever it takes to get results”? Given the variety of changes an organization may encounter and the complexity involved, individual leaders can no longer serve as ultimate authorities or experts. As noted in Chapter 4, emotion- ally intelligent leaders and followers have

a competitive edge with regard to change, as compared to more rigid, closed thinking, and closed feeling professionals. Because effective leaders rely on employees and teams for information and insight to understand and resolve complex situations, collaboration and communication take priority over authority. Today’s leaders create environments where employees can share information and propose alternate solutions to the problems at hand.

When Scott Cook, cofounder of the software company Intuit, which creates personal and small-business finance products, such as TurboTax and QuickBooks, wanted to revital- ize his organization, he imagined a design-driven model like Apple. However, he quickly

Encouraging employees to take risks fosters creativity and is a vital part of what makes an agile organization able to learn and to grow.

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CHAPTER 5Section 5.1 Introduction: The Road Ahead

realized that he was no Steve Jobs, a visionary CEO with the power to inspire and com- pel his employees. Instead, he turned his company upside down, letting the vision come from designers close to the front lines. He worked with one of Intuit’s design directors to create the Design for Delight (D4D) forums, which encourage employees to engage problems in new ways. Intuit eventually developed a D4D customer- and design- centered process. It begins with a “painstorm” to understand real consumer issues and to identify how Intuit can help. These frontline conversations happen directly with customers. The team has a “sol-jam” to generate as many solutions as possible and then moves to prototype to test the solutions. Finally, the team has the “code-jam” to quickly get a product to user testing. The entire process from painstorm to testing takes four weeks and these employee-led innovations have created some of Intuit’s most popular products, including their highly rated smartphone apps (Martin, 2011).

In fact, while leaders place greater emphasis on relationship building and creating open work environments, the idea of leadership has shifted so that it is no longer regarded as a quality desired only in management. Leadership responsibilities have been pushed down in organizational hier- archies (Martin, 2007) in order to enable faster identification of potential challenges and com- press response times. Another way of describing this shift in expectations is empowerment. As we discussed in Chapter 4, employees are empow- ered by being given more autonomy in making decisions, which is paired with increased respon- sibility. At Intuit, the initial D4D facilitators were recruited with the following responsibilities:

Actively participate in a one-day brainstorm/workshop Commit to the execution of initiatives generated through the . . . workshop. Become a more visible Design for Delight leader across Intuit Be a D4D coach/facilitator that the larger company can draw upon. . . .” (Martin, 2011)

These designers were at least one step removed from directorships, meaning they were closer to the bottom of the organizational hierarchy than to the top, yet they were given the task of changing the company’s culture and finding ways of being more immediately responsive to their clients’ needs.

OD Consultants as Empowerment Sources As organizations move from old to new business models, leaders often employ, as we have discussed throughout this text, organizational development (or OD) consultants. These are experienced external consultants with expertise in assessing and recommending

Scott Cook, cofounder of Intuit, revi- talized his organization by turning his company upside down, letting the vision come from designers close to the front lines rather than from top management.

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modifications for change, and then working with managers to implement such changes. Today many OD consultants view their roles as “educators” or “facilitators” (Rothwell, Stavros, Sullivan, & Sullivan, 2010) rather than as external experts who present solutions, a change that mirrors evolving leadership roles and organizational cultures.

As discussed in Chapter 1, an OD consultant has several goals:

• To deeply understand how the various parts of an organization fit together to comprise a whole system.

• To communicate that systemic understanding to their clients so that the potential, organization-wide ripple effects of individual and departmental changes become clear prior to implementation.

• To facilitate the empowerment of employees so that they constantly aim for improvement and look for creative solutions to problems.

• To consider multiple ideas without judgment and to encourage others to do the same.

• To step aside as needed. (Rothwell, Stavros, Sullivan & Sullivan, 2010, 637)

Relevant to the discussion here, an OD consultant, many of whom also serve as executive coaches, that is, professionals hired by organizations to advise on complex decisions and individual and/or team skill building aimed at developing personal and professional per- formance (Executive Coach Academy, n.d.). These professionals also model the leadership behaviors needed in a flexible and responsive organization. They help establish cultural norms and practices that are receptive to innovation and change and then let the players fulfill their redefined roles, trusting their abilities and the updated processes. In this way, organizations can “learn by doing.” They are given an opportunity to step back, reflect, and then implement initial changes with the guidance of a facilitator who eventually exits the process (Rothwell, Stavros, Sullivan & Sullivan, 2010). As the organization moves for- ward, its leaders facilitate the same type of reflective process in whatever new change sce- narios arise. An increasing number of Fortune 500 companies are using executive coaches with OD expertise not only to help leaders and employees develop new skills, but also to “. . . improve all aspects of the business from productivity, workflow, well-being, and increase their overall bottom line” (Executive Coach and Executive Coaching, 2011).

For example, an organization that plans on changing from a hierarchical to a team-based model may hire an OD consultant to help facilitate this shift. Prior to recommending changes, the consultant would need to understand the organization, its leadership, the vision-mission-values and rationale for desiring the change, the corporate structure, and how various roles fit together. The consultant would also need to understand how indi- viduals view their positions, and how they contribute to the whole. Once the consultant understands the existing system and the desired outcomes, the shift has to be communi- cated to employees so that they understand the reason behind the changes and buy in. This process, as discussed earlier in the text, is how OD consultants learn an organization in order to coach leaders and managers on how to model new methods of leadership, that is, by involving employees in the process rather than decreeing change from the C-suite, or the executive team (CEO, COO, CFO, and CIO).