Creating and Leading Change PDF

CHAPTER 18 Creating and Leading Change The world hates change, yet that is the only thing that has brought progress....

CHAPTER 18 Creating and Leading Change The world hates change, yet that is the only thing that has brought progress. — C H AR L E S K E T T E R I N G My interest is in the future because I am going to spend the rest of my life there. — C H AR L E S K E T T E R I N G L EAR N IN G O B JEC T IV ES After studying Chapter 18, you will be able to: LO 1 Discuss what it takes to be world class. p. 602 LO 2 Describe how to manage and lead change effectively. p. 606 LO 3 Describe strategies for creating a successful future. p. 617 C H AP T E R O U T L IN E Becoming World Class Managing Change Shaping the Future Sustainable, Great Futures Motivating People to Change Thinking about the Future The Tyranny of the Or A General Model for Managing Creating the Future The Genius of the And Resistance Shaping Your Own Future Achieving Sustained Greatness Specific Approaches to Enlist Learning and Leading Cooperation Organization Development A Collaborative, Sustainable Future? Harmonizing Multiple Changes Leading Change 600  M AN AGE R’ S B RI E F Management Connection H O W TIME W A R NER S U R F S A TID A L W A VE O F CH AN GE Most managers would say that their industries are under- former service in favor going major transformations, and managers of media of broadband, and companies are seeing some of the greatest turbulence. cable service providers Consumers continue to read, watch, and listen to news struggled with compe- and entertainment, but tastes change quickly—not only tition from satellite and PROGRESS REPORT for particular shows or magazines, but for entire formats Internet alternatives. and technologies. Managers cannot simply define them- More recently, its mag- selves as being in the television business or the maga- azine group, Time Inc., zine business. Today a magazine, for example, likely has has experienced steady, an Internet presence, where it offers videos as well as steep declines in ad articles. Then it must consider how consumers want to revenue and newsstand watch those videos—perhaps not on a magazine website sales, despite being the but on YouTube, discovered via a friend’s recommenda- largest U.S. magazine tion on Twitter. publisher, with titles This is the kind of environment Time Warner must including Time, Sports contend with. For over a decade, the company sought to Illustrated, and People. master it by building a media empire extending into all So Time Warner decided ONWARD technologies as they gained popularity. In 1989, the to spin off Time Inc. According to Time Warner CEO merger of the Time Inc. magazine powerhouse with Jeff Bewkes, this change would enable Time Warner to Warner Communications created a single company enjoy stronger growth while Time Inc. could become a offering the major media of the day: magazines, films, and more flexible, focused publishing company. Time Warner’s cable television. In 2001, the company bought AOL to remaining operations also represent a more focused com- add a role on the Internet. pany, involved mainly in films (the Warner Bros. film stu- That strategy has not walled off Time Warner from dio) and cable television (including HBO, CNN, and TNT). change, however. Consumers move out of as well as into Of course, cable television and movies also are chal- new media, sometimes leaving Time Warner in shrinking lenged by new forms of Internet competition. The ques- sectors. Time Warner sold off Warner Music in 2004 as tion for Bewkes is how Time Warner, after it trims down music downloads sucked away profits. In 2009, it sold AOL by spinning off Time Inc., can ride atop the wave of and Time Warner Cable after consumers abandoned the change in its two remaining media.1 Changes like the ones faced by, and required of, Time Warner and other media companies are not easy, do not happen automatically, and often require managers to overcome a host of obstacles. As you study this chapter, think about why the ability to change is both challenging and essential. 601 602 Part Five Controlling: Learning and Changing An ever-changing world is full of uncertainty and risk.2 Now and in the foreseeable future, just a sampling of the many disruptive forces in play includes a fragile financial system, breakdowns in global trade, growing income inequality, environmental deg- radation, declining public health and education, and underperforming institutions.3 These and other dynamic forces make it essential for organizations (and people) to cope, anticipate, adapt, and change. Lest the preceding paragraph sound like gloom and doom, one useful perspective is to view problems as opportunities.4 As but one example, manufacturing was presumed in recent years to be virtually dead in the United States, but global circumstances are changing, and visionary leaders and optimistic entrepreneurs are spearheading a manufacturing comeback.5 As you can imagine, currently and forevermore, some organizations and people deal with change more effectively than others. The challenge for organizations is not just to produce innovative new products but to balance a culture that is innovative and that builds a sustainable business. And for individuals, the ability to cope with change is related to their job performance, the rewards they receive,6 and their career success. But coping with change isn’t enough. Managers and their organizations need to create change and improve constantly to achieve world-class excellence and competi- tive advantage for the future. For Time Warner and its leaders, change in the media industry is something in the environment that they must respond to by making their own changes. Becoming World Class LO 1 Managers today want, or should want, their organizations to become world class.7 Being world class requires applying the best and latest knowledge and ideas and having the ability to operate at the highest standards of any place anywhere.8 Thus becoming world class does not mean merely improving. It means becoming one of the very best in the world at what you do. To some people, striving for world-class excellence seems a lofty, impossible, unnecessary goal. But it is a goal that helps one survive and succeed Bottom Line in today’s intensely competitive business world. It’s a worthy aspiration: World-class companies create high-value products and earn superior profits becoming world class at every one of your competitive goals. over the long run. They demolish the obsolete methods, systems, and cultures of What does it mean to be world the past that impeded their progress and apply more effective organizational strat- class at a goal such as quality or egies, structures, processes, and management of human resources. And increas- sustainability? ingly, companies are vehicles for accomplishing societal purposes. Business is an intrinsic part of society, and value can be measured not just in short-term profits but sustainable profits and contributions to society over time.9 Great leaders, col- laborating with others, build enduring institutions that can compete successfully on a global basis.10 Sustainable, Great Futures Two Stanford professors, James Collins and Jerry Porras, studied 18 corporations that had achieved and maintained greatness for half a century or more.11 The companies included Sony, American Express, Motorola, Marriott, Johnson & Johnson, Disney, 3M, Hewlett-Packard, Citicorp, and Walmart. Over the years, these companies have been widely admired, been considered the premier institutions in their industries, and made a real impact on the world. Although every company goes through periodic downturns—and these firms are no exceptions over their long histories—these com- panies have consistently prevailed across the decades. They turn in extraordinary per- formance over the long run, rather than fleeting greatness.  Creating and Leading Change Chapter 18 603 The researchers sought to identify the essential characteristics of enduringly great companies. These great companies have strong core values in which they believe deeply, and they express and live the values consistently. They are driven by goals— not just incremental improvements or business-as-usual goals, but stretch goals (recall Chapter 13). They change continuously, driving for progress via adaptability, experi- mentation, trial and error, entrepreneurial thinking, and fast action. And they do not focus on beating the competition; they focus primarily on beating themselves. They continually ask, “How can we improve ourselves to do better tomorrow than we did today?” But underneath the action and the changes, the core values and vision remain steadfast and uncompromised. Table 18.1 displays the core values of several compa- nies that were built to last. Note that the values are not all the same. In fact, no set of common values consistently predicted success. Instead the critical factor is that great companies have core values, know what they are and what they mean, and live by them—year after year. 3M Innovation—“Thou shalt not kill a new product idea.” TABLE 18.1 Core Ideologies in Built-to- Absolute integrity. Last Companies Respect for individual initiative and personal growth. Tolerance for honest mistakes. Product quality and reliability. “Our real business is solving problems.” Sony To experience the sheer joy that comes from the advancement, application, and innovation of technology that benefits the general public. To elevate the Japanese culture and national status. Being pioneers—not following others, but doing the impossible. Respecting and encouraging each individual’s ability and creativity. Walmart “We exist to provide value to our customers”—to make their lives better via lower prices and greater selection; all else is secondary. Swim upstream, buck conventional wisdom. Be in partnership with employees. Work with passion, commitment, and enthusiasm. Run lean. Pursue ever-higher goals. Walt Disney No cynicism allowed. Fanatical attention to consistency and detail. Continuous progress via creativity, dreams, and imagination. Fanatical control and preservation of Disney’s “magic” image. “To bring happiness to millions” and to celebrate, nurture, and promulgate “wholesome American values.” SOURCE: From Built to Last by James C. Collins and Jerry I. Porras, Copyright © 1997 by James C. Collins and Jerry I. Porras. Reprinted by permission of the authors, HarperCollins Publishers, Inc. and Random House Group Limited. 604 Part Five Controlling: Learning and Changing The Tyranny of the Or tyranny of the or Many companies, and individuals, are plagued by the tyranny of the or. This refers to The belief that things must be the belief that things must be either A or B and cannot be both. The authors of Built either A or B and cannot be to Last provide many common examples: beliefs that you must choose either change or both; that only one goal and stability; be conservative or bold; have control and consistency or creative freedom; do not another can be attained. well in the short term or invest for the future; plan methodically or be opportunistic; create shareholder wealth or do good for the world; be pragmatic or idealistic.12 Such beliefs, that only one goal but not another can be attained, often are invalid and cer- tainly are constraining—unnecessarily so. The Genius of the And genius of the and; In contrast to the tyranny of the or, the genius of the and—more academically, organizational organizational ambidexterity—refers to being able to achieve multiple objectives at ambidexterity the same time.13 It develops via the actions of many individuals throughout the orga- Ability to achieve multiple nization. We discussed earlier in the book the importance of delivering multiple com- objectives simultaneously. petitive values to customers, performing all the management functions, reconciling hard-nosed business logic with ethics, leading and empowering, and others. Authors Collins and Porras have their own list:14 Purpose beyond profit and pragmatic pursuit of profit. Relatively fixed core values and vigorous change and movement. Conservatism with the core values and bold business moves. Clear vision and direction and experimentation. Stretch goals and incremental progress. Control based on values and operational freedom. Long-term thinking and investment and demand for short-term results. Visionary, futuristic thinking and daily, nuts-and-bolts execution. You have learned about all of these concepts throughout this course and should not lose sight of any of them—either in your mind or in your actions. To achieve them requires the continuous and effective management of change. Achieving Sustained Greatness A study of 200 management techniques employed by 160 companies over 10 years identified the specific management practices that lead to sustained, superior perfor- mance.15 The authors boiled their findings down to four key factors: 1. Strategy—focused on customers, continually fine-tuned based on marketplace changes, and clearly communicated to employees. 2. Execution—good people, with decision-making authority on the front lines, doing quality work and cutting costs. 3. Culture—one that motivates, empowers people to innovate, rewards people appropriately (psychologically as well as economically), entails strong values, challenges people, and provides a satisfying work environment. 4. Structure—making the organization easy to work in and easy to work with, characterized by cooperation and the exchange of information and knowledge throughout the organization. You have been learning about these concepts throughout this course. Becoming world class doesn’t apply only to the private sector. People worry about globalization’s negative effects on local communities as plants shut down and people lose their jobs to overseas workers. But local communities do have options—not easy ones, but doable. A locality can strive to become a world-class Becoming world class doesn’t apply only center of thinkers, makers, or traders.16 Thus Boston creates new ideas and technologies that often to the private sector. dominate world markets; Spartanburg–Greenville,  Creating and Leading Change Chapter 18 605 South Carolina, is a world-class manufacturing region that is home to more than 80 international firms representing 18 countries; and Miami, Florida, connects Latino and Anglo cultures the way Hong Kong and Singapore have historically bridged Chinese and British cultures. The keys to creating world-class local communities include visionary leadership, a climate friendly to business, a commitment to training workers, and col- laboration among businesses and between business and local government.17 Organization Development How do organizations become more ambidextrous and move in the other positive organization directions described throughout this book? This chapter discusses several general development (OD) approaches that will create positive change. We begin here with an umbrella concept The systemwide application of called organization development. behavioral science knowledge Probably the single most widely-used approach to organizational change in the to develop, improve, and Western world, applied increasingly on a global scale,18 is organization development reinforce the strategies, (OD). OD is a systemwide application of behavioral science knowledge to develop, structures, and processes improve, and reinforce the strategies, structures, and processes that lead to organi- that lead to organizational zation effectiveness.19 Throughout this course, you have acquired knowledge about effectiveness. behavioral science and the strategies, structures, and processes that help orga- nizations become more effective. The systemwide component of the defini- tion means that OD is not a narrow improvement in technology or operations but a broader approach to changing organizations, units, or people. The behavioral science com- ponent means that OD is not directly concerned with economic, financial, or technical aspects of the organization—although they may benefit through The strategy of Cirque du Soleil changes in the behavior of the people in the organization. The other key part of is one of constant innovation: combining circus and theater and the definition—to develop, improve, and reinforce—refers to the actual process of studying other industries such as changing for the better and for the long term. car design, fashion, and restaurants Two features of organization development are important to note.20 First, it aims to to get ideas for new shows. increase organizational effectiveness—improving the organization’s ability to deal with customers, stockholders, governments, employees, and other stakeholders, which results in better-quality products, higher financial returns, and high quality of work life. Sec- ond, OD has an important underlying value orientation: It supports human potential, development, and participation in addition to performance and competitive advantage. Many specific OD techniques fit under this philosophical umbrella.21 The basic types are strategic interventions, including helping organizations conduct mergers and acquisitions, change their strategies, and develop alliances; technostructural inter- ventions relating to organization structure and design, employee involvement, and work design; human resources management interventions, including attracting good people, setting goals, and appraising and rewarding performance; and human process interventions, including conflict resolution, team building, communication, and lead- ership. You learned about these topics throughout your management course. You also will learn more about the process of creating change in the rest of this chapter. 606 Part Five Controlling: Learning and Changing Managing Change LO 2 People are the key to successful change.22 For an organization to be great, or even just to survive, people have to care about its fate and know how they can contribute. But typically leadership lies with only a few people at the top. Too few take on the burden of change; the number of people who care deeply, and who make innovative contribu- tions, is too small. People throughout the organization need to take a greater interest and a more active role in helping the business as a whole. They have to identify with the entire organization, not just with their unit and close colleagues. Shared leadership is crucial to the success of most change efforts—people must be not just supporters of change but also implementers.23 This shared responsibility for change is not unusual in start-ups and very small organizations. But too often it is lost with growth and over time. In large, traditional corporations, it is all too rare. Organizations need to rekindle individual creativity and responsibility permanently, instituting a true change in the behavior of people throughout the ranks. The essential task is to motivate people fully to keep changing in response to new business challenges. Motivating People to Change People must be motivated to change. But often they resist changing. Some people resist change more than others, but managers tend to underestimate the amount of resistance they will encounter.24 People at all levels of their organizations, from entry-level workers to top execu- tives, resist change. For example, many banks and credit unions are switching from specialized roles in branches, such as tellers and personal bankers, to employing employees who are universal agents, able to process transactions, open accounts, and sell products. When they make this change, the main source of resistance is that the new jobs involve selling (identifying unmet customer needs and suggesting products and services). A typical branch employee is unaccustomed to selling and may even have a negative opinion of a salesperson’s role, especially in a bank.25 At IBM, executives learned that lower-level managers were getting bogged down because they had to invest so much time and effort in obtaining approval from higher- ups. CEO Sam Palmisano announced that he would give first-level managers authority to spend $5,000 without prior approval—a daring move, considering that the author- ity applied to 30,000 managers. However, the managers felt uncomfortable with their new authority, and in the first year of the new program, they spent only $100,000 of the $150 million Palmisano had entrusted to them.26 In other words, they were reluc- tant to change the way they worked, even though it stood to make their job easier. Many people (and organizations) settle for mediocrity rather than aspire to excel- lence. They resist the idea of striving mightily for excellence. When told by their managers, “We have to become world class,” their reactions resemble the following statements: “Those world-class performance numbers are ridiculous! I don’t believe them, they are impossible! Maybe in some industries, some companies... but ours is unique...” “Sure, maybe some companies achieve those numbers, but there’s no hurry... We’re doing all right. Sales were up 5 percent this year, costs were down 2 percent. And we’ve got to keep cutting corners...” “We can’t afford to be world class like those big global companies; we don’t have the money or staff...” “We don’t need to expand internationally. One of our local competitors tried that a few years ago and lost its shirt.” “It’s not a level playing field... the others have unfair advantages...”  Creating and Leading Change Chapter 18 607 General reasons for resistance FIGURE 18.1 Reasons for Resistance to Peer Change Inertia Timing Surprise pressure Resistance to change Different Management Self-interest Misunderstanding assessments tactics Change-specific reasons for resistance To deal with such reactions and successfully implement positive change, managers must understand why people often resist change. Many factors go into people’s resis- tance to, ambivalence toward, and readiness for change.27 Figure 18.1 shows some common reasons for resistance. Some reasons are general and arise in most change efforts. Other reasons for resistance relate to the specific nature of a particular change. General Reasons for Resistance Several reasons for resistance arise regardless of the actual content of the change:28 Inertia. Usually people don’t want to disturb the status quo. The old ways of doing things are comfortable and easy, so people don’t want to shake things up and try something new. For example, it is easier to keep living in the same apartment or house than to move to another. Timing. People often resist change because of poor timing. Maybe you would like to move to a different place to live, but do you want to move this week? Even if a place were available, you probably couldn’t take the time. If managers or employ- ees are unusually busy or under stress, or if relations between management and workers are strained, the timing is wrong for introducing new proposals. Where possible, managers should introduce change when people are receptive. Surprise. One key aspect of timing and receptivity is surprise. If the change is sudden, unexpected, or extreme, resistance may be the initial—almost reflex- ive—reaction. Suppose your school announced an increase in tuition, effective at the beginning of next term. Wouldn’t you at least want more warning so you might be prepared? Managers or others initiating a change often forget that others haven’t given the matter much thought; the change leaders need to allow time for others to prepare for the change. Peer pressure. Sometimes work teams resist new ideas. Even if individual members do not strongly oppose a change suggested by management, the team may band together in opposition. Peer pressure will cause individuals to resist even reasonable changes, especially if a group is highly cohesive and has antimanagement norms (recall Chapter 14). Of course peer pressure can be a positive force, too. Change leaders who invite—and listen to—ideas from team members may find that peer pressure becomes a driving force behind the change’s success. Change-Specific Reasons for Resistance Other causes of resistance arise from the specific nature of a proposed change. Change-specific reasons for resistance include29 Self-interest. Most people care less about the organization’s best interest than they do about their own best interests. They will resist a change if they think it 608 Part Five Controlling: Learning and Changing will cause them to lose something of value. What could people fear to lose? At worst, their jobs, if management is considering closing down a plant. A merger, reorganization, or technological change could create the same fear. Other possible fears include loss of the feeling of being competent in a familiar job, expectations that the job will become more difficult or time-consuming, and concerns about the organization’s future, given that management wasn’t satisfied with the status quo. Misunderstanding. Even when management proposes a change that will benefit everyone, people may resist because they don’t fully understand it. People may not see how the change fits with the firm’s strategy, or they simply may not see the change’s advantage over current practices.30 One company met resistance to the idea of introducing flexible working hours, a system in which workers have some say regarding the hours they work. This system can benefit employ- ees, but a false rumor circulated among plant employees that people would have to work evenings, weekends, or whenever their supervisors wanted. The employees’ union demanded that management drop the flexible hours idea. The president was caught completely off guard by this unexpected resistance and complied with the union’s demand. Different assessments. Employees receive different—and usually less—informa- tion than management receives. Even within top management ranks, some executives know more than others do. Such discrepancies cause people to develop different assessments of proposed changes. Some may be aware that the benefits outweigh the costs, whereas others may see only the costs and not the advantages. This is a common problem when management announces a change, say, in work procedures, and doesn’t explain to employees why the change is needed. Management expects advantages in terms of increased effi- ciency, but workers may see the change as another arbitrary, ill-informed man- agement rule that causes headaches for those who must carry it out. Management tactics. Management may attempt to force the change and may fail to address concerns. Or it may fail to provide the necessary resources, knowledge, or leadership to help the change succeed. Sometimes a change receives so much exposure and glorification that employees resent it and resist. Managers who overpromise what they, or the change, can deliver may discover that the next time they want to introduce a change, they have lost credibility, so employees resist. It is important to recognize that employees’ assessments can be more accurate than management’s; employees may know a change won’t work even if management doesn’t. In this case, resistance to change is beneficial for the organization. Thus, even though management typically considers resistance a challenge to be overcome, it may actually represent an important signal that a proposed change requires further, more open-minded scrutiny.31 In Practice FLEXIBLE WORKSPACES AT AMERICAN EXPRESS An increasingly common change that can spark a wide variety of reactions is the switch from offices or cubicles to open workspaces. Shared workspaces are intended not only to save money but also to stimulate conversations that might lead to sharing ideas or answer- ing questions. In a twist on this idea, some companies have noticed that many employees do not even come into the office every day; they may be traveling to meet with customers, or perhaps they work from home or another remote location for part of the week. These companies save space (and therefore money) by setting up unassigned workspaces, often in open arrangements. Whoever comes to the office on a given day selects a place to work and sets up for that day. Companies using flexible workspaces include American Express, GlaxoSmithKline, Eli Lilly, and PricewaterhouseCoopers.  At American Express, flexible workspaces are tied to flexible work arrangements. Based on data from employee surveys, the company classifies each employee into one of four groups: (1) Hub employees have jobs requiring them to work face to face with their col- leagues; (2) club employees work in a hub office fewer than four days a week because they work part-time or do some work from another location; (3) roam employees mainly work away from the office, usually because they visit clients; and (4) home-based employees have made arrangements to work from home. Hub employees have their own desk at the office; others share desks in open spaces when they go in. American Express trains managers to work with employees at remote locations and has measured improvements in costs and productivity.32 Which of the reasons given for resistance to change might you have expected to see in response to American Express’s introduction of flexible workspaces? Why? A General Model for Managing Resistance Motivating people to change often requires three basic stages, shown in Figure 18.2: unfreezing, moving to institute the change, and refreezing.33 unfreezing Unfreezing In the unfreezing stage, management realizes that its current prac- Realizing that current practices tices are no longer appropriate and the company must break out of (unfreeze) its pres- are inappropriate and that new ent mold by doing things differently. People must come to recognize that some of the behavior is necessary. past ways of thinking, feeling, and doing things are obsolete.34 A direct and sometimes effective way to do this is to communicate the negative consequences of the old ways by comparing the organization’s performance with that of its competitors. As dis- cussed in Chapter 15, management can share with employees data about costs, qual- ity, and profits.35 Sometimes an organization can open minds by easing employees into the transition gently and letting the more flexible employees deliver the mes- sage favoring change. When Washington State Employees Credit Union rewrote job descriptions to staff its branches with universal agents, it didn’t force all the employees to change jobs. Rather, those who wanted to remain tellers or in other traditional roles could do so as long as they demonstrated a supportive attitude. In addition, the company selected and trained a group of branch employees to answer questions about the new universal-agent position.36 When managers communicate the need to change, they need to take care not to arouse people’s defensiveness. Instead of unfreezing resistance, managers are likely to place employees on the defensive when they pin the blame for shortcomings directly and entirely on the workers.37 Similarly, bombarding employees with facts aimed at inducing fear may only add to their resistance. When a problem seems huge, people often decide it is hopeless and don’t face it. In these difficult situa- tions, leaders more effectively unfreeze negative behavior with a message of hope and a commitment to collaborate so that they can accomplish successful change together. FIGURE 18.2 Unfreezing Refreezing Motivating People to Moving (breaking from (reinforcing and Change (instituting the old ways of supporting the the change) doing things) new ways) 609 610 Part Five Controlling: Learning and Changing An important contributor to unfreezing is the The gap is between what is and what recognition of a performance gap, which can be a could be. precipitator of major change. A performance gap is the difference between actual performance performance gap and the performance that should or could exist.38 As an impetus for change, a perfor- mance gap can apply to the organization as a whole; it also can apply to departments, The difference between actual groups, and individuals. performance and desired performance. A gap typically implies poor performance; for example, sales, profits, stock price, or other financial indicators are down. This situation attracts management’s atten- tion, and management introduces changes to try to correct things. But another, very Bottom Line important form of performance gap can exist. This type of gap can occur when perfor- A useful tactic for innovating mance is good but someone realizes that it could be better. Thus the gap is between toward a positive future is to imagine the difference between what is and what could be. Important changes can and should be made even when what is and what could be performance is good.39 In the realm of change management, employees are particularly motivated by situ- ations that combine the sense of urgency that comes from identifying a problem with the sense of excitement that comes from identifying an opportunity. Furthermore, managers communicating a performance gap should keep in mind that employees care moving about more than market share and revenues. Employees want to know how making Instituting the change. a change can help them have a positive impact on their work group, their customers, their company, their community, and themselves. For example, a financial services company met resistance when it tried to persuade employees that a change would force-field analysis enhance the company’s competitive position. Employees got on board only after An approach to implementing the change leaders also started talking about how the change would help employees the unfreezing/moving/refreezing reduce errors, enable teams to avoid duplication of effort, make jobs more interesting, model by identifying the forces and help the organization fulfill its mission to deliver affordable housing.40 that prevent people from changing and those that will Moving The next step, moving to institute the change, begins with establishing drive people toward change. a vision of where the company is heading. You learned about vision in the leader- ship chapter. The vision can be realized through strate- gic, structural, cultural, and individual change. Strategic ideas are discussed throughout the book. Changes in structure may involve moving to the divisional, matrix, or some other appropriate form (discussed in Chapters 8 and 9). Cultural changes (Chapter 2) are institutional- ized through effective leadership (Chapters 12 through 15). Individuals will change as new people join the com- pany (Chapters 10 and 11) and as people throughout the organization adopt the leader’s new vision for the future. One technique that helps to manage the change pro- cess, force-field analysis, involves identifying the spe- cific forces that prevent people from changing and the specific forces that will drive people toward change.41 Managers operating under this concept investigate forces acting in opposite directions. Eliminating the restraining forces helps people unfreeze, and increasing the driving forces helps and motivates them to move forward. The great social psychologist Kurt Lewin developed Lawrence Ellison, CEO of Oracle, force-field analysis (and the unfreezing/moving/refreez- is well-versed in what it takes to convey a vision of change within ing model). Lewin theorized that although driving forces may be more easily changed, his organization. Oracle has often shifting them may increase opposition (tension and/or conflict) within the organiza- acquired other companies, bringing tion and add restraining forces. Therefore, to create change, it is crucial to remove tumultuous change for individual employees and managers within restraining forces. An exercise at the end of the chapter provides an example and takes both organizations. you through this process.  Creating and Leading Change Chapter 18 611 Refreezing Finally, refreezing means strengthening the new behaviors that sup- refreezing port the change. Refreezing involves implementing control systems that support Strengthening the new the change (Chapter 16), applying corrective action when necessary, and reinforc- behaviors that support the ing behaviors and performance (Chapter 13) that support the agenda. Management change. should consistently support and reward evidence of movement in the right direction.42 In today’s organizations, refreezing is not always the best third step if it creates new behaviors that are as rigid as the old ones. The ideal new culture is one of continuous change. Refreezing is appropriate when it permanently installs behaviors that focus on important business results and maintain essential core values. But refreezing should not create new rigidities that might become dysfunctional as the business environ- ment continues to change.43 The behaviors that should be refrozen are those that promote continued adaptability, flexibility, experimentation, assessment of results, and continuous improvement—in other words, lock in key values, capabilities, and strategic mission but not necessarily specific practices and procedures. Specific Approaches to Enlist Cooperation You can try to command people to change, but the key to long-term success is to use other approaches.44 Developing true support is better than driving a program for- ward.45 How, specifically, can managers motivate people to change? Most managers underestimate the variety of ways they can influence people during a period of change.46 Several effective approaches to managing resistance and enlist- ing cooperation are available, as described in Table 18.2 and expanded here. TABLE 18.2 Methods for Managing Resistance to Change Commonly Used in Approach Situations Advantage Drawbacks Education and When there is a lack of Once persuaded, people Can be very time- communication information or inaccurate will often help with the consuming if lots of people information and analysis. implementation of the are involved. change. Participation and When the initiators do not People who participate Can be very time- involvement have all the information will be committed to consuming if participators they need to design the implementing change, and design an inappropriate change and when others any relevant information change. have considerable power to they have will be integrated resist. into the change plan. Facilitation and support When people are resisting No other approach works Can be time-consuming because of adjustment as well with adjustment and expensive and still fail. problems. problems. Negotiation and rewards When someone or some Sometimes it is a relatively Can be too expensive group will clearly lose out easy way to avoid major in many cases if it alerts in a change and when that resistance. others to negotiate for group has considerable compliance. power to resist. Manipulation and When other tactics will not It can be a relatively quick Can lead to future problems cooptation work or are too expensive. and inexpensive solution to if people feel manipulated. resistance problems. Explicit and implicit When speed is essential, It is speedy and can Can be risky if it leaves coercion and the change initiators overcome any kind of people angry at the possess considerable resistance. initiators. power. SOURCE: Reprinted by permission of the Harvard Business Review. An exhibit from “Choosing Strategies for Change” by John P. Kotter and Leonard A. Schlesinger (March–April 1979). Copyright © 1979 by the Harvard Business School Publishing Corporation; all rights reserved. 612 Part Five Controlling: Learning and Changing Education and Communication Management should educate people about upcoming changes before they occur. It should communicate not only the nature of the change but its logic. This process can include one-on-one discussions, presenta- tions to groups, and reports and memos. As we discussed in Chapter 15, effective communication includes feedback and listening. That provides an environment in which management can explain the rationale for the change—and perhaps improve it. Participation and Involvement The people who are affected by the change should be involved in the change’s design and implementation. For major, organi- zationwide change, participation in the process can extend from the top to the very bottom of the organization.47 When feasible, management should use the advice of people throughout the organization. As you learned in Chapter 3, people who are involved in decisions understand them more fully and are more committed to them. People’s understanding and commit- ment are important ingredients in the successful implementation of a change. Partici- pation also provides an excellent opportunity for education and communication. Facilitation and Support Management should make the change as easy as possible for employees and support their efforts. Facilitation involves providing the training and other resources people need to carry out the change and perform their jobs under the new circumstances. This step often includes decentralizing authority and empowering people—that is, giving them the power to make the decisions and changes needed to improve their performance. Offering support involves listening patiently to problems, being understanding if performance drops temporarily or the change is not perfected immediately, and gener- ally being on the employees’ side and showing consideration during a difficult period. Negotiation and Rewards When necessary and appropriate, management can offer concrete incentives for cooperation with the change. Perhaps job enrichment is acceptable only with a higher wage rate, or a work rule change is resisted until manage- ment agrees to a concession on some other rule (say, regarding taking breaks). Even among higher-level managers, one executive might agree to another’s idea for a policy change only in return for support on some other issue of more personal importance. Rewards such as bonuses, wages and salaries, recognition, job assignments, and perks can be examined and perhaps restructured to reinforce the direction of the change.48 When people trust one another, change is easier. But change is further facilitated by demonstrating its benefits to people.49 Describing benefits can take place in the context of negotiation or working together to find a mutually acceptable way to imple- ment the change. A Colorado nonprofit agency called Envision did this when the state government slashed its funding, reducing the agency’s budget by 7.5 percent. Envision provides a variety of services to adults and children with developmental disabilities and depends on employees’ commitment to its mission. Executive director Mary Lu Wal- ton set up a team of employees to figure out how to cut costs, and she encouraged them to focus on eliminating the tasks employees dislike. The team members restructured work, sparing seven of the ten jobs originally targeted for layoffs. Within a few months, Envision was a leaner organization with employees fully committed to the change.50 Manipulation and Cooptation Sometimes managers use more subtle, covert tac- tics to implement change. One form of manipulation is cooptation, which involves giv- ing a resisting individual a desirable role in the change process. The leader of a resisting group often is coopted. For example, management might invite a union leader to be a member of an executive committee or ask a key member of an outside organization to join the company’s board of directors. As a person becomes involved in the change, he or she may become less resistant to the actions of the coopting group or organization. Explicit and Implicit Coercion Some managers apply punishment or the threat of punishment to those who resist change. With this approach, managers use force to  Creating and Leading Change Chapter 18 613 make people comply with their wishes. For example, a manager might insist that subor- dinates cooperate with the change and threaten them with job loss, denial of a promo- tion, or an unattractive work assignment. Sometimes you just have to lay down the law. Each approach to managing resistance has advantages and drawbacks and, like many of the other situational management approaches described in this book, each is useful in different situations. Look back at Table 18.2, which summarizes the advantages, drawbacks, and appropriate circumstances for these approaches to managing resis- tance to change. As the table implies, managers should not use just one or two general approaches, regardless of the circumstances. Effective change managers are familiar with the various approaches and know how to apply them according to the situation. Throughout the process, change leaders need to build in stability. Recall from the companies that were built to last that they all have essential core characteristics of which they don’t lose sight. In the midst of change, turmoil, and uncertainty, people need anchors onto which they can latch.51 Making an organization’s values and mission con- stant and visible can often serve this stabilizing function. In addition, strategic principles can be important anchors during change.52 Maintaining the visibility of key people, con- tinuing key assignments and projects, and making announcements about which organi- zational components will not change can also promote stability. Such anchors will reduce anxiety and help overcome resistance. As you read “Management Connection: Progress Report,” consider how the managers of Time Warner’s magazine spin-off should apply these methods. MANAGER’S BRIEF Management Connection CHANGE MANAGEMENT CHALLENGES OF THE TIME INC. SPIN-OFF In Time Warner’s announcement that it would spin Employees could see the declines in revenue, and Time off the Time Inc. magazine business, CEO Jeff Bewkes Inc. had recently said it would lay off 6 percent of employ- expressed the change positively. According to Bewkes, ees—the third layoff in four years. Pay rates were fro- PROGRESS REPORT Time Warner would strengthen its “growth profile,” and zen, and bonuses were eliminated. Time Warner also had Time Inc. would benefit because it would have the “flexi- explored selling the magazine group to a company in Des bility and focus of being a stand-alone public company.” In Moines, a possible change in location or management an e-mail to Time Inc. employees, Bewkes acknowledged style that displeased some of the New York employees. that change “can be unsettling” and expressed confidence Some questioned whether the Time Warner CEO even that employees “have the fortitude to stay focused on cared about the magazine business. what Time Inc. does better than anyone: produce great To restore morale, Time Inc.’s managers needed to journalism that your readers and audiences love.” offer a positive vision of the future. Although the maga- Bewkes did not say, however, that the change would be zine group lost access to a bigger company’s cash, it could ONWARD easy. In fact, the magazine company would face challenges choose to invest more in the future of digital magazine such as finding leadership and restoring morale even as content rather than competing for resources with more- it struggled to cope with a world in which print maga- profitable divisions. And within the magazine business, zines have become less relevant. On the leadership front, Time Inc. is the biggest publisher. Soon after the spin-off Time Inc. had already experienced turnover at the top. announcement, Time magazine’s managing editor, Richard A CEO hired in 2010 was dismissed months later for his Stengel, told a reporter that operating independently pre- management style, and nine months passed before Time sented a chance to “test that hypothesis that people will Warner found a replacement, Laura Lang, who brought pay for great content and great journalism.”53 a background in direct advertising. After Time Warner Of the methods for managing resistance to change announced the spin-off, Lang said she intended to resign (Table 18.2), which are potentially relevant to Time but would stay through the transition long enough to help Inc.? How and why? with the search for the next CEO. Imagine you were brought in to lead Time Inc. What Even before the announcement of the spin-off, the would you say and do to restore morale? What ideas magazine group’s struggles had been hurting morale. could you include from the genius of the and? 614 Part Five Controlling: Learning and Changing Harmonizing Multiple Changes There are no silver bullets or single-shot methods of changing organizations success- fully. Single shots rarely hit a challenging target. Usually many issues need simultane- ous attention, and any single, small change will be absorbed by the prevailing culture total organization and disappear. Total organization change involves introducing and sustaining mul- change tiple policies, practices, and procedures across multiple units and levels.54 Such change Introducing and sustaining affects the thinking and behavior of everyone in the organization, can enhance the multiple policies, practices, and organization’s culture and success, and can be sustained over time. procedures across multiple A survey at a Harvard Business School conference found that the average attend- units and levels. ee’s company had five major change efforts going on at once.55 The problem is, these efforts usually are simultaneous but not coordinated. As a result, changes get muddled; people lose focus.56 The people involved suffer from confusion, frustration, low morale, and low motivation. Because companies introduce new changes constantly, many people complain about their companies’ “flavor of the month” approach to change. That is, employees often see many change efforts as just the company’s jumping Many people complain about their on the latest bandwagon or fad. The more these companies’ “flavor of the month” approach change fads come and go, the more cynical people become, and the more difficult it is to get them to change. committed to making the change a success.57 So an important question is, Which change efforts are really worth undertaking? Here are some specific questions to ask before embarking on a change project:58 What is the evidence that the approach really can produce positive results? Is the approach relevant to your company’s strategies and priorities? Can you assess the costs and potential benefits? Does it really help people add value through their work? Does it help the company focus better on customers and the things they value? Can you go through the decision-making process described in Chapter 3, understand what you’re facing, and feel that you are taking the right approach? Management also needs to connect the dots—that is, integrate the various efforts into a coherent picture that people can see, understand, and get behind.59 You con- nect the dots by understanding each change program and its goals, by identifying similarities among the programs and their differences, and by dropping programs that don’t meet priority goals or demonstrate clear results. Most important, you do it by communicating to everyone concerned the common themes among the various pro- grams: their common rationales, objectives, and methods. You show them how the various parts fit the strategic big picture and how the changes will make things better for the company and its people. You must communicate these benefits thoroughly, honestly, and frequently.60 Leading Change Successful change requires managers to lead it actively. The essential activities of leading change are summarized in Figure 18.3. The companies that lead change most effectively establish a sense of urgency.61 To do so, managers must examine current realities and pressures in the marketplace and the competitive arena, identify both crises and opportunities, and be frank and honest about them. In this sense, urgency is a reality-based sense of determination, not just fear-based busyness. The immediacy of the need for change is an important compo- nent, in part because so many large companies grow complacent. Figure 18.4 shows some common reasons for complacency. To stop complacency and create urgency, a manager can talk candidly about the organization’s weaknesses compared with competitors, making a point to back up statements with data. Other tactics include setting stretch goals, putting employees in direct contact with unhappy  Creating and Leading Change Chapter 18 615 FIGURE 18.3 1 Establishing a sense of urgency Leading Change 2 Creating the guiding coalition 3 Developing a vision and strategy 4 Communicating the change vision 5 Empowering broad-based action 6 Generating short-term wins 7 Consolidating gains and producing more change 8 Anchoring new approaches in the culture SOURCE: Reprinted by permission of Harvard Business School Press. Exhibit from Leading Change by John P. Kotter, 1996. Copyright 1996 by the Harvard Business School Publishing Corporation; all rights reserved. customers and shareholders, distributing worrisome information to all employees instead of merely engaging in management happy talk, eliminating excessive perks, and highlighting to everyone the future opportunities that exist but that the organiza- tion so far has failed to pursue. Ultimately, urgency is driven by compelling business reasons for change. Survival, competition, and winning in the marketplace are compelling; they provide a sense of direction and energy around change. Change becomes not a hobby, a luxury, or some- thing nice to do, but a business necessity.62 To create a guiding coalition means putting together a group with enough power to lead the change. Change efforts fail when a sufficiently powerful coalition is not formed.63 Major organization change requires leadership from top management, working as a team. But over time, the support must gradually expand outward and downward throughout the organization. Middle managers and supervisors are essen- tial. Groups at all levels are the glue that can hold change efforts together, the medium for communicating about the changes, and the means for enacting new behaviors.64 Developing a vision and strategy, as discussed in earlier chapters, directs the change effort. This process involves determining the idealized, expected state of affairs after the change is implemented. Because confusion is common during major organizational 616 Part Five Controlling: Learning and Changing FIGURE 18.4 The absence of a major Sources of Complacency and visible crisis Too much happy talk from senior management Too many visible resources Human nature, with its capacity for denial, especially if people Low overall performance are already busy or stressed Complacency standards A kill-the-messenger-of-bad- Organizational structures that news, low-candor, low- focus employees on narrow confrontation culture functional goals A lack of sufficient Internal measurement systems performance feedback from that focus on the wrong external sources performance indexes SOURCE: Reprinted by permission of Harvard Business School Press. Exhibit from Leading Change by John P. Kotter, 1996. Copyright 1996 by the Harvard Business School Publishing Corporation; all rights reserved. change, the clearest possible image of the future state must be developed and conveyed to everyone.65 This image, or vision, is a target or guideline that can clarify expecta- tions, dispel rumors, and mobilize people’s energies. The portrait of the future also should communicate how the transition will occur, why the change is being imple- mented, and how people will be affected by the change. The power of a compelling vision is one of the most important aspects of change and should not be underesti- mated or underused. Communicating the change vision requires using every possible channel and opportunity to talk up and reinforce the vision and required new behaviors. It is said that aspiring change leaders undercommunicate the vision by a factor of 10, or even 100 or 1,000, seriously undermining the chances of success.66 In delivering more messages, however, do not forget that communication is a two-way street. When consultant Steve Schumacher was hired to improve the performance of a division in which quality, productivity, and customer service had been declining, he started by setting up meetings in which employees described what they saw as the underlying problems. His message to them was simply that the company cared about their views and wouldn’t make changes until they had been heard. Schumacher and his team then compiled a list of all the issues and shared it with every employee. Only then did he ask for volunteers to participate in planning solutions. The consulting team was flooded with volunteers. Not only were employees willing to change, but they were excited to be included in planning, and they hungered for a better understand- ing of where the company wanted to go and how they could contribute to that vision. Before long, as a result of this team effort, performance measures began to rise across the board.67 Empowering broad-based action means getting rid of obstacles to success, includ- ing systems and structures that constrain rather than facilitate. Encourage risk tak- ing and experimentation and empower people by providing information, knowledge, authority, and rewards, as described in Chapter 13. Generate short-term wins. Don’t wait for the ultimate grand realization of the vision. You need results. As small victories accumulate, you make the transition from an isolated initiative to an integral part of the business.68 Plan for and create small victories that indicate to everyone that progress is being made. Recognize and reward the people who made the wins possible, doing it visibly so that people notice and the positive message permeates the organization. Make sure you consolidate gains and produce more change. With the well-earned credibility of previous successes, keep changing things in ways that support the vision.  Creating and Leading Change Chapter 18 617 Hire, promote, and develop people who will further the vision. Reinvigorate the orga- nization and your change efforts with new projects and change agents. Finally, anchor new approaches in the culture.69 Highlight positive results, com- municate the connections between the new behaviors and the improved results, and keep developing new change agents and leaders. Continually increase the number of people joining you in taking responsibility for change.70 The conventional way in which organizations apply these eight steps of lead- ing change has been to set up strategy or project teams to conduct annual strat- egy reviews or launch new projects over the course of months or years. However, this approach can be too slow for seizing the opportunities popping up in today’s business environment. Therefore, John Kotter, who proposed the eight steps, now advises companies to become more agile in leading change by empowering net- works of employees to accelerate change.71 These networks bring together vol- unteers from all levels and functions of the organization who are excited about the change vision and have the skills needed to implement it. When someone in the organization sees a problem or opportunity, any member of the network can share the issue and invite others to join a team developing a solution. The team- work is in addition to the employee’s usual responsibilities, so the network requires highly committed people who experience the rewards of making a significant, vis- ible contribution. Shaping the Future Most change is reactive. A better way to change is to be proactive. Reactive change LO 3 means responding to pressure after a problem has arisen. It also implies being a fol- lower. Proactive change means anticipating and preparing for an uncertain future. It implies being a leader and creating the future you want. reactive change The road to the future includes drivers, passengers, and road kill. Put another way: A change effort that occurs on the road to the future, who will be the windshield, and who will be the bug?72 under pressure; problem- Needless to say, it’s best to be a driver.73 How do you become a driver? By being driven change. proactive more than merely reactive, by really thinking about the future, and by creating futures. proactive change A change effort that is initiated Thinking about the Future before a performance gap has If you think only about the present or wallow in the uncertainties of the future, your occurred. future is just a roll of the dice. It is far better to exercise foresight, set an agenda for the future, and pursue it with everything you’ve got. So contemplate and envision the future. Before the 20th century, people lived without antibiotics, automobiles, airplanes, tractors, and On the road to the future, who will be the air conditioning. Imagine how this combina- windshield, and who will be the bug? tion of inventions has revolutionized where and how well people live. And in just the past few decades, we have seen the invention and spread of personal computers, cell phones, and the mapping of the human genome. These innovations are still shaping how we learn, communicate, and treat disease. Will the 21st century bring transformations that are just as dramatic? Some people think the potential for innovation and growth is unprecedented in areas such as infor- mation technology, the biological sciences, agriculture, water supply, and clean energy technologies.74 Futurist Richard Watson sees the cell phone as the device that will most transform how we live in the 21st century. He foresees a cashless society in which consumers use signals from their phones to make payments as well as send 618 Part Five Controlling: Learning and Changing messages. Futurist Cynthia Wagner sees career opportunities stemming from researchers’ growing knowledge of processes in the human brain. In the future, Wagner surmises, this knowledge will help bioengineers develop microelectrodes to translate paralyzed patients’ brain signals into words and movements, and computer scientists will apply the knowledge to make advances in artificial intelligence.75 Just as technologies change, so do additional trends rise and fall, recently including a (temporary, most likely) damper on globalization, rising distrust of business, a growing role of government, strains on natural resources, and changing patterns of global consumption.76 Vast new markets exist, new kinds of companies are ready to be created, and new business models will emerge.77 All offer prime opportunity to those who create the future. Creating the Future Companies can try different strategic postures to prepare to compete in an uncertain future. Adapters take the current industry structure and its future evolution as givens. They choose where to compete. This posture is taken by most companies by conducting standard strategic analysis and Don’t think taking risks and being choosing how to compete within given environments. In contrast, shapers fearless is only for companies; try to change the structure of their industries, creating a future competitive think of your own quest for personal advantage in the same landscape of their own design.78 way. Ultimately where you go, Researchers studying corporate performance over a 10-year period found that 17 what you do, who you become are companies in the Fortune 1000 grew total shareholder return by 35 percent or more per up to you. year.79 How did they do it? They completely reinvented industries. Harley-Davidson turned around by selling not just motorcycles but nostalgia. Amgen broke the rules of adapters the biotech industry by focusing not on what customers wanted but on great science. Starbucks began selling a commodity in trendy stores. CarMax and other companies Companies that take the current industry structure reinvented the auto industry. and its evolution as givens and You need to create advantages. The challenge is not to maintain your position in choose where to compete. the current competitive arena but to create new competitive arenas, transform your industry, and imagine a future that others don’t see. Creating advantage is better than playing catch-up. At best, doing things to catch up buys time; it cannot get you out shapers ahead of the pack or buy world-class excellence.80 To create new markets or transform Companies that try to industries—these are perhaps the ultimate forms of proactive change.81 change the structure of their Figure 18.5 illustrates the vast opportunity to create new markets. Articulated industries, creating a future needs are those that customers acknowledge and try to satisfy. Unarticulated needs are competitive landscape of their own design. those that customers have not yet experienced. Served customers are those to whom your company is now selling, and unserved customers are untapped markets. Business as usual concentrates on the lower-left quadrant. The leaders who re- create the game are constantly trying to create new opportunities in the other three quadrants.82 For example, as a middle class emerges in populous and fast-developing nations such as India, China, and Brazil, some see problems in the strain this puts on the planet’s resources. Others see unexploited opportunities to serve new customers with new kinds of products that are made more sustainably or enable consumers to live a more sustainable lifestyle.83 Other companies hope to meet unarticulated needs by developing and exploiting cutting-edge technology. The nanometer—one-billionth of a meter, 1/100,000 the width of a human hair, or about the size of 10 hydrogen atoms in a row—is the build- ing block of a new industry, nanotechnology. The nanometer is so important because matter at this scale often behaves differently—speeding electrons through circuits faster, conducting heat better, or offering qualities such as greater strength, durability, or reactivity.84 Large and small companies are beginning to rush nano-based products into the marketplace. Current applications include nanotech silver (which has antimi- crobial properties) in grooming products and odor-resistant socks, nanoscale features in semiconductors, and the use of nanoparticles as catalysts in making chemicals for  Creating and Leading Change Chapter 18 619 FIGURE 18.5 Vast Opportunity Unarticulated Unexploited opportunities Needs Articulated Served Unserved Customer types SOURCE: Reprinted by permission of Harvard Business School Press. Exhibit from Competing for the Future by Gary Hamel and C. K. Prahalad, 1994. Copyright 1994 by the Harvard Business School Publishing Corporation; all rights reserved. use in coatings, paints, sunscreens, and other products.85 Applications under develop- ment include high-performance rechargeable batteries that can store hydrogen and other high-energy gases, nano-biochips that can detect cancer in a patient within min- utes, and a nanotechnology material called graphene that can be used to produce a computer touchscreen one atom thick.86 Is nanotech—for that matter, are most industries of the future—being overhyped? By some estimates, products using nanotech materials could achieve sales of $3.3 trillion by 2018; others say $49 billion in 2017 would be a more realistic figure. Either way, the expansion of this technology has been impressive, given that it is still under develop- ment. Sales of products applying nanotechnology have grown by more than 18 percent a year over the past few years.87 However, there are concerns that the technology is untested and perhaps risky.88 The particles are so small that they can pass through most manufactured filters as well as through cell walls, and their ability to react at the atomic level could cause unforeseen chemical and biological consequences. At the heart of the problem is a lack of experience with these materials, coupled with the fact that their properties are different from the same materials at a larger scale. Scientists have measured inhaled particles in the respiratory tract, for example, but have only begun to study whether cells’ functions are impaired by contact with nanoparticles. Thus indus- try is challenged to apply this exciting new technology while protecting its workers and customers against the possibility of risks that aren’t yet known.89 Who can meet such a challenge best? As you’ve read, technological change is a cen- tral part of the changing landscape, and competition often arises between newcomers and established companies. All things considered, which should you and your firm do? Preserve old advantages or create new advantages? Lock in old markets or create new markets? Take the path of greatest familiarity or the path of greatest opportunity? Be only a benchmarker or a pathbreaker? Place priority on short-term financial returns or on making a real, long-term impact? 620 Part Five Controlling: Learning and Changing Do only what seems doable or what is difficult and worthwhile? Change what is or create what isn’t? Look to the past or live for the future?90 Shaping Your Own Future If you are an organizational leader and your organization operates in traditional ways, your key goal should be to create a revolution, genetically reengineering your com- pany before it becomes a dinosaur of the modern era.91 What should be the goals of the revolution? You’ve been learning about them throughout this course. But maybe you are not going to lead a revolution. Maybe you just want a successful career and a good life. You still must be able to choose and pursue long-term goals92 and deal with an economic environment that is highly competitive and fast-moving.93 Creating the future you want for yourself requires setting high personal standards. Don’t settle for mediocrity; don’t assume that good is necessarily good enough—for yourself or for your employer. Think about how not just to meet expectations but to exceed them; not merely to live with apparent constraints but break free of the unim- portant, arbitrary, or imagined ones; and to seize opportunities instead of letting them pass by.94 The most successful individuals take charge of Look for positions that stretch you and for their own development the way an entrepreneur bosses who develop their protégés. takes charge of a business.95 More specific advice from the leading authors on career management:96 Consciously and actively manage your own career. Develop marketable skills and keep developing more. Make career choices based on personal growth, development, and learning opportunities. Look for positions that stretch you and for bosses who develop their protégés. Seek environments that provide training and the opportunity to experi- ment and innovate. And know yourself; assess your strengths and weaknesses, your true interests, and ethical standards. If you are not already thinking in these terms and tak- ing commensurate action, you should start now. Additionally, become indispensable to your organization. Be enthusiastic in your job and committed to doing great work, but don’t be blindly loyal to one company. Be prepared to leave if necessary. View your job as an opportunity to prove what you can do and increase what you can do, not as a comfortable niche for the long term.97 Go out on your own if it meets your skills and temperament. This points out the need to maintain your options. More and more, contemporary careers can involve leaving behind a large organization and going entrepreneurial, becoming self-employed in the postcorporate world.98 In such a career, independent individuals are free to make their own choices. They can flexibly and quickly respond to demands and opportunities. Developing start-up ventures, consulting, accepting temporary employment, doing project work for one organization and then another, working in professional partnerships, being a constant deal maker—these can be the elements of a successful career. Ideally, this self-employed model can help provide a balanced approach to working and to living life at home and with family because people have more control over their work activities and schedules. This go-it-alone approach can sound ideal, but it also has downsides. Indepen- dence can be frightening, the future unpredictable. It can isolate road warriors who are always on the go, working from their cars and airports, and interfere with social and family life.99 Effective self-management is needed to keep career and family obli- gations in perspective and in control. Coping with uncertainty and change is easier if you develop resilience. To become more resilient, practice thinking of the world as complex but full of opportunities; expect change, but see it as interesting and potentially rewarding, even if changing is difficult. Also, kee