Business Case Studies, Executive Interviews, Michael Beer on Change Management

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Executive Interviews: Interview with Michael Beer on Change Management
June 2007 - By Dr. Nagendra V Chowdary

Michael Beer
Cahners-Rabb Professor of Business Administration,
Emeritus at the Harvard Business School,
Chairman and co-founder of TruePoint a research based consultancy.

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    It is not hard to theorize about change because I started with the grounded experience of working with managers to help them change their organizations (see their challenges above), observing and documenting success and failures (one has to be honest with oneself and fact-based as a scholar consultant and/or ask others to join the team who are less involved as consultants) through cases, survey data, participant observations and then using cross-sectional analysis of multiple documented cases to lift out of them key causes for success or failure and then forming connections between these key success factors to develop theory.

    In other instances, I was simply a researcher using Interviews and survey data in organizations with varied success and then connecting the dots to develop theory (Beer M. et. al. (1990) The Critical Path to Corporate Renewal, Harvard Business School Press). In yet a third approach (the change formula), INTERVIEW 4 I used a formulation developed by someone else for a different context (individual change) and used my experience with change to develop this formulation for organization change.

  • What should be the logical expected outcomes of change management initiatives? After all, most of the change initiatives are responses to impending problems?
    Problems, as you suggest, are often shaped by the situation poor perfor mance or an ineffective organization. Problems in performance or behavior gaps between managerial intent and actual performance and behavioral outcomes always (even when these may not be manifest) give rise to change (dissatisfaction with the status quo). Leaders with low standards do not stimulate change because gaps between their intent and reality do not become manifest. Of course, goals and values are not always known to the leader or they are only vaguely understood.

    We as academics and/or consultants have our own values. Each society has different values they ascribe to numerous potential organizational outcomes. Japanese managers have different assumptions about desirable outcomes than American managers and these differences reflect both personal and societal values. In developing a theory and recommending interventions and actions to leaders we in academia need to be clear about the outcomes that are likely to occur. See Beer and Nohria (2000) Breaking the Code of Change, Harvard Business School Press, and Beer and Nohria, (2000) Cracking the Code of Change, Harvard Business Review, for the development of a conceptual framework that specifies different outcomes of two different strategies. What good consultants do is help leaders clarify goals and values before developing the approach to change.

  • However, we also notice occasional change initiatives that are proactive in nature. For instance, when Reg Jones handed over GE's mantle to Jack Welch in 1981, GE was doing pretty fine. Yet, Jack Welch institutionalized organization wide change initiatives that catapulted the company in all the performance metrics. Which are, therefore, more important; reactive change initiatives or proactive change initiatives?
    I agree with your observation about Reg Jones at GE. Yes his selection of Jack Welch gave rise to proactive change, but I believe the same dynamic I described in my answers to the previous questions was operating. Reg Jones was dissatisfied with where GE was heading to or how it might fare in the future given his view of where the environment in which GE would have to operate in the next 20 years was going. This is proactive change and is always desirable because financial and human costs of reactive change are very high. So, proactive change is a function of a gap between managerial intent and the reality they see now or in the future. Leaders who do not initiate proactive change will never build a great company (like GE and Southwest Airlines). They are mediocre managers who lead mediocre businesses.

1. Change Management Case Studies
2. ICMR Case Collection
3. Case Study Volumes

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