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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  • You have observed, "The brutal fact is that about 70% of all change initiatives fail. In our experience, the reason for most of those failures is that in their rush to change their organizations, managers end up immersing themselves in an alphabet soup of initiatives." If this were the case, why change management initiatives at all? Are those initiatives not required in the first place? Or is it that these initiatives are to be guided by more subtle and sublime processes?
    Yes, initiatives are required and are part of all change efforts. There are a number of criteria to be considered when evaluating their effectiveness that is implied in the quote above.

    These are spelt out in The Critical Path to Corporate Renewal and Why Change Program do Not Produce Change, HBR, 1990. Are the initiatives occurring in the context of a broader change effort articulated by the leaders and rooted in a shared (with key people in the organization) diagnosis of the organization's effectiveness? Initiatives fail when the CEO embraces a fad and imposes it on the organization through a staff group. Another way to state this is that initiatives fail if they do not take place in a context that prepares readiness for change stretch goals, clarity about why these goals are legitimate and a high involvement process of diagnosis and planning for the initiatives. Ask yourself how committed thousands of people will be, if asked to go through a leadership or quality program, have these leaders not spent a lot of time involving people in a dialogue about why change is needed and have involved key people in a diagnosis Proactive change is a function of a gap between managerial intent and there ality they see now or in the future. Leaders who do not initiate proactive change will never build agreat company like GE and Southwest Airlines INTERVIEW 5 that led to the programs. Our findings are that cynicism occurs and commitment to the initiative is reduced.

    A second major reason for initiative failure, connected to these earlier points, is that top-down programs assume that one solution fits all subunits of the organization. Leaders of sub-units we studied, agreed with the potential value of the initiative they were being asked to undertake. They were not committed to them and did not aggressively implement them because their diagnosis of their own sub-units led them to see the problems facing their own business differently than leaders at the top different sub-unit goals, strategies, cultures, skills and readiness. In short, one size almost does not fit all parts of the corporation. When Jack Welch initiated Six Sigma he did it with a lot of involvement and it was in the context of a broader change effort that had been underway and accepted for several years. Even so, my reading of that effort is that managers did not always feel that it applied to their unit as well as it did to others. Does Six Sigma apply in GE Capital as well as it does in the Appliance business?

    Finally, because top management can easily launch a top down initiative they tend to launch too many in their eagerness to create rapid change. The result, our research shows, is overload. None of the initiatives are implemented with focus and sufficient resources and none could achieve the desired results.

  • Why do you think some change agents are successful while many are not? For instance, Howard Stinger at Sony. Even those who are successful once (initially) are not consistently successful. Why is it so? For instance, Ed Zander at Motorola and Carlos Ghosn at Nissan Motors.
    Leaders succeed or fail due to their personal skills, change strategies chosen, as well as the degree of favorability of the conditions for change. I do not know the reasons for success or failure in the cases you mention, but I suspect that if we examined carefully the situations these leaders faced, we would find differences the extent to which circumstances made it relatively easy to raise the level of dissatisfaction with the status quo, the amount of time the situation allowed leaders to succeed, the support of the boards of directors, the nature of the culture and the extent it was entrenched. There were probably also differences in the change strategies and skills employed.

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

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