The Journal of 2020 Foresight

Reports from the Knowledge Labs about our recent findings, research topics, and interviews with lifestyle leaders who are creating their own futures.

How to stimulate your own powers of foresight. Consider the following thought provokers. Ask yourself, in these categories what are the brand new trends and forces? Which are the ones growing in importance? Which current forces are loosing their steam? Which have peaked or are reversing themselves? Which are the "wildcards" about to disrupt us in the future? POLITICAL AND TECHNICAL thought for food: Electronics, Materials, Energy, Fossil, Nuclear, Alternative, Other, Manufacturing (techniques), Agriculture, Machinery and Equipment, Distribution, Transportation (Urban, Mass, Personal, Surface, Sea, Subsurface, Space), Communication (Printed, Spoken, Interactive, Media), Computers (Information, Knowledge, Storage & Retrieval, Design, Network Resources), Post-Cold War, Third World, Conflict (Local, Regional, Global), Arms Limitation, Undeclared Wars, Terrorism, Nuclear Proliferation, Weapons of Mass Destruction, Governments (More/Less Power and Larger or Smaller Scale), Taxes, Isms: Nationalism, Regionalism, Protectionism, Populism, Cartels, Multinational Corporations, Balance of Trade, Third Party Payments, Regulations (OSHA, etc.) Environmental Impact, U.S. Prestige Abroad. SOCIAL AND ECONOMIC Food for thought: Labor Movements, Unemployment / Employment Cycles, Recession, Employment Patterns, Work Hours / Schedules, Fringe Benefits, Management Approaches, Accounting Policies, Productivity, Energy Costs, Balance of Payments, Inflation, Taxes, Rates of Real Growth, Distribution of Wealth, Capital Availability and Costs, Reliability of Forecasts, Raw Materials, Availability and Costs, Global versus National Economy, Market versus Planned Economies, Generations: Y, X, Boomers, Elderly, Urban vs. Rural Lifestyles, Affluent vs. Poor, Neighborhoods and Communities, Planned or Organic Growth. Got Knowledge?

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Monday, June 09, 2003

Revitalizing Status Quo into Change Agents for Broad Change

Chapter Two: The Ridge

By Steve Howard, CKO
The Knowledge Labs

Table of Contents
Chapter One: Basecamp
Chapter Two: The Ridge
Chapter Three: The Outpost
Chapter Four: The Tribal Territories

“Whether the influence is unstated or directive in nature, a corporation’s cultural beliefs, behaviors, and assumptions serve as a powerful means for defining, justifying, and reinforcing business operations. Culture provides ways for employees to understand important decisions…. Culture provides means for understanding strategic decisions. Which allows expectations to be developed. Which generates thoughts and emotions. Which leads to decisions about implementation. Which guides and justifies activities that are supportive of the culture.”

Daryl Conner, "Managing At the Speed of Change"

Journal of 2020 Foresight: Let’s talk about the second intervention path. We covered resistance last time. And next we’ll spend more time on renewal and restructuring. The second is revitalization.

Trailblazer: That’s right. Resistance with leadership by committee is the typical old game, no change response.

J2020F: Earlier you told us about the importance of the consistency between the characteristics of the chosen path and the interplay between the forces of change and resistance.

TB: That’s right, because in terms of resistance to the types of changes required, counterproductive change dynamics produce the strongest resistance.

J2020F: How do leaders avoid counterproductive change dynamics?

TB: If the change force is strong and still growing, only the more radical change associated with restructuring and revitalization will be able to adapt the company to the change force and allow it to adopt the new game strategies.

J2020F: Both of those cope with resistance closed to change, right?

TB: Yes, in cases where the organization is open to change, the resistance can be reduced gradually to initiate a corporate turning point followed by all-encompassing revitalization.

J2020F: So revitalization is appropriate when resistance that is open to change must be adapted to a strong and growing change force.

TB: Yes. Under these conditions, lowering the resistance usually stimulates the change forces.

J2020F: What happens when you stimulate the change forces?

TB: By converting status quo agents into change agents that result in a stronger force of change. The pace of change is slow, but continuous and all encompassing. The company's internal organization is mainly involved.

J2020F: So a strong external change forces drive the internal processes.

TB: This is the continuous change scenario, with a longer lead-time available to dramatically change the culture.

J2020F: Can you give us an example?

TB: Sure, with another classic story. Paul Strebel describes the culture revolution Jan Carzon used to revitalize SAS. SAS used to think their biggest assets were aircraft, overhaul stations and technical resources.

J2020F: You said, “Used to.”

TB: Carzon realized that they had only one real asset, and that is a satisfied customer prepared to come back to SAS and pay for their costs at least once more.

J2020F: What change force triggered his insight?

TB: While competitors cut back on new product development in the face of sagging demand, SAS invested heavily in its Businessman's Airline Program, a new approach conceived by Carlzon and small team of handpicked people.

J2020F: How did the revitalized SAS Cultural Revolution unfold?

TB: Through a variety of initiatives -- a cost reduction drive, a new corporate identity, and new marketing projects.

J2020F: What was Carlzon’s leadership role in all this?

TB: He instituted a punctuality drive, which he supervised from his office with a viewing screen providing him with details of all flights, their departure and arrival times, and delays. Occasionally he even personally phoned the pilots.

J2020F: How was this approach different than IBM’s committee style you described before?

TB: Under Carlzon's influence, the resistance to change was relatively weak and SAS was open to a continuous change process, whereas, the IBM culture resisted strongly to a strong change force.

J2020F: A cultural revitalization is all about delegation, right? What changes did Carlzon bring about in this area?

TB: Responsibility for action was delegated downward to the front line, putting employees in charge. Management was asked to serve as consultants rather than as leaders of the organization.

J2020F: How is that different that the corporate headquarters telling everyone that they are now empowered, and then everyone is on their own to fail?

TB: To implement the Cultural Revolution, Carlzon and his team personally visited the front line all over the company and established a training program on the new concept of service for 20,000 managers and employees.

J2020F: So a CEO and senior managers develop the guidelines on how the company is going to deal with the discontinuity?

TB: Yes. The guidelines include the new mission of the company, its values and acceptable behavior, and concrete objectives like catching up with the number-one competitor.

J2020F: But behaviors and attitudes don’t change by themselves. What else has to occur?

TB: Supporting systems and processes are then developed to encourage each individual to adopt his or her activities to the mission and objectives.

J2020F: So, implementation is delegated to the frontline executives, who can best adapt the company's response to the environment, in harmony with the corporate vision?

TB: Of course, the cultural style involves the delegation of both decision-making and implementation to frontline executives. The strengths of the cultural approach are also- it's weakness.

J2020F: In what way? Don’t shared values embedded in a strong culture hold an organization together during times of adversity?

TB: True, but the change in beliefs and behavior can take an enormous amount of time. And, a strong culture can make the organization vulnerable to the not-invented-here syndrome.

J2020F: What about in response to a radical change?

TB: The cultural approach cannot be used successfully in crisis situations. Early revitalization avoids the later need for a sudden radical restructuring to deal with radical change.

J2020F: So, by the time action plans are formulated in the cultural model, the business will be overwhelmed by the discontinuity.

TB: Just as a cultural model will fail in sudden restructuring efforts, any attempt to use the commander style on a revitalization path, or the cultural style for restructuring will doom the intervention before it starts.

J2020F: What about during renewal efforts?

TB: No, the cultural approach isn’t appropriate for the partial renewal of an organization.

J2020F: Why?

TB: The all-encompassing reach of cultural change typically goes beyond the more focused change expected of task forces charged with renewal.

J2020F: So, only the all-encompassing, delegating, cultural style fits revitalization but not radical restructuring because of the urgency needed?

TB: Exactly. Top management decides to revitalize the company with a radical but gradual decentralization of all decision-making designed to change the culture.

J2020F: The objective is to make the whole company more market-sensitive by widening the responsibility of both divisional and operating management, right?

TB: And. to raise productivity by increasing the responsibility of the employees and workers.

J2020F: How is this new approach typically introduced?

TB: As was the case with SAS, at the management level, the new approach is typically introduced through the planning process.

J2020F: And then implementation encourages and supports, what?

TB: Entrepreneurial, cost-cutting, and action-oriented projects.

J2020F: Such as?

TB: Local management is given responsibility for plant-level finance and marketing, for example, together with most of the decision-making and implementation by the frontline executives.

J2020F: Ok. We've covered resistance and revitalization, how about renewal?

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