Learning by Doing – A Prescription for Leading Organizational Change

July 22, 2019 • ILE LAB • Boaz Tamir

“Managers do not solve problems, they manage messes. [They need the skill of] designing a desirable future and inventing ways of bringing it about.” Russell Ackoff (1979)

This is the third is a series of columns relating to Waterfall, Inc.  To read the previous columns:

Is it Possible to Lead a Deep Change in Times of Crisis?

As you may remember, Waterfall Inc. was in a mess because the overload on the development systems had put a halt on any change or renewal processes.  The attempt to make the developments system more efficient, led by external consultants, eased the pressure only temporarily, without resolving the problem of organizational behavior or developing organizational coping capacities.

The key to organizational change at Waterfall is in the hands of the CEO.  He has to decide to focus on the distant horizon and give up on his attempts to “contain the mess and manage the crisis.”  This is not a simple decision – the constant flow of problems that demand solutions and the CEO’s centralized view of management make it difficult for him to take time to observe, learn, plan and prepare for a process of strategic change.

Management Operating System (MOS)

As a first step, the transition from merely putting out the ongoing fires to a deep process of change was accompanied by the building up of a Senior Management Team (SMT) to lead that process.  The job of the company management board is to articulate the purpose, vision and strategy and to develop the organization’s basic thinking and teams’ and individuals’ problem solving capabilities. In contrast, the purpose of the SMT is to manage the operation flow, allocation of resources, striding the tension between provision of solutions to ongoing problems (including “putting out the fires”) and activity intended to promote innovative initiative as the organization changes.

The SMT included the CEO, the head of R&D, the director of marketing, the CFO, and the head of organizational development.  The head of the Project Management Office (PMO) headed up the entire team.

Organizational Structure, Principles and Tools

After he had successfully created a dynamic viewpoint, oriented vertically from an overview of the process necessary for change to the on-the-ground, on-going situation, the CEO concentrated his efforts on directing the system onto a new course.  He faced three dilemmas:

  1. Responsibility vs. Risk: On the one hand, the working teams’ trust is dependent on the CEO’s ability to generate stability and security; on the other hand, all change entails risk.
  2. Thinking Big vs. Acting Small: Change requires articulation of a broad vision (Thinking Big) that can justify the painful sacrifices and the challenging adjustments; on the other hand, change must progress in measured steps.
  3. Engaging Work-teams in the Process vs. Preventing Clutter: Top-down decisions are necessary, but on the other hand, they contradict the value of a decentralized organization based on the bottom-up activities of autonomous teams.

Walking Gingerly in the Fog on a Tightrope

A leader makes a determined decision despite the threat of risk, but simultaneously involves the workers in the plan and in his thinking, so that they will not feel that there is a loss of control.  He focuses the organization on a clear vision for the future (the North Star) but takes action cautiously, in small PDCA increments.  Ultimately, he attempts to decentralize the system into a network of autonomous working teams.  He does all this while the first steps towards change were determined by a centralized leadership that is supported by the board of directors.  Ostensibly, this contradicts the values of decentralization and autonomy for the work teams, yet, when the change process is first launched, it is necessary to set clear boundaries that will serve as the scaffolding for the construction of the process and in order to avoid chaos.

Articulation of the purpose (the narrative), definition of the organizational structure (structure of the network) and working principles (planning instead of program) – these are the strategic decisions that management must make, and they require determination, persistence, tenacity, monitoring of internalization and training in work practices.

The definition of the purpose, which focuses all of the stakeholders, even if it is determined from above, does not necessarily contradict the value of cooperation based on the teams’ autonomous activities within the decentralized organization.  In fact, it points to the CEO’s commitment to change and encourages individuals and teams in the field to progress through trial and error.  When the process of transformation has been completed and the organization has embarked on a new path, the centralized scaffolding should be taken down and the organization should strive for a more balanced system, which should be constructed as part of the process of change.

Learning by Doing

In “How to Change Culture” John Shook summed up his experience at the New United Motor Manufacturing, Inc. (NUMMI), the automobile manufacturing company jointly owned by General Motors and Toyota, thus:  “It’s easier to act your way to new way of thinking than to think your way to a new way of thinking” (John Shook, 2010).

In my experience as an entrepreneur-CEO and change leader in Be-Connected (Boaz Tamir, “Startup Down”, 2007), I have learned that the first stages of change are confusing and threatening and exacerbate peoples’, managers’, suppliers’, and stockholders’ sense of insecurity.  Waterfall employs a group of experienced engineers and professionals.  Against the background of the impending crisis and change, and despite their seniority, many of them sense a loss of personal and professional security.  The situation is impacting on the mindset of many of the workers.

Discussions of values and worldviews only add to the confusion and anxiety. Analysis Paralysis – the addiction to designing a detailed plan – can unhinge the peoples’ security, upset the authority of the leadership, undermine trust and disrupt the journey towards change before it even sets out.

At Waterfall, the first signs of change in thought processes and mental models appeared as individuals and teams increased their skills at using the dynamic methodology for problem solving, as part of a series of successful rounds of planning.

Surprises are an inevitable part of the journey towards change, and it is impossible to prepare for all possible scenarios.  For this reason, the individuals and teams’ capacity for problem solving is a necessary skill within an organizational culture that is coping with a complexity and ever-changing business environment.

Boaz Tamir, ILE.

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