Using Systems Thinking to Facilitate Organizational Change

David Peter Stroh

There is an old adage in change management: “People don’t resist change; they resist being changed.” Leaders want people to embrace change as a natural process, rather than not resist it. What do we know about what motivates people to embrace change? What are the implications of this knowledge for successful change leaders? What actions do they take that cultivate people’s intrinsic desire to change, and what qualities do they embody to be effective with minimum effort?

Through my own extensive experiences over thirty years in developing myself, furthering individuals’ growth, and advising leaders of organizational change, I have come to recognize several key principles that support natural change and growth:

· Both discomfort and safety are required

· The truth will set you free

· Commitment follows clarity

· Make a few key changes

· Engage others in the process, not just the product

· Bring in the reinforcements

Container Building: Establishing the Foundation for Change

The purpose of container building is to develop readiness for change. Senior OD consultant Ed Schein notes that the primary challenge in initiating change is creating sufficient discomfort that people feel the need to change, and sufficient safety that they are willing to take the necessary risks involved in learning something new. The metaphor of container building describes the process of constructing a vessel that is strong enough to safely hold the uncertainty and difficulty that most change entails. Imagine a cooking pot: the sides of the container hold the heat that is required to transform the individual ingredients into a nourishing dish.

In order to create discomfort and safety in a system, leaders first cultivate these qualities in themselves. They have sufficient passion to achieve a better future, and the requisite self-confidence to take risks. In addition, they develop a supportive coalition or core group that agrees with what they want to accomplish, but also represents different views about how to best achieve the results.

Change leaders create discomfort in a system by articulating the discrepancy between the current and desired states. For example, early in his tenure at General Electric, Jack Welch noted that GE would be first or second in every one of its markets, and clarified the current performance of each business with respect to this standard. He complemented the challenge he set forth with mechanisms intended to help people feel capable of making such a change: personal attention; training, coaching and consulting resources; the “workout” methodology designed to help managers increase the productivity of their businesses; and an emphasis on adherence to new values as the basis for initial performance evaluations.

People in a strong container move through five stages as they change:

· Clarity

· Compassion

· Commitment

· Choice

· Courage

These 5 C’s provide a useful mnemonic. More importantly, they inform change leaders about qualities they need to embody and steps they need to take to help people and organizations grow. While the following qualities are presented here as linear steps, successful change leaders often weave them together in practice.

Clarity and Compassion: The Truth Will Set You Free

Change leaders create a shared picture of current reality to motivate change, foster collaboration, and identify where to focus limited resources to make significant and lasting change. They develop a shared picture of not only what is happening, but also why it is happening. Leaders also help people understand how they frequently contribute to the very problems they are trying to solve. Moreover, leaders couple confronting people with their responsibility for current reality with compassion for the fact that most people are unaware of their responsibility.

Telling the truth about reality begins with testing the assumption that we already know the way things are. People often deny existing problems or ignore a problem that is likely to get worse if not addressed now. Alternatively, they know that a problem exists or might unfold, but deny that they have any role in addressing it. They are certain about who is to blame for the problem, and even assume what others should be doing to solve it. Finally, people might be reluctant or unable to deal with conflicting views regarding what is wrong, why the problem exists, who is responsible, and what should be done to solve it.

Overcoming Resistance to Seeing Reality Clearly

Change leaders address the obstacles of denial, certainty, and conflict to help people develop a more accurate assessment of reality. One natural antidote to denial is curiosity – a desire to understand the sources of our frustration and the world around us. Leaders stimulate curiosity in the course of softening denial, reducing certainty, and making conflict safe. They also ensure that the organization affirms its strengths and what is important to not only retain but build on.

1) Softening Denial

Three ways to reduce denial are:

· Call attention to the gap between people’s good intentions and negative experiences

· Introduce feedback from a wide range of sources

· Ask questions that uncover not only what is happening but also why it is happening

Most people have good intentions and are genuinely surprised and frustrated when their hard effort doesn’t produce corresponding results. Hence, one powerful question to ask is, “Why are we having such difficulty in achieving our goals despite our best efforts?” This question communicates support by acknowledging positive intentions and simultaneously questions if success must come at such a high cost.

Requiring managers to get feedback from a wide range of sources - for example, both satisfied and dissatisfied customers, employees on the front lines, high potential leaders, and colleagues - often confronts them with the reality that performance is lower or less sustainable than they imagined. For example, managers who become anonymous customers of their own organization often discover how their real customers are treated. Large group interventions that bring together multiple stakeholders can offer more diverse views of a whole system, and 360-degree feedback provides an individual with a broader perspective. Video feedback also helps people observe their own behavior without being able to easily discount the source of information.

It is also useful to ask a series of questions that get below the surface of what is happening to uncover the root causes of specific events. The “Iceberg” is a tool that helps people identify what has been happening over time; what might happen in the future if they do not change the course of events; and what are the underlying policies, processes, procedures, and perceptions that influence and shape current events and trends.[1]

2) Reducing Certainty

Digital Equipment Corporation founder Ken Olsen used to say that nothing concerned him more than success. He pointed out that success leads to complacency and complacency causes people to miss cues that signal a change in the competitive landscape. The attribution is ironic in light of Digital’s failure to anticipate the rise of personal computers, and significant in that even the most successful strategies decay over time and require fresh thinking. Here are some ways to reduce the certainty that what works today will also work tomorrow:

· Consider the limits to growth of your current strategy, for example, constraints in your own resources or the markets you serve, and actions that your “nightmare” competitor could take to undermine your competitive advantage.

· Develop alternative scenarios of the future and plan what you must do to be successful in the face of uncertain and diverse possibilities.

· Look for indicators that things are changing. For example, examine what’s different or unusual in other industries or disciplines, track changes in the rates of your own performance growth, and gauge leading indicators such as process effectiveness or morale that could signal changes in results over time if not addressed now.

Another form of certainty that hurts an organization is the belief that a problem exists and that others are to blame and must be the ones to change. One way to reduce this certainty is to gather all the key stakeholders in one place and ask them to develop a systems map that describes the full complexity of the problem: the many factors, what these factors impact, and what drives these factors. The complexity of the resulting map usually leads people to realize that their simple hypotheses about what’s wrong, who’s to blame, and what should be done are inaccurate or at least incomplete. It increases their willingness to look more deeply for root causes and effective solutions.

3) Making Conflict Safe

One of the greatest barriers to clarifying current reality is the concern that people will see reality differently and not know how to resolve their different views. This is one of the reasons for building a strong container in the first place. Establishing ground rules and providing tools for holding productive conversations around difficult issues is one early step that change leaders can take to help people address conflict. The metaphor of the blind men and the elephant, where several blind men touch different parts of an elephant and swear that it is something else, also frees people up to recognize the inherent limitations in any individual’s or group’s point of view. The aforementioned systems map can help everyone draw the whole elephant, acknowledge both the validity and limits of their own perspective, and create a richer picture of reality that incorporates multiple views.

4) The Power of Appreciative Inquiry

Underlying the need to address obstacles of denial, certainty, and conflict is the assumption that people will naturally resist self-criticism. Hence, a very different approach to cultivating curiosity is to ask them to identify what is already working in their organization and how they can build on it. This approach, known as appreciative inquiry, can produce dramatic improvements in effectiveness without raising defensiveness.[2]

I believe that appreciative inquiry works best when it draws people’s attention to core values that the organization wants to cultivate independent of particular circumstances. At the same time, the primary limit to appreciative inquiry is what Gary Hamel calls the “inevitability of strategy decay.”[3] As noted, strategies and behaviors that work today might not work in the future. Therefore, in order for people to realize their aspirations, people need to continuously distinguish what they care about from how they need to operate.

5) Removing Barriers to Clarity: An Example

The Chairman of a retail conglomerate was concerned about the strategic viability of one of his companies. While the company performed adequately, changes in the competitive landscape indicated that it might not survive without significantly overhauling its strategy. However, the company was very operationally focused and had failed in all previous attempts to initiate strategic company-wide changes.

He took several steps to challenge the management team:

· He replaced the retiring Managing Director, who had been very operational, with a more strategically oriented MD.

· He hired both a strategy consulting firm and an expert in the company’s market niche to analyze and report on key challenges and opportunities for the company.

· He also hired an organizational consultant to “breathe life into the strategy.” He was concerned that the management team would not be able to either agree on the strategists’ recommendations or implement them without additional help.

These steps had the dual effect of affirming the company’s value and questioning its potential effectiveness. The Chairman’s actions signaled that the company warranted investment, in no small part because of its traditional and extensive presence in communities throughout the company’s home market. The new MD was also younger, favored teamwork over one-on-one management, and brought new enthusiasm to the job. At the same time, the MD’s strategic focus and the use of outside strategy and change consultants paved the way for the management team and the rest of the organization to rethink not only what it needed to focus on, but also how people would have to work differently to survive, if not thrive, in the future.

Seeing Reality Clearly

Achieving clarity means:

· Discerning what to build on – and what to let go of – in moving forward

· Identifying the root causes of problems before trying to solve them

· Determining how people are partially responsible for the very problems they are trying to solve

· Recognizing the payoffs of the way things are

Knowing “when to hold them and when to fold them” can be as difficult in management as it is at the card table. Many studies point out that holding to a strong and positive set of values is key to an organization’s long-term success.[4] However, values that produce success under one set of conditions can destroy it under different circumstances.[5] Moreover, if we hold too tightly to a specific growth strategy, we might discover that competitors attracted to the market by our success force us to change the rules of the game and devise a new strategy to stay ahead. At the same time, learning from one’s own success is essential because it raises pride, builds morale, and verifies homegrown solutions that competitors often find difficult to copy. Leaders cultivate and maintain strengths that are sustainable given likely changes in the environment.