PART 1
 Life in the Blender

Perhaps because of the gloomy titles of our books (Why Teams Don't Work, Turf Wars, Techno-Crazed), people get the impression that we're negative. Well, we're not. We are "skeptical optimists": we believe good things can and will happen, but these victories will not come easily or automatically. Most will come only after a knock-down, drag-out fight.

Download Why Teams Don't Work in its entirety here.

We're very much for organizational change. We see it as necessary, desirable, and often quite capable of succeeding. With the wave of global, external change that is continually breaking over us, only a foolish organization would turn its back on the many ways it might improve its efficiency, competitiveness, and morale. The future is a dangerous place, and we are already living in it.

We are interested in any idea that promises a pathway through the blender global change has plunked us in -- the breathless speedup of technology, the collapse of the American standard of living, the globalization of everything. But we are not cheerleaders for change. Indeed, we have experienced enough initiatives, and witnessed the disappointment that settles over organizations when they fail, that we wince when they are announced. Change hurts.

The pain is flat-out physical in organizations where the solution to flat productivity has been to downsize and heap the remaining work on the shoulders of half as many people, pummeling them into submission.

In less draconian scenarios, the pain is financial. The learning curves for major change initiatives are steep, and they go on forever, and every hour that a company learns, the meter is running. Tens of billions are spent annually on consulting and training for change, and many billions more are squandered by companies willing to try anything to catch up to their competitors. When present-day milk production declines because the farmer spends all his time breeding future cows, imagining future cream, and dreaming of the green grass of a reengineered dairy operation, well, the cows dry up. Only the most sagacious (or befuddled) stockholders reward this kind of crystal-balling. Competitors more interested in beating you today than tomorrow will probably get their wish.

But the worst pain brought on by change happens between the ears of the people in your organization. Discomfort, anxiety, inconstancy, bloodletting, psychological distress: whatever terms you choose, there has never been, nor will there ever be, a change initiative that leaves unscathed the people it purported to benefit.

Consider a paper products company based in the Upper Midwest. We base this composite on a couple of companies we are familiar with. Beginning in 1988, the company put itself through a gamut of change initiatives against a shifting background of "vision movements." Each change was a raindrop on a tin roof during a cloudburst. Each made its little noise, had its momentary effect, and then drained away.

During the 6-year period, the company gradually transformed itself from a place where corrugated paper products were manufactured to a place where meetings were held. We reproduce here the chronology of initiatives at the paper products company (let's call it Fort Mudge Paper). You can dig down through them like an archeologist discovering Troy, seven layers down. Only when you got there, you'll find the original city squashed flatter than a pancake.

                    ƒ   Quality circles. This effort was initiated in 1988, lashed to an existing quality assurance effort to reduce defects. People at Fort Mudge were excited at the opportunity to offer suggestions. But nothing ever seemed to get done, and several people who stepped forward to offer criticisms of the system got permanently back-burnered. This was followed by ...

                    ƒ   TQM (total quality management). Undaunted by the collapse of quality circles, Fort Mudge sprang big bucks to fly a consultant up from Chicago to show how to get everyone engaged in continuous improvement. Fort Mudge people got to attend classes and learn about fishbone diagrams and statistical process control. Banners were hung and charts displayed. A recognition banquet was scheduled, featuring something chicken-like. The vice president who brought in the consultant was hired away by the consultant, and the program went into a dormant stage. Until ...

                    ƒ   Reengineering. The idea was to get away from the seven-signatures way of doing things -- simplify, simplify! Naturally, the union at Fort Mudge hit the ceiling, and why not? The plan changed everyone's relationship to everyone else, and called for the loss of 40 people by attrition, and that was just the start. The most tangible result of two years of reengineering was $3 million worth of new hardware and software, which the staff is still struggling to learn, even as a new consultant starts beating the drum for ...

                    ƒ   Mission-and-vision. Management liked this one, because all the top honchos got to go to Lake Tahoe. The organization spent $85,000 on a consultant who helped fashion a values statement for the next millennium. Then they came across the same statement in a competitor's annual report. Verbatim. The anger had just begun to dissipate when a guru somebody's brother-in-law recommended suggested ...

                    ƒ   Delayering. The idea was to put managerial talent to work closer to customers. There were only four job descriptions in the entire company: CEO, Customer Service Reps Class 1 and 2, and Night Watchman. The plan met with ferocious resistance from (you guessed it) managerial talent. The plan was hacked to bits, and most of the old job levels were restored as "steps" between the four main categories even as the VP-HR was blinded on the road to Damascus by a vision of ...

                    ƒ   The learning organization. This initiative had real appeal. People appreciated the idea that all work was a work in progress. But a few people spoiled everything by pinning a lot of nonproductive time on "learning." Management was not about to be made fools of by fifth-discipline goldbricks, so this program, too, was put on hold. Which was wise, because the senior management team had just been on a mountaineering leadership binge in Aspen, and everyone was hot to trot for ...

                    ƒ   Teams. The idea was that people would self-supervise, self-train, self-recognize and self-evaluate. Management assured workers it was only about quality, and never about eliminating middle management. Unfortunately, none of the people who got to stay knew how to manage anything. But that still left a huge gaping hole in dire need of addressing ...

                    ƒ   Customer satisfaction. The notion that the customer is king had an uphill path to take at the organization. It ran counter to the prevailing opinion, that the customer was an idiot. The company brought in customers for product design focus groups, to get their ideas. They didn't have any, unless you count infinite backward compatibility with standards that were already holding the company back. Basically, customers couldn't get you into trouble in the organization's culture; only management could do that. "Customer sat" got sat on. Which spelled an early demise for the company's attempts at ...

                    ƒ   Empowerment. The organization called a big meeting and informed people that from that moment on, everyone was encouraged to do whatever was necessary to make customers happy. But "whatever was necessary" had strings attached, and within a couple of weeks those strings were yanked back.

When Fort Mudge management reneged on empowerment, that was the last straw for many workers. In April 1995 they called a wildcat strike out of sheer frustration. Their own parent union did not support them, but they didn't care. They were tired of the electroshock therapy management kept administering, tired of the endless cadres of consultants with their full-wax treatments and spangled bunting, tried of not knowing what their job was or who to report to or if they had jobs at all. They struck, the company locked them out, things went downhill, and by August the company had sold off its assets to a competitor for a dime on the dollar. Too many fads, heaped on top of another, eventually proved too much. In the war for the future, Fort Mudge went over the hill.

     What this book is about

It's about change, and the right and wrong ways to undertake it. Fort Mudge tackled change with great energy and desire. But energy and motivation are not enough to carry the day.

In the fast current, some organizations surprise by demonstrating unexpected abilities. The survivors are those organizations which have always struggled to survive. They take nothing for granted, and have no illusions about their immunity to trouble. It's the secure, pampered companies that fall hardest and most painfully -- IBM, General Motors, Xerox.

People are not natural resisters of change. We have a love/hate relationship to it. We are equal parts yin and yang. We adore change and the stimulation and improvement it can represent; and in the same breath we despise the discomfort and anxiety it imposes on us.

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Change is the elixir of life in so many ways. It engages our imagination -- sometimes for good, sometimes for ill. People fight change when they feel pain. We must learn to be sympathetic to the reasons people have for failing to move forward; often, they are simply survival responses dictated by past experience.

Put simply, we like discrete change that is easy to mark off, that has a chance of success, and whose success will make things better. Not surprisingly, we are less  enthusiastic about horrible, hopeless ordeals that leave us weaker and unhappier than we were to begin with.

Where we get lost is between these two poles -- where we balk unreasonably at challenges that, while they are not slam dunks, have at least some chance of success.

We are going to show you:

                    ƒ   A way of thinking about how people respond to change challenges that will give you greater change leverage in your work, on your team, on your organization.

                    ƒ   A way to gauge your organization's and your personal potential for change. You may not become a change master or metaphile overnight. But you can learn to identify where the points of resistance are in your nature and in the personalities and situations of those around you.

                    ƒ   A list of a zillion separate change initiatives and the characteristic ways each one fails, and ways to avoid failure.

Armed with this knowledge, your odds of surviving life in the blender should improve. The blender won't slow down, but you may find you are able to avoid getting sucked into the blade. x

Mark them well. In 40,000 years, they have not changed one iota:

       †   People do what they perceive is in their best interest, thinking as rationally as circumstances allow them to think. We call this the law of Push.

       †   People are not inherently anti-change. Most will, in fact, embrace initiatives provided the change has positive meaning for them. This is the law of Pull.

       †   People thrive under creative challenge, but wilt under negative stress.

       †   People are different. No single "elegant solution" will address the breadth of these differences.

       †   People believe what they see. Actions do speak louder than words, and a history of previous deception octuples present suspicion.

       †   The way to make effective long-term change is to first visualize what you want to accomplish, and then inhabit this vision until it comes true.

       †   Change is an act of the imagination. Until the imagination is engaged, no important change can occur. x

     The High Cost of Change Failures

You win some, you lose some. Lest we imagine that a failed change initiative is a victimless crime, however, let us count the victims, and the aftereffects of a false start:

    1)    Loss of jobs. People lose their jobs when change fails to achieve hoped-for results. In the case of many initiatives, lost jobs is the hoped-for result. Job loss ripples through the organization, through the affected individual and his or her family, then into the community as a whole.

    2)    Loss of energy. Every misstep along the change journey makes the next step more difficult. The most successful change initiatives build inevitable small successes into the early going to forestall this power-sapping stage. To lose momentum in most cases is to lose the battle.

    3)    Loss of trust. If people were led to believe success was assured before, they will be less likely to believe anything after.

    4)    Loss of respect. See if people look up to their leaders with the same shiny-eyed appreciation after they've been led off a cliff.

    5)    Higher stress. You thought things were bad before. Pinning your hopes on a change that fails is like swimming to a life raft and finding out it leaks.

    6)    Fragmentation. Whatever cohesion the team had managed to achieve may begin to come apart, as people drift back to solitary pursuits.

    7)    Depression. There is nothing employed people enjoy less than contemplating unemployment.

    8)    Anger. Where workers once reacted to initiatives by dragging feet, now they may resort to outright sabotage.

    9)    Diminished risk-taking. A good change initiative lights a flame of creativity under people. If the change is snuffed, so is the light. Some workers are ruined for life -- certainly as long as they stay with this organization.

10)    A frayed knot. Credibility hangs by a thread. People become more skeptical about the employer's claim that they are loyal to employees, and that people are their most important resource.

11)    Trouble at home. Stress in people's personal livesmay have contributed to the failure of the change initiative in the first place. Now the stress loops back, and makes things even worse at home.

12)    A change in management's attitude. The stakes are raised when the strike count goes to one, and then two. Loyalty to workers may decrease, as management goes into save-the-company mode.

13)    Games. When the ice is thin, people skate lightly. Do not look for the same attitude of directness and disclosure you saw before the change failed.

14)    Less to go around. All that consulting, training, and reengineering cost big bucks. While the consultants tiptoe away, careful not to let their coins jingle, workers face the prospect of diminished resources.

15)    Craziness. Flickering inside every man and woman is a lit bomb fuse. Our fuses are all different lengths, but we all go off eventually. Workplace violence claims the lives of 1,400 Americans annually, at a total cost to employers of $42 billion.^[2] Not exactly what you hoped for from TQM. x

     Of Babies and Bathwater

The age of change in organizational thinking, sometimes called New Age management theory, is occurring in part because of the baby boomer generation. The generation that came before flourished in the mass production economy of the 1920s-1960s. It is no Oedipal coincidence that the very next generation has done everything it could to trash the success of the generation preceding it. Organizations in the 1990s are picking up and trying on new initiatives like a teenager in the mirror, uncertain of much but that it does not want to be like its mom and dad. The New Age must be better; it is, well, new.

It is beyond the scope of this book to analyze all that happened to make the generation that started to come of age in the 1960s so tuned in to one another, and so determined to be different from the generation that went before. But you cannot discuss change in our time without addressing the enormous demographic and psychographic blip of our time, and why they (we) can't help trying out every new thing that comes along -- and are unable to make many of them stick.

Some of the factors behind the fads:

                    ƒ   Globalization. Where the older generation made and sold to a single American market, the baby boomers make and sell to (and compete against) the whole world.

                    ƒ   Technology. Baby boomers possess much more intimate information processing technologies, and are thus prone to greater decentralization and individualization.

                    ƒ   Speed. Baby boomers are impatient because technology has given them that luxury. The previous planned changes like the moon landing that took years; this generation does not feel it can wait that long. If an idea doesn't take hold and yield quick results, they move on to another idea.

                    ƒ   Education. Business schools taught only one approach to business in the first half of the century; today there is zero "conventional wisdom," even in the most hidebound academy. Years ago there was no management theory section of the bookstore; today there is an avalanche of offerings.

                    ƒ   Experience. People today travel more, read more, do continuing education, change jobs more frequently, encounter greater diversity, work across functional lines and interact with people from other countries, cultures, and industries.

Many change initiatives of the '80s and '90s were attempted in the communal hippie experiments of the '60s. High employee involvement initiatives like TQM and empowerment are analogous to the coop ethic of no bosses and everyone pitches in. The learning organization concept is reminiscent of the phenomenon of "the perpetual student" of the 1960s, having too much fun in college to venture out into the narrower world of jobs and assigned roles. Diversity, cross-functionality, and "dress-down Fridays" all have their roots in the rebellious mood of the '60s that railed against conformity, squares, button-down collars and gray flannel suits. "The leader as servant" idea owes more to the I-Ching and Che Guevara than to Iwo Jima and Dale Carnegie.

The children of the Age of Aquarius are more abstract, more philosophical, more eclectic, more "big-picture," and more hip than the generation that won World War II. They bring great gifts to the banquet of change they have set for themselves. If there is a gnawing insecurity among this confident generation, it is that they lack the grit and brass-tacks competence of the earlier generation.

The Aquarian school of management must guard against two great hazards. The first is a tendency to trash the past. To the very idealistic, all business ideas predating Woodstock are bad, mechanistic, controlling, bureaucratic, plastic, in-the-box, and anal.

The truth is that the conventional wisdom of the industrial age is no less wise in the age of change. Organizations are remarkably like machines, no matter how we "humanize" them. Bureaucracies remain efficient ways to organize complex systems. In-the-box is still the place where most of us dwell, and think, and are happiest. A wise generation would take pains, in tossing out the bathwater from the previous generation, to conduct routine baby checks.

The second hazard is that boomers may fall victim to their own opportunities. People with many choices tend to make many choices, and not have the resolve to see any one of them through. If the age of change is a smörgasbord, too many of us have piled  our trays too high with desserts. Baby books warn against giving an infant too many choices; so too with adults. We need to focus on a few good ideas, and give them a chance to work.

The matter that every manager, leader, and team member must ask is whether we are actually in a New Age of management, and everything has changed, and a new philosophy of work can take hold. If we are, then the New Age management theories are right on and should be implemented without delay.

On the off-chance that we are in an In-Between age, stepping awkwardly between the Push of Old Age authority and the Pull of New Age optimism, we will have to guard against two errors simultaneously -- too slowly adopting the new and too rapidly offloading the old. x

     Some Discarded Babies

The best change ideas out there today are not fads. They are honest, rigorous, and genuine. It is when we become sloppy in our thinking that we make them into fads. When we do that, we start making insipid generalizations. We assign some ideas white hats -- these are the ideas that must save us. And we give other ideas, those that had some currency with the previous generation, politically incorrect incorrect black hats. Under no circumstances are we to give these ideas an even break. Here are some of these discarded ideas.

                    ƒ   Bureaucracy. So negative have the connotations of the word bureaucracy become that we hardly give a second thought to what the word actually denotes: a system for organizing large bodies of work so that specialized workers attend to specialized tasks. Instead we hear the word, picture waiting in a long line to get our driver's license renewed, and shake our heads. But before computers raised our expectations of quicker turnaround, bureaucracy was an effective way to handle large workloads. Bureaucracy is not antithetical to good service unless it is mismanaged. What people object to about bureaucracy is not its order but its fragmentation -- how disconnected, bloated, and unaccountable its parts can be if not watched carefully.

                    ƒ   Command. No one comes right out and says so, but it is a major no-no in the new world of organizations even to cultivate, much less use, managerial clout. We hear the phrase "command-and-control" and picture Vincent Price as the insane scientist pulling levers and inflicting pain planetwide. Leaders are expected to lead solely on the basis of example and outreach. "Do this or you're fired" is an unacceptable throwback to the recent era. On paper, anyway. In reality the boss still casts the tie-breaking vote in any power situation in any organization. Why we don't admit that, and figure out some way to deal with it, is an indication of the dreaminess of today's management fashions.

                    ƒ   Complexity. We picture Einstein standing by a chalkboard riddled with arcane equations, himself the very emblem of a complex universe. And it was Einstein who said, "If you are out to describe the truth, leave elegance to the tailor." The strong preference of baby boomer management theory is away from complexity and toward the concise, elegant solution. It should be a master key that opens all locks, a philosopher's stone that transmutes to any element. But if simplicity in human systems were within our reach, why haven't we simply grasped it by now? Sadly, nature is complex and does not yield to a simple scan, and neither do human systems. But that has not hurt the business book business, has it.

                    ƒ   Hierarchy.  The New Age has made up its mind that the most valid organization is the one that is flattest, in which power derives not from how high on the organization chart a position appears, but from the quality of leadership demonstrated. In extreme de-hierarchization, no individual holds sway over any other, no one is subordinate to anyone, and no one is better than anyone else. At work here is an ethic of puritanical egalitarianism that recalls some of the tear-down fervor of the Cultural Revolution in China in the 1960s. It also recalls the leveling edicts of marauding conquerors, who dictate that a city that resisted too energetically be razed until not one stone remained atop another. Never mind that nature, the model from which New Age organizations are supposed to take all their cues, is hierarchical to the core -- younger learning from older, weaker deferring to stronger, every creature in every phyla knowing its place in the pecking order or food chain and being, if not content, at least resigned to it.

                    ƒ   Homogeneity. The passion in recent years has been to yoke people together who have different skills and knowledge. This is done under the rubric of teams, cross-functionality, and diversity. This is all to the good, and it often gets people out of the kind of narrow "silo" thinking of working only alongside people like oneself. Thousands of organizations have broken up functional cadres of accountants, attorneys, information professionals, even clerical and support staff, and sent them out into the midst of new groups, with the idea that they will mesh well in the "real world" and flourish as they regard one another as customers to be satisfied. It often works. Just as often, however, the new challenges -- mastering the language of new functions, getting along without the cultural comfort of functional peers -- make people very nervous. And for what? For the high cost of relocating, retraining, decentralizing and reengineering, the visible results are loneliness, anxiety, and diminished productivity. Many valuable people do their best work within their functional tribe.

                    ƒ   Pragmatism The new corporate leader, according to Richard Pascale, a devotee of Japanese management practices, must be less of a "do-er" and more of a "be-er."^[4] Other books call on CEOs to emulate classic good guys like Jesus Christ, Lao Tsu, and Abraham Lincoln. Of the three, Lincoln is probably the best model because he was willing to take unpleasant steps to achieve desired goals -- precisely the philosophy of Renaissance management guru Nicolo Machiavelli. He appreciated that there was value in secrecy, in shielding his intentions from people until the last moment, in ambiguous pronouncements that could mean whatever a person wanted to hear, in saying one thing and doing another. Zen business consultants recoil from this, the diametric opposite of "open book management." But who can dispute its power -- the flexibility to move this way and that, opportunistically, as the winds of change shift? Most important, this unfashionable expediency acknowledges what the New Age wants to forget: that business is competition, driven by the passion to survive. And even if you manage with purity of heart, you will have problems if your competitors are less fastidious.

                    ƒ   Blame and accountability. If you screwed up in the previous era, and got caught, your fate was clear: people jumped all over you, you got at the very least a good dressing-down in the boss's office, your job security diminished, and your pay docked. Error was punished as if it were sin, and the offender that was discovered was made to bear the guilt for every error they had not found anyone to blame for. In the new era, we encourage an atmosphere of blamelessness. Finger-pointing and punishment are out, risk-taking and information loops are in. If you screw up, you say so, and explain to other people on the team or in the system what you did, and what can be learned from it. This explanation turns the error into a learning opportunity, and everyone goes on from there, happier and wiser than if the mistake had never been committed.

If only Michael Leeson of Barings Bank had been man enough to admit he had bet $14 billion on risky securities in Singapore, and lost. And if only Barings Bank had learned from the admission and looped that information back into process improvement. Of course, there was no Barings Bank by that time, as Leeson's learning opportunity, alas, had bankrupted the 238-year old firm. The point is that there must be a balance between terrifying people so that they feel they must sweep their screw-ups under the carpet, and adding failure to the cardinal virtues of faith, hope, and charity. How about "Punishments must not exceed the offense"? Or, "We will strive to learn from mistakes, but not to commit them recklessly or without thought to consequences?"

                    ƒ   Management. Managers are out and leaders are in. At least, that's the gist of the worst of the recent wave of business books. Management is equated with linear skills, arranging people in boxes and keeping them there. This is opposed to leadership, which is a shamanistic role for people capable of having lengthy visions and casting effective spells. The prejudice against management is intended as a revolt against the factory and the World War II generation of business engineers. What it boils down to, however, is a revolt against competence, for one can't be a "good" leader without first being a good "manager." The opposite, however, is not true. Of course there is a place for managers in the New Age dawning, a point emphatically made in Fad Surfing in the Boardroom,^[5] a critique of the contemporary rejection of management. The problem organizations are struggling with isn't management per se, but bad management, lacking in courage and conviction.

                    ƒ   Short-term thinking. We rail against the American system's attraction to short-term gains, and point fondly toward anecdotes of companies in Japan hewing to a 100-year strategic plan. But the "greed" that drives the American system toward quarterly profits is the same appetite we all have for quick turnaround at the grocery checkout, expeditious processing of our income tax refund, or the satisfaction we get from having the person we are calling pick up the phone, instead of being referred to voicemail. It is illogical that we would like speed in so many areas of modern existence but reject it when it comes to money. But we are loath to forgive short-term thinking, even as we fret about paying our own bills at the end of each month. The New Age has not quite accepted that business is largely about making money so people can feed themselves.