Change Through Persuasion

· Leading Change When Business Is Good

Introduction to the Lesson with the authors’ summaries:

1) Change Through Persuasion

Faced with the need for a massive change, most managers respond predictably. They revamp the organization’s strategy, shift around staff, and root out inefficiencies. They then wait patiently for performance to improve—only to be bitterly disappointed because they’ve failed to adequately prepare employees for the change. In this article, the authors contend that to make change stick, leaders must conduct an effective persuasion campaign—one that begins weeks or months before the turnaround plan is set in concrete.

Like a political campaign, a persuasion campaign is largely one of differentiation from the past. Turnaround leaders must convince people that the organization is truly on its deathbed—or, at the very least, that radical changes are required if the organization is to survive and thrive. (This is a particularly difficult challenge when years of persistent problems have been accompanied by few changes in the status quo.) And they must demonstrate through word and deed that they are the right leaders with the right plan.

Accomplishing all this calls for a four-part communications strategy. Prior to announcing a turnaround plan, leaders need to set the stage for employees’ acceptance of it. At the time of delivery, they must present a framework through which employees can interpret information and messages about the plan. As time passes, they must manage the mood so that employees’ emotional states support implementation and follow-through. And at critical intervals, they must provide reinforcement to ensure that the desired changes take hold and that there’s no backsliding.

Using the example of the dramatic turnaround at Boston’s Beth Israel Deaconess Medical Center, the authors elucidate the inner workings of a successful change effort.

2) Leading Change When Business Is Good

Lou Gerstner’s was a hard act to follow. As CEO in what were arguably IBM’s darkest hours, Gerstner brought the company back from the brink. After nearly ten wrenching years, in which the big-machine manufacturer remade itself into a comprehensive software, hardware, and services provider, business was looking good. So the challenge for Sam Palmisano, when he took over as CEO in 2002, was to come up with a mandate for a second act in the company’s transformation.

His primary aim was to get different parts of the company working together so IBM could offer customers “integrated solutions”—hardware, software, services, and financing—at a single price. As part of this effort, he asked all of IBM’s 320,000 employees, in 170 countries, to weigh in on a new set of shared corporate values.

Over a 72-hour period, thousands of IBMers throughout the world gave Palmisano and his executive team an earful in an intranet discussion dubbed “ValuesJam,” an often-heated debate about the company’s heart and soul. Twenty-four hours into the exercise, at least one senior exec wanted to pull the plug. The jam had clearly struck a chord with employees, but it was a dissonant one, full of rancor and discontent.

Palmisano let the discussion continue, and the next day, the mood began to shift. The criticism became more constructive. Out of the million words generated by the jam grew a set of values that, as Palmisano explains in this interview, are meant to guide the operational decisions made by IBM’s employees—and, more important, to serve as Palmisano’s mandate to continue the reinvention of the company.See attached