[SOLVED] Design and include a plan for addressing resistance to change, management homework help – Business Finance

1 Design and include a plan for addressing resistance to change.2. Explain the lessons that you want learned from your story of how this organization needs to change. Tell them why.3. Explain the image of change management that you are using and why.4. Using Kotter’s 8 Step plan as a model, p. 328, Table 10.6, create an implementation plan. Be specific by giving dates, timelines, accountable parties, champions, and anything else that will help your plan be completed as you intend for it to be completed. Spell your plan out with steps and graphics. Do NOT give a generic description of what you wish will happen. Instead, give the reader a well-developed set of action steps and dates to guide the organization through the change.5. Format, format, format. Make your paper easy to read by including subheadings for each new piece. Without formatting, your case is just a jumble of words that lose meaning and context. Use color. Use graphics. Use figures. Use whatever it takes to keep your reader engaged and wanting to read more. If the reader looks at a page that is all words and more words on the next page, your reader will get lost and disengage from the presentation. Make the presentation polished and professional. This must not look like student work. Instead, this needs to be a practice session for your final change plan project, so professionalism counts. 6. Write a conclusion.I will apply the text and the file you can useManaging
Organizational
Change
A Multiple Perspectives Approach
Third Edition
Ian Palmer
Richard Dunford
David A. Buchanan
MANAGING ORGANIZATIONAL CHANGE: A MULTIPLE PERSPECTIVES APPROACH, THIRD EDITION
Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2017 by McGraw-Hill Education. All rights reserved. Printed
in the United States of America. Previous editions © 2009 and 2006. No part of this publication may be reproduced or distributed in any form or by any
means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network
or other electronic storage or transmission, or broadcast for distance learning.
Some ancillaries, including electronic and print components, may not be available to customers outside the United States.
This book is printed on acid-free paper.
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ISBN 978-0-07-353053-6
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Library of Congress Cataloging-in-Publication Data
Palmer, Ian, 1957Managing organizational change : a multiple perspectives approach / Ian Palmer, Richard Dunford,
  David A. Buchanan. — Third Edition.
   p. cm.
   Revised edition of Managing organizational change, 2009.
   Includes bibliographical references and index.
   ISBN 978-0-07-353053-6 (alk. paper)
   1. Organizational change. 2. Organizational change–Management. I. Dunford, Richard.
   II. Buchanan, David A. III. Title.
  HD58.8.P347 2016
 658.4’06–dc23
2015033668
The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the
authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites.
mheducation.com/highered
DEDICATIONS
From Ian
To Dianne, Matthew, and Michelle
From Richard
To Jill, Nick, and Ally
From David
To Lesley with love—and thanks
This book is also dedicated to the memory of Gib Akin, our
co-author from 2005 to 2014.
Acknowledgements
A number of people have contributed to this edition, and we owe them all a debt of gratitude, including Jonathan Bamber, Lesley Buchanan, Daloni Carlile, Mimi Clarke, and
Alastair McLellan. In addition, we would like to thank our McGraw-Hill Education team,
including Michael Ablassmeir, Director, Laura Hurst Spell, Senior Product Developer; Jeni
McAtee, Evan Roberts, Karen Jozefowicz, Content Project Managers; Gunjan C
­ handola
(Lumina), Full-Service Content Project Manager; and DeAnna Dausener, Content Licensing Specialist. We would also like to thank the second edition reviewers for their helpful
feedback: Diane Bandow, Troy University; Cynthia Bean, University of South Florida–
St. Petersburg; Bradford R. Frazier, Pfeiffer University; Dominie Garcia, San Jose State
­University; Selina Griswold, University of Toledo; Mark Hannan, George Washington
University; Christopher S. Howard, Pfeiffer University; Jim Kerner, Athens State University; Catherine Marsh, North Park University; Patricia A. Matuszek, Troy University;
Ranjna Patel, Bethune Cookman University; Mary Sass, Western Washington University;
Dennis Self, Troy University; Patricia Scescke, National Louis University.
iv
Brief contents
Preface ix
PART 1 Groundwork: Understanding and Diagnosing Change  1
1
Managing Change: Stories and Paradoxes  3
2
Images of Change Management  31
3
Why Change? Contemporary Pressures and Drivers  61
4
What to Change? A Diagnostic Approach  101
PART 2 Implementation: The Substance and Process of Change  137
5
What Changes—and What Doesn’t?  139
6
Vision and the Direction of Change  171
7
Change Communication Strategies  205
8
Resistance to Change  249
9
Organization Development and Sense-Making Approaches  279
10
Change Management, Processual, and Contingency Approaches  315
PART 3 Running Threads: Sustainability, and the
Effective Change Manager  353
11
Sustaining Change versus Initiative Decay  355
12
The Effective Change Manager: What Does It Take?  385
Name Index  423
Subject Index  433
v
Contents
Preface ix
Part 1
Groundwork: Understanding and
Diagnosing Change  1
1 Managing Change: Stories and
Paradoxes 3
Learning objectives  3
Stories About Change: What Can We
Learn? 4
The Story of Beth Israel Deaconess
Medical Center  5
The Story of Sears Holdings  8
The Story of J. C. Penney  10
Tension and Paradox: The State of the Art  14
Assessing Depth of Change  18
What’s Coming Up: A Road Map  19
Change Diagnostic: The Beth Israel Story  21
Change Diagnostic: The Sears Holdings
Story 23
Change Diagnostic: The J. C. Penney Story  24
Exercise 1.1: Writing Your Own Story of
Change 26
Additional Reading  27
Roundup 27
References 28
2 Images of Change Management  31
Learning objectives  31
What’s in a Name: Change Agents, Managers,
or Leaders?  32
Images, Mental Models, Frames,
Perspectives 33
The Six-Images Framework  34
Six Images of Change Management  37
Using the Six-Images Framework  46
vi
Self-Assessment: What Is Your Image of
Managing Change?  49
Self-Assessment: Scoring  51
Exercise 2.1: Assessing Change Managers’
Images 52
Exercise 2.2: The Turnaround Story at
Leonard Cheshire  53
Additional Reading  55
Roundup 56
References 57
3 Why Change? Contemporary Pressures
and Drivers  61
Learning objectives  61
Environmental Pressures for Change  62
Why Do Organizations Not Change in
Response to Environmental Pressures?  79
Why Do Organizations Not Change after
Crises? 82
Internal Organizational Change Drivers  85
Exercise 3.1: Top Team Role Play  91
Exercise 3.2: Case Analysis: The Sunderland
City Story  91
Exercise 3.3: The Reputation Trap: Can You
Escape? 92
Additional Reading  93
Roundup 94
References 96
4 What to Change? A Diagnostic
Approach 101
Learning objectives  101
Organizational Models  102
Organization Strategy and Change  108
Diagnosing Readiness for Change  117
Built-to-Change 124
Exercise 4.1: The Capital One Financial
Story 125
Contents  vii
Exercise 4.2: Scenario Planning  127
Exercise 4.3: Readiness for Change
Analysis 128
Additional Reading 130
Roundup 131
References 134
Part 2
Implementation: The Substance and
Process of Change  137
5 What Changes—and What
Doesn’t? 139
Learning objectives  139
What Changes?  140
Innovation 146
Organizational Culture  150
Technology 155
Exercise 5.1: The Nampak Story  161
Exercise 5.2: Organizational Culture
Assessment 162
Exercise 5.3: How Will the Digital Revolution
Affect Your Organization?  163
Additional Reading  163
Roundup 164
References 166
6 Vision and the Direction
of Change  171
Learning objectives  171
Vision: Fundamental or Fad?  172
The Characteristics of Effective Visions  174
How Context Affects Vision  180
How Visions Are Developed  181
Why Visions Fail  187
Linking Vision to Change: Three
Debates 189
Exercise 6.1: Interviewing Change
Recipients 197
Exercise 6.2: Analyze Your Own
Organization’s Vision  197
Exercise 6.3: The Role of Vision at Mentor
Graphics 197
Additional Reading  198
Roundup 199
References 201
7 Change Communication
Strategies 205
Learning objectives  205
The Change Communication Process  206
Gender, Power, and Emotion  211
Language Matters: The Power
of Conversation  215
Change Communication Strategies  222
Contingency Approaches to Change
Communication 228
Communication Channels and the Role
of Social Media  232
Exercise 7.1: Listen to Who’s Talking  238
Exercise 7.2: How Defensive Are You?  239
Exercise 7.3: Social Media at the
Museum 240
Additional Reading  241
Roundup 242
References 244
8 Resistance to Change  249
Learning objectives  249
WIIFM, WAMI, and the Dimensions
of Resistance  250
Benefits 251
Causes 253
Symptoms 260
Managers as Resisters  261
Managing Resistance  263
Exercise 8.1: Diagnosing and Acting  270
Exercise 8.2: Jack’s Dilemma  270
Exercise 8.3: Moneyball  271
Additional Reading  272
Roundup 272
References 274
viii  Contents
9 Organization Development and
Sense-Making Approaches  279
Learning objectives  279
Alternative Approaches to Managing
Change 280
Organization Development (OD)  280
Appreciative Inquiry (AI)   291
Positive Organizational Scholarship (POS)  293
Dialogic Organizational Development   295
Sense-Making   298
Exercise 9.1: Reports from the Front Line  304
Exercise 9.2: Designing a Large-Scale Change
Intervention 304
Exercise 9.3: Making Sense of
Sense-Making 304
Exercise 9.4: Interpreting the Interpreter:
Change at Target  305
Exercise 9.5: Change at DuPont  306
Additional Reading  308
Roundup 308
References 310
10 Change Management, Processual, and
Contingency Approaches  315
Learning objectives  315
Alternative Approaches to Managing
Change 316
Why Change Fails  317
Change by Checklist  319
Stage Models of Change Management  325
Process Perspectives on Change  331
Contingency Approaches to Change
Management 335
Exercise 10.1: Develop Your Own Change
Model 341
Exercise 10.2: The British Airways Swipe
Card Debacle 342
Exercise 10.3: The Italian Job  344
Additional Reading  346
Roundup 346
References 349
Part 3
Running Threads: Sustainability, and
the Effective Change Manager  353
11 Sustaining Change versus
Initiative Decay  355
Learning objectives  355
Initiative Decay and Improvement
Evaporation 356
Praiseworthy and Blameworthy Failures  359
Actions to Sustain Change  362
Words of Warning  369
Exercise 11.1: A Balanced Set of
Measures 373
Exercise 11.2: Treating Initiative Decay  373
Exercise 11.3: The Challenger and Columbia
Shuttle Disasters  374
Additional Reading  379
Roundup 380
References 382
12 The Effective Change Manager:
What Does It Take?  385
Learning objectives  385
Change Managers: Who Are They?  386
Change Managers: What Kind of Role
Is This?  394
Change Management Competencies  397
Political Skill and the Change Manager  403
Developing Change Management
Expertise 410
Exercise 12.1: Networking—How Good
Are You?  412
Exercise 12.2: How Resilient Are You?  413
Exercise 12.3: How Political Is Your
Organization? 415
Additional Reading  416
Roundup 417
References 419
Name Index  423
Subject Index  433
Preface
Since the previous edition of this book published in 2009, the organizational world has
changed dramatically—the global financial crisis, fresh geopolitical tensions, environmental concerns, greater focus on corporate social responsibility, economic uncertainties,
emerging new markets, dramatic technological developments, demographic shifts, changing consumer tastes and expectations. Add to that mix the growing significance of social
media, where positive and critical views of organizations and their products and services
can be shared instantly and globally with large numbers of people.
From a management perspective, it feels as though the drivers for organizational change
are now more numerous, and that the pace of change has also increased; more pressure,
more change, faster change. While the pace of change may only appear to have quickened,
failure to respond to those pressures, and in some cases failure to respond quickly enough,
can have significant individual and corporate consequences. The personal and organizational stakes appear to have increased.
The management of organizational change thus remains a topic of strategic importance for most sectors, public and private. Current conditions have, if anything, increased
the importance of this area of management responsibility. This new edition, therefore,
is timely with regard to updating previous content, while introducing new and emerging
trends, developments, themes, debates, and practices.
In the light of this assessment, we believe that the multiple perspectives approach is
particularly valuable, recognizing the variety of ways in which change can be progressed,
and reinforcing the need for a tailored and creative approach to fit different contexts. Our
images of how organizational change should be managed affect the approaches that we
take to understanding and managing change. Adopting different images and perspectives
helps to open up new and more innovative ways of approaching the change management
process. We hope that this approach will help to guide and to inspire others in pursuit of
their own responsibilities for managing organizational change.
This text is aimed at two main readers. The first is an experienced practicing manager
enrolled in an MBA or a similar master’s degree program, or taking part in a management
development course that includes a module on organizational change management. The
second is a senior undergraduate, who may have less practical experience, but who will
probably have encountered organizational change through temporary work assignments,
or indirectly through family and friends. Our senior undergraduate is also likely to be
planning a management career, or to be heading for a professional role that will inevitably involve management—and change management—responsibilities. Given the needs
and interests of both types of readers, we have sought to present an appropriate blend of
research and theory on the one hand, and practical management application on the other.
Instructors who have used our previous edition will find many familiar features in this
update. The chapter structure and sequence of the book remain much the same, with some
minor adjustments to accommodate new material. The overall argument is again underpinned
by the observation that the management of organizational change is in part a rational or technical task, and is also a creative activity, with the need to design novel strategies and processes
ix
x  Preface
that are consistent with the needs of unique local conditions. We hope that readers will find
the writing style and presentation clear and engaging. We have also maintained the breadth of
coverage of the different traditions and perspectives that contribute to the theory and practice
of managing organizational change, with international examples where appropriate.
The development of this new edition has introduced new content and new pedagogical
features. The new content for this edition includes the following:
Depth of change: Change can be categorized and understood with regard to how deeply
it penetrates an organization. A “depth of change” model is explained, using a “shallow to transformational” scale, forming the basis for discussion and analysis at various
points in the text (chapters 1, 4, and 12).
New tensions and debates: A new section explores contemporary dilemmas in organizational change management. One of these concerns striking the balance between
large-scale transformational change (which can be disruptive) and “sweating the small
stuff” (which can create a platform for further changes). A second concerns pace, with
some commentators advising how to speed up change, while others warn of the dangers
of “the acceleration trap” (chapter 1).
Change managers or change leaders: Some commentators claim this is an important
distinction, while others argue that this is a words game. Can we resolve this debate
(chapter 2)?
Post-crisis change: Recommendations for change from investigations into accidents,
misconduct, and catastrophes are often not implemented. We explore why this should
be the case—in conditions where it might be presumed that change would be welcome
and straightforward (chapter 3). We also consider briefly the problems and practice of
communication during and after crises (chapter 7).
Change in a recession: Is change more challenging when economic conditions are difficult? A new section argues that change may be more straightforward during a recession (chapter 3).
Innovation: We explore how change is driven by the proactive development, adoption, and diffusion of product and operational innovations, along with the distinction
between sustaining and disruptive innovations, and the nature and development of
innovative organization cultures (chapter 4).
Built to change: We explore the organizational capabilities that contribute to change,
adaptation, responsiveness, and agility, considering mechanistic and organic management systems, segmentalist and integrative cultures, and the concept of the “built-tochange” organization (chapter 4).
Change communication strategies: This chapter has been thoroughly updated, with the
emphasis on change communication, exploring the characteristics of effective change
communication strategies, the potential impact and applications of social media as corporate communications tools, and the “communication escalator” (chapter 7).
Middle management blockers: The traditional stereotype has middle managers subverting top team initiatives. Recent research suggests that this image is wrong, and
that middle management are often the source of creative strategic ideas as well as the
“engine room” for delivery (chapters 8 and 12).
Preface  xi
Organization development and sense-making approaches: As in the previous edition,
recent developments in organization development, appreciative inquiry, positive organizational scholarship, and dialogic organization development are explored (chapter 9).
Contingency and processual approaches: Covered in the last edition, recent developments have been incorporated to update these sections, reflecting their influence on
theory and practice (chapter 10).
Praiseworthy and blameworthy failures: The section on “recognizing productive failures” has been updated with recent commentary suggesting that some failures should
be rewarded (chapter 11).
The effective change manager: What does it take? This new chapter explores the capabilities of change managers, considering competency frameworks, interpersonal communication processes and skills, issue-selling tactics, and the need for the change
manager to be politically skilled (chapter 12).
The pedagogical features in the text include:
• learning outcomes identified at the beginning of each chapter;
• fewer, and shorter, “high-impact” case studies of organizational change and other diagnostic and self-assessment exercises for classroom use;
• movie recommendations, identifying clips that illustrate theoretical and practical
dimensions of organizational change management;
• a short “roundup” section at the end of each chapter, with reflections for the practicing change manager, and summarizing the key learning points (linked to the learning
outcomes);
• a small number of suggestions for further reading at the end of each chapter.
Since this book was first published, we have continued our conversations with managers who have been using it as part of their teaching, consulting, and other organizational change activities. In so many of these conversations, it was reassuring to hear how
the multiple perspectives framework that underpins this book struck the right chord with
them, opening up new, innovative, and different ways of seeing, thinking, conceptualizing,
and practicing organizational change. We hope that this new and updated third edition will
continue to inspire various change journeys, and we look forward to more conversations
along the way.
Online Resources
Instructors: If you are looking for teaching materials in this subject area, such as case studies, discussion guides, organizational diagnostics, self-assessments, company websites, or
audio-visual materials (feature films, YouTube clips) to use in lectures and tutorials, then
go to McGraw-Hill Connect: connect.mheducation.com
Continually evolving, McGraw-Hill Connect has been redesigned to provide the only
true adaptive learning experience delivered within a simple and easy-to-navigate environment, placing students at the very center.
xii  Preface
• Performance Analytics – Now available for both instructors and students, easy-to-decipher
data illuminates course performance. Students always know how they are doing in class,
while instructors can view student and section performance at a glance.
• Personalized Learning – Squeezing the most out of study time, the adaptive engine
within Connect creates a highly personalized learning path for each student by identifying areas of weakness and providing learning resources to assist in the moment of need.
This seamless integration of reading, practice, and assessment ensures that the focus is
on the most important content for that individual.
The Connect Management Instructor Library is your repository for additional resources
to improve student engagement in and out of class. You can select and use any asset that
enhances your lecture.
The Connect Instructor Library includes:
• Instructor Manual
• PowerPoint files
• Test Bank
Students: If you are looking for additional materials to improve your understanding of
this subject and improve your grades, go to McGraw-Hill Connect: connect.mheducation.com
Manager’s Hot Seat: Now instructors can put students in the hot seat with access to an
interactive program. Students watch real managers apply their years of experience when
confronting unscripted issues. As the scenario unfolds, questions about how the manager
is handling the situation pop up, forcing the student to make decisions along with the
manager. At the end of the scenario, students watch a post-interview with the manager and
view how their responses matched up to the manager’s decisions. The Manager’s Hot Seat
videos are now available as assignments in Connect.
LearnSmart: LearnSmart, the most widely used adaptive learning resource, is proven
to improve grades. By focusing students on the most important information each student needs to learn, LearnSmart personalizes the learning experience so they can study
as efficiently as possible.
SmartBook: An extension of LearnSmart, SmartBook is an adaptive ebook that helps
students focus their study time more effectively. As students read, SmartBook assesses
comprehension and dynamically highlights where they need to study more.
PART
1
Groundwork:
Understanding and
Diagnosing Change
CHAPTER 1  Managing Change: Stories and Paradoxes
CHAPTER 2  Images of Change Management
CHAPTER 3  Why Change? Contemporary Drivers and Pressures
CHAPTER 4  What to Change? A Diagnostic Approach
The central theme of the four chapters in Part 1 is groundwork. How are we to approach
an understanding of organizational change? With what approaches, perspectives, or
images of change management should we be working? What drivers and pressures
­produce organizational change? What diagnostic tools can we use in order to decide
what aspects of the organization and its operations will need to change or will benefit
from change?
1
Chapter
1
Managing Change:
Stories and Paradoxes
Learning objectives
By the end of this chapter you should be able to:
Understand how stories of change can contribute to our knowledge of theory
and practice.
LO 1.2
Explain why managing organizational change is both a creative and a rational
process.
LO 1.3
Identify the main tensions and paradoxes in managing organizational change.
LO 1.4
Evaluate the strengths and limitations of our current understanding of this field.
www.CartoonStock.com
LO 1.1
3
4  Chapter 1  Managing Change: Stories and Paradoxes
LO 1.1
LO 1.2
  Stories About Change: What Can We Learn?
Changing organizations is as messy as it is exhilarating, as frustrating as it is satisfying, as muddling-through and creative a process as it is a rational one. This book
recognizes these tensions and how they affect those who are involved in managing
organizational change. Rather than pretend that these tensions do not exist, or that they
are unimportant, we confront them head on, considering how they can be addressed and
managed, recognizing the constraints that they can impose. We also want to demonstrate how the images that we hold about the way in which change should be managed,
and of the role of change agents, affect how we approach change and the outcomes we
think are ­possible.
To begin this exploration, we present three stories of recent changes. The first concerns the turnaround of the Beth Israel Deaconess Medical Center in Boston. The second concerns the new organizational model introduced at Sears Holdings in an attempt
to restore falling sales and profits. The third concerns innovative efforts to restore falling sales and a fading brand at J. C. Penney, a retailer. These stories address different problems, but they display many common issues concerning the management of
change. Each of these accounts comes with a set of assessment questions. We would
like to ask you to think through the answers to those questions for yourself, or in a class
discussion.
Our aim is to demonstrate that stories about change can be one valuable source of
practical lessons, as well as helping to contribute to our general understanding of change.
These stories are of course distinctive, one-off. How can they contribute to knowledge
and practice in general, in other sectors and organizations? Stories are one of the main
ways of knowing, communicating, and making sense of the world (Czarniawska, 1998;
Pentland, 1999; Dawson and Andriopoulos, 2014). Our stories have actors: change leaders, other managers, staff, customers. They take decisions that lead to actions that trigger responses: acceptance, resistance, departure. There is a plot: a serious problem that
could be solved by organizational change. There are consequences: to what extent did the
change solve the problem, and were other problems created along the way? The sequence
of events unfolds in a typical manner: … and then … and then. This tells us why the outcomes were reached.
Our narratives are not just descriptions of a change process, of what happened. They
also provide us with explanations. These are process narratives. Process narratives have
several advantages over more traditional (quantitative, statistical) research methods (Mohr,
1982; Poole et al., 2000; Van de Ven and Poole, 2005):
•
•
•
•
they tell us about the context, give us a sense of the whole, a broader frame of reference;
complexity can be expressed within a coherent sequence of events;
the nature and significance of the causal factors acting on events are exposed;
the narrative patterns transcend individual cases.
This approach is based on what is called narrative knowing (Langley, 2009). Because
stories can reveal the mechanisms or logics behind a sequence of events, they are process
theories. (We will explore process perspectives on change in chapter 10.) What combinations of factors drive, slow down, accelerate, block the change process? The three stories
Chapter 1  Managing Change: Stories and Paradoxes  5
that follow explain the relative success of the organizational changes at Beth Israel, Sears,
and J. C. Penney. We will ask you to consider the extent to which those explanations, each
based on a single unique case narrative, can be applied to managing organizational change
in general, in other settings.
Although our three stories are quite different from each other, they have common features, with regard to the issues and processes that shape the outcomes of organizational
change. Despite the differences, they demonstrate common tensions and the choices
that are involved in the change process. When you have made your own assessments, in
response to the questions that precede each story, you will find our suggested answers in
the Roundup section at the end of the chapter.
LO 1.1
  The Story of Beth Israel Deaconess Medical Center
Issues to Consider as You Read This Story
1. Identify five factors that explain the success of this corporate turnaround.
2. How would you describe Paul Levy’s role and contributions to this turnaround?
3. What insights does this story have to offer concerning the role of the change leader?
4. What lessons about managing organizational change can we take from this experience
and apply to other organizations, in healthcare and in other sectors? Or, are the lessons
unique to Beth Israel Deaconess Medical Center?
The Setting
This is the story of a corporate turnaround, rescuing the organization from financial
disaster and restoring its reputation, competitiveness, and profitability. Based in Boston,
­Massachusetts, the Beth Israel Deaconess Medical Center (BID) was created in 1996 by
the merger of two hospitals. The business case for the merger was that the larger organization (over 600 beds) would be better able to compete with, for example, the Massachusetts
General Hospital and the Brigham Women’s Hospital. The two merged hospitals had different cultures. Beth Israel had a casual management style that encouraged p­ rofessional
autonomy and creativity. Deaconess Hospital was known for its rules-based, top-down
management. Staff were loyal to their own organization. After the merger, the Beth
Israel culture dominated, and many Deaconess staff, especially nurses, left to join the
competition.
The Problems
By 2002, BID was losing $100 million a year and faced “financial meltdown.” There were
problems with the quality and safety of care, with low staff morale, and with poor relationships between clinical staff and management. The media attention was damaging BID’s
reputation.
The Solutions
External management consultants recommended drastic measures to turn around the hospital’s finances, and Paul Levy was appointed chief executive officer of BID in 2002. Levy
had no healthcare background and little knowledge of hospitals. He felt that gave him an
6  Chapter 1  Managing Change: Stories and Paradoxes
advantage, as he was a “straight talker” and could act as an “honest broker.” But staff were
skeptical at first.
Levy’s turnaround strategy was based on two themes: transparency and commitment to
quality. His first action was to share with all staff the full scale of the financial difficulties,
to create “a burning platform,” from which escape would only be possible by making radical changes. His second approach was to signal absolute commitment to the continuous
improvement of quality, in order to build trust and to establish a sense of common purpose. Levy described his management style:
Perhaps I had an overly developed sense of confidence, but my management approach is that
people want to do well and want to do good and I create an appropriate environment. I trust
people. When people make mistakes it isn’t incompetence, it’s insufficient training or the
wrong environment. What I’ve learned is that my management style can work.
Phase 1:  With the hospital “bleeding money,” urgent action was necessary. Levy accepted
some of the management consultants’ recommendations, and several hundred jobs were
lost, in an attempt to restore financial balance. He refused to reduce nursing levels, but
the financial crisis was resolved.
Phase 2:  Medical staff were tired of poor relationships with management. In 2003, Levy
hired Michael Epstein, a doctor, as chief operating officer. Epstein met with each clinical department to win their support for the hospital’s nonclinical objectives and to break
down silo working. Kathleen Murray, who had joined BID in 2002, was director of performance assessment and regulatory compliance. The hospital had no annual operating
plans, and she set out to correct this, starting with two departments that had volunteered
to take part in phase 1, orthopaedics and pancreatic surgery. Other departments soon
joined in. Operating plans had four goals, addressing quality and safety, patient satisfaction, finance, and staff and referrer satisfaction. One aim was to make staff proud of
the outcomes and create a sense of achievement. Although the performance of doctors
would now be closely monitored, the introduction of operating plans was seen as a
major turning point.
Phase 3:  To help address the view that medical errors were inevitable, Levy appointed
Mark Zeidel as chief of medicine. Zeidel introduced an initiative that cut “central line
infection” rates, reducing costs as well as harm to patients and providing the motivation
for more improvements. The board of directors were not at first convinced that performance data should be published, but Levy was persuasive, and he put the information
on his public blog, which he started in 2006, and which became popular with staff, the
public, and the media, with over 10,000 visitors a day. Levy explained:
The transparency website is the engine of our work. People like to see how they compare with others, they like to see improvements. Transparency is also important for clinical leaders and our external audience of patients and insurers. We receive encouraging
feedback from patients. We’ve also managed to avoid a major controversy with the media
despite our openness. Transparency’s major societal and strategic imperative is to provide
creative tension within hospitals so that they hold themselves accountable. This accountability is what will drive doctors, nurses and administrators to seek constant improvements
in the quality and safety of patient care.
Chapter 1  Managing Change: Stories and Paradoxes  7
Other performance data were published, for the hospital and for individual departments. This included measures to assess whether care was evidence-based, effective,
safe, patient-centered, timely, efficient, and equitable. Progress in meeting priorities for
quality and safety could be tracked on the hospital’s website, and the data were used by
staff to drive quality improvements. The board also set tough goals to eliminate preventable harm and increase patient satisfaction. Every year, staff were invited to summarize
their improvement work in poster sessions, featuring the work of 95 process improvement
teams from across the hospital.
Levy hired staff with expertise in lean methods. Previously an option, training in quality and safety became mandatory for trainee doctors, who had to take part in improvement
projects. The culture was collaborative, and nurses had the respect of doctors. Patients
often chose BID for the quality of nursing care. The departmental quality improvement
directors met twice a month to share experiences. Department meetings routinely discussed adverse events. A patient care committee fulfilled a statutory requirement for
board oversight of quality and safety. The office of decision support collected data on
complication rates, infection rates, department-specific quality measures, and financial
goals. A senior nurse said: “We felt a sense of ownership with issues of quality. We have
dashboards up in the units to see how we are doing. Staff know what the annual operating goals are, as they are actively involved in setting them and integrating them into
their work.”
The Outcomes
By 2010, BID was one of the leading academic health centers in the United States, with
6,000 employees and state-of-the-art clinical care, research, and teaching. Competing
effectively with other major healthcare organizations, BID was generating annual revenues of over $1.2 billion.
Postscript
Paul Levy resigned in January 2011. He explained his decision in a letter to the board of
directors, making this available to staff and the public on his blog. The letter included the
following remarks:
I have been coming to a conclusion over the last several months, perhaps prompted by
reaching my 60th birthday, which is often a time for checking in and deciding on the
next stage of life. I realized that my own place here at BID had run its course. While I
remain strongly committed to the fight for patient quality and safety, worker-led process
improvement, and transparency, our organization needs a fresh perspective to reach new
heights in these arenas. Likewise, for me personally, while it has been nine great years
working with outstanding people, that is longer than I have spent in any one job, and I need
some new challenges.
Story Sources
Abbasi, K. (2010) Improvement in Practice: Beth Israel Deaconess Case Study. London: The
Health Foundation.
http://www.bidmc.org/
http://runningahospital.blogspot.co.uk/2011/01/transitions.html
8  Chapter 1  Managing Change: Stories and Paradoxes
LO 1.1
  The Story of Sears Holdings
Issues to Consider as You Read This Story
1. How would you describe Eddie Lampert’s leadership style?
2. How would you assess his approach to implementing major organizational change—in
this case, restructuring the whole company with a new organizational model?
3. On balance, would you assess his organizational model as having been a success, or not?
4. What lessons about managing organizational change can we take from this experience
and apply to other organizations, in this or other sectors?
The Setting
Sears Holdings Corporation was a specialty retailer, formed in 2005 by the merger of
Kmart and Sears Roebuck. The merger was the idea of Eddie Lampert, a billionaire hedge
fund manager who owned 55 percent of the new company and who became chairman.
Based in Illinois, the company operated in the United States and Canada, with 274,000
employees, 4,000 retail stores, and annual revenues (2013) of $40 billion. Sears and
Kmart stores sold home merchandise, clothing, and automotive products and services. The
merged company was successful at first, due to aggressive cost cutting.
The Problem
By 2007, two years after the merger, profits were down by 45 percent.
The Chairman’s Solution
Lampert decided to restructure the company. Sears was organized like a classic retailer.
Department heads ran their own product lines, but they all worked for the same merchandising and marketing leaders, with the same financial goals. The new model ran Sears
like a hedge fund portfolio with autonomous businesses competing for resources. This
“internal market” would promote efficiency and improve corporate performance. At first,
the new structure had around 30 business units, including product divisions, support functions, and brands, along with units focusing on e-commerce and real estate. By 2009, there
were over 40 divisions. Each division had its own president, chief marketing officer, board
of directors, profit and loss statement, and strategy that had to be approved by Lampert’s
executive committee. With all those positions to fill at the head of each unit, executives
jostled for the roles, each eager to run his or her own multibillion-dollar business. The new
model was called SOAR: Sears Holdings Organization, Actions, and Responsibilities.
When the reorganization was announced in January 2008, the company’s share price
rose 12 percent. Most retail companies prefer integrated structures, in which different
divisions can be compelled to make sacrifices, such as discounting goods, to attract more
shoppers. Lampert’s colleagues argued that his new approach would create rival factions.
Lampert disagreed. He believed that decentralized structures, although they might appear
“messy,” were more effective, and that they produced better information. This would give
him access to better data, enabling him to assess more effectively the individual components of the company and its assets. Lampert also argued that SOAR made it easier to
divest businesses and open new ones, such as the online “Shop Your Way” division.
Chapter 1  Managing Change: Stories and Paradoxes  9
Sears was an “early adopter” of online shopping. Lampert (who allegedly did all his
own shopping online) wanted to grow this side of the business, and investment in the stores
was cut back. He had innovative ideas: smartphone apps, netbooks in stores, a multiplayer
game for employees. He set up a company social network, “Pebble,” which he joined
under the pseudonym “Eli Wexler,” so that he could engage with employees. However,
he criticized other people’s posts and argued with store associates. When staff worked out
that Wexler was Lampert, unit managers began tracking how often their employees were
“Pebbling.” One group organized Pebble conversations about random topics so that they
would appear to be active users.
The Chairman
At the time of the merger, investors were confident that Lampert could turn the two companies around. One analyst described him as “lightning fast, razor-sharp smart, very direct.”
Many of those who worked for him described him as brilliant (although he could overestimate his abilities). The son of a lawyer, it was rumored that he read corporate reports and
finance textbooks in high school, before going to Yale University. He hated focus groups
and was sensitive to jargon such as “vendor.” His brands chief once used the word “consumer” in a presentation. Lampert interrupted, with a lecture on why he should have used
the word “customer” instead. He often argued with experienced retailers, but he had good
relationships with managers who had finance and technology backgrounds.
From 2008, Sears’ business unit heads had an annual personal videoconference with
the chairman. They went to a conference room at the headquarters in Illinois, with some
of Lampert’s senior aides, and waited while an assistant turned on the screen on the wall
opposite the U-shaped table and Lampert appeared. Lampert ran these meetings from his
homes in Greenwich, Connecticut; Aspen, Colorado; and subsequently Florida, earning
him the nickname “The Wizard of Oz.” He visited the headquarters in person only twice a
year, because he hated flying. While the unit head worked through the PowerPoint presentation, Lampert didn’t look up, but dealt with his emails, or studied a spreadsheet, until he
heard something that he didn’t like—which would then lead to lengthy questioning.
In 2012, he bought a family home in Miami Beach for $38 million and moved his
hedge fund to Florida. Some industry analysts felt that Sears’ problems were exacerbated
by Lampert’s “penny pinching” cost savings, which stifled investment in its stores. Instead
of store improvements, Sears bought back stock and increased its online presence. In
2013, Lampert became chairman and chief executive, the company having gone through
four other chief executives since the merger.
The Outcomes
Instead of improving performance, the new model encouraged the divisions to turn against
each other. Lampert evaluated the divisions, and calculated executives’ bonuses, using a
measure called “business operating profit” (BOP). The result was that individual business units focused exclusively on their own profitability, rather than on the welfare of the
company. For example, the clothing division cut labor to save money, knowing that floor
salesmen in other units would have to pick up the slack. Nobody wanted to sacrifice business operating profits to increase shopping traffic. The business was ravaged by infighting
as the divisions—behaving in the words of one executive like “warring tribes”—battled
10  Chapter 1  Managing Change: Stories and Paradoxes
for resources. Executives brought laptops with screen protectors to meetings so that their
colleagues couldn’t see what they were doing. There was no collaboration, no cooperation.
The Sears and Kmart brands suffered. Employees gave the new organization model a new
name: SORE.
The reorganization also meant that Sears had to hire and promote dozens of expensive
chief financial officers and chief marketing officers. Many unit heads underpaid middle
managers to compensate. As each division had its own board of directors, some presidents sat on five or six boards, which each met monthly. Top executives were constantly
in meetings.
The company posted a net loss of $170 million for the first quarter in 2011. In
­November, Sears discovered that rivals planned to open on Thanksgiving at midnight, and
Sears executives knew that they should also open early. However, it wasn’t possible to get
all the business unit heads to agree, and the stores opened as usual, the following morning. One vice president drove to the mall that evening and watched families flocking into
rival stores. When Sears opened the next day, cars were already leaving the parking lot.
That December, Sears announced the closure of over 100 stores. In February 2012, Sears
announced the closure of its nine “The Great Indoors” stores.
From 2005 to 2013, Sears’ sales fell from $49.1 billion to $39.9 billion, the stock value
fell by 64 percent, and cash holdings hit a 10-year low. In May 2013, at the annual shareholders’ meeting, Lampert pointed to the growth in online sales and described a new app,
“Member Assist,” that customers could use to send messages to store associates. The aim
was “to bring online capabilities into the stores.” Three weeks later, Sears reported a first
quarter loss of $279 million, and the share price fell sharply. The online business contributed 3 percent of total sales. Online sales were growing, however, through the “Shop Your
Way” website. Lampert argued that this was the future of Sears, and he wanted to develop
“Shop Your Way” into a hybrid of Amazon and Facebook.
Story Sources
Kimes, M. 2013. At Sears, Eddie Lampert’s warring divisions model adds to the troubles.
Bloomberg Businessweek, July 11.
http://www.businessweek.com/articles/2013-07-11/
at-sears-eddie-lamperts-warring-divisions-model-adds-to-the-troubles.
http://en.wikipedia.org/wiki/Sears_Holdings
http://www.forbes.com/profile/edward-lampert
http://www.searsholdings.com
http://www.shopyourway.com
LO 1.1
  The Story of J. C. Penney
Issues to Consider as You Read This Story
1. What aspects of Ron Johnson’s turnaround strategy were appropriate, praiseworthy?
2. What mistakes did Ron Johnson make?
3. What would you suggest he could have done differently?
Chapter 1  Managing Change: Stories and Paradoxes  11
The Setting
J. C. Penney Company, Inc. (known as JCPenney, or JCP for short) was one of America’s
largest clothing and home furnishing retailers. An iconic brand, founded by James Cash
Penney and William Henry McManus in 1913, the headquarters were in Plano, Texas. By
2014, with annual revenues of around $13 billion, and 159,000 employees, JCP operated
1,100 retail stores and a shopping website at jcp.com. JCP once had over 2,000 stores,
back in 1973, but the 1974 recession led to closures. The company’s main customers were
middle-income families, and female. JCP had a “promotional department store” pricing
strategy with a confusing system of product discounts. There were around 600 promotions and coupon offers a year. Mike Ullman, chief executive since 2004, had grown sales
with a strong private label program, with brands such as Sephora, St. John’s Bay clothing, MNG by Mango, and Liz Claiborne. Another 14 stores were opened in 2004, and the
e-commerce business exceeded the $1 billion revenue mark in 2005.
The Problems
When the stock reached an all-time high of $86 in 2007, JCP was performing well. However, the recession in 2008 affected sales badly; core customers had mortgage and job
security problems. Between 2006 and 2011, sales fell from $19.9 billion to $17 billion.
JCP had one of the lowest annual sales per square foot for department stores (around
$150). Macy’s and Kohl’s, the main competition, had sales per square foot of around $230.
In 2011, the catalogue business, with nineteen outlet stores, was closed, along with seven
other stores and two call centers. The New York Times accused JCP of “gaming” Google
search results to increase the company’s ranking in searches, a practice called “spamdexing.” Google’s retaliation dramatically reduced JCP’s search visibility.
In 2008, JCP struck a deal with Ralph Lauren to launch a new brand, American Living,
sold only in their stores. But JCP was not allowed to use Ralph Lauren’s name or the Polo
logo. The idea failed. Sales continued to fall. In 2011, 50 to 70 percent of all sales were
discounted, based on a “high-low” pricing strategy. An item would be priced initially at,
say, $100. Customers would see the product and like it, but not like the price. After six
weeks, the price was marked down, say, to $50, and the goods started to sell. But those
items had been sitting on a shelf doing nothing for over a month.
The Solutions
In 2010, two billionaire investors, Bill Ackman and Steven Roth, approached Ullman with
an offer to buy large amounts of JCP stock. They felt that the company had potential.
Ackman and Roth were invited to join the board, attending their first meeting in February
2011. Leaving that meeting, Ullman was involved in a serious car accident, suffered multiple injuries, and spent three months in a neck brace, making his existing health problems
worse. The board wanted a replacement, and there were no internal candidates. Ullman
suggested Ron Johnson, who was working for Steve Jobs at Apple. Johnson then met with
Ackman and Roth to explore possibilities. Johnson said that he was concerned about the
lack of innovation in department stores, and he brought a positive, “can do” approach
more typical of Silicon Valley than retailing.
In November 2011, Ron Johnson was appointed chief executive officer. JCP stock rose
17 percent on the announcement. Johnson had been responsible for setting up Apple’s
12  Chapter 1  Managing Change: Stories and Paradoxes
highly profitable retail stores, and he had also been successful at another retailer, Target.
In December, after one month in post, he presented to the board his plans to revive the
company with a fundamentally new way of doing business. The board agreed. Johnson
told a journalist, “I came in because they wanted to transform; it wasn’t just to compete or
improve.” In a board update before leaving, Ullman noted that Johnson had not asked him
any questions about how the business was currently running.
Johnson moved quickly. First, he wanted to transform the culture. In February 2012,
he installed a large transparent acrylic cube in the company headquarters. The cube was
a version of the new company logo. Johnson told staff that he did not want to see the old
logo anywhere in the building. For a week, staff threw “old Penney” items into the cube:
T-shirts, mugs, stationery, pens, tote bags.
Second, no more promotions. Why wait six weeks to mark an item down to the price at
which it would sell? Why not sell at that price from the start? Johnson simplified the pricing structure with “everyday” prices, which were what used to be sale values; “monthly
value,” for selected items; and “best price,” linked to paydays—the first and third Fridays
of each month. The stores were tidier, with no messy clearance racks, and the customer
relationship became “fair and square” (another slogan).
Third, Johnson developed a “store within a store” strategy, with each store becoming a
collection of dozens of separate “boutiques.” He wanted a higher percentage of younger
and higher-priced brands such as Joe Fresh clothes, Martha Stewart home furnishings,
Michael Graves Designs, Happy Chic, and furniture from the British designer Sir ­Terence
Conran. These new boutiques, of course, were not interested in having their brands diluted
by discount pricing. Traditionally, JCP got 50 percent of sales from its own brands, which
were displayed by product (bath mats) rather than brand (Martha Stewart). When a director asked him when he was going to test his new approach, Johnson replied that he had
made his decision relying, like Steve Jobs, on instinct. Hundreds of stores were to be
redesigned by the end of 2012. JCP already sold Levi’s jeans, but Johnson wanted 700
Levi’s boutiques in the stores; building these boutiques cost JCP $120 million. Southpole,
a clothing brand that appealed to black and Hispanic customers, was dropped. St. John’s
Bay, a less fashionable women’s clothing brand generating $1 billion annual revenues,
was dropped.
The speed of these changes would be motivating and unifying, Johnson thought. He
wanted to rebrand an old, stale company with a modern name and logo. Johnson was a
charismatic and passionate presenter. He said that the changes would be painful and would
take four years to complete. The board were awed by the scale of the transformation, but
they did not challenge him. Johnson talked about the “six Ps”: product, place, presentation, price, promotion, personality. One analyst noted, “One ‘P’ that seems to be missing
is people.” Employees were also excited about the developments, especially when Johnson
threw them a lavish party, costing $3 million.
Johnson wanted to make checkout simpler, with roving clerks taking payment on iPads.
Millions were spent on equipping stores with Wi-Fi. He also wanted all items to have an
RFID tag, but that proved to be too expensive. He also decided to separate the store buying
group from the JCP.com buying group, an approach used by Apple. However, this meant
that there was no coordination between what was available online and what customers
could find in the stores. Johnson was more concerned with “the look and feel” of the
physical stores, and less support went to the website.
Chapter 1  Managing Change: Stories and Paradoxes  13
Johnson hired his own new team of top executives, who distanced themselves from
the existing staff; most of them refused to move to Dallas, flying there weekly instead.
If you were not part of this new team, you were out of the loop. One director called the
“old” staff DOPES: dumb old Penney’s employees. Veterans called the new team the Bad
Apples. The new human resources director cancelled performance reviews as being too
bureaucratic. This made it easier to fire people; managers did not have to consult performance data before making that decision. The new team recruited Ellen DeGeneres—a
television celebrity and lesbian—to appear in JCP advertising. A conservative group, One
Million Moms, threatened a boycott, claiming that, “DeGeneres is not a true representation of the type of families that shop at their store. The majority of J.C. Penney customers
will be offended and chose to no longer shop there.” The relationship with DeGeneres was
discontinued. Johnson introduced a new exchange policy; customers could return an item,
without a receipt, and receive cash. This policy was immediately abused, and one popular
item was returned so often that its sales turned negative. The plan to put Martha Stewart
stores into JCP stalled when Macy’s sued, claiming breach of its own agreement with the
home furnishings brand.
The Outcomes
The results published in February 2012 were poor. Revenues had fallen by $4.3 billion,
making a $1 billion loss. The stock fell to $18, and Standard & Poor’s cut JCP’s debt
rating to CCC+ (a long way from “triple A”). In April 2012, JCP laid off 13 percent of
its office staff in Texas, closed one of its call centers, and also “retired” many managers, supervisors, and long-serving employees on the grounds that new working practices
required less oversight. In May 2012, store sales were down 20 percent compared with
the previous year. Johnson had projected a short-term drop in sales, but not by that much.
He commented that, “I’m completely convinced that our transformation is on track,” leading to a 5.9 percent rise in the stock. In July 2012, a further 350 headquarters staff were
laid off. By October 2012, online sales were almost 40 percent down over the year. It
was estimated that the decision to separate the two buying groups had cost JCP around
$500 million.
During Johnson’s two-year tenure, the price of the JCP stock fell by almost 70 p­ ercent,
and sales fell in 2012 by 25 percent, resulting in a net loss of $985 million. JCP had
alienated its traditional customers, who were used to shopping for discounts, but had not
attracted new ones, and 20,000 employees had lost their jobs. In March 2013, Steven Roth,
who had backed Johnson’s appointment but who had now lost faith, sold over 40 ­percent of
his JCP shares at a loss of $100 million. Bill Ackman resigned from the board in August,
selling his shares at a loss of $470 million.
In April 2013, the company chairman told Johnson that the board would be accepting
his resignation; within a few weeks, all but one of the other senior staff hired by Johnson
had also left. Mike Ullman was reinstated. He immediately restored the old promotional
pricing model. In May, JCP ran an “apology ad,” with an earnest female voice admitting, “We learned a very simple thing, to listen to you.” A coincidence of timing, in June,
­Johnson’s renovated home departments opened in stores, selling Jonathan Adler lamps,
Conran tables, and Pantone sheets. Too expensive for core customers, these departments
failed and were withdrawn. However, traditional sales in stores started to grow slowly, and
by November, Internet sales had increased by 25 percent on the previous year (Ullman had
14  Chapter 1  Managing Change: Stories and Paradoxes
reintegrated the stores and online buyers). Sales of the private brand merchandise lines
that had been restored also began to return to previous levels.
The JCP brand had been damaged. Sales per square foot of shopping space had fallen
steadily since 2010 as shoppers turned to Macy’s and Kohl’s. Macy’s sales per square foot
had risen. With sales and profitability falling, in January 2014, JCP closed 33 underperforming stores (3 percent of the total), with 2,000 layoffs. This would reduce annual operating costs by $65 million, but the company had made a loss of $1.4 billion in 2013. After
100 years in business, with Mike Ullman back in charge, JCP stock continued to fall in the
first half of 2014. Commenting on Johnson’s legacy at JCP, one analyst said, “Nobody will
be attempting something similar for a very long time.”
Story Sources
Reingold, J., Jones, M., and Kramer, S. 2014. How to fail in business while really, really trying.
Fortune, July 4, 169(5):80–92.
http://ir.jcpenney.com/phoenix.zhtml?c=70528&p=irol-homeprofile
http://www.jcpenney.com/
http://en.wikipedia.org/wiki/J._C._Penney
http://www.forbes.com/sites/hbsworkingknowledge/2013/08/21/what-went-wrong-at-j-c-penney/
LO 1.3
LO 1.4
  Tension and Paradox: The State of the Art
tension when two or more ideas are in opposition to each other
paradox when two or more apparently correct ideas contradict each other
From a management perspective, organizational change is seen as problematic. How do
we persuade people to accept new technologies that will make their skills, knowledge,
and working practices obsolete? How quickly can people who find themselves with
new roles, and new relationships, learn how to operate effectively after a major reorganization? How about this new system for capturing and processing customer information? We prefer the old system because it works just fine. Change can be difficult.
Change that is not well managed, however, can generate frustration and anger.
Most estimates put the failure rate of planned changes at around 60 to 70 percent
(Keller and Aiken, 2008; Burnes, 2011; Rafferty et al., 2013). In a global survey of 2,000
executives by the consulting company McKinsey, only 26 percent of respondents said that
their transformational changes had successfully improved performance and enabled the
organization to sustain further improvements (Jacquemont et al., 2015). There is, therefore, no shortage of advice. However, that advice is both extensive and fragmented. The
literature—research and other commentary—can be difficult to access, and to absorb, for
the following reasons (Iles and Sutherland, 2001):
multiple perspectives there are contributions from several different schools, academic disciplines, and theoretical perspectives—there are several literatures
conceptual spread the concepts that are used range in scale, from whole schools of
thought or perspectives, through methodologies, to single tools
fluid boundaries depending on the definitions of change and change management
in use, the boundaries of the topic vary between commentators
Chapter 1  Managing Change: Stories and Paradoxes  15
rich history interesting and useful contributions date from the 1940s, and recent
work has not necessarily made previous commentary irrelevant
varied settings as with our stories, evidence and examples come from a range of
organizational types and contexts, using different methodologies
LO 1.2
Multiple perspectives is the most significant of these properties of the literature. That is
usually seen as a problem—“the experts can’t agree.” We disagree, and we prefer instead
to emphasize the advantages in adopting a multiple perspectives approach to the management of organizational change. First, a perspective that works in one context may not work
well in a different setting: we will explore contingency frameworks in chapter 10. Second,
this is a way of opening up debate: “Should we define our problem in these terms, or in
some other way?” Third, multiple perspectives encourage the search for creative solutions:
“Can we combine ideas from two or more approaches and adapt them to fit our context?”
We will meet all of these characteristics again in later chapters.
The practicing manager, less interested in theoretical perspectives, wants to know
“what works?” There are difficulties in providing a clear answer to that question, too, for
the following reasons:
many variables even with simple changes, the impact is multidimensional, and
measuring “effectiveness” has to capture all of the factors to
­produce a complete picture
slippery causality it is difficult to establish cause and effect clearly across complex
processes that unfold over time, usually at the same time as lots
of other changes
many stakeholders different stakeholders have different views of the nature of the
problem, the appropriate solution, and the desirable outcomes—
whose measures to use?
LO 1.3
What works well in one setting may not work well in another. The broad outlines of a good
change strategy are widely known and accepted. What matters is the detail, concerning how
a strategy or intervention is designed for a particular organization. For example, most practical guidelines begin by suggesting that change will be more readily accepted if there is a
“sense of urgency” that underpins the business case for change. That sense of urgency can
be seen in the financial meltdown at Beth Israel and the falling profitability at both Sears
and J. C. Penney. Note, however, that there are many different ways in which a sense of
urgency can be established and communicated. Some methods may emphasize the “burning
platform” in a way that heightens anxiety and encourages escape. Other approaches might
encourage instead a “burning ambition” to confront and solve the problem.
What works depends on the context. It is rarely possible to just do what someone else
has done. Change is in part a rational process; we know what kinds of issues need to be
taken into account. Change is also a creative process; it is always necessary to design—to
create—an approach that is consistent with local circumstances. Accounts of how other
organizations have handled change can be a rich source of ideas that can be adapted creatively to address similar problems in other settings.
The field of change management is also rich in tensions and paradoxes. We will explore
six of these briefly, in the form of key questions. These issues will also appear in later
16  Chapter 1  Managing Change: Stories and Paradoxes
chapters. You will probably encounter further tensions, in your reading across the subject
and in practice. How these tensions and paradoxes are managed has implications for the
process and outcomes of change.
Transformational Change, or Sweat the Small Stuff?
Where to start—with sweeping radical changes, or a gradual process of incremental initiatives? We will explore a simple model for “locating” the scale of change in the next section.
However, faced with geopolitical, economic, demographic, sociocultural, and technological developments, most organizations seem to think in terms of deep transformational
change. The Beth Israel, Sears, and J. C. Penney stories reflect this view, implementing
whole-organizational changes to deal with survival threats. This may mean that minor
changes are seen as less valuable and important and are overlooked in favor of the “high
impact” initiatives. This could be a mistake. Moore and Buchanan (2013), for example,
demonstrate how an initiative designed to fix small problems rapidly in an acute hospital
generated major performance improvements for almost no cost. In this case, “sweating
the small stuff” was an enabling strategy, getting people involved (the small problems
were identified by staff), establishing a reputation for getting things done, and creating the
platform for further developments. Shallower changes can facilitate and complement the
deeper initiatives, and evidence suggests that these should not be underestimated.
Systematic Tools, or Messy Political Process?
If one looks below the surface of cases of managed change, one can always discern the
ever-present effect of the “other side” of organizational life. The ambiguities, uncertainties,
ambivalences, tensions, politics and intrigues are always involved, and are influential and
addressed in some manner—however half-cocked, fudged, guessed at, messed up or little
understood.
(Badham, 2013, p. 24)
Most of the practical guidance on change implementation (chapters 9 and 10) suggests a
straightforward sequence of steps, with advance support from diagnostic tools and assessments
(chapters 4 and 5). This is a systematic process, with helpful tools. We have already suggested
that change is a creative process as well as a rational one. It is also a political process. Organizations are political systems, and because there are often “winners and losers,” change is a political process. The systematic tools-based approach, the creativity, and the politics work hand in
hand. We will explore the political skills that change managers require later (chapter 12). It is
important to recognize that, despite what the textbook or the change management consultant
says, those systematic tools are only part of the answer to “how to do it, and how to get it right.”
Organizational Capabilities, or Personal Skills?
Beth Israel, you may remember, was formed by the merger of two organizations with different cultures. One had a casual management style that encouraged professional autonomy and creativity. The other was known for its rules-based, top-down management. The
research evidence suggests that the “casual” style is likely to be more open to change, and
that this will be a more “agile” and responsive organization. Top-down management and
rules suggest that change will be slow, if it happens at all, dependent on due process and
committee cycles. In other words, we need to pay attention to organizational capabilities
to understand the change drivers and barriers (chapter 5). The skills of change leaders are
Chapter 1  Managing Change: Stories and Paradoxes  17
of course also important. However, skilled change agents struggle in rules-based organizations, and agile and responsive organizations still need capable change agents. We will
explore the capabilities of effective change managers in chapter 12.
Rapid Change, or the Acceleration Trap?
The pace of change—social, political, economic, technological—appears to have accelerated.
Can organizations keep up? There is now a considerable amount of advice on how to speed up
change, to accelerate the pace. Rapid change, however, can cause problems. Can people keep
up? Change too fast, and you run the danger of destabilizing the organization and creating
staff burnout. There is also, therefore, advice on how to manage “painless change” and how to
avoid “the acceleration trap.” We will explore the dilemma of pace further in chapter 3.
Change Leader, or Distributed Leadership?
It is widely assumed that change needs a champion, a senior figure, who sets the direction,
inspires others, and drives the project. A lot of work has gone into identifying the competencies of the “ideas champion,” the effective change leader. This parallels work on the capabilities of effective leaders in general (although most researchers argue that leadership success is
highly contingent). However, in most organizations, change is not a solo performance but a
team effort. There is usually a “guiding coalition” of more or less senior managers, who guarantee permission for change, oversee progress, and unblock problems that arise. Research has also
shown how change is driven by large numbers of organizational members, in an approach that
is also called “distributed leadership,” “leadership constellations,” or “leadership in the plural.”
Learning Lessons, or Implementing Lessons?
Change following crises, accidents, misconduct, failures, and other extreme events
often does not happen. There is always an investigation, which produces recommendations for preventing such an event from happening again (or at least reducing the probability). The evidence shows that those recommendations are often ignored. One might
assume that, in such circumstances, change would be rapid, straightforward, and welcome. The distinction between passive learning (identifying lessons) and active learning (implementing changes) is important here. The latter does not automatically follow.
Why is that not the case? In exploring “why organizations change” in chapter 3, we
will also consider why organizations do not change, when they perhaps should.
Change Has Never Been So Fast
That this is an age of change is an expression heard
frequently today. Never before in the history of
mankind have so many and so frequent changes
occurred. These changes that we see taking place
all about us are in that great cultural accumulation
which is man’s social heritage. It has already been
shown that these cultural changes were in earlier
times rather infrequent, but that in modern times
they have been occurring faster and faster until
today mankind is almost bewildered in his effort
to keep adjusted to these ever increasing social
changes. This rapidity of social change may be due
to the increase in inventions which in turn is made
possible by the accumulative nature of material culture (i.e., technology).
Source: Ogburn (1922), pp. 199–200.
18  Chapter 1  Managing Change: Stories and Paradoxes
The perceptive reader will have noticed that the answer to each of these six paradoxes,
these six questions, is in each case “both.” We need big change and small change. Change
is at the same time a systematic process and a political one. We need both organizational
and individual capabilities. The pace of change must, if possible, vary with circumstances.
Change is almost always driven by “a cast of characters” that includes one or more champions and many supporters. There is no point in learning lessons if we do not then implement them. As noted earlier, the way in which these tensions are confronted and managed
both drives and constrains the change process, and influences the outcomes.
LO 1.4
  Assessing Depth of Change
We have noted the tension between “transformational change and the small stuff.”
Depth is one metaphor that can be used to categorize change. Figure 1.1 presents a
framework for that assessment.
FIGURE 1.1
Assessing Depth of Change
Off the scale
Deeper
Deep change
Disruptive innovation
Frame-breaking, mold-breaking
Redraw dramatically organization and sector boundaries
Paradigm shift, strategic change
New ways of thinking and solving problems, whole system change
New ways of doing business
Change the mission, vision, values, the organization’s philosophy, in
order to symbolize a radical shift in thinking and behavior
Change the organization’s definition of success
Create new goals, objectives, targets
Sustaining
innovation
Improve business planning to symbolize a shift in thinking
Tighten up on documentation, reporting, controls
Reallocate resources
Grow some departments, cut others, create new units
Shallow change
Fine tuning: cut costs, improve efficiencies
Constantly “nibble away” making minor improvements
Not on the scale
“Sweat the small stuff”—quickly solve the minor annoying problems
that nobody has bothered to fix; “grease the wheels”
Chapter 1  Managing Change: Stories and Paradoxes  19
At the bottom of this figure sits the “small stuff” that may not even be regarded as
“change.” In the middle of the scale we have “sustaining innovation,” which involves improving on current practices. At the top of the scale is “disruptive innovation,” which involves
radically new business models and working methods (Christensen, 2000). One obvious
point to make is that, in considering change in an organization, the proposed solution should
be consistent with the diagnosis of the problem. Using shallow changes to address strategic
challenges may not be appropriate, and attempting to solve minor difficulties with disruptive
innovation could consume disproportionate amounts of time and resources.
Shallow changes are usually easier to implement than frame-breaking changes. Transformational “off the scale” changes are more challenging because they are costly and timeconsuming, and they affect larger numbers of people in more significant ways, potentially
generating greater resistance. In most cases, many changes are likely to be under way at
the same time, at different depths. Recognizing this, many organizations have established
corporate project or program management offices (PMOs) to support and coordinate their
initiatives (Ward and Daniel, 2013). The U.S. Project Management Institute’s white paper
(2012) gives examples of the aims and benefits of PMOs at the State Auto insurance company in Ohio and the National Cancer Institute in Maryland.
One of the tensions in this framework concerns the ambitions of the individual manager. When interviewed for the next promotion, stories about the impact of the deep transformations for which one has been responsible are typically more impressive than stories
about minor stuff.
LO 1.4
  What’s Coming Up: A Road Map
This text is divided into three parts. Part 1, including this chapter, sets out the groundwork, and is concerned with understanding and diagnosing change, and with different
images of change management. Part 2 focuses on implementation, exploring the substance of change, the role of vision, managing resistance, developing communication
strategies, and several approaches to the implementation process. Part 3 examines two
running threads that relate to all of the previous chapters. The first concerns managing
the sustainability of change, which we argue has to be considered from the beginning
and not managed as an afterthought. The second running thread is an assessment of
what it takes to be an effective change manager—which is, of course, the theme of the
book as a whole. Figure 1.2 sets out a road map, an overview of the content.
One of the main assumptions underpinning this road map is that our images of the roles
of change leaders affect how we approach the other issues on the map. Remember, for
example, how the different change leadership styles adopted by Paul Levy at Beth Israel,
Eddy Lampert at Sears, and Ron Johnson at J. C. Penney colored their approaches to
communicating the changes that they wanted to implement. This explains why “images,”
chapter 2, is at the center of the figure. However, by necessity, a book such as this follows a linear sequence for presentational reasons. This is not necessarily the sequence
in which change leaders will need to consider these issues, or in which instructors will
wish to introduce and explore these themes. What will work best depends on context. In
some cases, the question of “vision” may be fundamental to the change process, and it
would be unwise to proceed until that issue has been resolved. In many change models
20  Chapter 1  Managing Change: Stories and Paradoxes
FIGURE 1.2
To Be an Effective Change Manager, This Is What You Need …
to understand the
pressures and drivers
for change, internal and external
to diagnose the
nature and depth
of the changes required and
individual and organizational readiness
Part 1 chapters 3 and 4
to be aware of
change manager
images,
and to see the change
process through
different lenses:
director
coach
navigator
interpreter
caretaker
nurturer
Part 1 chapters 1 and 2
to determine
what is going to change
to develop a credible and compelling
vision
of the organization’s future
to design “high impact”
change communication strategies
to anticipate and respond to
resistance to change
to decide how the process will be driven:
organization development and sensemaking approaches
to decide how the process will be driven:
checklist, process, and contingency
approaches
Part 2 chapters 5 to 10
strategies to embed change and
manage sustainability
effective change managers
individuals and teams
Part 3 chapters 11 and 12
and textbooks, the question of sustainability is presented at the end, as it is here. However, if sustainability is not built into change implementation from the beginning, then this
may become an unnecessary problem. Communication is another issue that is typically
involved throughout the change process.
This road map comes with an added caution. If you follow the recipe correctly, that
cake should be perfect; enjoy. However, success is not guaranteed by following a set of
change implementation guidelines. There are two main reasons for this. First, designing
Chapter 1  Managing Change: Stories and Paradoxes  21
a change process is a task with both technical and creative components; blending these
components can in many circumstances be a challenging business involving much trial
and error. Second, what works depends on organizational context, which is not stable but
which can change suddenly and in unpredictable ways. External conditions can change,
intensifying or removing the pressures for change. Budget considerations may mean that
resources are diverted elsewhere. Key stakeholders change their minds and shift from supporting to resisting. There are numerous factors that are not under the control of change
leaders, and things go wrong despite careful planning and preparation. This is one reason
why, as chapter 12 explains, resilience or “bouncebackability” is a core attribute for effective change leaders.
LO 1.1
  Change Diagnostic: The Beth Israel Story
Here are the four questions that you were asked to consider while reading the Beth
Israel story, followed by our suggested answers:
1. Identify five factors that explain the success of this corporate turnaround.
2. How would you describe Paul Levy’s role and contributions to this turnaround?
3. What insights does this story have to offer concerning the role of the change leader?
4. What lessons about managing organizational change can we take from this experience
and apply to other organizations, in healthcare and in other sectors? Or, are the lessons
unique to Beth Israel Deaconess Medical Center?
The story of this turnaround has been cited as one from which other healthcare organizations can learn, in other countries. The account on which this case is based was commissioned by the Health Foundation in the United Kingdom. As we will see, many of the
change management issues raised here are common and can be found in other sectors and
cultures. While it is always possible to argue that healthcare is “special” in some respects,
many of the change management concerns are generic.
1. Identify five factors that explain the success of this corporate turnaround.
• The sense of urgency, the “burning platform,” created deliberately by the new chief
executive, who was open with all staff about the true position concerning the hospital’s finances.
• The focus that was consistently maintained on improving the quality and safety of
patient care, which appealed (perhaps more than budget layouts) to the professional
values of clinical staff.
• The phased approach that involved, first and quickly, fixing the finances; second,
repairing medical-managerial relationships and getting staff involved in operational
plans; and third, focusing on safety issues and eliminating harm. Frontline staff
involvement was key.
• Making hospital and department performance data available to staff, the public, and
the media, to inspire pride in achievement and to stimulate further improvements.
• The creation of a “leadership constellation” through the appointment of other senior
staff who understood and who supported the chief executive’s goals and strategy
(Denis et al., 2001).
22  Chapter 1  Managing Change: Stories and Paradoxes
2. How would you describe Paul Levy’s role and contributions to this turnaround?
• Did Paul Levy actually change anything directly? He described his style as “creating
the environment” that enabled other people to do good work.
• One of his main contributions was to insist on transparency, about the hospital’s
financial problems and with performance data. That transparency may have been
uncomfortable for some, but it created pride in achievement and the motivation for
continuous improvement.
• A second key contribution concerned his consistency of purpose, the relentless
focus on the quality and safety of patient care, which were issues that engaged and
motivated clinical staff.
• His innovative use of the Internet and his personal blog about “running a hospital”
made sure that everyone—staff, patients, the wider community, the media—knew
what he was thinking and doing and why, building respect and trust.
• He stayed with BID for nine years. Not many chief executives stick around for this
long. But tenure helps to build influence and reinforces the consistency of purpose.
3. What insights does this story have to offer concerning the role of the change
leader?
• Levy had no healthcare background. Maybe this means that one does not need specialist sector knowledge and experience to drive a corporate turnaround. But he
made sure that he had access to those specialist resources though his other senior
appointments.
• He had confidence in his management approach. That confidence may be as important as the style—maybe a different style, applied consistently, could be just as
effective, especially when it involved laying off a number of staff soon after taking
up his new post, and standing up to the board of directors and defending a view different from theirs.
• The role of a change leader is a demanding one, and it can be difficult to maintain
for long periods. It is necessary to recognize when it is time to leave—and also
to know when leaving would damage the project. Levy departed only after BID’s
financial, clinical, and operational performance goals had been achieved and the
future of the hospital was secure.
4. What lessons about managing organizational change can we take from this experience and apply to other organizations, in healthcare and in other sectors? Or, are
the lessons unique to Beth Israel Deaconess Medical Center?
This is controversial. A lot of the research evidence concerning organizational change
management—what works and what doesn’t—relies on case study accounts such as this.
Could an approach to rapid and radical organizational change that worked in a large hospital in Boston be applied to a small software design company in Sacramento? Looking
at the details, the answer is probably “no”; the software company doesn’t have to worry
about medical engagement and patient safety metrics. Looking at the approach in general,
however, the answer is probably “yes.” If our software company was losing money and
reputation, a new “straight talking” chief executive with clear and consistent goals, an
inclusive management style, a strong management team, and a transparent approach to the
use of performance data to motivate improvement could be a highly effective combination.
Chapter 1  Managing Change: Stories and Paradoxes  23
In other words, if we look beyond the details, we can see a number of actions that
could well be applied in other settings. Also, when one gathers a number of such stories,
of successes and failures, similar patterns emerge, especially with regard to establishing a
sense of urgency and purpose, creating a strong and stable senior team, using “leadership
constellations” to drive change, a participative management style, staff engagement, open
communications, and transparency of performance information that is used for feedback,
performance management, motivation, and reward purposes. The Beth Israel story is a
compelling one, but it is neither idiosyncratic nor unique.
LO 1.1
  Change Diagnostic: The Sears Holdings Story
Here are the four questions that you were asked to consider while reading the Sears
Holdings story, followed by our suggested answers:
1. How would you describe Eddie Lampert’s leadership style?
2. How would you assess his approach to implementing major organizational change—in
this case, restructuring the whole company with a new organizational model?
3. On balance, would you assess his organizational model as having been a success, or not?
4. What lessons about managing organizational change can we take from this experience
and apply to other organizations, in this or other sectors?
Is this the Sears story, or the Eddie Lampert story? One commentator concluded that,
in addition to the other difficulties facing retailers, Sears had a unique problem—Lampert
himself.
1. How would you describe Eddie Lampert’s leadership style?
Lampert could be described as a transformational leader. He was highly intelligent and
decisive. He was innovative, concerning both the company structure and its service
delivery. He had a clear and interesting vision for the online future of the business.
Check out “Shop Your Way” for yourself.
However, he also appears to have been an autocratic leader. There is little evidence
to suggest that he either sought or considered the views of others, including his senior
colleagues, before making business-critical decisions. He was something of a recluse,
preferring to meet with his division heads infrequently, and through a video link (and
he rarely allowed media interviews). His “engagement” with staff through the company’s social network was more confrontational than consultative.
2. How would you assess his approach to implementing major organizational change—
in this case, restructuring the whole company with a new organizational model?
If rapid action is necessary to rescue an organization that is experiencing extreme difficulties, then an autocratic approach may be appropriate. It takes time to pause, to ask
everyone else what they think should be done, to process that feedback, to develop
a more widely informed decision, to check that with those involved, and then to
implement the approach. By that time, the company could be bust. Lampert’s “crisis management” style may thus have been appropriate immediately after the merger.
Although profitability was declining, it is debatable whether that approach was appropriate in 2008.
24  Chapter 1  Managing Change: Stories and Paradoxes
A more prudent approach in this case would probably have been to listen to the
views of colleagues, at all levels of the company, and to take those into account before
imposing that reorganization. There could have been many other ways in which to
achieve the required end results, including improved divisional and corporate performance, and data transparency. Whatever restructuring was implemented, it was probably going to be more successful if those who were affected understood the decision,
had contributed significantly to it, and had agreed with it. “Behavioral flexibility” is
one of the core capabilities of managers and leaders at all levels in an organization.
This means adapting one’s overall approach and personal style to fit the circumstances.
Lampert did not do that.
3. On balance, would you assess his organizational model as having been a success,
or not?
From 2005 to 2013, the company’s sales, profits, and share value fell. Although not
mentioned in the case account, many experienced executives left the company, frustrated
by the impact of the restructuring. Divisional collaboration was stifled, and it appears
that the competition stimulated by the new organizational model was not healthy competition. The model, therefore, appears to have been damaging to the company’s performance and to its reputation. The new model, however, made it easier for Lampert to set
up the online business as a division run independently of the other units. It may thus be
too early to assess the longer-term overall success of that organization restructuring.
4. What lessons about managing organizational change can we take from this experience and apply to other organizations, in this or other sectors?
Change leaders need to adapt their style to fit the context. An autocratic style can rapidly resolve a crisis. In other circumstances, “decisive action” may leave others feeling that they have been excluded, and they may decide to undermine decisions that
they feel were ill-advised (especially where the approach was considered to be idiosyncratic) as well as imposed on them.
LO 1.1
  Change Diagnostic: The J. C. Penney Story
Here are the three questions that you were asked to consider while reading the J. C.
Penney story, followed by our suggested answers:
1. What aspects of Ron Johnson’s turnaround strategy were appropriate, praiseworthy?
2. What mistakes did Ron Johnson make?
3. What would you suggest he could have done differently?
1. What aspects of Ron Johnson’s turnaround strategy were appropriate,
praiseworthy?
First, he was charismatic, passionate, energetic, and persuasive, using theatrics (the
acrylic cube) to draw attention and generate excitement. These are useful characteristics
for change leaders to possess, although in this case they contributed to the problems. It
is possible to be too charismatic, too passionate, too energetic, too persuasive, too theatrical. Second, he was highly innovative, bringing lots of fresh ideas to a long-established
Chapter 1  Managing Change: Stories and Paradoxes  25
and stale organization. Organizations that have been trading for a century will often
benefit by importing new thinking and practices from other sectors. Third, he was
action-oriented and wanted to move quickly, to bring about radical change rapidly.
2. What mistakes did Ron Johnson make?
Ignoring the company’s traditional core customers was probably his first and most serious mistake. There was no market research, either directly with customer groups or
indirectly through store staff and managers, to develop a better understanding of the
buying habits and preferences of JCP customers. How would customers interpret the
changes that he wanted to implement? It would have been helpful to know the answer
to that question before proceeding. This lack of customer knowledge led to some disastrous marketing, and to pricing and merchandising strategies that alienated core customers without attracting new shoppers. Selling more expensive products seems like
a good way to increase sales per square foot, but only if your customers want those
items and can afford to buy them. Second, he allowed his new top team of “outsiders”
to distance themselves from the existing JCP managers and staff. This meant that the
top team had restricted access to the business knowledge stored in the corporate memory, and it also created unnecessary tensions between the DOPES and the Bad Apples.
Third, he made critical decisions based on his own judgement, dismissing the views
of other senior executives. Fourth, he acted rapidly. While speed may be necessary,
especially in a crisis, introducing so many changes at a quick pace was destabilizing.
Finally, and linked to the fourth point, he did not pilot test his big ideas before committing the investment and implementing them.
Johnson’s approach to change at JCP had two other adverse consequences. First, he
damaged the brand image, and that would take time—perhaps years—to repair. Second, he closed the door to any future JCP chief executive who might be tempted to play
the part of charismatic innovator.
3. What would you suggest he could have done differently?
There is no correct answer to this question, but there is a wide range of possibilities. The first obvious suggestion concerns better customer intelligence. Did sales fall
because middle-income families were hit by recession and customers became confused
by pricing practices? Or would customers have welcomed an expansion of the range of
JCP exclusive private brands and a modified promotions program instead? A second
suggestion concerns testing new ideas in a small number of representative outlets to
see how those would work before committing the whole organization. Third, review the
decision to fill senior management roles with friends and “outsiders”; did the organization have internal candidates who could have filled at least some of those roles equally
well? Find ways to integrate new with existing staff: teambuilding, corporate events, job
rotations and partnerships, insisting that senior staff move to Dallas. In summary, these
suggestions concern market research, pilot testing, recruitment, and promotions policy.
However, this does not suggest that changes should have been made slowly, just a little
less rapidly. That would have allowed mistakes and wrong turns to become apparent, so
that they could be withdrawn, lessons learned, and revised plans put in place. Johnson’s
charisma, passion, and energy could have driven this alternative approach effectively.
A final suggestion for Ron Johnson would be: ask your board to probe and to challenge your decisions, and listen carefully to what they say. The why and how of change
26  Chapter 1  Managing Change: Stories and Paradoxes
in this case would probably have been more successful if these had been the result of
board decisions, and not Ron Johnson’s decisions. The board themselves, in this case,
seem to have made the mistake of not challenging their new, charismatic, persuasive,
passionate chief executive.
EXERCISE
1.1
Writing Your
Own Story
of Change
LO 1.1
Think of a change that you have experienced, in either your work or personal life. We
would like to ask you to write a story about that experience. Here is a definition of a story
to help you:
A story expresses how and why life changes. It begins with a situation in which life
is relatively in balance: You come to work day after day, week after week, and everything’s fine. You expect it will go on that way. But then there’s an event—in screenwriting, we call it the “inciting incident”—that throws life out of balance. You get a
new job, or the boss dies of a heart attack, or a big customer threatens to leave. The
story goes on to describe how, in an effort to restore balance, the protagonist’s subjective expectations crash into an uncooperative objective reality. A good storyteller
describes what it’s like to deal with these opposing forces, calling on the protagonist
to dig deeper, work with scarce resources, make difficult decisions, take action despite
risks, and ultimately discover the truth. (McKee, 2003, p. 52)
Plan A
Write down your experience of change in about one page, and then answer these
questions:
• What made this experience a “story”?
• What lessons for managing change can you take from your story?
• Compare these with the lessons from the Beth Israel, Sears, and J. C. Penney stories.
Which are the same?
• From your experience, what new lessons have you added, particularly for future
changes in which you might be involved?
• In small groups, share your lessons with colleagues. Which lessons are similar, and
what are the differences among you?
• What three main conclusions can you take from these stories about managing change?
Plan B
In small groups of around four to six people, ask each of the group members to tell
their story of change, taking only three or four minutes each. Record key elements of
each story on flip-chart paper. When everyone has told their story, answer the following
questions:
• What are the common themes and issues across these stories?
• What are the differences between these stories?
• Of the change lessons from Beth Israel, Sears, and J. C. Penney, which are revealed in
the groups’ stories, and which are absent? What are the implications of this?
• Are there any further lessons embedded in these stories that could apply to future
changes in which group members may be involved?
• What three main conclusions can you take from these stories about managing change?
Chapter 1  Managing Change: Stories and Paradoxes  27
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