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The Fundamentals of Change

What are the fundamental dynamics of leading strategic change? The following diagram (Figure 1.3) attempts to capture this process, and subsequent short sections describe these dynamics relative to each of the main cells in the matrix. And as we mentioned, real mastery of these concepts will come through subsequent chapters that walk you through these dynamics and explain them in much greater detail.

Figure 1.3

Figure 1.3 Matrix of the fundamental dynamics of change.

Virtually every major change has its roots in success (Stage 1). In almost every case, the need for change is born of past success—of doing the right thing well. The more right it is and the better it has been done, the more likely that it has a long rather than short history. For example, IBM did the right thing (making main frame computers) and did it well. It did it better than anyone else for nearly 50 years. Xerox was so closely tied to the invention and commercialization of copying that the company name became a verb ("Please xerox this document for me.").

In almost every organizational or individual case, change starts with a history of doing the right thing and doing it well. Then, often unexpectedly, something happens: the environment shifts, and the right thing becomes the wrong thing. A new competitor comes on the scene with equal quality but significantly lower price, or a new technology renders past standards of product reliability obsolete, or government regulations disallow previous business practices, or customers change their preferences, or a million and one other shifts.

As a consequence of the shift, what was once right is now wrong (an initial shift from Stage 1 to Stage 2). More importantly, and the really frustrating thing, is that while what we did right is now wrong, we are still very good at it. In IBM's case, computing power soared while cost remained constant (or dropped in real terms); and servers, minicomputers, and even desktop computers began to replace the role of some mainframes. Just making big boxes was no longer the right thing, but IBM continued doing it so well. People's hearts and souls, self-worth, and image were tied up in years and years of making "big iron" (IBM's vernacular for mainframes). This persistence to keep moving along the old successful pathways of the past constitutes the first part of change.

Then after enough pain, blood, or at least red ink on the floor, we start the second stage of change by finally recognizing that the old right thing is now the wrong thing—we finally see the light. We then begin to envision what the new right thing might be. Over time, the new right thing becomes clear. But, in almost every case, because the new right thing is new, we are usually not very good at it at first. Initially we end up doing the new right thing quite poorly. This is the third and frustrating part of change.

For example, not long after Lou Gerstner took over as CEO at IBM, people inside the company finally saw that just "selling boxes" would not work and that providing integrated solutions was critical to their future success. However, neither IBM nor its employees were good at making money from providing integrated solutions at first. While analysts today tout the importance of "solutions" in IBM's revenue and profit growth, we quickly forget that back in the early 1990s, as IBM initiated this strategic change, the integrated solution units (ISUs as they were called) were most closely associated with losing money, not making it.

Hopefully, after a time, we master the new right thing and start to do it well (a move from Stage 3 back to Stage 1). At this point, the sun shines again, and we bask in the warmth of its rays. Life is good. (Well, that is until life changes and the new right thing once again becomes the wrong thing.) IBM eventually did become proficient at providing integrated solutions. In fact, the service business was the largest revenue and profit growth engine for IBM during the late 1990s.

The fundamental process or cycle of change is just that simple. This is the core 20 percent that captures 80 percent of the picture:

  • Stage 1: Do the right thing and do it well.
  • Stage 2: Discover that the right thing is now the wrong thing.
  • Stage 3: Do the new right thing, but do it poorly at first.
  • Stage 4: Eventually do the new right thing well.

Anyone can understand, remember, and recall this framework. The three barriers we mentioned earlier cause the process to break down. The failure to see keeps the change process from even getting started. Even when started, the failure to move keeps us from entering the path of the new right thing. Even if we start and move, the failure to finish keeps us from doing the new right thing and doing it well.

With this overall map, the following chapters help you master the challenge of remapping change. We dive into the dynamics that drive behavior in each step of our change framework and explore the power of mental maps that can often divert us from successful change and how we can break through these brain barriers.

Specifically, in Chapter 2, "Barrier #1: Failure to See," we examine the first remapping challenge. We explore why—even when a threat or opportunity is visible—we fail to see it. Clearly, if we fail to see threats or opportunities, we will not make needed changes. In response to this challenge, in Chapter 3, "Solutions and Tools for Breaking through Barrier #1: Helping People See the Need," we detail how you can break through this barrier and help yourself and others actually see the need to change.

We explore the second remapping challenge in Chapter 4, "Barrier #2: Failure to Move." We examine why even when we see, we often fail to move. While it sounds illogical (why would someone fail to move if they saw the need?), there is ample evidence that failure to move is quite common. As a consequence, effective change must overcome this powerful mental barrier. Chapter 5, "Solutions and Tools for Breaking through Barrier #2: Helping People Make the Move," delivers the keys to overcoming this barrier and helping people actually move once they see the need to change.

The third and final remapping challenge fills Chapter 6, "Barrier #3: Failure to Finish." We explore why, even when people move, they often fail to finish—not moving far or fast enough. While recognizing the need for change is the thrust that gets us going, and moving down the new path lifts us off the ground, if the momentum cannot be maintained, the initial upward lift needed to fly is overpowered by the constant downward pull of gravity and natural resistance to change. We have seen and studied many cases in which change projects attained initial liftoff, only to falter and crash shortly after clearing the runway. Chapter 7, "Solutions and Tools for Breaking through Barrier #3: Helping People Fight through the Finish," provides a simple but effective framework for overcoming this challenge and provides specific tools that can help you break through this barrier and help people finish a major change initiative.

In Chapter 8, "Pulling It All Together," we combine and integrate all the specific components that we discuss separately up to that point to ensure that you can apply these fundamental principles of change in real situations, which don't come so neatly divided as chapters in a book. In most of these examples in Chapter 8, we examine how using the principles can help you remap your organization for greater revenue and profit growth.

Chapter 9, "Getting Ahead of the Change Curve," provides the glue to ensure that all this sticks—sticks together and sticks to you, the reader. This glue is essentially a tool that you can use to gauge where you and others are in the change process and what might need to be done to ensure the targeted change succeeds. The tool is not only something you can use to lead change, but is also something you can use to train, educate, and empower others to meet this challenge as well.

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