Bulletin, April/May 2007

Leadership in the Information Age: A Culture of Continual Change 

by Maureen L. Mackenzie

Maureen Mackenzie is an assistant professor at Dowling College in the Townsend School of Business. She can be reached at mackenzm<at>dowling.edu

The inventor Charles F. Kettering said, “The world hates change, yet it is the only thing that has brought progress.”
Humankind has been wrestling with the nature of change for thousands of years. In corporate environments, change threatens the organization’s culture. The employees’ attachments to stories, rituals and the symbols that define their work environment can cause confusion, insecurity and anger when these artifacts are severed or changed. Leadership may unknowingly create barriers to change if strategies are installed that undermine the embedded guiding corporate values. Leaders are equally vulnerable to the cultural messages that suggest that change may disrupt their individual and collective safe havens within the corporate community. 

Along with internal forces, broad external conditions and societal trends influence the effectiveness of an organization. The external environment broadly includes technological, economic, legal, political, social, cultural and competitive elements. Senior leadership must thoughtfully establish and nourish a corporate culture where continuous monitoring and assessing of the mega-environment is integrated into mainstream strategic and operational activities.

A senior leader wears many hats, but an explicit duality exists in his or her role as both change enabler and change victim. Judgmental human bias can cause managers to buy into a shared vision that their organization is invincible and that continuous change is unnecessary. A very strong culture can thereby prevent an accurate assessment of the external environment. Leaders who are successfully embedded in and value the current corporate environment and culture may unconsciously resist change, though consciously leaders understand that change is inevitable.

A Culture of Continuous Change
External Forces. Senior leadership must establish environmental scanning as an ongoing and non-negotiable activity. Changes in the external environment may be clues or signals for the internal organization. Even weak, confusing and spurious external signals need to be interpreted so that sense can be made of these events and clues. Leadership must perceive the environment realistically, process and assimilate what they perceive, and adapt quickly so that the organization competitively suits the mega-environment. 

Internal Forces. Different types of change can be more or less accepted by individuals working within organizations. Adaptive change may be less threatening because it appears familiar; innovative change is unfamiliar and leads to anxiety. Regardless, ongoing and overlapping change is essential for organizations to stay competitive, alert and agile. Senior leaders must be cautious because an organization with a strong corporate culture, deeply embedded with values that guide behavior, may not support the momentum required to face ongoing and overlapping change. Leaders may shift key players and may articulate change objectives, but the culture will filter and perhaps distort the messages so they fit within the value schema currently accepted by the organization. It may be in the senior leader’s own interest to resist severe change. The leader’s personal schema may distort the need for change to lessen the impact on his or her personal position or status. There are numerous competing forces: the employees’ interests, the shareholders’ interests, the culture of the organization and the senior leadership’s unwritten safe haven within the organization. The senior leadership’s resistance may be unconscious and therefore difficult to manage. Yet, for lasting change to occur it must be able to pervade the culture. For the employees, new role models and heroes must be established not solely by leadership but by the employees. As the culture adapts, the employees will begin to reflect the change with stories and explanations that fit the modern culture. New work rituals and pervasive behavioral changes will emerge that will involve everyone at all levels of the organization. Senior leaders must be active and purposive architects for this cultural change to stick. But they must also be aware of their own vulnerability and subtle unconscious resistance.

A culture of continuous change requires that leaders prepare employees, frontline managers and mid-level managers for the change that the organization and the environment will demand to survive. 

Technological Forces. Technology is a powerful force shaping environmental conditions. A technological breakthrough may take many years of incremental assimilation within an organization to fully optimize the original genius hidden in the breakthrough. Organizational visionaries and transformational leaders must design change strategies to support an organizational culture that views continual change as a competitive strategy and necessary business activity. Continual change to optimize technological breakthroughs is required for an organization to systemically evolve until it has exhausted the improvement. This advanced understanding of how incremental change evolves over time must be embedded in the knowledge and skill set of senior leaders.

The leader must be able to forecast and thereby predict how the organization should prepare to assimilate technological changes that will pay back economic returns, both now and in the future. Senior leaders must have the insight and commitment to look far enough into the future to predict the path of change so as to allow the technological shifts to be competence-enhancing rather than competence-destroying (Tushman & Anderson, 1986). The leader must be prepared to change as well. Optimizing only the economic payoff in the short-term without foreseeing the obsolescence that may emerge in the future can result in an industry failure when the next breakthrough takes place or as the marketplace shifts. 

Knowledge, skills, abilities, competencies, values, attitudes, investments and training are among the battle cries that must be woven into the culture and the schema of the organizational members’ collective experience and shared vision. Information literacy and knowledge management concerns are drastically different from those that existed in an industrial culture where the means of production were external to the worker. The knowledge information culture and the speed of technological advancement have changed the psychological contract between the employer and employee. Knowledge workers now own the means of their productivity and are mobile. As a result, senior leadership’s role is immensely more complicated with greater extremes between success and failure. 

The Human Elements within the Change Process
Senior leaders must prepare employees, frontline managers and mid-level managers for the change that the organization will require to thrive. Leaders must also prepare themselves. Employees desire and expect a level of predictability and order. Employee needs, which are not only economic but social and psychological, will have significant influence on the organization’s ability to change rapidly. For many workers, including lower-level managers, change is considered disruptive. But, a corporate culture that values continuous change can be reinforced by a culture of learning. As employees learn, the collective organizational state of knowledge will change. The change is no longer disruptive and intrusive, but a welcomed outcome of employee learning. The learning culture transcends the defined work group. 

In a culture that reinforces learning, an unfreezing of the knowledge state of the community members may be perceived as a natural outcome of new knowledge. The communities of practice are more fluid and overlapping than explicit work teams. 

A learning culture composed of individuals who accelerate the innovative process of change must be established on a culture of trust. The process of change will precede the acceptance of a culture that values change. Employees need to understand why change is occurring. They need to be invited into the change process. Left outside of the process, employees will more severely judge senior leaders. Senior leaders must not underestimate the expectations of employees when it comes to the process of change. Excellent management decisions that are economically valuable for the success of the organization may be undermined if employees distrust the process or its leaders.

Distrust of senior managers may lead employees to focus more on individual interests than holistically on organizational interests. The line of sight regarding change can be drastically different between managers and employees. Senior managers must recognize the human element and the impact change may have on individuals. The ability to cope and to absorb the change must be a prerequisite or the planning and investment for change may be for naught. The need to cope is tied to the stress that emerges from a change-resistant culture. An employee’s need to cope can emerge from his or her perceptions, such as that accountability is being increased but resources are being reduced or that management is focusing too heavily on the task yet neglecting the employees. It can arise from feelings of insecurity or from other employees and managers who lack the ability to cope. Employees cope and absorb change to a much greater extent if they feel that they have the skills and abilities to face the challenges of change. Poor communications, poor at-work relationships, low engagement, insufficient skills and experience and low motivation to change are all factors that employees have identified as barriers to absorbing and coping with change.

The Leader as Unconscious Resister and Guardian of the Status Quo
An underlying and subtle theme that is often overlooked when studying change management strategies is the leader as unconscious resister. Theorists focus heavily on how the leader must establish trust among the employees so they redefine their roles and embrace the needed change for the organization to move forward. There appears to be an assumption that leadership is rational, always focusing on what is in the best interest of the larger organization and its stakeholders and is selfless and perhaps willing to sacrifice itself for the company. But leadership is no more than the collective behaviors of individual people. Many of the same fears of disruption may be so deeply embedded that these individual leaders are unable to face these seeds of resistance.

To illuminate the need for senior leadership to reflect on its own motivations to maintain the status quo, one needs a better understanding of how the culture embraces and trains its rising leaders so they become the guardians of the status quo. The corporate culture transforms outsiders into insiders and teaches them how to think and feel. An organization with a strong culture will heavily influence employees and lead them toward alignment with the organization’s objectives. Strong organizational cultures have been cited as a foundation for organizational success where employees feel secure as they work together to do what needs to be done. 

The focus of senior managers may not always be on what is best for the organization, but rather on protecting their places within the organization’s upper echelon. Also, critical thinking that may prevent problems or challenge the status quo is neither solicited nor welcomed until the individual manager has demonstrated conformance and loyalty to the current culture. Senior leaders must be reflective on their own fears and constraints as they embark on a change strategy that will disrupt an organization’s culture. Influential senior leaders need to uncover any fear among its rising leaders as to the change strategy. Fears must be quelled or sincerely addressed before these managers can be expected to fully embrace and champion change within the organization. Senior leaders must not only prepare employees and front line managers, but must also look closely at the members of the senior leadership team to ensure that all are in sincere alignment and can actively engage the challenges that come with enabling continuous and overlapping change.

Insights into Managing Change Successfully
As change becomes more pervasive and the velocity and volume of change increases, the strategies for managing change must become more sophisticated. The first insight that I offer is that senior leaders fully accept their role as change enablers. A primer would be Peter Schwartz’s The Art of the Long View, which supplements the long-term strategy with the long-view strategy. Schwartz helps leaders stop and think through the possibilities, not just as hopes, but as fully developed and researched what-if scenarios and strategies. Anticipating the future and all its potential scenarios creates a culture that does not fear change, but welcomes it as familiar and comfortable. 

The second set of insights is offered by Deal and Kennedy who suggest that a hero be positioned in charge of the change process. This hero brings his or her own legacy to the table with the conviction that the change is necessary. Such a hero is especially important if leadership is going to battle the current culture. Kennedy and Deal warn of the expendable senior leaders “who have tried to impose new cultures on existing corporations only to find the old cultures the victors and themselves the victims” (2000: 175). External threat to the organization must be recognized as a need for the internal organization to change. It should not be simply a whim of a new leader. All senior leaders need to fully understand why change is needed so that each can support and defend against resistance. Senior leaders need also to understand how the change will affect them personally so that their concerns can be addressed and put aside so each member of the leadership team can focus on his or her role as a change enabler. 

Organizational rituals are the visible and tangible artifacts of a culture. The change process should involve people throughout the organization and allow a transition that mourns the old rituals and welcomes the new. It should provide transition training in new values and behavior patterns. Even language may need to evolve in order to create a shared experience for organizational members. By building tangible symbols of the new direction, struggling employees will more easily find their way. Senior leaders must help employees feel secure during the transition. Senior leaders must also feel secure. Job security or insecurity at any level can be a positive or negative influence. 

A third set of insights comes from Jeffrey Goldstein and his book titled The Unshackled Organization. Goldstein studies change emerging from an organization’s inner essence, which can be viewed as the soul of the organization from which self-regulation, self-steering, self-maintenance, self reference and self-organization emerge. The traditional management model of change that relies solely on planning, assessment, anticipation of resistance and overcoming the resistance, should be swallowed up by a model of change that is non linear and non-hierarchically driven. Rather than a culture where change is mandated, it is a culture where change is constantly emerging from within the inner workings of the organization. The linear model of change views the current system and the new system as different, while a non-linear model of change views the change process as a flower emerging from a bud when the right conditions for change exist. The seeds for ongoing change are contained within the current system. 

The last set of insights comes from Daryl R. Conner who describes how to create an organization that is resilient to organizational change. Managers may anticipate change differently. Some managers may perceive that they work in a stable environment where customers’ expectations do not increase nor does the quality of products require upgrading. Some managers perceive that their organizations will require change, but only for a limited time to address certain issues. And then there are those managers who expect continuous and overlapping change that will require ongoing adjustments. 

Recognizing the constant pressure to adapt, it is the resilient organizational members that will readily perceive change actions, strategies, and at times discomfort, as necessary and consistent with positive organizational change. An organizational pattern of resiliency will allow employees to assimilate change and to quickly reorient themselves and their processes. A resilient pattern of organizational change permits individuals to regularly cope. Resilient organizations may still face the stress of change but the employees recover more effectively. They see more value and less damage than individuals within other organizations that do not demonstrate a resilient pattern of managing change.

The digital information age requires management behaviors to inspire and manage change within organizations. Those organizations may be for-profit, government or not-for profit. As long as people are involved, the leadership role in the change process must be broad and deep. It requires insight into the human elements that may sabotage or accelerate the change process coupled with strategic skill and commitment to continuously scan the external environment and to integrate breakthroughs. Senior leaders must develop the art of the long view to establish a culture that can assimilate incremental changes as well as create a resilient culture where employees can bounce back quickly with radical adaptive change. The leaders’ communication styles must establish an ongoing stream of messaging that allows all employees a sense of predictability and also allows the organization’s own resources and natural tendencies to emerge, as remedies are needed.

For Further Reading
Brown, J. S., & Duguid, P. (1991). Organizational learning and communities-of-practice: Toward a unified view of working, learning, and innovation. Organizational science, 2(1), 40-57.

Carson, T.C. (1999). Organizational change and strategies for turbulent environments. Journal of Modern Business. Available to members February 11, 2007, at www.dcpress.com/jmb/jmb1999.htm.

Choo, C.W. (1998). Information management for the intelligent organization. Medford, NJ: Information Today.

Conner, D. R. (1993). Managing at the speed of change: How managers succeed and prosper where others fail. New York: Villard Books.

Daft, R.L., Sormunen, J. & Parks, D. (1988). Chief executive scanning, environmental characteristics, and company performance: An empirical study. Strategic Management Journal, 9, 123-139. 

Deal, T. E., & Kennedy, A. A. (2000). Corporate cultures: The rites and rituals of corporate life. Cambridge: Perseus. 

Drucker, P. (2001, November 1). The next society. The Economist. Reprinted online at the Economist Newspaper Limited 2005. Available January 2, 2005, at www.economist.com/surveys/displaystory.cfm?story_id=770819 

Gladwell, M. (2002). The tipping point. New York: Little, Brown and Company.

Gladwell, M. (2005). Blink. New York: Little, Brown and Company.

Goldstein, J. (1994). The unshackled organization. Portland, OR: Productivity Press.

Hammer, M., & Champy, J. (1994). Reengineering the corporation: A manifesto for business revolution. New York: HarperCollins.

Ironside, E. (1995). Strategic planning: Creating a future for AAACE. Adult Learner, 6(4). 

Irving, J. (1972). Victims of groupthink. Boston: Houghton Mifflin.

Kim, W. C., & Mauborgne, R. (2003, January). Fair process: Managing in the knowledge economy. Harvard Business Review, 81,127-136.

Kirkpatrick, D. L. (1985). How to manage change effectively. San Francisco: Jossey Bass.

Lawton, P. (1995, September). Initiating and managing change in your organization. CMA Magazine, 69, 28-32.

Maccoby, M. (2003). The seventh rule: Creating a learning culture. Research Technology Management, 43(3), 59-60. Available February 15, 2007, from www.maccoby.com/Articles/SeventhRule.html.

Nutt, P.C. (1986. June). Tactics of implementation. Academy of Management Journal, 29, 230-261.

Sawyer, O. O. (1993). Environmental uncertainty and environmental scanning activities of Nigerian manufacturing executives: A comparative analysis. Strategic Management Journal, 14, 287-299.

Schein, E. H. (1985). Organizational culture and leadership. San Francisco: Jossey Bass.

Schwartz, P. (1996). The art of the long view: Planning for the future in an uncertain world. New York: Doubleday.

Strebel, P. (1996. March). Why do employees resist change? Harvard Business Review, 74(3), 86-92.

Thomas, J.B., Clark, S.M. & Gioia, D.A. (1993). Strategic sensemaking and organizational performance: Linkages among scanning, interpretation, action, and outcomes. Academy of Management Journal, 36, 239-270.

Tushman, M.L. & Anderson P. (1986). Technological discontinuities and organization environments. Administrative Science Quarterly, 31, 439-465.

Vlamis, A. (1999). Smart leadership. New York: AMA Publications Division.

Woodward, S. & Hendry, C. (2004). Leading and coping with change. Journal of Change Management, 4(2), 155-183.