Spring 1997, Vol. 6, No. 1

Book review essay: The Four Levers of Corporate Change

By C. Donald Williams, M.D.

Peter Brill's and Richard Worth's book begins with this passage:

"On a steamy July day, the leaders of a major American organization assembled at a stately old colonial building to discuss the serious problems currently confronting them. They were operating in an environment that was daily growing more turbulent, with increasing economic pressures from abroad and dissatisfaction among their domestic customers, and the organization itself was rapidly being torn apart by fierce internal struggles between its various units. Indeed, disaster seemed in the offing unless the organization could somehow change."

This introduction, a variation of the classic "It was a dark and stormy night…," sets the tone for a book that is at once an amalgam of the storyteller's art (Richard Worth has 20 years' experience as a writer and video/film producer for Fortune 500 clients) and creatively expressed insights into organizations, their dynamics, and techniques for bringing about change. It is clear throughout the book that the ideas have been developed and proven in the field. The book is organized around the use of "four levers of change into twelve hallmarks of outstanding organizations."

The editors use historical anecdotes and case material from Brill's consulting practice to develop the book's central themes. Crises, natural or created by the organization's leader, provide the catalyst for change. Effective use of power and understanding human nature are prerequisites for successful leaders. Social processes, i.e. exercises designed to change employees' belief systems intellectually and emotionally, are illustrated with case examples. Maintenance of successfully initiated organizational change requires that the organization's members both identify with and emotionally internalize the new values.

The book is divided into "A Framework for Change," "The Four Levers," and "Ensuring Continued Success."

A Framework for Change underscores the complexity of organizations, and the fact that there are no simple solutions. It explores the role of crises in opening an organization to a change process, and specifies both the purpose and limitations of ideals and vision statements in that process.

The Four Levers describes aspects of change: the human factor, the uses of power, social process, and dimensions of leadership. Ensuring Continued Success focuses on sustaining change by means of fostering identification and alignment.

A Framework for Change

This begins with a description of how successful organizations possess certain essential qualities; these include having vision, innovation, flexibility, and being customer driven. Bringing these qualities into harmony requires effective organization and distribution of power within the organization while taking into account an understanding of human nature. Effective leaders must be able to create networks within the organization which remain at once in balance with each other and capable of efficient pursuit of the goals of the organization. To accomplish this requires an understanding of social process. When guided effectively by the leader, social process can be used to produce and sustain changes in vision and power relationships within the organization. The beliefs and value systems of the individuals who are assigned the task of achieving its goals must be aligned with the purposes of the organization, and in harmony with its overall structure and purpose.

Management is not an exact science, like mathematics; it is closer to psychotherapy, where there are generally no right or wrong answers, just theories, and hundreds of them, at that. Perhaps to an even greater extent than psychotherapy, the study of organizations is only in its infancy. We simply don't have the database to say with any confidence what works or what doesn't, and (even more importantly) why.

However, Brill has considerable experience with consulting to organizations, and records his experiences in accessible language such as providing the three priciples of power: People who have power usually do not give it up voluntarily; hierarchies are the natural order of things; and in each organization there are different kinds of power (formal, moral, expertise, coercive).

Strategies employed by Jack Welch when he became CEO of General Electric, are used to illustrate effective use of power. Welch created a crisis at GE to make it open to change, and then created a vision statement which radically altered how GE conducted business. Welch recognized GE needed to compete internationally if it were to prosper. To start the change process, he decreed that all GE divisions that were not leading their market area would be sold. The initial reaction against this initiative was intense. However, as Welch demonstrated that he possessed the power to implement his plan and that his plan made sense in the changing global competitive environment, and it became obvious that it was untenable for anyone to argue that second place was good enough.

The Four Levers

"Change must occur at the emotional level—the same place where resistance to change usually occurs. It's a battle for the hearts of employees, and if you lose that battle, the transformation process will encounter barriers that may prove insurmountable." An in-depth analysis of resistance (familiar in the therapeutic context to all psychiatrists) follows. The "elites, the ins, and the outs" all have a particular view of the world that is determined by their place in the hierarchy. These views direct the responses to change initiatives undertaken by management. The consultant must appreciate the different perspectives of the members of the organization, as it is shaped and influenced by their status.

It follows that obtaining clear and accurate information regarding an organization is difficult. Several principles of information gathering are elucidated, such as never depend on one individual and the culture of the organization will determine what views are sanctioned. Immediately useful and practical techniques for gaining insight into organization members are presented, such as the Life Chart. It consists of a graph with life satisfaction levels on the y-axis and age on the x-axis. Peaks and valleys are labeled as significant events in the individual's life. Remarkable longitudinal insights can be developed in the 40 minutes or so that completion of the chart requires. This portrayal of patterns serves to lead naturally to an appreciation of sequences of repetition, in which developmentally significant experiences are played out repetitively in relationships with co-workers and superiors. Most people completing the chart learn things about themselves they did not know consciously.

Other techniques include the use of Powergrams, a graphical representation of power relationships within an organization. The clarity of the diagrams is a testimony to the thought and experience which led to their development. Specific case examples illustrate the concepts.

The following quotation illustrates the detailed analysis of the elements of a "social process" in Chapter 6. "Centuries ago the Greek mathematician Archimedes, trying to demonstrate the power of a lever to King Hiero II, reportedly told him, 'Give me a place to stand and I will move the world.' Properly designed, a social process can act as a lever, initiating change in almost any organization. Conversely, a process that is poorly designed can only increase resistance, produce deadlock, and eventually derail an entire change effort.'' Proper emphasis is placed on the necessity of the change process focusing on the elements of the organization which need changing, as opposed to change processes which focus simply on personal development. While the latter may be desirable, what is critical for the organization is that the change be directed to improving the organization's functioning in critical areas.

The universal solvent, a means of obtaining crucial information from employees is designed to be an efficient and powerful "social process." Suppose an organization needs to know the opinions of 20 key people regarding 10 issues. The universal solvent breaks the group up into 10 pairs of two people, each assigned to ask one question, with 5 minutes allotted for their partner's response, the listener simply acting as a recorder and not offering any opinion of his own. Every 10 minutes the pairs change, and after only 100 minutes, all 20 have expressed their feelings about each one of the 10 issues, privately, and without group coercion. The responses are summarized, without identifying who said what, and presented to management. Equally important, each person becomes emotionally engaged in the process, and feels empowered.

The universal solvent removes the power of the boss as an obstacle to communication. Furthermore, when the answers are summarized at the end and presented to the boss, the exercise demonstrates dramatically his or her willingness to listen. The entire group sees that the boss is prepared to take in new information and learn from it. This provides a model for them to do the same thing.

Ensuring continued success

The concluding section begins with a description of how Mikhail Gorbachev's efforts at perestroika, or "restructuring," failed. In discrediting the past conduct of the state and undermining Communist ideology, Gorbachev failed to provide any credible replacement. This history lesson dramatizes how a change process can spiral out of control for a leader. It also demonstrates "the importance of an ideology—a glue—to hold things together as the change effort is underway." The parallel with modern corporate experience is apparent. The old security of lifetime jobs which was given in return for loyalty to the company is gone. Layoffs and restructuring broke the contract between employer and employee. Now companies are attempting to create a culture with which employees can identify even though they can no longer count on security and loyalty from their companies. These efforts are meeting with mixed success at best.

The authors examine identification, the process of attributing to oneself, consciously or unconsciously, the characteristics of another person or group. They identify key elements, such as: internalizing a set of values and beliefs; personal investment and sacrifice; use of symbols to stand for beliefs; and a cause that is larger than life.

A workshop was developed, because after power was decentralized, it became apparent that the work teams did not share in the overall corporate goal, nor did they work together. Instead, they pursued independent agendas and worked at cross purposes. The training workshop was utilized as a social process, and included life charts, the universal solvent, and an educational component. Simulation activities provided an opportunity to practice what was learned, and to experience both success and failure. Great emphasis is placed on having events occur in proper sequence, as this is the key to its impact. A public ceremony in which each employee "proclaimed what he or she would do individually to embody the values of the organization and implement them in their jobs" while holding posters with symbols they had created was highly emotional, and cemented the identification process.

The final chapter reviews the elements of change—12 characteristics of organizations which will achieve success. Some of them are: vision-directed; flexible and adaptive; flatter and empower, where individuals at every level of an organization are empowered to make decisions; and customer driven, including anticipating future need.

The book concludes with policies for following up. This consists of regular information gathering which will allow for mid-course corrections as necessary. Sampling different levels and areas of the organization at least every three months to provide the leader with accurate data is essential. Outside consultants may provide a truer picture of the status of the change effort, anticipating future needs.

The Four Levers of Corporate Change is a valuable contribution to the organizational consultation literature. That it is also enjoyable to read is a bonus.

 
Return to Top