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Leading Innovation and Change

Table of Contents

1        Executive Summary…………………………………………………………………………………… 2

2        Literature Review……………………………………………………………………………………… 2

2.1         Creativity, Invention and Innovation……………………………………………………………………………. 3

2.2         Change and Change Management……………………………………………………………………………………. 3

2.3         Leading Innovation and Change………………………………………………………………………………………. 3

2.3.1      Understand Human Behaviour……………………………………………………………………………………. 5

2.4         Leading Change……………………………………………………………………………………………………………….. 5

2.4.1      Understand Leadership Behaviour……………………………………………………………………………… 6

2.4.2      Effective methods to achieve change and create innovation……………………………………… 6

2.5         Conclusion………………………………………………………………………………………………………………………… 8

3        Real Life Applications……………………………………………………………………………….. 9

3.1         Successful change – Middle East…………………………………………………………………………………….. 9

3.1.1      Background………………………………………………………………………………………………………………….. 9

3.1.2      Change of the organisation……………………………………………………………………………………….. 10

3.2         Less successful change – Shared Service Center………………………………………………………….. 11

3.2.1      Background………………………………………………………………………………………………………………… 11

3.2.2      Change of the organisation……………………………………………………………………………………….. 11

3.3         Conclusion……………………………………………………………………………………………………………………… 12

4        Self assessment………………………………………………………………………………………… 12

4.1         Self-assessment………………………………………………………………………………………………………………. 12

4.2         Action Plan…………………………………………………………………………………………………………………….. 13

5        Reference Notes & Bibliography………………………………………………………………. 15

6        Appendix…………………………………………………………………………………………………. 17

6.1         Appendix 2 – Table Addressing the Tensions between Competing Change Management Strategies……………………………………………………………………………………………………………………………………… 17

6.2         Appendix 3 – Table Leading change in operational versus innovating organizations… 18

6.3         Appendix 4 – Organisational Sub-systems……………………………………………………………………. 18

6.4         Appendix 4 – Kotter 8 step model…………………………………………………………………………………. 19

1        Executive Summary

The scientific behaviourism has been going on for more than 100 years and created several accepted conclusions we have today (Daniels, 2009). But most of these philosophers, scientists or researchers emphasised more transactional leadership, e.g. Machiavelli who focused on control, instead of trust, and this became clearer when Taylor published his theories about scientific management (Appendix 1) (Lindberg, 2009).

 So why have we not change our way of leading sine a long time ago? This paper will via real-life applications show that despite most of the traditional leadership works and gives results, but it will not even near creating the success we could achieve if we embraced what the scientific research could have taught us (Hamel, 2008).

But from a more positive side, when we thought that we just reach the barrier how efficient we could ever be, scientific researches show us that the biggest improvements are in front of us (Daniels, 2009).

2        Literature Review

I have tried to look into different aspects of innovation, change management and leadership. As humans are quite complex beings, it is difficult to summarize all the knowledge that exists in the area.

2.1       Creativity, Invention and Innovation

The today business organizational structure does not always support creativities. For example, a hieratical organization often constrains creativity by centralized decision making.

 

Creativity defined by Amabile (1996) is the creation of novel and useful ideas in any area. She continues with defining innovation as the successful implementation of creative ideas in organizations. Innovation starts with creative individuals or a team.

Creativity is essential to innovation, it is the first step toward innovation, and it often starts with an invention. So innovation is the next step in the invention process, i.e. move the invention into something that works in reality and to be able to be in a practical use (Tidd, 2009).

For example industrial innovation is the process to move the invention, whenever it is new or improved product, into a commercial possibility. But also outside the commercial world in minor technological know-how, the invention could be used.

Logically, in order to stimulate creativity and innovation, change is needed.

2.2       Change and Change Management

Unfortunately up to 70% of all changes fail (Kotter, 2009). Why? Part of that answer is that managers mix several theories together or maybe even try to blend up several into a new one. This will of course lead to the scattered centre of attention both losing the goals that have been set and doubt from the employees.

With today’s globalization and especially depending on the new technologies, e-business and booming of electronics, the market moves much faster these days and also start to be more virtual companies. If you then add the unstable political situation we today have with the new economics, the inventions and innovations we easily understand that we need to adapt to the situation and that change has come to stay.

So what is Change management? According to Lewin (1958) change management is a theoretical frame work for the organizational effectiveness and management. It is about identifying the need change within the organization, and today has become a vital part of our continuously change within for example companies. The more knowledge we can get from research on how to manage change the better we can prepare leaders and their organizations to manage more effectively the challenges that organizations are exposed to during a change. If we understand the factors affecting organizational change and most important how we can respond to these stimuli allows us to make changes and manage the behavioural, motivational and dynamic benefits that arise during the change process.

Beer and Nohria (2000) defined change into 2 different theories;
Theory E change for economic values and also seen as a “hard” way of doing a change. This is the most common in the United States and it is focusing on the monetary values and it has components such as extreme downsize and reorganization. And the manager’s focuses are to please the shareholder. Staff has the lowers prioritization.

Theory O change is Organizational capability and should be seen as the “soft” way of doing the change. Managers that use this theory only pay attention to the price of their company stock value. The manager’s focuses are on creating a learning organization, and staff is the first prioritization.

The key differences between Theory E and Theory O you could see in appendix 2.

2.3       Leading Innovation and Change

In working life, we already see there are less routine jobs. We change our way of working into much more tasks oriented activities that requiring more independency. Most of these new tasks oriented activities will not be possible to lead in the traditional way (Melander, 2008). Leadership change and quality of work will increasingly depend on the individual’s own initiative, motivation and willingness to take personal responsibility.

Nowadays change and innovations have become a constant issue, due to the globalization. To be able to adapt and being innovative are the keys to business success in the 21st century. However, leaders in business often mentioned that bring about/achieve change is extremely difficult. Similarly leading innovation is just as difficult.

It is the leaders and people that execute the theories, but we need to understand the human behaviour in employees to really have a good way of handling the change.

The work environment we have today is more of continues improvement, than a static work environment, and the hardest part is to change the behaviour of the employees (Appelo, 2009).

Knowledge employees are a matter of fact enjoying developing themselves, but the organization around them has another phase and don’t pace with them.

Change could be an urgent action needed something that has been wrong or inefficient for a long time or even a new way of doing towards a known problem as per Lewin (Senior & Swailes, 2010). During my year in a lean thinking company, I learnt that you always find the source of the problem and never try to solve the symptoms.

As the problem could often just be a symptom and even if we use a lot of resources, money and effort trying to solve the problem it continues, but that is often because we not search for the source of the problem. The importance is to break down the problem in minor pieces so it will be manageable. Then find out who is the owner of the problem. Address the accountability to the owner if you want the solution to stick.

I think the lean thinking is something we use to seldom, but really is a good way of improve change management. Why? Lean thinking takes everything in perspective of the customer view. If we have the customer view we will have a common goal that we all focus against which will unite us.

The second part is to involve as widely as possible into e.g. brainstorming and workshops to get as many views of solutions as possible and also from a stakeholder’s perspective. At the same time, people feel involved and that is very important as they otherwise feel disconnected and unmotivated (Tidd & Bessant, 2009).

Many change programs fail big time. Why? Kotter (2009) mean that it is too few managers that understand that transformation is not an event; it is an on-going process that emerged over years. As we today often want to have efficiency and speed, we often miss the first steps in Kotters (2009) eight part model of Change Management. Some companies try to shortcut the model, but this never works. And often the management take out the victory to early, i.e. the change is not finished. Change will happened if you put all small improvements together and keep up the momentum over time.

Regarding the discussion of the definition between management and leadership, my perspective that you need both and management and leadership. Management I see more as the “management” parts you do in your daily work, e.g. administration of staff, forecast, resource planning (Senior & Swailes, 2010).

As per the leadership, part is more of establish the direction, vision, leading the team, develop the individuals and be the communication channel between the upper management and the team you manage and are responsible for (Senior & Swailes, 2010).

From my point of view, the today leadership is a combination of change agency and leadership. I see a risk that we separate roles into even more definitions, so I disagree with Katzenbach and Nadler, on the new term of the leader; change leader. And I also disagree that what many scientists agree on – that transformational leaders can create less stability in an organization. More over I am think that “change leader” should not be divided as a separate leadership competence (Bevan, Buchanan, Godfrey Harris, Plsek. 2003, p 2). Instead, I think it should be merged in as a part of the ordinary leadership.

2.3.1       Understand Human Behaviour

Marslow explain that when you are exposed for change each person react in different ways, depending on your personality; genetically, environment, culture, inherit etc (Robbins & Judge, 2009).

And some scientists mean that basic human behaviour is close to a constitution; every behaviour is a function of it consequences. It means that everything we do influence of what we meet and expect. If certain behaviour is paying off, you get motivated to do the same next time (Daniels, 2009).

Principles behind human behaviour are often explained, but should not just be accepted because of those principles. Sometimes scientific results could contradict the common truths about leadership and organizations, or the managers own intuition and personal opinion. For example: A manager complained; I do not pay Joe to sit and lethargic, but to do his job! Will he get a salary every month? Manager; Yes. Does he do his job? Manager; No. Then you pay him to sit down and lethargic (Daniels, 1999).

Prominent scientists such as Jim Collins (2001) and his team conclude that organizations that will have an inner commitment to the work of its members will stand the best in the future, and I agree on this statement with my more than 20 years experience of leadership and knowledge from different organizations behavior.

2.4       Leading Change

Different change approach is described by Beckhard and Harris (1987) in several behaviours steps, but I think this could be summarized into three approaches of change behaviour; Ignore it, Quit your job, Do nothing about it. And this is very similar to Trolle (2004) BRO-model; Influence the situation, Leave it, Do nothing about it. Even Appelo (2012) friend Olaf Lewitz said; Take it, Leave it or Change it. Appelo (2012) himself adjusted the last part by as “Learn about change management” and that is probably a very good advice.

Kotter thinks that the biggest mistake change managers do not to create the sense of urgency towards the managers and co-worker.

Although this may lead to different behaviour, the leadership should be focus on correct competence and personality on the resources. But many managers are unused to keep their observation on our co-workers behaviour. Managers are use to review attitude, intelligence, talent and education. In my perspective, I think we need to have more Transformational Leaders that look at those behaviours (Bass, 1998).

I believe Dr. Audrey Daniels regarding the Organisational Behaviour Management (OBM) when he thinks that the leaders should focus on the behaviour. If leaders will pay much more attention to behaviour they will be surprised by the effectiveness of that change in leading. The OBM theory that Leif E. Andersson (2009) describes is that our behaviours work by 3 steps;

A-Antecedent is the stimulus that starts the chain reaction.

B-Behaviour it the action that leads to the

C-Consequence is much stronger than communication.

For example, the top management say; From now on we focus on quality. Some if the employees implement this behaviour in their daily work. Later they get feedback from managers that they are to slow. Guess what behaviour they will do now?

In the OBM model ,they say communication will affect 20% of people’s behaviour and consequence 80% (Andersson, 2009). So even if you follow the 8 steps (Kotter 1996) and communicate the change vision etc, it will not be effective if you do not have consequences in the leader’s behaviour and the employees. If all the steps are followed, but no consequences if you don’t follow them, the outcome will be that you only reach a 20% effect.

Appelo (2009) wrote that Demings stated in 1986 that bonuses was bad for business, but we still using them. And Peter F. Ducker said in 1974 that knowledge workers could not be subordinates of managers, but some managers still act as they were other peoples superiors. Appelo continues; researcher such as Bobinski year 2010 continuously tells us that performance appraisals will not be of any use. Still, many managers lead by this primary valuation method.

2.4.1       Understand Leadership Behaviour

The scientific results could sometimes even feel provocative, as it sounds too simplified for some managers. For example, Kotter (1996) defined Eight Stage approach to leading change, but I also think you need to understand it is a good theory but it could be difficult to implement in reality.

Leaders should preferably be level 5 leaders (Collins, 2006) who not have the approach as we are use to; confident managers with a high profile and are like celebrities in media. The level 5 leaders seem more of self-effacing, silent even shy and often very humble and have a high integrity regarding their professionalism.

2.4.2       Effective methods to achieve change and create innovation

A lot of human behaviour principles that we see as common sense and knowledge are based on truths in how we lead and organize. They are as matter of fact more of bad habits in reality. It works but could be replaced with something much better (Daniels, 2009).

My experiences tell me that leaders are not suppose to always receive support from their organizations; they sometimes have to earn respect and support from not only their employees but also their superior management. In order to obtain those supports, a leader must via effective leadership such as transformational leadership to convince people and deliver results.

What is meant by transforming leadership and what foundation rests on this theory? The dynamics of transformational leadership is that employees identify with the leader, shares his vision for the future and make efforts beyond their own interests. This transformation effect is achieved by if the leader could; raise employee awareness of the importance of the identified targets, employees to go beyond their own interests, and change or increase employees to reach a higher level in Maslow’s hierarchy of needs (Bass, 1998).

Why is it difficult to lead change? Robert M. Grant a professor known for understanding a company’s resource base more than from the strategies. Grant’s is very much in sync with Gary Hamel, and his theories are developed further on by Bowman.

If the employees feel trust in their relationship with each other, they could also be more open for the fact that they will face a lot of disagreements. However they will be able to continue the process via constructive criticism, and at the end find better innovations and solutions (Grant, 2010).

Leading change from an Operating organization to an Innovating organisation meets a lot of challenges. This is described in appendix 4.

Kotter (1996) defined 8 Stage approach (see appendix 5) to leading change, but I also think you need to understand it is a good theory but not often implemented in reality.

To follow simple models is a good start when you want to do change management but in reality, it is far more complex than you ever could imagine, but we need at least to try and use the knowledge that exist in the area. The reason why it is hard is the simple fact that it is very difficult to predict how your organisations social system will behave. To get the understanding you need to test different approaches and see what is affecting the system. As Donella H. Meadows wrote in the book Thinking in Systems, 2008, was that a destructive behaviour need to be mitigated as much as possible and a positive behaviour you need to praise (Appelo, 2009).

If you see different change management tools from many different origins you could have a new innovation idea that both accumulates as well as develop the previous tool. To steal with pride saves a lot of time in contrarily of inventing a completely new idea (Appelo, 2009).

2.4.2.1      Step 1 – Change

As a manager, you could have a large impact if the change will be successful and in a fast pace, or the contradiction, i.e. unsuccessful and too slow (Daniels, 1996).

Kotter thinks that the biggest mistake change managers do not to create the sense of urgency towards the managers and co-worker.  I agree with Kotter (1996) and belief that this first step often is the crucial one.

One of the most critical positions in change is the change agents (Yukl 2010). Many scientists have tried to define change agents and it seems to be a complex and almost impossible role. On top of that, the change agents are not a carrier move – at least if you are alone. As an alone change agent will struggle and you will have difficulties to succeed.

2.4.2.2      Step 2 – Innovation

To be a successful entrepreneur, the invention needs to create opportunities for the business (Tidd & Bessant, 2009).

Leading innovation requires a leader to create a supportive environment in order to stimulate creativity, while change management demands a leader to understand human behaviours and select suitable people to every task.

To achieve a high innovative organisation you need to have an organization that has self-confident and are prepared to take risks. As a leader, you need to create the playground for the creative people to be curious, adventurous and risk-taking. “The essence of play is that it permits unconstrained forms of experimentation” (Grant, p. 316. 2010).

A perquisite to get innovation is that creative people have trust in their leaders. A leader in an Operational organization have even more difficulties as you need to protect the innovating product teams from the more hierarchic way of working, and the secure the space for the innovating teams to develop autonomous products (Grant, 2010).

All companies are depending on new inventions and innovations to continue their business and that’s why it is worth fighting for the space to being creative and champions that works there. And Schön’s study in innovations states (Grant, 2010, p 319) that leaders need to be aware of that “the new idea either finds a champion or dies”.

Still, the leadership need to consider that the teams outcome need to be manage towards the common objectives and goals, coach the employees with their own personal development, support the team when they get into hinders they can’t solve by the team individuals, report the progress to the upper management (Yukl, 2007).

2.5       Conclusion

Summary of a new way of change and innovation;

  • Theories, Use models such as Kotter (1996) where you do a more involvement and analysis in the beginning of the change.
  • Change leadership, Secure that you have the right type of leaders and people to drive the change, as per Collins (2001) and Apello (2009)
  • Organizational Behavior, Lead with strict consequence attitude (Daniels, 2009).

Easy to forget that an organization is not a mechanic thing ruled by a CEO, it is a social network that interacts with each other cross over all different hierarchy levels, inputs and outputs (see Appendix 4 – Organisational Sub-systems). To lead people you need first to understand their behavior and also the organizational structure, value/moral, development, top-management, leaders etc and it is a complex animal.

So if the next challenge is to change the Operational organizations management to the right kind of managers for an Innovating company, what do we need to do? For example I belief that the companies I have worked had too much of Transactional Leadership and Henry Ford “one fit all”-approach and Taylor-ism (Senior & Swailes, 2010).

I agree with Jim Collins (2001) when he state that; the people are not the most important asset in a company, the right people is. This summarizes many of the problems an organization has.

And to create the change we need act, i.e. to do things and if you have the wrong people nothing will happen. Leif E. Andersson and Mira Klintrot (2009) described in their Swedish book OBM – Ledarskapets Psykologi about Organizational Behaviour Management that leaders need to make a big effort when we recruit people, with correct competence, personality and specially a positive attitude.

It is the behaviour that is the key, so I disagree with the behaviour expert Aubrey C. Daniels (1999) when he establishes; to have a lazy co-worker is not a problem as long as they do their work.

If it is your personality to be lazy the leader will risk failing if these people’s hands if they are on a critical position. So in my perspective, we should focus and have more interest towards behaviour in each person. If managers focus on behaviours, they will be surprised how efficient their leadership will be, and that this also will be our co-workers key to success in our results of changing the organization.

It is a long time since American Psychologist, Bass (1997) published the journal and define the four components of Transformational leadership, but I still think we have seen to little of this kind of leadership in our companies and organisations.

Paradox is that I think just this type of leadership, i.e. Transformational Leadership, will support and cover the organisations need of creativity, change, innovation etc;

“Idealized influence (charisma) leaders” who show their conviction, strong confidence, taking clear stand on issues that are political, stand up for the values they think are the most important and weights intentions engagement and the ethical implications very high in, different decision. These leaders are often recognized as role models and which can create pride, loyalty, confidence and common approach towards the common goals.

“Inspirational motivation leader” that producing an attractive vision, challenge their peers by setting high standards, are enthusiastic and optimistic, providing very constructive encouragement and explain what needs to be done.

“Intellectual stimulation leaders” that questioning former assumptions, traditions and beliefs, that stimulate others to search new approaches and new ways of doing things, encourages staff to suggest ideas and their justifications.

“Personal care leaders” treat others as individuals, taking into account their individual needs, such as ability and wishes, listen intently, promote their development, advises, learns and supervises. (Robbins & Judge cited in Bass, 2009 p. 453).

My personal opinion of the characteristics of a transformational leader is; self-confidence, determination, understanding of employees’ needs and freedom from inner conflicts.

Why are human against change? I think Stephen Covey (2009) wrote a very interesting theory in his book; he compare with the lunar voyage of Apollo 11. His thoughts were that the change of habits and humans behaviour is like when the rocket needs to move into space. As habits is something that sits deep inside us all it is difficult to change. But if you want to change you need to do tremendous effort to get away from the “habit”-gravity pull of the earth”. The astronaut spent the counterpart in the first few minutes of lift-off, than during the following several days they travel half a million miles.

Habits, has also a tremendous gravity pulled so as to achieve a change you really need to put some effort into it in the beginning (Covey, 2009).

I think there is one important area where further research is desirable. There are many well-done studies that confirm the transformational leadership beneficial effects. It seems, however, not be many good studies that illustrate how you can change yourself as a leader into the transformational direction.

3        Real Life Applications

3.1       Successful change – Middle East

3.1.1       Background

During the end of 1970’s the company established a branch office in the most conservative counties in the Middle East. After the contract was ended the activities was stopped and the business was in a mothproof bag. It took more or less 20 years until a new contact made it possible to continue and some staff from previous time period came to a matter of fact back.

This Middle East is an especially difficult country to live in, in many ways, if you have the western lifestyle. This country culture is built very much on the relationship, and family connections. It is also very hieratic ruled and high respect for older is very clear, even if they don’t have competence.

 

My management role in the Middle East (ME) organization

During my assignment in the Middle East I have again come back to team size level (2-8 individuals) that is optimal.

I was the Company Controller for the 3 different branch offices that existed in this Middle East country. In the Finance department, I have to manage 7 people from 5 different cultures/countries. The interaction we had was mostly with the departments and the resources that we should serve.

I got support from the Finance Director, which also was my manager. His leadership style was much of the approach; throw them out in the water and see if they manage to swim to the shore. But he had a lot of knowledge in leadership theoretical, but didn’t use those skills in his daily leadership or lack of it.

3.1.2       Change of the organisation

As per the change of this organization where the focus is to develop the employees and aim to educate and get better structure the organization and focuses on culture development.

Emergent change – a continuously change made by the organisations staff which in the long run will change the organisation into a more efficient and more innovative (Senior & Swailes 2010).

The re-start of the business began 1999 and was a small scale operation at that time. Later on, more and more people got recruited. The business accelerated during the year 2001 as the business needed to fulfil the new contract. Recruitment was focusing on quantity instead of quality as manpower was the focus for delivery. During this year the organization had become more and more unstructured and undisciplined, there was a need to change into a more disciplined way of working.

During 2002 the organization needed to be more disciplined and new resources where brought in to levirate the organisations maturity. Year 2003 was this country attack by Al Qaeda which influenced and gave another perspective of life and leadership in stress.

I agree and belief that this first step works maybe better in the Anglo-Saxon countries, such as USA, UK, Australia as they maybe still use a higher level of Transactional Leadership (Robbins & Judge cited in Bass, 2009 p. 453) where the manager is in the focus and efficiency is to know details. “Managers aspire to be effective, decisive and tough under the motto ‘managers have a right to manage’ ” (Mole, 1993, p. 103).

But despite the Anglo-Saxons, it is many managers take the “common way” of unfortunately less good management and still work with “Management by fear”, i.e. management strategy to use people’s build-in fear to have them under control.

But that is just a perception that powerful leadership behavior change the peoples behavior, as the fact it is the direct opposite. Positive amplification will be remembered and behavior will still consist even when the manager not present. Praise creates the need for more praise (Daniels, 1996).

Americans is often based on a concept of individual accountability, and therefore more direct or in-direct management. Maybe that is based on what Machiavelli once said; “He who neglects what is done for what ought to be done, sooner effects his ruin than his preservation”. So if something goes wrong it is more focus to find the culprit than secure that the mistake never happens again. “American bosses are not generally skilled or experienced in dealing with the argument or open disagreement from their subordinates.” (Mole, 1993, p. 147). Any vestigial notion of shared responsibility evaporates completely if it goes wrong; it is one person carries total responsibility. And punishment is also motivating, but only enough to escape the punishment, then the motivation disappear.

I like more the Japanese way of culture as they have a high value on team norms, and very supportive if the team member when something gone wrong they help out.

“Western culture values the ultimate superiority of individual over the group” (Mole, 1993, p. 155) and then he continues with that Japanese culture is the contradiction, i.e. the loyalty is to his team and he has no self-interest other than that the team should be successful. As a change agent this also a parameter you need to take into consideration during the change.

3.2       Less successful change – Shared Service Center

3.2.1       Background

The company had a strategy to consolidate and structure the financial, sourcing and human resource (HR) transactions into a more aligned processed way of working and gain a lot of synergies. To do so they needed to take the existing departments in approximately 10-15 companies with all their cultures, ways of working, IT-systems etc, and move them into a completely new company where it should only exist one culture, aligned processes and one IT-system. The first Shared Service Center (SSC) was created in the group.

The SSC was a subsidiary in the group and invoiced the previous companies per transaction instead. The thought behind this change was that the internal customers should pay for what they used and therefore get an indirect driver for reducing transactions and cost.

3.2.2       Change of the organisation

In this case, it seems to be amore of a strategic change from the CFO so we could utilize synergies and scale advantages to cut cost. Also, a lot focus on reducing the number of ERP-systems for the different merged companies. With a quite tuff time plane, all these changes should be done in a few years.

So this planned change (Senior & Swailes 2010) was an important step for the whole group to get better structure and control over administration processes. Quality systems such as ISO 9001 and ISO 14001 were implemented as an example.

But the real challenge was too merge all these companies’ administration departments, both the different areas, i.e. Finance, Sourcing, HR and their different company cultures into one culture.

HR was assign to be the driver of a culture change within the SSC. A lot of workshops took place as well as a leadership programs for the managers.  As the managers was moved into this SSC as-is. Therefore the first leadership teams was not the best to drive this change, as they where the one’s that created the culture in the previous companies’ local departments. Quite soon some managers was moved or resigned and new managers came in from the outside of these companies to manage the change in a more objective way.

The CEO as I understood didn’t follow Kotters (1996) 8 steps in change. We didn’t have a proper analysis process where we took the new concept of SSC into practice and a workable strong financial model. CEO had a gut feeling of his plan, more than a very good market investigation; look into the products and service needed and whom would be interested to pay for it. His idea was that we should increase our scope of customers, from internal subsidiaries to even include external companies. This plan was not a very clear communicated luckily.

Because the SSC organization struggled to just keep up with deliveries and quality with the internal customers, i.e. subsidiaries. And then to take on external companies would be a disaster, as you probably totally de-motivated the people. But then again the biggest mistake was that even if it existence of a plan – it was not communicated.  Most of the top management leaders where not strong enough or had the courage to quest ionize the CEO. I also think that they where confused as the natural and most logical was that we should focus on our subsidiaries first and when we succeeded to deliver to them with good quality and price, maybe it could be interesting to benchmark by taking in external companies.

Punishment could reduce or stop the behaviour, but don’t change or create a new way of behaviour.

3.3       Conclusion

Regarding the Middle East organizations, we have a focus lot of focus on the ”how”, i.e. how we work together more then ”what” we do. Normally the group have high knowledge and competence in skilled resources, but management don’t interact as much as they should to be really successful.

In the Shared Service Centre organization situation, the management waited to long to do the change of managers from the previous departments, which established sub-cultures instead of a new SSC culture. If the opponents that didn’t belief in the new vision of one SSC culture has been dealt with consequently and replaced managers that was not correct earlier the change would been more successful (Yukl, 2010).

The focus was also outside the stakeholders scope, e.g. the CEO want to bring in external customer, but the scope was to support and handle the groups different companies, i.e. inter companies. These two parts made it difficult to implement a new culture.

Question is what kind of activities our top management will do to make this leadership change within our company? The CEO clearly stated that we need to transform to be an Innovation company, but we are still in the Operational company phase.

4        Self assessment

4.1       Self-assessment

During my role Company Controller, I used “Lean” and Kaizen as one way of focus much more on “how” we do things and more efficient. I used the book Kaizen – sakta ner och gör mer by Gordon & Åsa Meland which gave me possibilities to do extensive experiments working with kaizen and I also implemented kaizen thinking in the business as well as the organizations. Structure the work into a Kanban similar way of working.

My reflection on me as manager for in the SSC organisation is mostly that I had passion, but didn’t have the courage to be myself. I went from an apartment of 7 that I manage for 3 years to 73 and after 10 months to 160 people. Think that scared me at the same time as it inspired me, but I didn’t have the knowledge to lead this organization in an efficient way.

The difficulties in all the theoretical and studies that been done is that sometimes they are a contradiction, but at the same time the truth is not black and white within leadership, but as a leader, you need to be consequent to have a successful leadership.

I worked harder and more and more hours than I ever done, but the mistake was that I never reflected on the fact that I wasn’t working with my direct reporting managers with consequent. I didn’t have the knowledge of the different behaviour the people took; so what leadership competence they had was not only a problem, what they didn’t do was the issue. I didn’t have the knowledge to see the behaviours and lead by consequences.           

4.2       Action Plan

I had the role of Vice President of one of the department for the 10-15 companies that we served. Our departments consisted of 10 managers direct reporting to me and a total organization of 160 people. Our interaction was manly towards the companies we served and the internal Sourcing department.

I was direct reporting to the CEO and he was my manager. His leadership style was clearly “Transactional Leadership” and focused a lot on the “what”. He didn’t use coaching style; instead, he held a very hierarchic leadership style approach. Therefore I started to avoid and meet him. Instead, I lead more or less my department in the way I thought was correct and by transformational leadership.

I could probably try to take the fight, but I often think about what Steven Covey referring to what Albert Einstein observed, “The significant problems we face cannot be solved at the same level of thinking we were at when we created them” (Covey, 2009, p 48).

So Appelo (2009) has a 4 step theory that I like a lot and belief that could support me in my coming development and actions;

Step 1. Dance with the system

As Mitchell (2009) wrote that this “social network is complex and adaptive”. And with that you understand that the change will not follow a straight line and will have some bumps on the road of change (Appelo, 2009).

Step 2. Mind the People
I use to think this complex social network as an equation. All people have one small part of the equation, and if someone leaves or new comes in – that whole equation has suddenly totally different outcome (Appelo, 2009). So as a leader I need to set the right example, and also communicate better.

Step 3. Stimulate the Network

Appelo (2009, p 6) wrote that if you find out about the individuals and their interactions between each other if you see the change behaviour spread like viruses through a whole organization. That means that you could by social network stimulation overcome resistance. I will take that into my leadership and strategies already today.

 

Step 4. Change the Environment

I will consider the physical barrier in the environment and work much more to get self-organizing teams. And also use Appelo (2009) enhance model of Mark van Vugt “Four I-model”. Appelo extended this model into 5 parts;
Information; to give the employees feedback on their behaviours and aware of the consequences
Identity; to find an appealing higher identity for the team, to join behind.
Incentives; Treat and recognize the right behaviour by compliments and feedback direct to the person.

Infrastructure; Tools and infrastructure need to drive the correct behaviour.

Institutions; introduce best practice and other informal institutions.

5        Reference Notes & Bibliography

Amabile, T (1996). Creativity and Innovation in Organizations. Cambride, MA: Harvard Business School.

Andriopoulos, C. (2001). Determinants of organisational creativity: a literature review, Management Decision, Vol. 39 Iss: 10, pp.834 – 841. Glasgow, UK: MCB UP Ltd Hunter Centre for Entrepreneurship, University of Strathclyde.

Andersson, L. E. (2009). OBM – Ledarskapets Psykologi. Stockholm: Bonniers

Bass, B.M. (1990). Bass & Stogdill’s handbook of leadership: Theory, research, and managerial applications. Third Edition New York: The Free Press.

Bass, B.M. (1997). Does the transactional – transformational leadership paradigm transcend organizational and national boundaries? American Psychologist, 52, pp 130-139.

Bass, B.M. (1998). Transformational leadership: Industry, military and educational impact. London: Lawrence Erlbaum Associates, Publishers.

Beer M., Michael and Nohria, Nitin (eds 2000). Breaking the Code of Change, ‘Resolving the Tension Between the Theories E and O of Change’ pp 1-33. Cambridge, MA: Harvard Business School Press.

Burnes, B. (2004). Managing Change: A Strategic Approach to Organisational Dynamics. Pearson Education Limited.

Bevan, H., Buchanan, D., Godfrey Harris, L., Plsek, P (2003). Enabling Innovation To Transform Healthcare: An Action Development Project. Dave Buchanan Leicester Business School, De Montfort University.

Collins, J. (2001). Good to Great, Why Some Companies Make the Leap… and Others Don’t. New York: Harper Collins Publishers Inc.

 Covey, S. (2009). The Seven Habits of Highly Successful People. New York: RosettaBooks LLC.

Daniels, A. (2009), Oops! 13 Management Practices that Waste time and Money. Atlanta, Ga.: Performance Management Publications

Daniels, A. (1999). Bringing Out the Best in People: How to Apply the Astonishing Power of Positive Reinforcement. York, NY: McGraw-Hill Proffesionals.

Gal, R. (1987). Military leadership for the 1990s: Commitment-derived leadership. Report from the Israeli Institute for Military Studies, 070-06-87.

Hamel, G. (2008). Management MUST Be Reinvented (2009). HSMAmericas, You Tube clip http://www.youtube.com/watch?v=TVX8XhiR1UY&feature=em-share_video_user  [accessed 26 June 2012]

Holbeche, L. (2006). Understanding change: theory, implementation and success. Elsevier Butterworth-Heinemann

Kohn, A. (1999). Punished by Rewards. Boston: Houghton Mifflin

Kotter, J. (1996). Leading Change. Boston: Harvard Business Review Press.

Machiavelli (2011). The Prince, Gutenberg.org, “Chapter XV”. http://www.gutenberg.org/files/1232/1232-h/1232-h.htm#2HCH0015 [accessed 12 June 2012].

Meland, G & Å. (2008). Kaizen – sakta ner och gör mer. Halmstad: Bull Graphics.

Mole, J (1993). Mind your manners. London: Nicholas Brealey Publishing Limited.

Robins, S. & Judge, T. (2009). Organizational Behavior, 13th edn. New Jersey: Person Education Inc.

Senior, B. & Swailes, S. (2010). Organizational Change, 4th edn. Essex: Pearson Education Limited.

Tidd, J. & Bessant, J. (2009). Managing Innovation, 4th edn. John Wiley & Sons Ltd: West Sussex, UK.

Tolle, E. (2004). A Guide to SPIRITUAL ENLIGHTENMENT; The Power of Now. http://www.mindwell.be/ebooks/thepowerofnow.pdf [accessed 7 June 2012]

Weick, K. (2000). Making Sense of the Organization. Blackwell Publishers

Yukl, G. (2006) Leadership in Organizations, Prentice Hall: New Jersey

6        Appendix

Appendix 1 – Table of management and leadership history

Year Person Brief description
374 BC Platon Government, management would be entrusted with the insightful
1532 Machiavelli The Prince, how a state should be controlled
1800 Napoleon Revolutionized the art of war
1831 Clausewitz “Vom Kriege”, i.e. The war
1911 Taylor ‘Scientific management’
1922 Weber Gave bureaucracy a face
1925 Fayol Created the linestaff organization
1933 Mayo Predecessor of the Human Relations School
1947 Lewin Leadership styles: democratic authoritarian laissez-faire
1950 Stogdill Opposed to unilateral property research
1954 Maslow “Hierarchy of Needs”
1957 Argyris Single loop and double loop learning, reflection
1958 Tannenbaum and Schmidt “Democratic management”
1958 Schutz FIRO-theory
1959 Herzberg Studied satisfaction at work
1960 McGregor Theory X and Y
1961 Bion Pioneer in group therapy, Tavistock Clinic
1961 Likert Examined the leadership styles
1964 Blake & Mouton Managerial grid”
1967 Fiedler Style situation
1969 Hersey & Blanchard Situational leadership”
1978 Burns Predecessor of transformational leadership
1981 Deming TQM
1982 Peters & Waterman On the hunt for the championship
1985 Schein Organizational culture
1985 Bass Transformational leadership’
1989 Yukl Interdisciplinary approach to leadership

Source; Roger Lindberg, 2009, ’Bättre solbränd än utbränd’, Transformational Leadership. Gällöftsa Utbildning, Stockholm. (23 October).

6.1       Appendix 2 – Table Addressing the Tensions between Competing Change Management Strategies

Dimension of Change Economic Value

Theory (E)

Organizational Capability Theory (O) Theories E and O Combined
Goals Maximize shareholder value Develop organizational capabilities Explicitly embrace the paradox between economic value and organizational capability.
Leadership Manage from the top down Encourage participation from the bottom up Set direction from the top and engage the people below
Focus Emphasize structure and systems Build up corporate culture; employees’ behaviour and attitudes Focus simultaneously on the hard (structures and systems) and the soft (corporate culture)
Process Plan and establish programs Experiment and evolve Plan for spontaneity
Reward system Motivate through financial incentives Motivate through commitment – use pay as fair exchange Use incentives to reinforce change but not to drive it
Use of Consultants Consultants analyze problems and shape solutions Consultants support management in shaping their own solutions Consultants are expert resources who empower employees

Source: Beer, M. and N. Nohria. 2000. Cracking the code of change. Harvard Business Review (May-June):133-141

 

 

6.2       Appendix 3 – Table Leading change in operational versus innovating organizations

Leading change area Operating Organization Innovating organisation
Staff Has more of deep specialized staff that has boundaries towards a function in the organization. Look at the person behind the CV to be able to find the creative and playful minded people, to be flexible and to develop into new areas over time.
Manager Has more on operational control and details. Focus on coaching and mentoring the people.
Structure Is bureaucratic, hierarchical and the people are more of the deepened specialists. Has a flat organization without hierarchical steering. Much more of project oriented activities without silos mentality
Process Come from higher management decisions to align to a common process for the company, e.g. supported by six-sigma approach. More of bottom up processes, i.e. focus on new and updates of existing process from the people that works in the process to have it more flexible and with more variations
Reward Is monetary, based on hierarchic promotions and more of status Is autonomy, the recognition based on the team’s efforts and participation.

 

Source; Grant, R M (2010) Contemporary Strategy analysis, 7th edn. West Sussex: John Wiley & Sons Ltd.

6.3       Appendix 4 – Organisational Sub-systems.

 

 

 

6.4       Appendix 4 – Kotter 8 step model

  1. Establish a sense of urgency
  2. Form a powerful guiding coalition
  3. Create a clear and compelling vision
  4. Communicate the vision
  5. Empower others to act on the vision
  6. Create short term wins
  7. Consolidate and build
  8. Institutionalize the new approaches