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<strong>About</strong> PfeifferPfeiffer serves the professional development <strong>and</strong> h<strong>and</strong>s-on resource needs oftra<strong>in</strong><strong>in</strong>g <strong>and</strong> human resource practitioners <strong>and</strong> gives them products to do theirjobs better. We deliver proven ideas <strong>and</strong> solutions from experts <strong>in</strong> HR development<strong>and</strong> HR management, <strong>and</strong> we offer effective <strong>and</strong> customizable toolsto improve workplace performance. From novice to seasoned professional,Pfeiffer is the source you can trust to make yourself <strong>and</strong> your organizationmore successful.Essential Knowledge Pfeiffer produces <strong>in</strong>sightful, practical, <strong>and</strong>comprehensive materials on topics that matter the most to tra<strong>in</strong><strong>in</strong>g<strong>and</strong> HR professionals. Our Essential Knowledge resources translate the expertiseof seasoned professionals <strong>in</strong>to practical, how-to guidance on critical workplaceissues <strong>and</strong> problems. These resources are supported by case studies, worksheets,<strong>and</strong> job aids <strong>and</strong> are frequently supplemented with CD-ROMs, websites, <strong>and</strong>other means of mak<strong>in</strong>g the content easier to read, underst<strong>and</strong>, <strong>and</strong> use.Essential Tools Pfeiffer’s Essential Tools resources save time <strong>and</strong>expense by offer<strong>in</strong>g proven, ready-to-use materials—<strong>in</strong>clud<strong>in</strong>g exercises,activities, games, <strong>in</strong>struments, <strong>and</strong> assessments—for use dur<strong>in</strong>g a tra<strong>in</strong><strong>in</strong>gor team-learn<strong>in</strong>g event. These resources are frequently offered <strong>in</strong> loose-leaf orCD-ROM format to facilitate copy<strong>in</strong>g <strong>and</strong> customization of the material.Pfeiffer also recognizes the remarkable power of new technologies <strong>in</strong>exp<strong>and</strong><strong>in</strong>g the reach <strong>and</strong> effectiveness of tra<strong>in</strong><strong>in</strong>g. While e-hype has oftencreated whizbang solutions <strong>in</strong> search of a problem, we are dedicated tobr<strong>in</strong>g<strong>in</strong>g convenience <strong>and</strong> enhancements to proven tra<strong>in</strong><strong>in</strong>g solutions. All oure-tools comply with rigorous functionality st<strong>and</strong>ards. The most appropriatetechnology wrapped around essential content yields the perfect solution fortoday’s on-the-go tra<strong>in</strong>ers <strong>and</strong> human resource professionals.www.pfeiffer.comEssential resources for tra<strong>in</strong><strong>in</strong>g <strong>and</strong> HR professionals
S<strong>Best</strong> <strong>Practices</strong> <strong>in</strong> <strong>Leadership</strong> <strong>Development</strong><strong>and</strong> Organization ChangeS
S<strong>Best</strong> <strong>Practices</strong> <strong>in</strong> <strong>Leadership</strong><strong>Development</strong> <strong>and</strong>Organization ChangeHow the <strong>Best</strong> Companies EnsureMean<strong>in</strong>gful Change <strong>and</strong>Susta<strong>in</strong>able <strong>Leadership</strong>SLouis CarterDavid UlrichMarshall GoldsmithEditors
Copyright © 2005 by John Wiley & Sons, Inc.Published by PfeifferAn Impr<strong>in</strong>t of Wiley989 Market Street, San Francisco, CA 94103-1741www.pfeiffer.comNo part of this publication may be reproduced, stored <strong>in</strong> a retrieval system,or transmitted <strong>in</strong> any form or by any means, electronic, mechanical,photocopy<strong>in</strong>g, record<strong>in</strong>g, scann<strong>in</strong>g, or otherwise, except as permitted underSection 107 or 108 of the 1976 United States Copyright Act, without either theprior written permission of the Publisher, or authorization through paymentof the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-8600, or onthe web at www.copyright.com. Requests to the Publisher for permissionshould be addressed to the Permissions Department, John Wiley & Sons,Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008,or e-mail: permcoord<strong>in</strong>ato@wiley.com.For additional copies/bulk purchases of this book <strong>in</strong> theU.S. please contact 800-274-4434.Pfeiffer books <strong>and</strong> products are available through most bookstores. Tocontact Pfeiffer directly call our Customer Care Department with<strong>in</strong> the U.S.at 800-274-4434, outside the U.S. at 317-572-3985, fax 317-572-4002, orvisit www.pfeiffer.com.Pfeiffer also publishes its books <strong>in</strong> a variety of electronic formats. Some contentthat appears <strong>in</strong> pr<strong>in</strong>t may not be available <strong>in</strong> electronic books.ISBN: 0-7879-7625-3Library of Congress Catalog<strong>in</strong>g-<strong>in</strong>-Publication Data<strong>Best</strong> practices <strong>in</strong> leadership development <strong>and</strong> organization change: how thebest companies ensure mean<strong>in</strong>gful change <strong>and</strong> susta<strong>in</strong>able leadership/[edited by] Louis Carter, David Ulrich, Marshall Goldsmith.p. cm.Includes bibliographical references <strong>and</strong> <strong>in</strong>dex.ISBN 0-7879-7625-3 (alk. paper)1. <strong>Leadership</strong>—United States—Case studies. 2. Organizationalchange—United States—Case studies. I. Carter, Louis. II. Ulrich, David,1953– III. Goldsmith, Marshall.HD57.7.B477 2005658.4'06—dc222004021983Acquir<strong>in</strong>g Editor: Matt DavisDirector of <strong>Development</strong>: Kathleen Dolan Davies<strong>Development</strong>al Editor: Susan RachmelerProduction Editor: Rachel AndersonEditor: Suzanne CopenhagenManufactur<strong>in</strong>g Supervisor: Bill MatherlyEditorial Assistant: Laura ReizmanInterior Design: Andrew OgusJacket Design: Adrian MorganPr<strong>in</strong>ted <strong>in</strong> the United States of AmericaPr<strong>in</strong>t<strong>in</strong>g 10 9 8 7 6 5 4 3 2 1
SCONTENTSSAcknowledgments<strong>About</strong> This BookxiixHow to Use This BookxiiiIntroduction xvLouis Carter, David Ulrich, Marshall Goldsmith1 Agilent Technologies, Inc. 12 Corn<strong>in</strong>g 203 Delnor Hospital 434 Emmis Communications 795 First Consult<strong>in</strong>g Group 1206 GE Capital 1617 Hewlett-Packard 1818 Honeywell Aerospace 1959 Intel 21310 Lockheed Mart<strong>in</strong> 239vii
viii CONTENTS11 Mattel 26212 McDonald’s Corporation 28213 MIT 30914 Motorola 33415 Praxair 34616 St. Luke’s Hospital <strong>and</strong> Health Network 36517 StorageTek 40318 W<strong>in</strong>dber Medical Center 42319 Conclusion: Practitioner Trends <strong>and</strong> F<strong>in</strong>d<strong>in</strong>gs 439<strong>About</strong> the <strong>Best</strong> <strong>Practices</strong> Institute 453<strong>About</strong> the Editors 455Index 457
SACKNOWLEDGMENTSS<strong>Best</strong> <strong>Practices</strong>Institute TeamBPI EDITORIAL TEAMLouis Carter, CEO <strong>and</strong> FounderChrist<strong>in</strong>e Alemany, Research AssistantJoanna Centona, Research AssistantVictoria Nbidia, Research AssistantMichal Samuel, Research AssistantConnie Liauw, Research AssistantShawn Sawyer, AssistantContributors, byRepresentativeOrganizationDiane Anderson, Agilent Technologies, Inc.Kelly Brookhouse, MotorolaSusan Burnett, Hewlett-PackardPaula Cowan, First Consult<strong>in</strong>g GroupSusan Curtis, StorageTekL<strong>in</strong>da Deer<strong>in</strong>g, Delnor HospitalJohn Graboski, PraxairJoseph Grenny, Lockheed Mart<strong>in</strong>Brian Griff<strong>in</strong>, Delnor HospitalDale Halm, IntelJames Intagliata, McDonald’s CorporationF. Nicholas Jacobs, W<strong>in</strong>dber Medical CenterDavid Kuehler, MattelJamie M. Lane, MotorolaCraig Livermore, Delnor HospitalRuth Neil, PraxairJohn Nelson, Emmis CommunicationsRichard O’Leary, Corn<strong>in</strong>gJeff Osborne, Honeywell AerospaceMelany Peacock, Corn<strong>in</strong>gLawrence Peters, Lockheed Mart<strong>in</strong>M. Qu<strong>in</strong>n Price, Lockheed Mart<strong>in</strong>Rich Rard<strong>in</strong>, PraxairIvy Ross, MattelSusan Rudolph, IntelL<strong>in</strong>da Sharkey, GE CapitalRobert A. Silva, Agilent Technologies, Inc.David Small, McDonald’s CorporationJanelle Smith, IntelAndrew Starr, St. Luke’s Hospital <strong>and</strong> Health NetworkBrian O. Underhill, Agilent Technologies, Inc.Karen Walker, Agilent Technolgies, Inc.Bob Weig<strong>and</strong>, St. Luke’s Hospital <strong>and</strong> Health NetworkCalhoun Wick, Fort Hill CompanyKarie Willyerd, Lockheed Mart<strong>in</strong>Tom Wright, Delnor HospitalGreg Zlevor, Honeywell Aerospaceix
xii ABOUT THIS BOOKWith<strong>in</strong> the forthcom<strong>in</strong>g chapters, you will learn from our world’s best organizations<strong>in</strong> various <strong>in</strong>dustries <strong>and</strong> sizes• Key elements of lead<strong>in</strong>g successful <strong>and</strong> results-driven change <strong>and</strong> leadershipdevelopment• Tools, models, <strong>in</strong>struments, <strong>and</strong> strategies for lead<strong>in</strong>g change <strong>and</strong>development• Practical “how-to” approaches to diagnos<strong>in</strong>g, assess<strong>in</strong>g, design<strong>in</strong>g,implement<strong>in</strong>g, coach<strong>in</strong>g, follow<strong>in</strong>g up on, <strong>and</strong> evaluat<strong>in</strong>g change <strong>and</strong>development• Critical success factors <strong>and</strong> critical failure factors, among othersWith<strong>in</strong> each case study <strong>in</strong> this book, you will learn how to• Analyze the need for the specific leadership development or organizationchange <strong>in</strong>itiative• Build a bus<strong>in</strong>ess case for leadership development <strong>and</strong> organizationchange• Identify the audience for the <strong>in</strong>itiative• Design the <strong>in</strong>itiative• Implement the design for the <strong>in</strong>itiative• Evaluate the effectiveness of the <strong>in</strong>itiative
SHOW TO USE THIS BOOKSPRACTICAL APPLICATIONThis book conta<strong>in</strong>s step-by-step approaches, tools, <strong>in</strong>struments, models, <strong>and</strong>practices for implement<strong>in</strong>g the entire process of leadership development<strong>and</strong> change. The components of this book can be practically leveraged with<strong>in</strong>your work environment to enable a leadership development or change <strong>in</strong>itiative.The exhibits, forms, <strong>and</strong> <strong>in</strong>struments at the back of each chapter maybe used with<strong>in</strong> the classroom or by your organization development team orlearners.WORKSHOPS, SEMINARS, OR ADVANCED DEGREE CLASSESThe case studies, tools, <strong>and</strong> research with<strong>in</strong> this book are ideal for students ofadvanced degree courses <strong>in</strong> management, organization development <strong>and</strong> behavior,or social <strong>and</strong> organizational psychology. In addition, this book can be usedby any senior vice president, vice president, director, or program manager whois <strong>in</strong> charge of leadership development <strong>and</strong> change for his or her organization.Teams of managers—project manager, program managers, organization development(OD) designers, or other program designers <strong>and</strong> tra<strong>in</strong>ers—should usethe case studies <strong>in</strong> this book as start<strong>in</strong>g po<strong>in</strong>ts <strong>and</strong> benchmarks for the successof the organization’s <strong>in</strong>itiatives.xiii
xiv HOW TO USE THIS BOOKThis book conta<strong>in</strong>s a series of dist<strong>in</strong>ct case studies that <strong>in</strong>volve variouscorporate needs <strong>and</strong> objectives. It is your job as the reader to beg<strong>in</strong> the processof diagnos<strong>in</strong>g your company’s unique organizational objectives.When apply<strong>in</strong>g <strong>and</strong> learn<strong>in</strong>g from the case studies <strong>and</strong> research <strong>in</strong> this book,ask yourself, your team, <strong>and</strong> each other the follow<strong>in</strong>g questions:• What is our context today?• What do we (I) want to accomplish? Why?• In what context am I most passionate about lead<strong>in</strong>g change <strong>and</strong>development? Why?• What are the issue(s) <strong>and</strong> concerns we are challenged with?• Are we ask<strong>in</strong>g the right questions?• Who are the right stakeholders?• What approaches have worked <strong>in</strong> the past? Why?• What approaches have failed <strong>in</strong> the past? Why?For more <strong>in</strong>formation on Lou Carter’s <strong>Best</strong> <strong>Practices</strong> Institute’s workshops,research, assessments, <strong>and</strong> models on the most current leadership development<strong>and</strong> organizational change topics, contact Louis Carter’s <strong>Best</strong> <strong>Practices</strong> Institutedirectly, toll free at 888–895–8949 or via e-mail at lcarter@bp<strong>in</strong>stitute.net.
SINTRODUCTIONSIn September 2003, Lou Carter’s <strong>Best</strong> <strong>Practices</strong> Institute performed a researchstudy on trends <strong>and</strong> practices <strong>in</strong> leadership development <strong>and</strong> organizationchange. BPI asked organizations <strong>in</strong> a range of <strong>in</strong>dustries, sizes, <strong>and</strong> positions<strong>in</strong> the bus<strong>in</strong>ess cycle to identify their top methods of achiev<strong>in</strong>g strategic change<strong>and</strong> objectives. The study found that there is a strong dem<strong>and</strong>, <strong>in</strong> particular, <strong>in</strong>the follow<strong>in</strong>g areas of leadership development <strong>and</strong> organization change (seeTable I.1). Our cont<strong>in</strong>ual research <strong>in</strong> the area of best practices <strong>in</strong> leadershipdevelopment <strong>and</strong> change strongly support the assumptions <strong>and</strong> organizationalcase studies that we profile with<strong>in</strong> this book.Based on this study, BPI chose the top organizations that are implement<strong>in</strong>gleadership development <strong>and</strong> organizational change with extraord<strong>in</strong>ary results.BPI found that each organization is unique <strong>in</strong> its methods of change <strong>and</strong> development.Each organization has different methods, motives, <strong>and</strong> objectives thatare relevant only to the unique l<strong>and</strong>scape of each of its <strong>in</strong>dividual dynamics <strong>and</strong>designs. <strong>Leadership</strong> development <strong>and</strong> organization change, therefore, are merecategories or a common lexicon for describ<strong>in</strong>g the way <strong>in</strong> which “real work” isdone with<strong>in</strong> our best organizations. This “real work” is illustrated with<strong>in</strong> everychapter of the book <strong>in</strong> terms of the bus<strong>in</strong>ess results that are achieved as a resultof the practices that were <strong>in</strong>stitutionalized with<strong>in</strong> the follow<strong>in</strong>g organizations(see Table I.2). A majority of our world’s best organizations describe leadershipdevelopment <strong>and</strong> organization change as “the real work of the organization.” Inthe past few years, we have seen this shift occur <strong>in</strong> the field of organizationxv
xvi INTRODUCTIONTable I.1. Program Method of Achiev<strong>in</strong>g Strategic Change <strong>and</strong> Objectives with HighestLevel of Dem<strong>and</strong>, <strong>in</strong> Order of Dem<strong>and</strong>OD/HRD TopicRank<strong>in</strong>g<strong>Leadership</strong> development 1Performance management 2Organization development <strong>and</strong> change 3Innovation <strong>and</strong> service enhancement 4Coach<strong>in</strong>g 5development or “OD.” Organizations are f<strong>in</strong>d<strong>in</strong>g that <strong>in</strong> order to compete, <strong>in</strong>novate,<strong>and</strong> become more effective, productive, <strong>and</strong> profitable <strong>in</strong> an <strong>in</strong>creas<strong>in</strong>glyglobal <strong>and</strong> challeng<strong>in</strong>g economy, the tools, techniques, <strong>and</strong> practices of OD arenecessary <strong>in</strong> order to harness the great power of human capital—both <strong>in</strong>customers <strong>and</strong> employees. As you will see <strong>in</strong> this book, our best practice organizationsprove the power of human capital through results-driven best practices<strong>in</strong> organization development <strong>and</strong> change.We have brought you eighteen of our world’s best organizations that haveused leadership development <strong>and</strong> organizational change program design <strong>and</strong>development to achieve their strategic bus<strong>in</strong>ess objectives.MAJOR FINDINGSThis year we talked to many organizations from a variety of <strong>in</strong>dustries withproven, practical methods for leadership development <strong>and</strong> organizationalchange to compile this book. We asked them to share the approaches, tools,<strong>and</strong> specific methods that made their programs successful. These organizationshave a strong f<strong>in</strong>ancial history, formal human resource management programsthat <strong>in</strong>tegrate company strategy with its program’s objectives, a strong pool oftalent, passion for positive change, <strong>and</strong> proven results from their <strong>in</strong>itiatives.All organizational <strong>in</strong>itiatives were carefully screened through a six-phase diagnosisfor an extraord<strong>in</strong>ary leadership <strong>and</strong> organizational change program(see under A Step-by-Step System to Organization <strong>and</strong> Human Resources<strong>Development</strong>, below).We chose companies that have succeeded <strong>in</strong> successfully implement<strong>in</strong>gresults-driven transformational organization change that achieves positivebus<strong>in</strong>ess results. These are the companies where change is facilitated through
INTRODUCTIONxviiTable I.2. List<strong>in</strong>g of <strong>Best</strong> Practice Case Studies by Company, Industry,Number of Employees, <strong>and</strong> Gross RevenueRevenuesCompany Industry Employees ($U.S.)Agilent Technologies, Electronics 36,000 $6,010.0 MInc.Corn<strong>in</strong>g Communications 23,300 $3,164.0 MDelnor Hospital Health care 1,382 $235.1 MEmmis Communications Media 3,080 $533.8 MFirst Consult<strong>in</strong>g Group Bus<strong>in</strong>ess services 1,775 $282.7 MGE Capital F<strong>in</strong>ance 315,000+ $131.7 BHewlett-Packard Computer hardware 141,000 $56,588.0 MHoneywell Aeorspace Technology <strong>and</strong> 100,000+ $22,274 Mmanufactur<strong>in</strong>gIntel Manufactur<strong>in</strong>g, electronics 78,700 $26,764.0 MLockheed Mart<strong>in</strong> Aerospace <strong>and</strong> defense 125,000 $26,578.0 MMattel Consumer products 25,000 $4,885.3 MMcDonald’s Corporation Leisure, restaurant 413,000 $15,405.7 MMIT Education 9,400 $1,664.7 MMotorola Telecommunications 97,000 $26,679.0 MPraxair Chemicals 25,010 $5,128.0 MSt. Luke’s Hospital Health care 5500 $424 M<strong>and</strong> Health NetworkStorageTek Computer hardware 7,100 $2,039.6 MW<strong>in</strong>dber Medical Health care 427 $54 MCenter<strong>in</strong>tegrated, multilevel programs that are systemic <strong>in</strong> nature, connect directly tobus<strong>in</strong>ess objectives <strong>and</strong> cont<strong>in</strong>uous improvement, <strong>and</strong> <strong>in</strong>clude the follow<strong>in</strong>gshared elements.Commitment to Organizational Objectives <strong>and</strong> CultureMost of the <strong>in</strong>itiatives we exam<strong>in</strong>ed made a commitment to the strategic objectivesor culture of the organization. Almost all of these <strong>in</strong>itiatives have a messageor vision upon which change or development was built. Emmis Communication
xx INTRODUCTIONsystem. Many of the study’s programs were specific to the behaviors required ofcoaches <strong>and</strong> managers who facilitate the performance management process. FirstConsult<strong>in</strong>g Group’s creation of targeted objectives to assist <strong>in</strong> achiev<strong>in</strong>g theorganization’s vision through an <strong>in</strong>tensified <strong>and</strong> streaml<strong>in</strong>ed leadership developmentprogram, <strong>in</strong>corporat<strong>in</strong>g 360-degree/multi-rater feedback, suggests thatleaders previously lacked self-awareness. MIT used adapted models based on thework of Peter Senge, organizational learn<strong>in</strong>g capabilities, <strong>and</strong> W. Warner Burke’skey competencies for organizational learn<strong>in</strong>g. These models frequently formthe basis of multi-rater <strong>and</strong> other competency-based assessment tools, <strong>and</strong> oftenprovide a focal po<strong>in</strong>t to the systemic design of the program itself.Strong Top Management <strong>Leadership</strong> Support <strong>and</strong> PassionTop leaders at the organization must not only budget for the change <strong>and</strong> leadershipdevelopment <strong>in</strong>itiative, they must also strongly believe <strong>in</strong> the <strong>in</strong>itiative<strong>and</strong> model this behavior throughout the organization. Support from senior managementhas been identified by 88 percent of the contributors as a critical step<strong>in</strong> overcom<strong>in</strong>g resistance to change.GE Capital energized its bus<strong>in</strong>ess leaders by design<strong>in</strong>g its program around itsleaders’ behaviors <strong>and</strong> values, a focus that generated buy-<strong>in</strong> <strong>in</strong> high levels of theorganization, <strong>and</strong> by hav<strong>in</strong>g participants work on projects for the office ofthe CEO. W<strong>in</strong>dber Medical Center’s patient empowerment program was drivenby its CEO, Nick Jacobs. In his account of W<strong>in</strong>dber’s organizational changeprogram <strong>and</strong> what drove its emphasis for patient-centered care at the hospital,President Jabobs writes, “When a patient walks <strong>in</strong>to the typical hospital, the overwhelm<strong>in</strong>gconfus<strong>in</strong>g signage, the smell of antiseptics, the curt <strong>and</strong> often unforgiv<strong>in</strong>gattitude of the employees, <strong>and</strong> the awesome power of the physicians areusually clear <strong>in</strong>dicators that they should leave their dignity at the door.” Jacobsis passionate about patient care, <strong>and</strong> it shows <strong>in</strong> the programs that he hassupported for years.When Agilent first became an <strong>in</strong>dependent entity, its CEO made developmentof future leaders one of his first priorities. He drew on <strong>in</strong>itiatives already <strong>in</strong> placeto ensure buy-<strong>in</strong> <strong>and</strong> then improved on these processes by mak<strong>in</strong>g themuniversally applicable. First Consult<strong>in</strong>g Group demonstrated a strong sense ofsupport from top-level executives through its creation of the <strong>Leadership</strong><strong>Development</strong> Committee, which <strong>in</strong>cluded the CEO, two vice presidents, <strong>and</strong> aneighteen-member task force of director <strong>and</strong> vice president-level staff, whoseresponsibility was to aide <strong>in</strong> conduct<strong>in</strong>g organizational assessment <strong>and</strong> benchmark<strong>in</strong>gsurvey data to assist <strong>in</strong> the development of future organizationalleaders. At Praxair, the change team recommended a four-step leadership strategydesign process to engage Praxair Distribution, Inc.’s (PDI’s) top 175 managers<strong>in</strong> assess<strong>in</strong>g the current state of the leadership practices <strong>and</strong> the changesrequired for PDI employees to become a susta<strong>in</strong>able source of competitive
INTRODUCTION xxiadvantage. Former chairman <strong>and</strong> CEO of Honeywell Larry Bossidy’s zeal for SixSigma was without a doubt exactly what the company needed to get this <strong>in</strong>itiativeoff the ground <strong>and</strong> on the radar screen of every leader <strong>and</strong> employee.FCG is unique <strong>in</strong> that the firm’s CEO <strong>and</strong> executive committee serve as facilitatorsto the <strong>Leadership</strong> First program sessions, <strong>and</strong> one member is required tobe a sponsor for the participants.A STEP-BY-STEP SYSTEM TO ORGANIZATION AND HUMANRESOURCES DEVELOPMENTThe <strong>Best</strong> <strong>Practices</strong> Institute has def<strong>in</strong>ed a six-phase system to leadership<strong>and</strong> organization change, which may be seen <strong>in</strong> most of the case studies <strong>in</strong>this book:1. Bus<strong>in</strong>ess diagnosis2. Assessment3. Program design4. Implementation5. On-the-job support6. EvaluationPhase One: Bus<strong>in</strong>ess DiagnosisThe first phase is usually a diagnostic step <strong>in</strong> which the bus<strong>in</strong>ess drivers <strong>and</strong>rationale for creat<strong>in</strong>g the <strong>in</strong>itiative are identified. Critical to this stage is enabl<strong>in</strong>gconsensus <strong>and</strong> a sense of urgency regard<strong>in</strong>g the need for the <strong>in</strong>itiative. A futurevision that is supported by management is a key factor of success for these programs.All of the systems have some model as a focal po<strong>in</strong>t for their work. Thebest of these models capture the imag<strong>in</strong>ation <strong>and</strong> aspirations of employees <strong>and</strong>the entire organization. Design<strong>in</strong>g the system also leads to strategic questions,such as those taken from the GE Capital example:• What are biggest challenges fac<strong>in</strong>g the bus<strong>in</strong>ess—what keeps you awakeat night?• If you had one message to future leaders of this bus<strong>in</strong>ess what wouldit be?• What will leaders need to do to address the bus<strong>in</strong>ess challenges?• What is it that you want to be remembered for as a leader?• What was your greatest def<strong>in</strong><strong>in</strong>g moment that taught you the mostabout leadership?• What excites you most about your current role?
xxii INTRODUCTIONHP conducted a survey on “Re<strong>in</strong>vent<strong>in</strong>g HP.” More than seven thous<strong>and</strong>managers <strong>and</strong> <strong>in</strong>dividual contributors responded. Several themes emerged thatunderscored the need to accelerate decision mak<strong>in</strong>g <strong>and</strong> collaboration. Respondentsthroughout the organization recognized the need to accelerate decisionmak<strong>in</strong>g <strong>and</strong> <strong>in</strong>crease accountability for action, thereby re<strong>in</strong>forc<strong>in</strong>g seniormanagement’s call for greater agility.A well-thought-out diagnostic phase is usually connected to an evaluation ofthe desired bus<strong>in</strong>ess impacts <strong>in</strong> Phase Six.Phase Two: AssessmentAssessments range from GE Capital’s assessment system (<strong>in</strong> which participantscomplete a 360-feedback survey that <strong>in</strong>cludes a question to describe a particularperson at peak performance) to the Myers Briggs Type Indicator (MBTI) tothe <strong>Leadership</strong> Impact Survey (a survey that correlates leader behavior withorganization culture <strong>and</strong> value) to First Consult<strong>in</strong>g Group’s system (<strong>in</strong> which<strong>in</strong>dividual participant assessment is conducted with five vehicles: participantself-assessment, 360-degree <strong>and</strong> multi-rater feedback, external benchmarks,managerial style profile, <strong>and</strong> behavioral needs profile).Assessment has become a norm for bus<strong>in</strong>ess. The question is how we usethe assessment to drive change <strong>in</strong> our bus<strong>in</strong>esses <strong>and</strong> ourselves. Agilent usedit to develop leadership behavioral profiles based on the company’s strategicpriorities, core values, <strong>and</strong> expectations of those <strong>in</strong> senior leadership roles.StorageTek performed an <strong>in</strong>ternal scan to determ<strong>in</strong>e what components oftransformation were lack<strong>in</strong>g. Praxair conducted the assessment process toprepare the organization for future changes by engag<strong>in</strong>g more than five hundredemployees: 175 leaders <strong>in</strong> the top three levels of management <strong>and</strong> over 325employees across all fifteen regional bus<strong>in</strong>esses. Organizations such as GeneralElectric, Intel, Motorola, McDonald’s, <strong>and</strong> others use behavioral analysis toolssuch as the Myers-Briggs Type Indicator or 360-degree assessments. Individualcoach<strong>in</strong>g often accompanies this assessment to facilitate behavioral change <strong>in</strong>participants. This coach<strong>in</strong>g has been extremely successful for firms such as GECapital, Intel, Agilent, McDonald’s, <strong>and</strong> others.Phase Three: Program DesignThe follow<strong>in</strong>g outst<strong>and</strong><strong>in</strong>g programs have several unique elements that areworthy of note.• Coach<strong>in</strong>g. Intel’s coach<strong>in</strong>g <strong>and</strong> mentor<strong>in</strong>g system features <strong>in</strong>ternalcoaches <strong>and</strong> a support network of program participants <strong>and</strong> graduates.Emmis Communications used coach<strong>in</strong>g to help managers overcomeresistance to cultural change.
INTRODUCTION xxiii• Selection of participants. Agilent’s coach<strong>in</strong>g program has a results guaranteeso employees are required to undergo a qualification process,<strong>in</strong>clud<strong>in</strong>g an <strong>in</strong>terview before be<strong>in</strong>g allowed to participate. Intel uses anapplication process to screen out apathetic or dis<strong>in</strong>terested c<strong>and</strong>idates.McDonald’s selects only high-potential c<strong>and</strong>idates chosen by theirdivision presidents.• Action learn<strong>in</strong>g. General Electric, Mattel <strong>and</strong> McDonald’s use actionlearn<strong>in</strong>g as an <strong>in</strong>tegral part of their leadership development systems. Inparticular, General Electric’s action learn<strong>in</strong>g program focuses on solv<strong>in</strong>greal bus<strong>in</strong>ess problems, whereas McDonald’s centers around operational<strong>in</strong>novations. These programs address such questions asWhat is a “doable” project that still exp<strong>and</strong>s th<strong>in</strong>k<strong>in</strong>g?How do we set senior management’s expectations for the bus<strong>in</strong>ess valuethat the learn<strong>in</strong>g will produce?How do action teams stay together as learn<strong>in</strong>g groups over time?• Leverag<strong>in</strong>g multiple tools. Every organization from Mattel to GE Capitaltook great care to use a variety of methods to tra<strong>in</strong>, develop, <strong>and</strong> <strong>in</strong>novate.At Hewlett-Packard (HP), the f<strong>in</strong>al design was a fast-paced programthat <strong>in</strong>terspersed presentations with small group work, practice,<strong>and</strong> discussions <strong>in</strong> order to provide sufficient depth <strong>and</strong> practice withoutoverwhelm<strong>in</strong>g the participants or requir<strong>in</strong>g excessive time out of theoffice. At Mattel, a small group was recruited to participate <strong>in</strong> an immersionprogram that <strong>in</strong>cluded the use of floor-to-ceil<strong>in</strong>g chalkboards <strong>and</strong> atwelve-by-forty-foot pushp<strong>in</strong> wall that acted as liv<strong>in</strong>g journals, <strong>and</strong> selfdiscoveryspeakers to help each participant discover a renewed sense ofself <strong>and</strong> expressiveness.• Use of current practices. Corn<strong>in</strong>g uses past strengths <strong>and</strong> successes toleverage future success. Through focus<strong>in</strong>g on history <strong>and</strong> storytell<strong>in</strong>g,Corn<strong>in</strong>g is able to <strong>in</strong>crease entrepreneurial behavior. StorageTek wascareful to build its organizational changes upon programs <strong>and</strong> practicesthat were already <strong>in</strong> place <strong>in</strong> order to lend a sense of stability <strong>and</strong>consistency to its <strong>in</strong>itiatives.• Connection to core organizational purpose. St. Luke’s Hospital <strong>and</strong>Health System embraces some basic concepts that foster a culture of serviceexcellence <strong>and</strong> form the basis of its models for leadership developmentsuch as its management philosophy, vision for patient satisfaction,PCRAFT core values, service excellence st<strong>and</strong>ards of performance, <strong>and</strong>performance improvement plan. These concepts <strong>in</strong>clude1. Employee satisfaction yields patient satisfaction yields a successful“bus<strong>in</strong>ess” (Build your people . . . they build your bus<strong>in</strong>ess)
xxiv INTRODUCTION2. Employee satisfaction beg<strong>in</strong>s <strong>and</strong> ends with effective leaders whoprovide vision, clear expectations regard<strong>in</strong>g care <strong>and</strong> service,development <strong>and</strong> education, effective communication, role model<strong>in</strong>g,constructive feedback, <strong>and</strong> recognition3. Effective leaders can <strong>and</strong> need to be developed4. <strong>Leadership</strong> development <strong>and</strong> education is based on educat<strong>in</strong>g tochange behaviorAt W<strong>in</strong>dber Medical Center, there was a clear program built on the follow<strong>in</strong>gtransformational changes. The organization determ<strong>in</strong>ed that it would focus onpatient-centered care as the number-one priority of the organization; provide alov<strong>in</strong>g, nurtur<strong>in</strong>g environment to the patients <strong>and</strong> their families; address allpatient <strong>and</strong> patient family issues quickly <strong>and</strong> efficiently; <strong>and</strong> become recognizedlocally, regionally, <strong>and</strong> nationally for this new type of commitment to care thatdid not compromise the patients’ dignity.Phase Four: ImplementationAlmost all of the <strong>in</strong>itiatives have a formalized tra<strong>in</strong><strong>in</strong>g <strong>and</strong> development programor workshops to propel the change or development process <strong>in</strong>to action.The follow<strong>in</strong>g are components of several noteworthy tra<strong>in</strong><strong>in</strong>g <strong>and</strong> developmentworkshops:• Lockheed Mart<strong>in</strong> tra<strong>in</strong>ed leaders to teach new behavioral competencies totheir employees <strong>in</strong> order to overcome their own resistance through public commitmentto the behavioral competencies. Lockheed Mart<strong>in</strong> also focused on agroup of op<strong>in</strong>ion leaders with<strong>in</strong> the company to <strong>in</strong>fluence their peers dur<strong>in</strong>g thecultural change effort.• First Consult<strong>in</strong>g Group’s program, <strong>Leadership</strong> First, prides itself on employ<strong>in</strong>ga situational approach rather than a more typical subject matter approach by<strong>in</strong>corporat<strong>in</strong>g case studies based on actual FCG work <strong>and</strong> scenarios. Unlike manyother programs that focus on motivation <strong>and</strong> communication, FCG’s programfocuses on various skills. For example, when complet<strong>in</strong>g a merger case study, thepotential leader must focus on a variety of issues: f<strong>in</strong>ancial, legal, bus<strong>in</strong>ess <strong>and</strong>revenue implications, emotional, motivational, <strong>and</strong> communication. FCG is alsounique <strong>in</strong> that the firm’s CEO <strong>and</strong> executive committee serve as facilitators to thesessions, <strong>and</strong> one member is required to be a sponsor for the participants.• Mattel’s Project Platypus centered on <strong>in</strong>dividual development <strong>in</strong> order tomaximize creativity directed toward product <strong>in</strong>novation. Trust, respect, <strong>and</strong>communication were all encouraged through the use of storytell<strong>in</strong>g, creativeculture speakers, <strong>and</strong> “face-to-face” connection. Outside experts such as aJungian Analyst <strong>and</strong> a Japanese Tea Master helped hone the team’s observationalskills. Us<strong>in</strong>g the concepts of postmodernism <strong>and</strong> the company as a liv<strong>in</strong>g
INTRODUCTION xxvsystem, the orig<strong>in</strong>al group of twelve bra<strong>in</strong>stormed, bonded, br<strong>and</strong>ed, <strong>and</strong> evenresearched <strong>in</strong> nontraditional ways; their efforts resulted <strong>in</strong> “Ello,” a hybrid build<strong>in</strong>gtoy for girls that is expected to be a $100 million l<strong>in</strong>e.• To ensure that dynamic leadership pr<strong>in</strong>ciples were put <strong>in</strong>to practice, HPimplemented a rigorous postcourse management system us<strong>in</strong>g a commercialfollow-through management tool (Friday5s ® ). In the conclud<strong>in</strong>g session of theprogram, participants were asked to write out two objectives to apply what theyhad learned to their jobs. The follow<strong>in</strong>g week, participants were rem<strong>in</strong>ded oftheir goals by e-mail. A copy of each participant’s objectives was e-mailed tohis or her manager to ensure that managers knew what their direct reports hadlearned <strong>and</strong> <strong>in</strong>tended to work on. The system made each participant’s goals visibleto all the other members of his or her cohort to encourage shared accountability<strong>and</strong> learn<strong>in</strong>g. These were entered <strong>in</strong>to a group-specific Friday5s ® website.The follow<strong>in</strong>g week, participants were rem<strong>in</strong>ded of their goals by e-mail.Other companies implemented change-catalyst programs to help preventsystemic dysfunction.• A key exercise <strong>in</strong> MIT’s transformational program was a visionary exercisethat focused on help<strong>in</strong>g develop<strong>in</strong>g leaders envision change <strong>and</strong> see themselvesas a part of the whole system. Envision<strong>in</strong>g the department operat<strong>in</strong>g <strong>in</strong> ahealthy <strong>and</strong> productive way <strong>in</strong> five years stimulated participants to discuss whatthey are do<strong>in</strong>g today to help ensure that transformation. Participants became<strong>in</strong>volved <strong>in</strong> th<strong>in</strong>k<strong>in</strong>g <strong>in</strong> a new way <strong>and</strong> realized the impact their decisions hadnot only for the future of the department, but also on each other.• At Corn<strong>in</strong>g, an <strong>in</strong>novation task force was established to focus on the company’ssuccesses <strong>and</strong> also identify short-com<strong>in</strong>gs—both considered an untappedresource that needed to be made more visible <strong>and</strong> understood by employees <strong>in</strong>order to champion <strong>and</strong> embrace the concept of <strong>in</strong>novation. Formalized tra<strong>in</strong><strong>in</strong>gprograms for employees of all levels were set up <strong>and</strong> became part of the basisfor promotion, reviews, <strong>and</strong> hir<strong>in</strong>g. Corn<strong>in</strong>g also <strong>in</strong>stituted a program namedCorn<strong>in</strong>g Competes, which is designed for cont<strong>in</strong>uous improvement of bus<strong>in</strong>esspractices through reeng<strong>in</strong>eer<strong>in</strong>g.• StorageTek knew that for its <strong>in</strong>itiatives to be successful they would needto <strong>in</strong>still a sense of urgency, as well as ensure buy-<strong>in</strong> at all levels. They partneredwith a company specializ<strong>in</strong>g <strong>in</strong> transform<strong>in</strong>g strategic direction throughemployee dialogue to create a learn<strong>in</strong>g map called “Current Reality: The Floodof Information.” The map was extremely effective <strong>in</strong> engag<strong>in</strong>g not only top-levelleaders worldwide, but all StorageTek employees <strong>in</strong> discussion about the company’scompetitive environment. The next step, which <strong>in</strong>cluded additionalcommunications <strong>and</strong> <strong>in</strong>itiatives around achiev<strong>in</strong>g a high-performance culture,served to susta<strong>in</strong> the sense of urgency.
xxvi INTRODUCTION• At Praxair the assessment phase lasted over fifteen months <strong>and</strong> was farmore than a few surveys or focus groups. It was an <strong>in</strong>tensive set of actions,engag<strong>in</strong>g more than five hundred employees <strong>and</strong> simultaneously lay<strong>in</strong>g thefoundation for implementation actions endorsed by those whose behaviors wereexpected to change. Resistance dur<strong>in</strong>g the implementation phase was virtuallynonexistent.Phase Five: On-the-Job SupportThese benchmark programs reach beyond the boardrooms <strong>and</strong> classrooms <strong>and</strong>provide on-the-job re<strong>in</strong>forcement <strong>and</strong> support. Work <strong>in</strong> this phase def<strong>in</strong>es thefollow-up support that determ<strong>in</strong>es whether change <strong>and</strong> development will transferon the job. In several of the programs, the support system outside of tra<strong>in</strong><strong>in</strong>gis one of the most salient elements of the organization development–humanresources development (OD-HRD) <strong>in</strong>itiative. Motorola <strong>in</strong>stalled a performancemanagement system to help transfer the shared goals of the organization to <strong>in</strong>dividualbehavior. McDonald’s <strong>in</strong>tegrated program-specific <strong>in</strong>sights with the overallorganization’s ongo<strong>in</strong>g personal development systems <strong>and</strong> processes. EmmisCommunication celebrated <strong>in</strong>dividual achievements dur<strong>in</strong>g special events <strong>and</strong>used a balanced scorecard measurement system to <strong>in</strong>corporate the desiredbehaviors to measure the company’s performance.Agilent uses a slightly different approach <strong>in</strong> its coach<strong>in</strong>g system, <strong>in</strong>volv<strong>in</strong>gperiodic “check-<strong>in</strong>s” with the participants’ constituents throughout the coach<strong>in</strong>gprocess. The check-<strong>in</strong> is important <strong>in</strong> part because the developmental goalsaddressed by the Accelerated Performance for Executives program often perta<strong>in</strong>to the relations between managers <strong>and</strong> their supervisor, peers, <strong>and</strong> supervisees,<strong>and</strong> so forth, <strong>and</strong> also because these constituents are the ones that determ<strong>in</strong>ewhether or not a participants have been successful <strong>in</strong> their development. Alongsimilar l<strong>in</strong>es, Mattel <strong>in</strong>creased manager participation <strong>in</strong> its <strong>in</strong>novation processso that when employees returned to their orig<strong>in</strong>al roles after participat<strong>in</strong>g <strong>in</strong>Project Platypus, there was smoother re<strong>in</strong>tegration <strong>and</strong> improved utilization ofnew skills.The coach<strong>in</strong>g <strong>and</strong> mentor<strong>in</strong>g case studies <strong>in</strong> this book are specificallydesigned to provide ongo<strong>in</strong>g support <strong>and</strong> development for leadership development<strong>in</strong>itiatives. Both the coach<strong>in</strong>g <strong>and</strong> mentor<strong>in</strong>g case studies, Intel <strong>and</strong> GeneralElectric, are excellent examples of organizations that provide ongo<strong>in</strong>gsupport for leadership development <strong>and</strong> more specifically the organization’sstrategic bus<strong>in</strong>ess goals <strong>and</strong> objectives. Other organizations take a more directapproach to provid<strong>in</strong>g ongo<strong>in</strong>g support <strong>and</strong> development for change by<strong>in</strong>stall<strong>in</strong>g review processes. First Consult<strong>in</strong>g Group, Motorola, MIT, <strong>and</strong> Praxairhave ongo<strong>in</strong>g review, monitor<strong>in</strong>g, <strong>and</strong> analysis processes <strong>in</strong> place to ensure that
INTRODUCTION xxviithe new policies <strong>and</strong> procedures are be<strong>in</strong>g followed. Delnor Hospital helpedteams stay on track by requir<strong>in</strong>g department heads to develop n<strong>in</strong>ety-dayplans that outl<strong>in</strong>e specific actions to be taken each quarter <strong>in</strong> work<strong>in</strong>g towardannual goals. This pr<strong>in</strong>ciple is also built <strong>in</strong>to the hospital’s review <strong>and</strong> evaluationsystem so everyone is held accountable for his or her performance <strong>in</strong>achiev<strong>in</strong>g <strong>in</strong>dividual, team, <strong>and</strong> organizational goals.Phase Six: EvaluationEvaluation is the capstone—the po<strong>in</strong>t at which the organization can ga<strong>in</strong><strong>in</strong>sights on how to revise <strong>and</strong> strengthen a program, elim<strong>in</strong>ate barriers to itsre<strong>in</strong>forcement <strong>and</strong> use <strong>in</strong> the field, <strong>and</strong> connect the <strong>in</strong>tervention back to theorig<strong>in</strong>al goals to measure success. Several <strong>in</strong>itiatives deserve not<strong>in</strong>g <strong>in</strong> this stage:• McDonald’s uses behavioral measurements to assess the participants’performance after the program, <strong>in</strong>clud<strong>in</strong>g the rate of promotion <strong>and</strong>performance evaluations.• Emmis Communication measures revenue per employee, employeesurvey results, <strong>and</strong> the rate of undesired turnover to measure thesuccess of the change effort.• Lockheed Mart<strong>in</strong> used employee surveys to track changes <strong>in</strong> criticalbehavior. The results <strong>in</strong>dicated that units that achieved significantimprovement <strong>in</strong> critical behaviors also improved <strong>in</strong> their f<strong>in</strong>ancialperformance.• Intel Fab 12’s leadership development program measures the effectivenessof its program based upon <strong>in</strong>creased participants’ responsibilityafter graduation, postprogram self-assessments, peer recognition letters,<strong>and</strong> results of WOW! Projects implemented by participants while <strong>in</strong> the<strong>Leadership</strong> <strong>Development</strong> Forum.• GE Capital surveys participants about actions taken at the <strong>in</strong>dividual,team, <strong>and</strong> organizational levels to drive change. The surveys follow theorig<strong>in</strong>al construct of the program around the three levels of leadershipafter graduation. A m<strong>in</strong>i-360 is conducted around each participant’sspecific development need; 95 percent of the participants show animprovement as viewed by their orig<strong>in</strong>al feedback givers. Programevaluations are also conducted to ensure that the design <strong>and</strong> contentrema<strong>in</strong> relevant <strong>and</strong> adapt to a global audience.• Agilent used a comb<strong>in</strong>ation of m<strong>in</strong>i-surveys, telephone check-<strong>in</strong>s, <strong>and</strong>face-to-face <strong>in</strong>terviews to determ<strong>in</strong>e perceived improvement <strong>in</strong> a leader’soverall leadership effectiveness <strong>and</strong> specific areas for development. The
INTRODUCTION xxixwith<strong>in</strong> organizations must be more m<strong>in</strong>dful than ever to keep focus on theirorganizational objectives <strong>and</strong> needs when deal<strong>in</strong>g with any outside consult<strong>in</strong>gfirm. I am rem<strong>in</strong>ded of the statement by John Atk<strong>in</strong>son, “If you don’t run yourown life, someone else will.” It is sage advice to listen to your own needs <strong>and</strong><strong>in</strong>st<strong>in</strong>cts for your organization, supported with sound data from all levels of yourorganization.Clearly, there are prom<strong>in</strong>ently shared views <strong>and</strong> approaches across the various<strong>in</strong>dustries <strong>and</strong> OD-HRD practices of what is needed to address the challengeof mak<strong>in</strong>g change. The formula for organization development <strong>and</strong> changerema<strong>in</strong>s an important goal, which companies need to keep as an asset. We lookforward to track<strong>in</strong>g these <strong>and</strong> other organizations as they cont<strong>in</strong>ue <strong>in</strong> theirleadership development <strong>and</strong> change journeys.October 2004Louis CarterWaltham, MassachusettsDavid UlrichVille Mont Royal, QuebecMarshall GoldsmithRancho Santa Fe, California
SCHAPTER ONEAgilent Technologies, Inc.SAgilent Technologies’ corporate-wide executive coach<strong>in</strong>g program forhigh-perform<strong>in</strong>g <strong>and</strong> high-potential senior leaders features a customized360-degree-feedback leadership profile, an <strong>in</strong>ternational network of externalcoaches, <strong>and</strong> a “pay for results” clause l<strong>in</strong>ked to follow-up measurements.OVERVIEW 2BACKGROUND 2Early Coach<strong>in</strong>g Efforts 2Agilent Global <strong>Leadership</strong> Profile 3DESIGN OF THE APEX PROGRAM 4Initial Objectives 4Five Coach<strong>in</strong>g Options 5Results-Guarantee Clause 6Worldwide Coach<strong>in</strong>g Pool 6Internal Market<strong>in</strong>g 7ABOUT THE APEX PROCESS 8Qualification <strong>and</strong> Coach Assignment 8What Do Coaches <strong>and</strong> Executives Do <strong>in</strong> the Program? 8Follow-Up with Key Stakeholders 10MEASUREMENT: THE MINI-SURVEY PROCESS 10RESULTS 10Figure 1.1: Aggregate Results for Overall <strong>Leadership</strong> Effectiveness 11Figure 1.2: Aggregate Results for Selected Areas of <strong>Development</strong> 12Figure 1.3: Aggregate Results for Follow-up Versus No Follow-up 13KEY INSIGHTS AND LESSONS LEARNED 13EXHIBITSExhibit 1.1: The Agilent Bus<strong>in</strong>ess Leader Inventory 15Exhibit 1.2: The Agilent Global <strong>Leadership</strong> Profile 15Exhibit 1.3: Agilent Sample M<strong>in</strong>i-Survey 16ABOUT THE CONTRIBUTORS 181
2 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEOVERVIEWAs a 47,000-person Silicon Valley “start-up,” Agilent Technologies was presentedwith an opportunity to beg<strong>in</strong> anew. The senior leadership team set out to pursuethe company’s future strategy <strong>and</strong> new corporate values. A focused leadershipdevelopment program aligned with the company’s strategic <strong>in</strong>itiatives, <strong>in</strong>clud<strong>in</strong>gan <strong>in</strong>tegrated executive coach<strong>in</strong>g program, quickly became a corporate imperative.This case study will highlight the development <strong>and</strong> implementation of Agilent’sAPEX (Accelerated Performance for Executives) coach<strong>in</strong>g program. APEXhas served over one hundred leaders through a sixty-person, worldwide coach<strong>in</strong>gpool over the past two <strong>and</strong> one-half years. Based on feedback from raters,over 95 percent of the leaders have demonstrated positive improvement <strong>in</strong> overallleadership effectiveness while participat<strong>in</strong>g <strong>in</strong> the program.The lessons learned by Agilent Technologies <strong>in</strong> the implementation of theAPEX program serve as valuable <strong>in</strong>sights for any organization committed tothe cont<strong>in</strong>u<strong>in</strong>g development of key leaders.BACKGROUNDIn 1999, Hewlett-Packard (HP) announced a strategic realignment to create twocompanies. One, HP, <strong>in</strong>cluded all the comput<strong>in</strong>g, pr<strong>in</strong>t<strong>in</strong>g, <strong>and</strong> imag<strong>in</strong>g bus<strong>in</strong>esses.Another, a high-tech “newco,” comprised test <strong>and</strong> measurement components,chemical analysis, <strong>and</strong> medical bus<strong>in</strong>esses. This second companywould be named Agilent Technologies.Agilent became entirely <strong>in</strong>dependent on November 18, 1999, while be<strong>in</strong>gafforded the NYSE ticker symbol “A” <strong>in</strong> the largest <strong>in</strong>itial public offer<strong>in</strong>g <strong>in</strong>Silicon Valley history. New corporate headquarters were constructed on the siteof HP’s first owned <strong>and</strong> operated research <strong>and</strong> development (R&D) <strong>and</strong> manufactur<strong>in</strong>gfacility <strong>in</strong> Palo Alto, California.At the time of its “birth,” Agilent declared three new corporate values toguide its future: speed, focus, <strong>and</strong> accountability. Agilent also reta<strong>in</strong>ed the“heritage” HP values: uncompromis<strong>in</strong>g <strong>in</strong>tegrity, <strong>in</strong>novation, trust, respect, <strong>and</strong>teamwork.With a clear underst<strong>and</strong><strong>in</strong>g of the need for strong <strong>in</strong>dividual leaders to build<strong>and</strong> susta<strong>in</strong> the company, an immediate requirement emerged to construct theleadership development strategy. The development of future leaders was <strong>and</strong>rema<strong>in</strong>s one of CEO Ned Barnholt’s critical few priorities.Early Coach<strong>in</strong>g EffortsA key piece of the emerg<strong>in</strong>g leadership development plan would <strong>in</strong>clude executivecoach<strong>in</strong>g aimed at further develop<strong>in</strong>g key executives who were alreadyrecognized as high-potential or high-perform<strong>in</strong>g leaders.
AGILENT TECHNOLOGIES, INC. 3Executive coach<strong>in</strong>g had an established track record with<strong>in</strong> HP, but effortswere generally uncoord<strong>in</strong>ated. Coach<strong>in</strong>g hadn’t been strategically <strong>in</strong>tegratedwith<strong>in</strong> the company’s leadership development <strong>in</strong>itiatives. Multiple vendors <strong>and</strong><strong>in</strong>dividual practitioners provided different coach<strong>in</strong>g programs at varied prices.Learn<strong>in</strong>g from h<strong>in</strong>dsight, Agilent had a desire to accomplish two early objectives:(1) to create an outst<strong>and</strong><strong>in</strong>g “corporate recommended” <strong>in</strong>tegrated coach<strong>in</strong>gprogram <strong>and</strong> (2) to benefit from a preferred discount rate.One of Agilent’s operat<strong>in</strong>g units, the Semiconductor Products Group (SPG),had engaged <strong>in</strong> a coord<strong>in</strong>ated, “results-guaranteed” coach<strong>in</strong>g program beg<strong>in</strong>n<strong>in</strong>g<strong>in</strong> summer 1999 with Keilty, Goldsmith & Company (later to become Alliance forStrategic <strong>Leadership</strong> Coach<strong>in</strong>g & Consult<strong>in</strong>g). Over fifty of SPG’s senior leaderswould receive one-year leadership effectiveness (behavioral) coach<strong>in</strong>g, which<strong>in</strong>cluded a unique “results guarantee.” The effort attracted positive attention <strong>in</strong>the company <strong>and</strong> would later form the foundation of the APEX program.In February 2000, Dianne Anderson, Agilent’s global program manager, wascharged with design<strong>in</strong>g the corporate coach<strong>in</strong>g solution for the company’ssenior managers <strong>and</strong> executives (about 750 people worldwide). She workedwith Brian Underhill of Keilty, Goldsmith & Company to collaborate on thedesign <strong>and</strong> delivery of the new APEX program, based on the same successfulcoach<strong>in</strong>g model used with<strong>in</strong> SPG.Agilent Global <strong>Leadership</strong> ProfileAt the outset of the APEX program, it was agreed that a critical need centered onthe development of a new leadership behavioral profile to clearly <strong>and</strong> accuratelyreflect the company’s strategic priorities, core values, <strong>and</strong> expectations of those <strong>in</strong>senior leadership roles. Although a leadership <strong>in</strong>ventory had been previouslycustom-designed to beg<strong>in</strong> the SPG divisional coach<strong>in</strong>g effort, at this time it waslargely agreed that an Agilent-wide profile would be needed to position the leadershipbehaviors throughout the whole organization <strong>in</strong> a consistent fashion.This next-generation leadership profile was drafted, based upon key strategicimperatives of top management, Agilent’s new <strong>and</strong> heritage core values, <strong>and</strong>SPG’s orig<strong>in</strong>al profile. After gather<strong>in</strong>g feedback from multiple sources, theAgilent Bus<strong>in</strong>ess Leader Inventory was created <strong>in</strong> summer 2000. The primarycompetencies are provided <strong>in</strong> Exhibit 1.1.Later, <strong>in</strong> spr<strong>in</strong>g 2001, Agilent decided to update the Agilent Bus<strong>in</strong>ess LeaderInventory <strong>and</strong> create a set of profiles that would span all management levelsfrom first-level managers through senior bus<strong>in</strong>ess leaders. A multifunctionalteam of Agilent <strong>and</strong> A4SL Coach<strong>in</strong>g & Consult<strong>in</strong>g (A4SL C&C) people set out tocreate the new profiles.Through a several-month iterative process of document review, <strong>in</strong>ternal<strong>in</strong>puts, <strong>and</strong> ref<strong>in</strong>ements, a scalable <strong>and</strong> aligned Global <strong>Leadership</strong> Profilewas developed for use throughout the organization. In the end, the midlevel/firstlevelmanager profile turned out to be 80 percent the same as the executive
4 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEprofile, with only slight differences <strong>in</strong> some of the specific behavioral descriptionsfor “Leads Strategy & Change” <strong>and</strong> “Drives for Results” areas.F<strong>in</strong>ally, both profiles were reviewed by a senior manager <strong>in</strong> each of Agilent’sbus<strong>in</strong>ess units <strong>and</strong> by representatives of non-U.S. geographies. Feedback fromthese reviews was <strong>in</strong>corporated <strong>in</strong>to the f<strong>in</strong>al product, <strong>and</strong> hence the AgilentGlobal <strong>Leadership</strong> Profile was ready for consistent application across all divisions<strong>and</strong> has been <strong>in</strong> use s<strong>in</strong>ce summer 2001. The primary competencies areoutl<strong>in</strong>ed <strong>in</strong> Exhibit 1.2. Assessment Plus of Atlanta, Georgia, served as APEX’sscor<strong>in</strong>g partner throughout the multiple revisions of the profile.DESIGN OF THE APEX PROGRAMInitial ObjectivesDur<strong>in</strong>g the same time that the design of the <strong>in</strong>itial leadership profile was tak<strong>in</strong>gplace, the basic components of the new coach<strong>in</strong>g program were be<strong>in</strong>g considered<strong>and</strong> crafted. From the outset, the Agilent viewpo<strong>in</strong>t was a coach<strong>in</strong>gprogram that could address multiple objectives, <strong>in</strong>clud<strong>in</strong>g• Senior manager <strong>and</strong> executive focus. C<strong>and</strong>idates for APEX participation<strong>in</strong>cluded vice presidents, corporate officers, bus<strong>in</strong>ess unit leaders,general managers, directors, <strong>and</strong> functional managers.• Global reach. Agilent is a worldwide organization with facilities <strong>in</strong> morethan sixty countries, <strong>in</strong>clud<strong>in</strong>g the United States. The APEX programwould need to effectively serve leaders with coaches <strong>in</strong> the local region(as often as possible) or with<strong>in</strong> an hour’s flight. The goal was to providemultiple coach<strong>in</strong>g options with<strong>in</strong> each geographic area. Awareness oflocal cultural nuances would be critical, <strong>and</strong> local language capabilitywould be highly preferred.• Flexible <strong>and</strong> user-friendly. APEX needed to be user-friendly from start tof<strong>in</strong>ish. To accomplish that a simple menu of options was created, whichwas suitable for a range of budgets <strong>and</strong> vary<strong>in</strong>g levels of <strong>in</strong>terest <strong>in</strong> thecoach<strong>in</strong>g process. Priority was also placed on creat<strong>in</strong>g a program thatmade it easy to <strong>in</strong>itiate a coach<strong>in</strong>g engagement <strong>and</strong> easy to adm<strong>in</strong>isterpayment for coach<strong>in</strong>g services.• Accountability for results. APEX needed to provide added value forAgilent. In return for the company’s <strong>in</strong>vestment <strong>in</strong> them, participantswould need to demonstrate positive, measurable change <strong>in</strong> leadershipeffectiveness as seen by direct reports <strong>and</strong> colleagues.Several months of design ensued to meet these objectives. The structure ofseveral coach<strong>in</strong>g options was outl<strong>in</strong>ed. A general program description wasdrafted. A global coach<strong>in</strong>g pool was established, emphasiz<strong>in</strong>g locations of
AGILENT TECHNOLOGIES, INC. 5Agilent’s key global facilities. Certification st<strong>and</strong>ards for APEX coaches weredeterm<strong>in</strong>ed. Procurement st<strong>and</strong>ards were established to smooth the contract<strong>in</strong>gprocess. Procedures to guide the 360-degree feedback <strong>and</strong> follow-up survey scor<strong>in</strong>gwere created. F<strong>in</strong>ally, pages on the corporate <strong>in</strong>tranet were developed thatconta<strong>in</strong>ed the program description, pric<strong>in</strong>g, coach bios, <strong>and</strong> contract<strong>in</strong>g <strong>in</strong>formation.The APEX groundwork was now <strong>in</strong> place.By design, APEX would be a behaviorally based executive coach<strong>in</strong>g approach,focus<strong>in</strong>g on improv<strong>in</strong>g leadership behaviors on the job. APEX would not be usedfor career plann<strong>in</strong>g, life plann<strong>in</strong>g, strategic plann<strong>in</strong>g, or remedial coach<strong>in</strong>g. Thisdist<strong>in</strong>ction was to be made clear throughout the market<strong>in</strong>g process.In May 2000 at a corporate <strong>Leadership</strong> <strong>Development</strong> Showcase, the AcceleratedPerformance for Executives program was officially launched. APEX was<strong>in</strong>troduced to human resource (HR) managers <strong>and</strong> leadership development specialiststhroughout the organization. The first participants signed up. Althoughref<strong>in</strong>ements <strong>and</strong> new services were cont<strong>in</strong>ually added, the APEX program historynow shows two-plus years of deliver<strong>in</strong>g results consistent with the orig<strong>in</strong>alprogram objectives.Five Coach<strong>in</strong>g OptionsBased upon an achievement-oriented mounta<strong>in</strong>eer<strong>in</strong>g theme implied by the programname, the full APEX offer<strong>in</strong>g <strong>in</strong>cludes five appropriately named coach<strong>in</strong>goptions:Base Camp. Executive participates <strong>in</strong> the Agilent Global <strong>Leadership</strong> Profile<strong>and</strong> receives a two- to four-hour face-to-face coach<strong>in</strong>g session to reviewresults, select area(s) of development, receive on-the-spot coach<strong>in</strong>g, <strong>and</strong>create a developmental action plan.Camp 2. Executive participates <strong>in</strong> the Agilent Global <strong>Leadership</strong> Profile <strong>and</strong>receives six months of face-to-face <strong>and</strong> telephone coach<strong>in</strong>g <strong>and</strong> one m<strong>in</strong>isurveyfollow-up measurement. Coach conducts telephone “check-<strong>in</strong>” withkey stakeholders. Coach<strong>in</strong>g work is guaranteed for results.Camp 3. Executive receives six months of face-to-face <strong>and</strong> telephonecoach<strong>in</strong>g <strong>and</strong> one m<strong>in</strong>i-survey follow-up measurement. Coach conducts upto twelve <strong>in</strong>terviews with key stakeholders <strong>and</strong> provides write-up ofresults. Coach conducts telephone “check-<strong>in</strong>” with key stakeholders.Coach<strong>in</strong>g work is guaranteed for results.High Camp. Executive participates <strong>in</strong> the Agilent Global <strong>Leadership</strong> Profile<strong>and</strong> receives one year of face-to-face <strong>and</strong> telephone coach<strong>in</strong>g plus twom<strong>in</strong>i-survey follow-up measurements. Coach conducts telephone “check<strong>in</strong>”with key stakeholders. Coach<strong>in</strong>g work is guaranteed for results.Summit. Executive receives one year of face-to-face <strong>and</strong> telephone coach<strong>in</strong>g<strong>and</strong> two m<strong>in</strong>i-survey follow-up measurements. Coach conducts up to
6 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEtwelve <strong>in</strong>terviews with key stakeholders <strong>and</strong> provides write-up of results.Coach conducts telephone “check-<strong>in</strong>” with key stakeholders. Coach<strong>in</strong>gwork is guaranteed for results.In addition, several add-on options were made available, <strong>in</strong>clud<strong>in</strong>g additional<strong>in</strong>terviews, <strong>in</strong>struments, <strong>and</strong> team <strong>and</strong> group-based experiences.The <strong>in</strong>tention of multiple options was to allow participants maximum flexibility<strong>and</strong> selection <strong>in</strong> their coach<strong>in</strong>g experience. Participants <strong>in</strong> each optionwere allowed to upgrade or extend <strong>in</strong>to the next higher option without penalty(for example, from six to twelve months). Some l<strong>in</strong>e executives have elected toadd a team-build<strong>in</strong>g objective with <strong>in</strong>tact team participation <strong>in</strong> APEX. The mostcommonly selected option has been High Camp.Results-Guarantee ClauseMost of the APEX options <strong>in</strong>clude a unique offer from A4SL Coach<strong>in</strong>g &Consult<strong>in</strong>g: a results guarantee. Leaders don’t pay until coach<strong>in</strong>g is complete<strong>and</strong> leaders don’t pay unless they improve. Improvement is determ<strong>in</strong>ed by thosework<strong>in</strong>g with <strong>and</strong> rat<strong>in</strong>g the leader, not by the leader him- or herself.This approach has proven to be popular among Agilent executives. In spiteof a challeng<strong>in</strong>g market environment, leaders can cont<strong>in</strong>ue their personal developmentefforts <strong>and</strong> delay payment for professional services for up to one year.Plus, leaders know beforeh<strong>and</strong> that they will only pay for demonstratedperceived improvements <strong>in</strong> their effectiveness as determ<strong>in</strong>ed via a follow-upm<strong>in</strong>i-survey process.The results-guarantee clause requires “qualification” of potential participants(more on that below). Leaders leav<strong>in</strong>g the program early or who have beendeterm<strong>in</strong>ed to no longer be committed are billed a pro-rated amount for theprofessional fees.Further, <strong>in</strong> establish<strong>in</strong>g a relationship with one coach<strong>in</strong>g vendor, Agilent hasbeen able to negotiate a preferred rate. Coach<strong>in</strong>g fees are set as flat rates foreach option. Coaches are encouraged to help achieve measurable change without<strong>in</strong>centiviz<strong>in</strong>g them to spend excessive billable time, wast<strong>in</strong>g money <strong>and</strong> theleader’s valuable time <strong>in</strong> the process.Worldwide Coach<strong>in</strong>g PoolA recurr<strong>in</strong>g challenge dur<strong>in</strong>g the rollout of the program has been the assurance forthe availability of qualified coach<strong>in</strong>g resources on a worldwide basis. As a virtualorganization, A4SL Coach<strong>in</strong>g & Consult<strong>in</strong>g contracts with <strong>in</strong>dependent coaches todeliver coach<strong>in</strong>g services on a worldwide basis. This means A4SL C&C can addcoaches to an Agilent coach<strong>in</strong>g pool without <strong>in</strong>curr<strong>in</strong>g additional expenses.Coaches had to agree to be compensated <strong>in</strong> the same manner as the resultsguarantee—no payment (except expenses) until the conclusion of the coach<strong>in</strong>g
AGILENT TECHNOLOGIES, INC. 7program <strong>and</strong> no payment without successful improvement. Sourc<strong>in</strong>g coaches <strong>in</strong> theUnited States was not difficult. However, <strong>in</strong> Europe <strong>and</strong> Asia, where executive coach<strong>in</strong>gis less established, quality practitioners have been fewer <strong>in</strong> number <strong>and</strong> extremelybusy, thus mak<strong>in</strong>g it difficult to entice them to agree to the results guarantee.With the wide variance <strong>and</strong> lack of regulation <strong>in</strong> the coach<strong>in</strong>g arena <strong>in</strong>general, it became evident from the outset that a set of coach certification guidel<strong>in</strong>eswas needed. M<strong>in</strong>imum APEX coach requirements were established, which<strong>in</strong>cluded significant experience work<strong>in</strong>g with senior executives, experience asa behavioral coach, multiple years <strong>in</strong> leadership roles, <strong>and</strong> an advanced degree.The results guarantee serves as a natural qualifier. That is, generally, the qualitycoaches believe <strong>in</strong> their work (<strong>and</strong> have enough of it), so they can guaranteethe results while afford<strong>in</strong>g a delay <strong>in</strong> compensation. Also, coaches agree toparticipate <strong>in</strong> company conference calls, rema<strong>in</strong> current <strong>in</strong> their profession, <strong>and</strong>abide by a set of ethical guidel<strong>in</strong>es. Coach bios are screened <strong>and</strong> potentialcoaches are <strong>in</strong>terviewed <strong>in</strong> detail.The coach<strong>in</strong>g pool has grown to over sixty coaches worldwide. Each coachparticipates <strong>in</strong> a telephone orientation <strong>and</strong> receives a sixty-page orientationpackage. Agilent now hosts quarterly conference calls to keep coaches <strong>in</strong>formedon corporate news, learn about the coaches’ challenges <strong>in</strong> work<strong>in</strong>g with Agilentleaders, <strong>and</strong> provide a forum for peer-to-peer learn<strong>in</strong>g.Internal Market<strong>in</strong>gIn that APEX st<strong>and</strong>s as a corporate-developed recommended approach, therehas never been a guarantee that any of the decentralized bus<strong>in</strong>esses would takeadvantage of the program. Early on, it was agreed that an <strong>in</strong>ternal market<strong>in</strong>gcampaign was necessary to highlight the benefits of the APEX program.The <strong>Leadership</strong> <strong>Development</strong> Showcase served as an appropriate open<strong>in</strong>g forthe program. Similar presentations were then conducted <strong>in</strong> a variety of <strong>in</strong>ternalHR <strong>and</strong> leadership development sessions, both <strong>in</strong> person <strong>and</strong> via telephone dur<strong>in</strong>gsummer <strong>and</strong> fall 2000.As the program grew, word of mouth became an extremely effective market<strong>in</strong>gtool. As more leaders participated <strong>in</strong> the program, word began to spread <strong>in</strong>ternally.Some l<strong>in</strong>e executives have nom<strong>in</strong>ated themselves <strong>and</strong> entire report<strong>in</strong>g teams to gothrough the program together as a unit. Higher-profile leaders have been someearly adopters, <strong>in</strong>clud<strong>in</strong>g multiple corporate officers <strong>and</strong> vice presidents (VPs). Itbecame apparent that the HR managers were well networked with each other aswell. As a result, word of APEX spread through the Agilent HR community.F<strong>in</strong>ally, a corporate <strong>in</strong>tranet site <strong>and</strong> support<strong>in</strong>g documentation were created,allow<strong>in</strong>g for easy distribution of <strong>in</strong>formation about the program. Much time wasspent craft<strong>in</strong>g crisp, straight-to-the-po<strong>in</strong>t documentation to assist bus<strong>in</strong>essleaders <strong>in</strong> underst<strong>and</strong><strong>in</strong>g the program quickly.
8 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEABOUT THE APEX PROCESSQualification <strong>and</strong> Coach AssignmentDue to the unique nature of the results guarantee, APEX requires a participantqualification process. Potential participants conduct a brief <strong>in</strong>terview with theA4SL Coach<strong>in</strong>g & Consult<strong>in</strong>g program manager to determ<strong>in</strong>e any specific needs<strong>and</strong> to ensure that APEX will meet their objectives. Participants need to <strong>in</strong>dicatea genu<strong>in</strong>e <strong>in</strong>terest <strong>in</strong> the program (rather than be<strong>in</strong>g “told” to do it), bewill<strong>in</strong>g to receive feedback, select areas for development, <strong>and</strong> follow up withkey stakeholders regularly regard<strong>in</strong>g their development goals.Based on this <strong>in</strong>itial conversation, the program manager sends the participanta set of bios for two to four coaches, based on the participant’s needs,style, <strong>and</strong> location. Participants then telephone <strong>in</strong>terview the coaches, learn<strong>in</strong>gmore about the coach’s style, approach, <strong>and</strong> background. At the same time,coaches ask questions to determ<strong>in</strong>e any unique needs or issues for this<strong>in</strong>dividual.In this fashion, executives have a greater sense of ownership <strong>in</strong> the process.Encourag<strong>in</strong>g the participant to select a coach greatly reduces mismatches. As afurther <strong>and</strong> f<strong>in</strong>al qualifier, leaders are required to fund APEX through their ownbudgets. (Agilent corporate sponsors the design <strong>and</strong> ongo<strong>in</strong>g development forAPEX but not the <strong>in</strong>dividual engagements.)What Do Coaches <strong>and</strong> Executives Do <strong>in</strong> the Program?What actually takes place between the A4SL C&C coach <strong>and</strong> the participat<strong>in</strong>gAgilent leader dur<strong>in</strong>g the delivery of the APEX process? In the broadest terms,the coach’s efforts <strong>in</strong> the delivery of coach<strong>in</strong>g services are directed toward twodimensions:1. The overall feedback process—guid<strong>in</strong>g the participant through the<strong>in</strong>itial onl<strong>in</strong>e 360-degree feedback solicitation <strong>and</strong> one or two m<strong>in</strong>isurveys,as well as help<strong>in</strong>g the participant both debrief <strong>and</strong> follow upwith feedback raters <strong>and</strong> providers.2. Content coach<strong>in</strong>g—help<strong>in</strong>g the participant become more effective <strong>in</strong>a targeted area (for example, listen<strong>in</strong>g skills, <strong>in</strong>fluenc<strong>in</strong>g withoutposition power, coach<strong>in</strong>g others). For most APEX assignments, thedevelopment targets are derived via the adm<strong>in</strong>istration of Agilent’scustomized 360-dgree feedback <strong>in</strong>strument, the Agilent Global<strong>Leadership</strong> Profile.APEX coach<strong>in</strong>g assignments have tended to orig<strong>in</strong>ate <strong>in</strong> one of two ways.The primary method is through <strong>in</strong>dividuals enter<strong>in</strong>g the program, generally atthe suggestion of a manager or HR manager. In other cases, a senior Agilentexecutive nom<strong>in</strong>ates his or her leadership team to undergo development via the
AGILENT TECHNOLOGIES, INC. 9APEX program. Each <strong>in</strong>dividual selects an A4SL C&C coach, <strong>and</strong> the process is<strong>in</strong>itiated. As <strong>in</strong>dividual energies rise with<strong>in</strong> the APEX coach<strong>in</strong>g partnerships,team synergies also grow around the collective personal development efforts.The two objectives of personal development <strong>and</strong> team development are wellserved <strong>in</strong> this model.On a side note, there is a benefit <strong>in</strong> the team model particularly with regardto the onl<strong>in</strong>e collection of the 360-degree feedback data. That is, when fullteams are nom<strong>in</strong>ated to participate together as a unit, the data collection processhappens simultaneously for <strong>in</strong>dividual members, <strong>and</strong> frequently the fact thatthe whole team is participat<strong>in</strong>g creates a greater sense of urgency.The APEX coach<strong>in</strong>g process <strong>in</strong>cludes <strong>in</strong>-person visits coupled with regular,ongo<strong>in</strong>g telephone or e-mail contact. In practice, coaches visit participat<strong>in</strong>gAgilent leaders approximately every six to eight weeks (<strong>in</strong> any given APEXassignment, the number of visits may be higher or lower). Telephone <strong>and</strong> e-mailcontact dur<strong>in</strong>g a typical month could range from one to six contacts.It is <strong>in</strong>terest<strong>in</strong>g that for an extended period spann<strong>in</strong>g most of the APEX program’sexistence, Agilent has been operat<strong>in</strong>g under a restricted travel policy.Although an immediate impact on some APEX assignments was a decrease <strong>in</strong>travel (particularly <strong>in</strong>ternationally), most APEX partnerships cont<strong>in</strong>ued tobenefit through the <strong>in</strong>creased use of telephone <strong>and</strong> e-mail contact.This travel restriction was successfully h<strong>and</strong>led, <strong>in</strong> part, through A4SL C&C’sglobal pool of coaches to supply local coach<strong>in</strong>g resources particularly <strong>in</strong> key<strong>in</strong>ternational sites. Also, some coaches have had multiple APEX assignments ata given Agilent site (for example Santa Clara; Denver; <strong>and</strong> Boebl<strong>in</strong>gen,Germany), thereby mak<strong>in</strong>g even regular travel more economical, s<strong>in</strong>ce the costwas shared by multiple participants.Dur<strong>in</strong>g each <strong>in</strong>dividual coach<strong>in</strong>g session, any number of topics may be covered:• Explore the current bus<strong>in</strong>ess context to determ<strong>in</strong>e what may be differentor similar s<strong>in</strong>ce the last coach<strong>in</strong>g session• Review perceived progress toward the developmental action plan• Identify resources <strong>and</strong> tools to support the executive’s change efforts• Review the executive’s recent experiences with his or her behavioral goals• Shadow the Agilent leader <strong>and</strong> observe first-h<strong>and</strong> personal leadershiptendencies (for example, staff meet<strong>in</strong>g, team meet<strong>in</strong>g, feedback delivery,key presentation)• Role play (coach <strong>and</strong> Agilent executive assume roles, do a practicedelivery or dry run, <strong>and</strong> conduct critique <strong>and</strong> review)• Prepare for or review follow-up efforts with key stakeholders <strong>and</strong>feedback providers• Set action items to complete for next coach<strong>in</strong>g session
10 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEFollow-Up with Key StakeholdersThe APEX program was grounded <strong>in</strong> the A4SL Coach<strong>in</strong>g & Consult<strong>in</strong>g researchregard<strong>in</strong>g the impact of follow-up on perceived leadership effectiveness. In virtuallyevery organization <strong>in</strong> which A4SL C&C has delivered coach<strong>in</strong>g services,one lesson is universally the same: regular follow-up with key stakeholdersequates with perceived improvement <strong>in</strong> leadership effectiveness.At least some of the Agilent executives who were seen as follow<strong>in</strong>g up effectivelyprobably <strong>in</strong>formed raters of their development objectives dur<strong>in</strong>g the <strong>in</strong>itialdebrief of the 360-degree results. The <strong>in</strong>itial debrief<strong>in</strong>g is ideally a focused,five- to ten-m<strong>in</strong>ute <strong>in</strong>dividual meet<strong>in</strong>g held with each respondent immediatelyafter the 360-degree report is received. The follow-up addresses• Thank<strong>in</strong>g raters for provid<strong>in</strong>g anonymous 360-degree <strong>in</strong>put• Relat<strong>in</strong>g the positive feedback• Disclos<strong>in</strong>g the developmental goal(s)• Enlist<strong>in</strong>g the rater’s help <strong>in</strong> the participant’s developmental effortsHav<strong>in</strong>g conducted this “<strong>in</strong>itial debrief<strong>in</strong>g,” APEX participants are encouragedto follow up with raters at regular <strong>in</strong>tervals (quarterly on average) to pursueadditional feedback on their improvement. Figure 1.3 provides some compell<strong>in</strong>gdata demonstrat<strong>in</strong>g the difference <strong>in</strong> perceived improvement among those APEXparticipants who followed up <strong>and</strong> those who did not.MEASUREMENT: THE MINI-SURVEY PROCESSAPEX coach<strong>in</strong>g <strong>in</strong>cludes up to two onl<strong>in</strong>e m<strong>in</strong>i-surveys (see Exhibit 1.3). Inaddition to provid<strong>in</strong>g a clear <strong>in</strong>sight <strong>in</strong>to perceptions of behavioral change, thesem<strong>in</strong>i-survey results are used to determ<strong>in</strong>e improvement for purposes of theresults-guarantee clause as well.M<strong>in</strong>i-surveys are short, three- to five-item questionnaires completed bya leader’s key stakeholders. Raters are asked to measure improvement <strong>in</strong> theleader’s overall leadership effectiveness <strong>and</strong> specific areas for development.Raters also <strong>in</strong>dicate whether the leader has followed up with them regard<strong>in</strong>g hisor her areas for development. Additional written comments are also requested.Aside from verify<strong>in</strong>g <strong>in</strong>dividual improvement, m<strong>in</strong>i-survey data can be aggregatedto provide team, group, or corporate-level improvement data.RESULTSAPEX results to date (as demonstrated by aggregated m<strong>in</strong>i-survey data) areimpressive. Figure 1.1 depicts aggregate results regard<strong>in</strong>g improvements <strong>in</strong> overallleadership effectiveness. (Data orig<strong>in</strong>ate from APEX as well as orig<strong>in</strong>al SPG raters.)
AGILENT TECHNOLOGIES, INC. 1135.0%32.8%30.0%25.0%20.0%19.1%21.6%23.7%15.0%10.0%5.0%0.0%0.6%–31.1% 1.0%–2 –1 0 1 2 3Less effectiveMore effectiveFigure 1.1 Aggregate Results for Overall <strong>Leadership</strong> Effectiveness.Source: Data collected <strong>and</strong> managed by Assessment Plus.Question: Has this person become more or less effective as a leaders<strong>in</strong>ce the feedback session?Scale: 3 “less effective” to 3 “more effective”N 831 ratersSeventy-three leadersNearly 57 percent of respondents felt that APEX leaders had improved <strong>in</strong> overallleadership effectiveness to a 2 or3 level. Over 78 percent of respondentsfelt that APEX leaders had improved to a 1, 2, or 3 level. N<strong>in</strong>eteen percentof respondents felt that leaders did not change, whereas nearly 3 percent feltthat leaders got worse.Figure 1.2 depicts improvement <strong>in</strong> participants’ selected areas for development.(Once aga<strong>in</strong>, the data orig<strong>in</strong>ate from all APEX as well as orig<strong>in</strong>al SPGraters.)Improvement on specific areas for development selected by leadersScale: 3 “less effective” to 3 “more effective”N 2276 ratersSeventy-three leaders
12 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE35.0%32.2%30.0%25.0%20.0%20.5%22.8%21.7% 23.7%15.0%10.0%5.0%0.0%0.7% 0.5%1.6%–3–2 –1 0 1 2 3Less effectiveMore effectiveFigure 1.2 Aggregate Results for Selected Areas of <strong>Development</strong>.Source: Data collected <strong>and</strong> managed by Assessment Plus.Nearly 54 percent of respondents felt leaders improved <strong>in</strong> their selected developmentalgoals to a 2 or 3 level. Nearly 77 percent felt leaders improved toa 1, 2, or 3 level. Nearly 21 percent of raters did not perceive any change,whereas 2 percent perceived leaders as gett<strong>in</strong>g worse.Results for those leaders who followed up versus those who did not(from APEX <strong>and</strong> the orig<strong>in</strong>al SPG groups)N 831 ratersSeventy-three leadersOf the 831 raters, 530 (64 percent) believed leaders followed up with them versus301 (36 percent) who perceived no follow-up. Nearly 67 percent of follow<strong>in</strong>gupleaders were seen as improv<strong>in</strong>g to a 2or3 level, compared to 38 percent forthose who did not follow up. More notably, 35 percent of leaders who did notfollow up were perceived as stay<strong>in</strong>g the same (0) compared to nearly 11 percentwho did follow up. Over 5 percent of those who did not follow up were perceivedas gett<strong>in</strong>g worse, compared to 1.2 percent of the follow-up group.In addition, positive feedback was frequently reported through the qualitativeremarks of the m<strong>in</strong>i-surveys.
AGILENT TECHNOLOGIES, INC. 1345.0%40.0%39.5%35.0%34.5%30.0%25.0%20.0%22.4%21.2%27.7%21.1%15.0%16.6%10.0%10.5%5.0%0.0%1.0% 0.4%2.8%0.2%1.7%0.6%–3–2 –1 0 1 2 3Less effectiveMore effectiveNo follow-upFollow-upFigure 1.3 Aggregate Results for Follow-up Versus No Follow-up.Source: Data collected <strong>and</strong> managed by Assessment Plus.Overall, APEX results to date have been very encourag<strong>in</strong>g. Leaders areimprov<strong>in</strong>g <strong>in</strong> both overall leadership effectiveness <strong>and</strong> their selected areas fordevelopment, as perceived by those work<strong>in</strong>g with the leaders.KEY INSIGHTS AND LESSONS LEARNEDThe follow<strong>in</strong>g are some key <strong>in</strong>sights <strong>and</strong> lessons learned from the APEXexperience that may enable any organization to more effectively implement anexecutive coach<strong>in</strong>g program:
Exhibit 1.1. The Agilent Bus<strong>in</strong>ess Leader Inventory• Delivers superior market-driven performanceFocuses externally on the customerDrives for resultsModels speedModels focusModels <strong>in</strong>novation• <strong>Practices</strong> active leadershipLeads peopleActively manages talentModels accountabilityModels trust, respect, <strong>and</strong> teamworkModels uncompromis<strong>in</strong>g <strong>in</strong>tegrity• Builds equity <strong>in</strong> the Agilent br<strong>and</strong><strong>Practices</strong> strategic portfolio managementPromotes a global br<strong>and</strong>Creates a boundaryless organizationAGILENT TECHNOLOGIES, INC. 15Exhibit 1.2. The Agilent Global <strong>Leadership</strong> Profile• Delivers high-growth performanceFocuses externally on the customerDrives for resultsModels speedModels focusModels accountability• <strong>Practices</strong> active leadershipLeads strategy <strong>and</strong> changeActively develops selfActively manages talentModels uncompromis<strong>in</strong>g <strong>in</strong>tegrityModels <strong>in</strong>novation• Acts globallyCreates a global organizationModels trust, respect, <strong>and</strong> teamwork
16 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 1.3. Agilent Sample M<strong>in</strong>i-SurveyAgilent Technologies M<strong>in</strong>i-Survey Follow-up to the 360-AssessmentReturn Information:You are rat<strong>in</strong>g Alison Jerden.You are <strong>in</strong> the “PEERS” rater group.Your Web ID is 434-211667.You may take this survey onl<strong>in</strong>e by go<strong>in</strong>g to . . .http://www.assessmentplus.com/surveyor . . .Fax this survey to 1.413.581.2791or . . .Mail this survey via traceable carrier (FedEx, UPS, etc.) to . . .Assessment Plus1001 Ma<strong>in</strong> StreetStone Mounta<strong>in</strong>, GA 30083-2922YOUR FEEDBACK MUST BE RECEIVED BY AUGUST 09, 2000If you have any questions, please call Alison Jerden at 1.800.536.1470or email ajerden@assessmentplus.comCompany ItemsC1 S<strong>in</strong>ce the feedback session, has this person followed-up with you regard<strong>in</strong>ghow he/she can improve?1: No2: YesC2 Do you feel this person has become more or less effective as a leader s<strong>in</strong>cethe feedback session? (Do not consider environmental factors beyond thisperson’s control.)3: Less Effective2:1:0: No Change1:2:3: More EffectiveN: No InformationOrig<strong>in</strong>al 360 Survey ItemsPlease rate the extent to which this <strong>in</strong>dividual has <strong>in</strong>creased/decreased <strong>in</strong> effectiveness<strong>in</strong> the follow<strong>in</strong>g areas of development dur<strong>in</strong>g the past several months.2. Distills market knowledge <strong>in</strong>to mean<strong>in</strong>gful trends <strong>and</strong> patterns3: Less Effective2:1:0: No Change1:2:3: More EffectiveN: No Information2a Do you feel that change was needed <strong>in</strong> the area mentioned <strong>in</strong> the previousquestion?1: No2: Yes
AGILENT TECHNOLOGIES, INC. 17Exhibit 1.3. (Cont<strong>in</strong>ued)14 Effectively communicates higher organization’s vision–3: Less Effective–2:–1:0: No Change1:2:3: More EffectiveN: No Information14a Do you feel that change was needed <strong>in</strong> the area mentioned <strong>in</strong> the previousquestion?1: No2: Yes30 Openly shares <strong>in</strong>formation–3: Less Effective–2:–1:0: No Change1:2:3: More EffectiveN: No Information30a Do you feel that change was needed <strong>in</strong> the area mentioned <strong>in</strong> the previousquestion?1: No2: YesYou are rat<strong>in</strong>g Alison JerdenCommentsWhat has been done <strong>in</strong> the past several months that you have found to beparticularly effective?What can this person do to become more effective as a manager <strong>in</strong> thedevelopment areas noted above?
18 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEABOUT THE CONTRIBUTORSBrian O. Underhill is a senior consultant <strong>and</strong> coach with Alliance for Strategic<strong>Leadership</strong> Coach<strong>in</strong>g & Consult<strong>in</strong>g, specializ<strong>in</strong>g <strong>in</strong> leadership development <strong>and</strong>multi-rater (360 degree) feedback, executive coach<strong>in</strong>g, <strong>and</strong> organizational culture.Brian designs <strong>and</strong> implements large-scale, results-guaranteed, executivecoach<strong>in</strong>g programs at multiple organizations. His executive coach<strong>in</strong>g work hassuccessfully focused on help<strong>in</strong>g clients achieve positive, measurable, long-termchange <strong>in</strong> leadership behavior. His clients have <strong>in</strong>cluded Agilent Technologies,AT&T, California Public Employees Retirement System (CalPERS), Federal AviationAdm<strong>in</strong>istration (FAA), Johnson & Johnson, Sun Microsystems, <strong>and</strong> WarnerLambert. Brian has a Ph.D. <strong>and</strong> a M.S. degree <strong>in</strong> organizational psychology fromthe California School of Professional Psychology (Los Angeles).Dianne Anderson is committed to help<strong>in</strong>g <strong>in</strong>dividuals <strong>and</strong> organizationsachieve learn<strong>in</strong>g, change, <strong>and</strong> growth. In her current position as global programmanager for Agilent Technologies, Inc., she is responsible for all global executivecoach<strong>in</strong>g programs, <strong>and</strong> for learn<strong>in</strong>g <strong>and</strong> organizational effectiveness consult<strong>in</strong>gto one of Agilent’s bus<strong>in</strong>ess units. Dianne’s career <strong>in</strong>cludes leadershippositions <strong>and</strong> operational experience <strong>in</strong> worldwide market<strong>in</strong>g for Hewlett-Packard (HP), as well as positions <strong>in</strong> R&D. Dianne’s seventeen-plus years ofoperat<strong>in</strong>g experiences have prepared her to develop the skills, knowledge, <strong>and</strong>abilities of senior management so they can more effectively compete <strong>in</strong> theglobal marketplace. Over her career she has managed complex organizationswith multi-million dollar budgets, with experience <strong>in</strong> l<strong>in</strong>e <strong>and</strong> staff positions atthe bus<strong>in</strong>ess unit <strong>and</strong> corporate levels, <strong>and</strong> had responsibility for build<strong>in</strong>g keymarket<strong>in</strong>g <strong>and</strong> sales capabilities.Robert A. Silva, s<strong>in</strong>ce January 2002, has served as head of the coach<strong>in</strong>g practicearea for A4SL Coach<strong>in</strong>g & Consult<strong>in</strong>g, a consult<strong>in</strong>g group based <strong>in</strong> San Diegothat specializes <strong>in</strong> leadership development. Prior to his current role, Bob servedas one of the seven directors of Keilty, Goldsmith & Company from 1987 to 2001.Bob’s bus<strong>in</strong>ess background <strong>in</strong>cludes experience <strong>in</strong> the <strong>in</strong>vestment field withPa<strong>in</strong>e, Webber <strong>in</strong> Boston, <strong>and</strong> fourteen years <strong>in</strong> sales management with M<strong>in</strong>nesotaM<strong>in</strong><strong>in</strong>g & Manufactur<strong>in</strong>g Company <strong>in</strong> New Engl<strong>and</strong>. Dur<strong>in</strong>g his fifteenyears as a consultant <strong>and</strong> coach, Bob has focused on the design <strong>and</strong> delivery oftra<strong>in</strong><strong>in</strong>g to promote leadership development, organizational values, <strong>and</strong> teameffectiveness. Bob’s primary emphasis s<strong>in</strong>ce the mid-1990s has been <strong>in</strong> the areaof executive coach<strong>in</strong>g, help<strong>in</strong>g lead<strong>in</strong>g organizations succeed by enhanc<strong>in</strong>g theleadership effectiveness of key <strong>in</strong>dividuals.Karen Walker is the director of client solutions for Assessment Plus <strong>and</strong> directsthe data services for the Agilent programs. Assessment Plus is an Atlanta-based
AGILENT TECHNOLOGIES, INC. 19consult<strong>in</strong>g firm specializ<strong>in</strong>g <strong>in</strong> web-based assessments to maximize results fromleadership, team, <strong>and</strong> organizational effectiveness programs. Karen teaches a360 Feedback Certification course for Corporate Coach <strong>University</strong> <strong>and</strong> a workshopon <strong>Best</strong> <strong>Practices</strong> for Implement<strong>in</strong>g 360 Programs through the Cornell <strong>University</strong>School of Industrial <strong>and</strong> Labor Relations. Some of Karen’s organizationalsurvey clients <strong>in</strong>clude Acushnet, Cox Enterprises, Lend Lease, Marsh, Porsche,Vic<strong>in</strong>ity, <strong>and</strong> Consumer Credit Counsel<strong>in</strong>g Services. Karen coaches executivestak<strong>in</strong>g part <strong>in</strong> leadership assessment programs for organizations <strong>in</strong>clud<strong>in</strong>g theAmerican Cancer Society, Citigroup, Lockheed Mart<strong>in</strong>, Akzo Nobel, BMW,Kodak, <strong>and</strong> Sun Microsystems. Karen has a degree <strong>in</strong> Industrial <strong>and</strong> SystemsEng<strong>in</strong>eer<strong>in</strong>g from the Georgia Institute of Technology <strong>and</strong> completed her Ph.D.<strong>in</strong> Counsel<strong>in</strong>g Psychology at the <strong>University</strong> of Georgia.
SCHAPTER TWOCorn<strong>in</strong>gSA change <strong>and</strong> <strong>in</strong>novation system that enables best practices <strong>in</strong> market<strong>in</strong>g,manufactur<strong>in</strong>g, <strong>and</strong> product development through Corn<strong>in</strong>g’sfive stage gate process, manufactur<strong>in</strong>g process, <strong>in</strong>novationpipel<strong>in</strong>e, <strong>in</strong>novation process, learn<strong>in</strong>g coaches <strong>and</strong>cont<strong>in</strong>uous evaluation features.OVERVIEW 21INTRODUCTION 22DIAGNOSIS: STAY OUT OF OUR HAIR AND FIX IT 22Organizational Challenge 23Change Objective 23Assessment 24Approach 24INTERVENTION: KEY ELEMENTS 25Figure 2.1: Five-Stage Stage-Gate TM Model 26Turn<strong>in</strong>g Po<strong>in</strong>t 27Critical Success Factors 27Figure 2.2: Innovation People! 27Innovation <strong>in</strong> Market<strong>in</strong>g 28Innovation <strong>in</strong> Manufactur<strong>in</strong>g 29HIGH-TECH COMPANY 29Corn<strong>in</strong>g Competes 30Innovation Today 30Background 31Contemporary Success Story: Innovation at Its <strong>Best</strong> 31Figure 2.3: Manufactur<strong>in</strong>g Process 32ON-THE-JOB SUPPORT: REINFORCING THE REINFORCEMENTS 33Innovative Effectiveness 33Figure 2.4: Corn<strong>in</strong>g Innovation Pipel<strong>in</strong>e 34Ideas <strong>in</strong>to Dollars 3420
CORNING 21Figure 2.5: Ideas <strong>in</strong>to Dollars 35Table 2.1: Innovation Delivery 35Evaluation 36THE LEARNING MACHINE: DRIVING SUBSTAINABLE VALUE 36AND GROWTHFigure 2.6: Innovation Process 36The Learn<strong>in</strong>g Mach<strong>in</strong>e: Provid<strong>in</strong>g New Angles on Insight 37Knowledge Management <strong>and</strong> Organizational Learn<strong>in</strong>g 37Enhanc<strong>in</strong>g the Learn<strong>in</strong>g Culture: Build<strong>in</strong>g Bridges 38to Enable InnovationFigure 2.7: Accelerat<strong>in</strong>g Learn<strong>in</strong>g by Build<strong>in</strong>g Bridges 39Across OrganizationsLearn<strong>in</strong>g Coaches: Establish<strong>in</strong>g a New Core Competency <strong>in</strong> R&D 39LESSONS LEARNED 40POSTLOGUE: CONTINUOUS IMPROVEMENT 41ABOUT THE CONTRIBUTOR 42OVERVIEWMany dream of re<strong>in</strong>vent<strong>in</strong>g themselves as nimble technologycompanies. Corn<strong>in</strong>g has actually done it.—Charlie Cray, Wall Street JournalFor over a century, Corn<strong>in</strong>g Incorporated has been a company synonymous withtechnology-based <strong>in</strong>novation. Today the spirit of <strong>in</strong>novation is stronger thanever. This management case study will look at the evolution of the current <strong>in</strong>novationprocess practiced at Corn<strong>in</strong>g. The case will describe the approach usedto successfully create, implement, <strong>and</strong> grow a world-class, systematic newproduct <strong>in</strong>novation process. It will also chronicle those who have championed<strong>in</strong>novation as a best practice for nearly two decades.In 1984, then Vice Chairman Tom MacAvoy was asked to “fix” Corn<strong>in</strong>g’sapproach to <strong>in</strong>novation; the technology cupboard was bare. To get JamesR. Houghton (Jamie), Corn<strong>in</strong>g’s chairman & CEO (1983–1996; 2001-current) tobless this effort, MacAvoy stressed the significance of the <strong>in</strong>novation process asthe most important quality program <strong>in</strong> the company. Learn<strong>in</strong>g how to <strong>in</strong>novateon a systematic basis over a long period, formerly a tacit matter, was now to beformally articulated so that it could be practiced across the company.Today, the <strong>in</strong>novation process is alive <strong>and</strong> well at Corn<strong>in</strong>g. In fact, it is clearthat the company’s expertise <strong>in</strong> this area is go<strong>in</strong>g to play a significant role <strong>in</strong> position<strong>in</strong>gCorn<strong>in</strong>g for susta<strong>in</strong>able value <strong>and</strong> growth. As Corn<strong>in</strong>g’s current ChiefTechnology Officer Joe Miller states emphatically, “Innovation will lead the way.”
22 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEINTRODUCTIONCorn<strong>in</strong>g Incorporated, responsible for at least three life-chang<strong>in</strong>g product<strong>in</strong>novations—the light bulb envelope, TV tube, <strong>and</strong> optical waveguides—celebrated its 150th anniversary <strong>in</strong> 2001. Known for shedd<strong>in</strong>g old, mature bus<strong>in</strong>esseswhile establish<strong>in</strong>g its leadership <strong>in</strong> <strong>in</strong>novative new product l<strong>in</strong>es <strong>and</strong>process technologies, the company was awarded the National Medal of Technologyfor <strong>in</strong>novation <strong>in</strong> 1993. The drive to rema<strong>in</strong> <strong>in</strong>novative <strong>and</strong> re<strong>in</strong>vent itselfis at the crux of Corn<strong>in</strong>g’s identity <strong>and</strong> has been s<strong>in</strong>ce Amory Houghton, Sr.(Jamie’s great-great gr<strong>and</strong>father) founded the company <strong>in</strong> the 1850s as a small,specialty glass manufacturer.In the 1870s, Houghton’s sons—Amory, Jr., <strong>and</strong> Charles—establishedCorn<strong>in</strong>g’s tradition of scientific <strong>in</strong>quiry <strong>and</strong> emphasis on specialty glassproducts. They believed very strongly <strong>in</strong> creat<strong>in</strong>g unique products for mank<strong>in</strong>d<strong>and</strong> <strong>in</strong> stay<strong>in</strong>g away from the mundane <strong>and</strong> the ord<strong>in</strong>ary. They believed, therefore,<strong>in</strong> <strong>in</strong>novation <strong>and</strong> research <strong>and</strong> development. The next generation, Alanson<strong>and</strong> Arthur, <strong>in</strong>stitutionalized research by br<strong>in</strong>g<strong>in</strong>g under management thecompany’s collective <strong>in</strong>genuity. In 1908, they set up one of the earliest corporateresearch laboratories <strong>in</strong> the United States, one of four at the time.Corn<strong>in</strong>g’s experience s<strong>in</strong>ce then offers countless examples <strong>in</strong> which <strong>in</strong>novativeactivities aimed at one objective have borne fruit <strong>in</strong> many arenas. Employeeshave responded to bus<strong>in</strong>ess challenges by f<strong>in</strong>d<strong>in</strong>g new <strong>and</strong> <strong>in</strong>novative uses forspecialty materials. The company’s best bus<strong>in</strong>ess successes have resulted fromits ability to tailor specialty materials for particular applications. We will focuson one such example, EAGLE 2000TM , <strong>in</strong> some depth later <strong>in</strong> the case, one thatused the <strong>in</strong>novation process to achieve a great result.Start<strong>in</strong>g with a semiformal, six-plus-stage process used <strong>in</strong> the 1960s <strong>and</strong> early1970s, Corn<strong>in</strong>g’s <strong>in</strong>novation process has evolved through five iterations to itscurrent manifestation as a centralized component of product development.DIAGNOSIS: STAY OUT OF OUR HAIR AND FIX ITAs vice chairman with special responsibilities for technology from 1983 to 1986,Tom MacAvoy found himself the target of open resentment expressed by theoperat<strong>in</strong>g divisions, which seemed to believe that they had been bear<strong>in</strong>gthe burdens of an <strong>in</strong>sufficiently productive, centralized technical establishmentfor far too long. Bus<strong>in</strong>ess leaders were given extremely challeng<strong>in</strong>g profit <strong>and</strong>loss (P&L) targets to meet. They felt the high cost <strong>and</strong> <strong>in</strong>efficiencies of research,development, <strong>and</strong> eng<strong>in</strong>eer<strong>in</strong>g (RD&E) were a major stumbl<strong>in</strong>g block to meet<strong>in</strong>gtheir numbers. “Stay out of our hair <strong>and</strong> fix it” was the message MacAvoywas hear<strong>in</strong>g.
Organizational ChallengeCORNING 23Innovation at Corn<strong>in</strong>g, as <strong>in</strong> U.S. <strong>in</strong>dustry more broadly <strong>in</strong> the 1980s, was a conceptthat had fallen out of public favor. This did not mean that Jamie Houghtonwould cut the R&D budget as a percentage of sales; he reasserted his personal commitmentto ma<strong>in</strong>ta<strong>in</strong> research <strong>and</strong> development (R&D) spend<strong>in</strong>g at 4 to 5 percentat that time. Although this was twice the national average <strong>and</strong> quite competitivefor the glass <strong>in</strong>dustry, it was hardly <strong>in</strong> the ballpark for a “high-tech” company,where 6 to 8 percent was closer to the norm. Today, <strong>in</strong> 2004, R&D spend<strong>in</strong>g is at 10to 11 percent of sales <strong>and</strong> expected to stay at that level.One universal method of “fix<strong>in</strong>g” R&D <strong>in</strong> the 1980s was to decentralizeeither the <strong>in</strong>stitutions themselves or the control over their fund<strong>in</strong>g, or both.At Corn<strong>in</strong>g, key managers still believed it was imperative to keep specialtyglass <strong>and</strong> materials research physically centralized, but f<strong>in</strong>ancial decentralizationwas a major plank of the profitable growth plan. The centrally locatedpart of the technical community accord<strong>in</strong>gly shrank from a high of 1,400 people<strong>in</strong> the early 1970s to a core force of 800 people, <strong>in</strong>clud<strong>in</strong>g central manufactur<strong>in</strong>g<strong>and</strong> eng<strong>in</strong>eer<strong>in</strong>g. Today, R&D is a mixture of centralized <strong>and</strong>decentralized resource allocation. Corn<strong>in</strong>g works hard to excel at creat<strong>in</strong>g l<strong>in</strong>kagesbetween the technology <strong>and</strong> the bus<strong>in</strong>ess. In fact, this drive is so strongat Corn<strong>in</strong>g that it overrides the natural organizational barriers <strong>in</strong>herentbetween the two functions.Change ObjectiveTo get Jamie Houghton to bless this significant change effort, MacAvoy had tostress the connection to at least two of the chairman’s critical imperatives:performance, that is, 10 percent operat<strong>in</strong>g marg<strong>in</strong> (at the time the OM was at2 percent) <strong>and</strong> Total Quality Management (TQM). To be sure, Houghton’spreoccupation with quality was complete. MacAvoy recalls: “I’d worked outsome very simple arithmetic. Let’s say we’re spend<strong>in</strong>g $150 million annually.We’re probably wast<strong>in</strong>g about a third of it, we just don’t know what third it is.If quality is only about improv<strong>in</strong>g manufactur<strong>in</strong>g we can get 5 percent at mostimprovement <strong>in</strong> gross marg<strong>in</strong>. The rest has to be about improv<strong>in</strong>g the way we<strong>in</strong>novate. F<strong>in</strong>ally I conv<strong>in</strong>ced him that this had to be one of the Total Qualityobjectives.”The change management mission was clear, <strong>and</strong> MacAvoy summarized theobjective this way: a good research laboratory staffed by good people, skilled atsens<strong>in</strong>g technical trends early; build<strong>in</strong>g relationships with OEM (orig<strong>in</strong>alequipment manufacturer) customers <strong>in</strong> grow<strong>in</strong>g <strong>in</strong>dustries; excellent l<strong>in</strong>ks betweenscientists <strong>and</strong> eng<strong>in</strong>eers <strong>and</strong> through sales <strong>and</strong> market<strong>in</strong>g groups to customers.It was also clear that to achieve MacAvoy’s vision, <strong>in</strong>novation would becomea key driver for change: Corn<strong>in</strong>g’s #1 quality process, its #1 vital few. Innovation
24 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEwould challenge the traditional ways of th<strong>in</strong>k<strong>in</strong>g—it would challenge the corporation<strong>and</strong> its bus<strong>in</strong>esses to th<strong>in</strong>k differently about what was possible. Innovationwould convert ideas <strong>in</strong>to opportunities <strong>and</strong> those opportunities <strong>in</strong>tosusta<strong>in</strong>able streams of earn<strong>in</strong>gs for Corn<strong>in</strong>g.AssessmentExcept for a few key projects protected by top management <strong>and</strong> a few new productsthat had come <strong>in</strong> from the periphery, most other aspects of the RD&Eprogram had fallen <strong>in</strong>to a state of neglect. New product development was <strong>in</strong>sufficientto susta<strong>in</strong> profitability, decl<strong>in</strong>es <strong>in</strong> new process development had allowedcore bus<strong>in</strong>esses <strong>and</strong> acquisitions to become unprofitable, <strong>and</strong> the manufactur<strong>in</strong>gsciences had deteriorated. There were, to be sure, pockets of promis<strong>in</strong>gtechnology here <strong>and</strong> there, but they were not strategically <strong>in</strong>tegrated even <strong>in</strong> thedesired market-based bus<strong>in</strong>esses, end-use <strong>and</strong> systems-based products.Corn<strong>in</strong>g’s defensive moves of the 1970s <strong>and</strong> early 1980s—to reduceresearch fund<strong>in</strong>g (down 20 percent <strong>in</strong> real dollar terms over the decade) <strong>in</strong>favor of development <strong>and</strong> to conf<strong>in</strong>e new <strong>in</strong>vestments primarily to low-riskproduct <strong>and</strong> process extensions <strong>and</strong> renewals—had set up a cycle of dim<strong>in</strong>ish<strong>in</strong>greturns. Corn<strong>in</strong>g’s traditional practice of sponsor<strong>in</strong>g exploration <strong>and</strong>“reach” projects across the board, as well as keep<strong>in</strong>g up a certa<strong>in</strong> level of risktak<strong>in</strong>g,had had the important side benefit of replenish<strong>in</strong>g the company’s“technology till.” By the mid-1980s that till was <strong>in</strong> need of revitaliz<strong>in</strong>g—thecupboard was bare.Further, much of the rest of the company was pay<strong>in</strong>g no attention to <strong>in</strong>novationat all, while low morale <strong>in</strong> the R&D organization itself was underm<strong>in</strong><strong>in</strong>gthe effectiveness of its projects. Innovations that did occur were based onextreme measures. Efforts to <strong>in</strong>novate were succeed<strong>in</strong>g by acts of heroism or byfight<strong>in</strong>g the rest of the company.ApproachWith Houghton’s bless<strong>in</strong>g, MacAvoy placed <strong>in</strong>novation under the umbrella ofTotal Quality <strong>and</strong>, with that, was on his way.The company’s <strong>in</strong>novation process previously had been def<strong>in</strong>ed only with<strong>in</strong>the research, product development, <strong>and</strong> eng<strong>in</strong>eer<strong>in</strong>g communities, <strong>and</strong> now thecompany would work to make this m<strong>in</strong>imalist, yet formal, process the central<strong>in</strong>tegrat<strong>in</strong>g mechanism across the broader community.A major part of MacAvoy’s effort consisted of a systematic appraisal ofCorn<strong>in</strong>g’s many past <strong>in</strong>novation successes <strong>and</strong> failures—its best practices <strong>and</strong>lessons learned—from which he <strong>and</strong> his team aimed to develop an explicit,formalized description of Corn<strong>in</strong>g’s way of <strong>in</strong>novat<strong>in</strong>g: an <strong>in</strong>novation process.
CORNING 25INTERVENTION: KEY ELEMENTSInnovation is possible <strong>in</strong> every aspect of our work together.—Tom MacAvoyAs the first step toward significant change, MacAvoy set up the <strong>in</strong>novation taskforce as a quality improvement team to f<strong>in</strong>d out why the rest of the companywas dissatisfied with RD&E. Members of the team—<strong>in</strong>clud<strong>in</strong>g recognizedCorn<strong>in</strong>g <strong>in</strong>novators—<strong>in</strong>vested months of their time, most of it over earlymorn<strong>in</strong>g breakfast meet<strong>in</strong>gs, which became commonly known as the Breakfastof Champions. So as not to ignore outside perspectives, the team reta<strong>in</strong>ed anoutside consultant as part of the program.The first decision was to focus on Corn<strong>in</strong>g’s past history of successful <strong>in</strong>novationas an untapped resource, one that could be crucial to rebuild<strong>in</strong>g morale.They also believed that the underst<strong>and</strong><strong>in</strong>g of <strong>in</strong>novation implicit <strong>in</strong> the company’sshared memory needed to be made more visible. MacAvoy proposed aslogan for this effort taken from a well-known say<strong>in</strong>g of Corn<strong>in</strong>g veteran EddieLeibig: We never dance as well as we know how.The group studied hundreds of Corn<strong>in</strong>g <strong>in</strong>novations, m<strong>in</strong><strong>in</strong>g them for theirlarger mean<strong>in</strong>g. Many of their generalizations matched those that were com<strong>in</strong>gout <strong>in</strong> broader studies of <strong>in</strong>novation across the country: that high-caliber peoplewho were will<strong>in</strong>g to take risks <strong>and</strong> had good communication <strong>and</strong> team-build<strong>in</strong>gskills were key.Another factor stood out: Corn<strong>in</strong>g’s ability to very quickly concentratemaximum strength on a project of major importance, referred to <strong>in</strong>ternally as“flexible critical mass.” This method enabled Corn<strong>in</strong>g to tackle outsized opportunities.In addition, <strong>in</strong>novation at Corn<strong>in</strong>g had never been the sole prov<strong>in</strong>ce ofscientists or even technical people. Corn<strong>in</strong>g had been good at identify<strong>in</strong>g <strong>and</strong>develop<strong>in</strong>g <strong>in</strong>novative leaders with the right qualities throughout the company’shistory, but this k<strong>in</strong>d of leadership had gone by the board <strong>in</strong> the face of countervail<strong>in</strong>gpressures to specialize, downsize, or reduce the asset base <strong>and</strong> shifts<strong>in</strong> balance between the short-term <strong>and</strong> the long-term. F<strong>in</strong>ally, based on a reviewof current literature on <strong>in</strong>novation, the task force identified a five-stage Stage-Gate TM model that could be adapted for Corn<strong>in</strong>g’s case (Figure 2.1).The <strong>in</strong>novation process, although depicted <strong>in</strong> a l<strong>in</strong>ear fashion for teach<strong>in</strong>g purposes,is anyth<strong>in</strong>g but l<strong>in</strong>ear. An iterative process by def<strong>in</strong>ition, <strong>in</strong>novation is oneof the most fluid, yet socially complex of bus<strong>in</strong>ess processes. Innovation transcendsthe entire organization—it is a way of enabl<strong>in</strong>g people to learn together;it provides a framework for a common language. Further, Figure 2.1 depictsthe concurrency of three functional discipl<strong>in</strong>es—typically organized as crossfunctionalteams for <strong>in</strong>novation activity.
26 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEMarket<strong>in</strong>gTechnologyManufactur<strong>in</strong>gIBuild knowledgeIIDeterm<strong>in</strong>efeasibilityIIITest practicalityIVProve profitabilityVManage lifecycleIdeas Experiments Projects Production ProfitsFigure 2.1 Five-Stage Stage-Gate TM Model.Source: Copyright © Corn<strong>in</strong>g Incorporated. Repr<strong>in</strong>ted by permission.Jim Riesbeck, director of corporate market<strong>in</strong>g, act<strong>in</strong>g as the market<strong>in</strong>g memberof the Breakfast of Champions, cautioned aga<strong>in</strong>st do<strong>in</strong>g what many companieswere do<strong>in</strong>g at the time, which was to def<strong>in</strong>e the process of new productdevelopment <strong>in</strong> such m<strong>in</strong>ute detail that it reduced <strong>in</strong>novation to fill<strong>in</strong>g <strong>in</strong> endlesschecklists <strong>and</strong> <strong>in</strong>hibited creativity <strong>in</strong>stead of enhanc<strong>in</strong>g it. The task forceadopted a skeletal overview of the essence of a process, grounded <strong>in</strong> Corn<strong>in</strong>g’sown unique experience, to be used as an <strong>in</strong>tegrative framework. “We are go<strong>in</strong>gto make this a market<strong>in</strong>g document. . . . We are really go<strong>in</strong>g to use this th<strong>in</strong>g!”exclaimed Riesbeck.As a second step toward significant change, MacAvoy orchestrated a two<strong>and</strong>-a-halfday <strong>in</strong>novation conference for more than two hundred senior Corn<strong>in</strong>gleaders that was <strong>in</strong>tended to focus attention on <strong>in</strong>novation <strong>and</strong> re-<strong>in</strong>troducethe <strong>in</strong>novation process. Moreover, he rem<strong>in</strong>ded those <strong>in</strong> attendance that theconference’s subject matter was <strong>in</strong> fact noth<strong>in</strong>g less than the company’s def<strong>in</strong><strong>in</strong>gactivity: “In all cases, technology is <strong>in</strong>volved <strong>and</strong> is at the heart of what we do.We lead primarily by technical <strong>in</strong>novation. Translat<strong>in</strong>g technology <strong>in</strong>to newproducts <strong>and</strong> processes, <strong>in</strong>to new ways to help our customers, <strong>in</strong>to new sourcesof profit <strong>and</strong> growth—that’s what we’re all about as a company.”
CORNING 27The task force had not limited its deliberations to celebrat<strong>in</strong>g Corn<strong>in</strong>g’s pastachievements. It had also identified the key ways <strong>in</strong> which Corn<strong>in</strong>g had fallenshort of <strong>in</strong>novat<strong>in</strong>g effectively. MacAvoy portrayed <strong>in</strong>novation as one of the topquality problems the company had. He firmly implanted the notion that improv<strong>in</strong>gthe <strong>in</strong>novation process by 10 percent a year could cut costs <strong>in</strong> half. Doubl<strong>in</strong>gthat rate would be equivalent to doubl<strong>in</strong>g the RD&E spend<strong>in</strong>g level. It camedown to restor<strong>in</strong>g several simple elements: an environment <strong>and</strong> culture ofenergy <strong>and</strong> enthusiasm, entrepreneurial behavior at all levels, the right people<strong>in</strong> the right places, sound bus<strong>in</strong>ess <strong>and</strong> technical strategies, improved processesfor nurtur<strong>in</strong>g ideas, <strong>and</strong> organizational mechanisms that could support theorganization’s drive for results.Turn<strong>in</strong>g Po<strong>in</strong>tThe conference was a real turn<strong>in</strong>g po<strong>in</strong>t. The conceptual marriage of TQM <strong>and</strong><strong>in</strong>novation was far more than simple rhetoric. Although it would be anotherseven years before quality programs <strong>and</strong> <strong>in</strong>novation would work together onthe same track, at least they began runn<strong>in</strong>g on parallel tracks. A full decadewould pass before the change <strong>in</strong> attitude <strong>in</strong>augurated at the <strong>in</strong>novation conferencewould be reflected <strong>in</strong> significantly <strong>in</strong>creased RD&E budgets, but a newgeneration of <strong>in</strong>novators with the necessary <strong>in</strong>tegrative skills was <strong>in</strong> the mak<strong>in</strong>g.Today Corn<strong>in</strong>g sees a re<strong>in</strong>vigoration of this marriage between TQM <strong>and</strong><strong>in</strong>novation effectiveness.Critical Success FactorsSeveral endur<strong>in</strong>g success factors emerged from the <strong>in</strong>novation conference. First,the articulated formal process provided a framework for tra<strong>in</strong><strong>in</strong>g programs atall levels of the company, becom<strong>in</strong>g part of the structure for project reviews <strong>and</strong>the basis for hir<strong>in</strong>g <strong>and</strong> deploy<strong>in</strong>g personnel. One requirement for attend<strong>in</strong>g thetra<strong>in</strong><strong>in</strong>g was to be part of an established team. Start<strong>in</strong>g with market<strong>in</strong>g <strong>and</strong> technology<strong>and</strong> later spread<strong>in</strong>g to other areas of the company, attention was paidto foster<strong>in</strong>g <strong>in</strong>novators <strong>and</strong> creat<strong>in</strong>g <strong>in</strong>tegrated technology plans. Accord<strong>in</strong>g toCharlie Craig, Vice President <strong>and</strong> COO, Science <strong>and</strong> Technology, “The graphicwe use [three upside-down exclamation marks that resemble people, followedby three right-side-up exclamation po<strong>in</strong>ts] says it all (see Figure 2.2). TheFigure 2.2 Innovation People!Source: Copyright © Corn<strong>in</strong>g Incorporated. Repr<strong>in</strong>ted by permission.
28 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEexclamation po<strong>in</strong>ts represent people, motivation, <strong>and</strong> the excitement of<strong>in</strong>novation—the most important <strong>in</strong>gredients.”The long-term benefit of hav<strong>in</strong>g the five-stage <strong>in</strong>novation process <strong>and</strong> tra<strong>in</strong><strong>in</strong>gpeople across the company <strong>in</strong> its use was that, <strong>in</strong> an era when “time tomarket” became the competitive issue for <strong>in</strong>dustry at large, Corn<strong>in</strong>g had alreadydeveloped the rout<strong>in</strong>e practice of <strong>in</strong>clud<strong>in</strong>g all major parties <strong>in</strong> any new processor product <strong>in</strong>novation as early as possible. Ted Kozlowski, one of Corn<strong>in</strong>g’s keydevelopment managers for many successful products, commented that therelations between people were critical.Another consequence of the <strong>in</strong>novation effort was a rise <strong>in</strong> <strong>in</strong>ternal entrepreneurialbehavior. At Sullivan Park, <strong>in</strong> particular, technologists were allowed tosupplement an essentially flat R&D budget with sales of shelf technology, salesof services <strong>in</strong> which Corn<strong>in</strong>g had particular expertise, <strong>and</strong> <strong>in</strong>creased governmentcontract<strong>in</strong>g for technologies they wanted to pursue anyway. Those who werewill<strong>in</strong>g to expend the effort were given the latitude to form small enterprises.Yet another success factor was possibly the most unusual for companies atthe time: the cont<strong>in</strong>uation of a practice of collective self-exam<strong>in</strong>ation that previousCorn<strong>in</strong>g generations had also employed. In reviv<strong>in</strong>g the practice of storytell<strong>in</strong>g,the task force showed that re<strong>in</strong>vigorat<strong>in</strong>g shared memory was a powerful way tobuild the company’s collective <strong>in</strong>genuity. It tied the notion of best practices notsolely to the dictates of outside experts or to the examples of other companies,but to the recovery of grounded experience <strong>in</strong> the company itself.Additional components were to exam<strong>in</strong>e <strong>in</strong>novation as it impacted market<strong>in</strong>g<strong>and</strong> manufactur<strong>in</strong>g.Innovation <strong>in</strong> Market<strong>in</strong>gI never believe it’s too early to br<strong>in</strong>g <strong>in</strong> that market<strong>in</strong>g expertise . . . it’smarket<strong>in</strong>g knowledge, it’s customer knowledge . . . where’s the productgo<strong>in</strong>g to be used . . . let’s ask someone <strong>in</strong> that area <strong>and</strong> see what theyth<strong>in</strong>k. . . . Once you’ve got a technology you th<strong>in</strong>k you can use forsometh<strong>in</strong>g . . . that’s maybe the secret . . . somebody’s got to believe . . .“I th<strong>in</strong>k it can be useful here.”—David Howard, Corn<strong>in</strong>g TelecommunicationsCorn<strong>in</strong>g needed to focus on its effectiveness <strong>in</strong> both approach <strong>and</strong> deploymentof resources to underst<strong>and</strong> current <strong>and</strong> future customer <strong>and</strong> market needs—aweak po<strong>in</strong>t traditionally. Included <strong>in</strong> this focus was—<strong>and</strong> still is—the assessmentof current performance, development, <strong>and</strong> execution of improvementplans. The prescription <strong>in</strong>volved people <strong>in</strong> all functions <strong>and</strong> levels collect<strong>in</strong>gdata, apply<strong>in</strong>g analytical tools, develop<strong>in</strong>g <strong>in</strong>sight, <strong>and</strong> shar<strong>in</strong>g that <strong>in</strong>sightthroughout the organization, which today supports “roadmapp<strong>in</strong>g,” “portfolio,”<strong>and</strong> the five-stage <strong>in</strong>novation process itself.
Innovation <strong>in</strong> Manufactur<strong>in</strong>gCORNING 29In addition to a renewal of <strong>in</strong>novation at its R&D centers—the obvious placewhere creativity matters—manufactur<strong>in</strong>g processes, too, would benefit from areturn to Corn<strong>in</strong>g’s roots. While Corn<strong>in</strong>g was work<strong>in</strong>g to rega<strong>in</strong> its position atthe forefront of <strong>in</strong>novation by <strong>in</strong>vent<strong>in</strong>g unique materials, processes, <strong>and</strong> technologies,its manufactur<strong>in</strong>g operations shared some common problems thatmade it difficult to susta<strong>in</strong> their lead over competitors. The quality effort wasalready do<strong>in</strong>g much to improve manufactur<strong>in</strong>g discipl<strong>in</strong>e <strong>in</strong> all of Corn<strong>in</strong>g’splants when management asked Roger Ackerman (who, <strong>in</strong> 1996, succeededJamie Houghton as chairman & CEO, until 2001) launched a companywideassessment of its manufactur<strong>in</strong>g operations <strong>in</strong> 1986.As the <strong>in</strong>novation process evolved, the need to develop <strong>in</strong>herent l<strong>in</strong>kagesamong technology, market<strong>in</strong>g, <strong>and</strong> manufactur<strong>in</strong>g became critical, as each componentwas an equal leg <strong>in</strong> the three-legged stool of <strong>in</strong>novation. Ed Sever, formerplant manufactur<strong>in</strong>g eng<strong>in</strong>eer, states: “It’s as true <strong>in</strong> plants today as it’sever been—anytime there’s a major project, we make sure that there’s a plantperson assigned to the team . . . who knows they are the receiver, that it’s theirjob to help make this th<strong>in</strong>g happen, <strong>and</strong> they ought to be pull<strong>in</strong>g equally as hardas they’re [R&D] push<strong>in</strong>g.”HIGH-TECH COMPANYKnowledge, risk, cost, <strong>and</strong> time to market are critical tosuccessful <strong>in</strong>novation <strong>in</strong> a high-technology company.—Charlie CraigBy the early 1990s Corn<strong>in</strong>g had demonstrated by means of its effective adoptionof quality <strong>and</strong> <strong>in</strong>novation as complementary discipl<strong>in</strong>es that a future as ahigh-technology company was a strategic option. Jamie Houghton’s address tothe Industrial Research Institute <strong>in</strong> 1993, on the tenth anniversary of his earlieraddress to that body, was a sign that this was so. Innovation, Houghtondeclared, was the glue that bound all functions <strong>in</strong>to a cohesive team of <strong>in</strong>ventors,producers, <strong>and</strong> <strong>in</strong>novators. Speak<strong>in</strong>g of the obligations of general managementleadership <strong>in</strong> high-technology product development <strong>and</strong> market<strong>in</strong>g,he argued that Corn<strong>in</strong>g had significantly improved the effectiveness of itsRD&E—the quality <strong>and</strong> rate of its <strong>in</strong>novation—by apply<strong>in</strong>g TQM pr<strong>in</strong>ciples to<strong>in</strong>novation: “In my view, Innovation is absolutely an <strong>in</strong>tegral part of TotalQuality; <strong>in</strong> the mid-1980s, it was the largest s<strong>in</strong>gle cost of quality problem wehad <strong>in</strong> the company. If we can cont<strong>in</strong>ue to move forward on this, if we can getanother 10–20 percent better <strong>in</strong> be<strong>in</strong>g more effective <strong>in</strong> l<strong>in</strong>k<strong>in</strong>g our technologyto the marketplace, we know what a huge opportunity it will be for us.”
30 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGECorn<strong>in</strong>g CompetesImmediately follow<strong>in</strong>g Houghton’s address to the Industrial Research Institute(1993), Corn<strong>in</strong>g launched Corn<strong>in</strong>g Competes, a program designed to reeng<strong>in</strong>eerits key bus<strong>in</strong>ess processes. Deliberate <strong>in</strong> its choice to reeng<strong>in</strong>eer rather thanrestructure, Corn<strong>in</strong>g Competes represented a re<strong>in</strong>vestment <strong>in</strong> Corn<strong>in</strong>g’s bus<strong>in</strong>essprocesses through cont<strong>in</strong>uous improvement of best practices. It also providedthe necessary tools for better communication among the technical <strong>and</strong> bus<strong>in</strong>essconstituencies. The company needed to enhance its capability to compete forpresent <strong>and</strong> future bus<strong>in</strong>ess while improv<strong>in</strong>g its f<strong>in</strong>ancial performance.As the <strong>in</strong>novation process was the number one cost of quality <strong>in</strong> the company,the goal of the Corn<strong>in</strong>g Competes <strong>in</strong>novation effectiveness team was to enableCorn<strong>in</strong>g to get the most from its <strong>in</strong>novation <strong>in</strong>vestment <strong>in</strong> product <strong>and</strong> processtechnologies. To ensure that the company was well positioned for growth <strong>and</strong> profitability,the team sought to “reeng<strong>in</strong>eer the process by which Corn<strong>in</strong>g creates,identifies, evaluates, prioritizes, <strong>and</strong> executes aga<strong>in</strong>st market opportunities.”Equally press<strong>in</strong>g with<strong>in</strong> the technology community was the need to drive discont<strong>in</strong>uousimprovement—to <strong>in</strong>still a “step change” with<strong>in</strong> the cont<strong>in</strong>uum ofbest practice cont<strong>in</strong>uous improvement. The company had to manage a culturechange that would enable it to strike a balance between cont<strong>in</strong>uous improvement<strong>and</strong> the step changes necessary to deliver breakthrough technologies.Some of Corn<strong>in</strong>g’s greatest profit-produc<strong>in</strong>g technology breakthroughs had comefrom just that—from achiev<strong>in</strong>g that delicate balance between <strong>in</strong>crementalimprovements on the one h<strong>and</strong> <strong>and</strong> breakthrough <strong>in</strong>vention on the other, thuslead<strong>in</strong>g to new product <strong>and</strong> process commercialization. Go<strong>in</strong>g forward, this k<strong>in</strong>dof <strong>in</strong>novation would be “the ticket” for Corn<strong>in</strong>g.Innovation TodayThe cont<strong>in</strong>ued focus on <strong>in</strong>novation at Corn<strong>in</strong>g today—with an ever-evolv<strong>in</strong>g,dynamic process featur<strong>in</strong>g pronounced cross-functional <strong>and</strong> cross-discipl<strong>in</strong>ary<strong>in</strong>tegration—has allowed the company to make decisions faster <strong>and</strong> closer tothe po<strong>in</strong>t of action. Implemented flexibly yet with rigor, the <strong>in</strong>novation processallows people <strong>and</strong> projects to overcome both <strong>in</strong>ternal <strong>and</strong> external barriers, tobe agile—ga<strong>in</strong><strong>in</strong>g, shar<strong>in</strong>g, <strong>and</strong> act<strong>in</strong>g on new <strong>in</strong>formation <strong>and</strong> <strong>in</strong>sights—provide more opportunities to <strong>in</strong>novate, reduce product development time, <strong>and</strong>enhance customer relationships. In short, it allows the company to outlearn<strong>and</strong> lead the competition.Through generations of change at Corn<strong>in</strong>g, <strong>in</strong>novation is the susta<strong>in</strong><strong>in</strong>g threadthroughout. “Innovation is <strong>in</strong> Corn<strong>in</strong>g’s DNA,” says Charlie Craig. It is whatallows the company to re<strong>in</strong>vent itself—most often through the reuse of itstechnology—which it has done sixteen times <strong>in</strong> its 151-year history. The companychampions <strong>and</strong> nurtures <strong>in</strong>novation; it uses <strong>in</strong>novation as a means to succeed.
CORNING 31Here is a current example. One way Corn<strong>in</strong>g is deal<strong>in</strong>g with the telecommunications<strong>in</strong>dustry collapse, <strong>in</strong> which an entire market disappearedseem<strong>in</strong>gly overnight, is to repurpose <strong>and</strong> redirect its <strong>in</strong>vestment <strong>in</strong> <strong>in</strong>tellectualproperty around optical technologies, clearly <strong>in</strong>to a technology that is nontelecommunicationsrelated.Another use of a core technology resulted <strong>in</strong> EAGLE 2000TM , a prime exampleof <strong>in</strong>novation at Corn<strong>in</strong>g today—<strong>in</strong>novation at its best.BackgroundInnovation has always been the hallmark of our success.—Jamie HoughtonCorn<strong>in</strong>g has a long tradition of build<strong>in</strong>g on <strong>and</strong> reus<strong>in</strong>g its exist<strong>in</strong>g technology<strong>and</strong> knowledge bases to <strong>in</strong>novate <strong>and</strong> create new bus<strong>in</strong>ess opportunities. Animportant example is the “fusion process,” developed <strong>in</strong> the early 1960s byCorn<strong>in</strong>g eng<strong>in</strong>eers. Initially used <strong>in</strong> comb<strong>in</strong>ation with a newly developed material,Chemcor (chemically strengthened glass for manufactur<strong>in</strong>g automobilew<strong>in</strong>dshields), the fusion process lived on when the w<strong>in</strong>dshield market did notmaterialize for Corn<strong>in</strong>g.Dur<strong>in</strong>g the 1970s, Corn<strong>in</strong>g scientists at the company’s research facility <strong>in</strong>Fonta<strong>in</strong>ebleau, France, used the fusion process to manufacture sunglass lenses.Long a supplier of tubes to the television <strong>in</strong>dustry, Corn<strong>in</strong>g began to look forways to extend its presence <strong>in</strong> the display markets. Us<strong>in</strong>g the fusion process, itbegan produc<strong>in</strong>g flat panel glass for liquid crystal display applications, such aslaptop computers.As the markets for laptops, PDAs (personal digital assistants), flat screenmonitors, <strong>and</strong> flat screen televisions began to grow <strong>in</strong> the 1990s, Corn<strong>in</strong>g scientists<strong>and</strong> eng<strong>in</strong>eers cont<strong>in</strong>ued to use the <strong>in</strong>novation process <strong>and</strong> the Fusionprocess to meet the dem<strong>and</strong>s of its customers. EAGLE 2000TM is an excellentexample of the use of both processes.Contemporary Success Story: Innovation at Its <strong>Best</strong>The results for EAGLE 2000TM have been fantastic. Not only did this project use theInnovation Process to meet the customers’ dem<strong>and</strong>s for lighter weight displays, italso improved our capacity <strong>and</strong> profitability as well.—R<strong>and</strong>y Rhoads, project managerWe had <strong>in</strong>terest<strong>in</strong>g jo<strong>in</strong>t sessions very early on. Manufactur<strong>in</strong>g,technology, <strong>and</strong> market<strong>in</strong>g worked very, very closely on this—<strong>in</strong> the firststages with product development, the detail<strong>in</strong>g of the product, <strong>and</strong> whatthe customers really required.—Dan Nolet, display technologies
32 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEWith its comb<strong>in</strong>ation of glass properties <strong>and</strong> manufactur<strong>in</strong>g technology, Corn<strong>in</strong>gEAGLE 2000TM flat glass substrates enable active matrix liquid crystal display(AMLCD) manufacturers to make larger, lighter, th<strong>in</strong>ner, <strong>and</strong> higher-resolutiondisplays for computer monitors <strong>and</strong> home enterta<strong>in</strong>ment. This glass has the<strong>in</strong>dustry’s lowest thermal expansion, thus decreas<strong>in</strong>g the effects of thermaldown shock <strong>and</strong> breakage, <strong>and</strong> due to its remarkably low-density compositionCorn<strong>in</strong>g EAGLE 2000TM glass is the lightest AMLCD substrate on the market.EAGLE 2000TM also has improved chemical durability over earlier substrateglasses, which m<strong>in</strong>imizes glass damage dur<strong>in</strong>g the harsh chemical processes<strong>in</strong>volved with display manufactur<strong>in</strong>g. Corn<strong>in</strong>g EAGLE 2000TM glass is made us<strong>in</strong>gCorn<strong>in</strong>g’s fusion process. This close-tolerance glass draw process, comb<strong>in</strong>edwith Corn<strong>in</strong>g’s patented composition, yields glass with truly remarkable qualities:prist<strong>in</strong>e, near-perfect flat surfaces with improved thickness variations thatdon’t require polish<strong>in</strong>g.By participat<strong>in</strong>g early <strong>in</strong> the <strong>in</strong>novation process, the manufactur<strong>in</strong>g group—along with market<strong>in</strong>g <strong>and</strong> technology—ensured that the production-deliveryprocess design accommodated all key operational performance requirements. Astrong, cross-functional team was established right from the start. This early<strong>in</strong>volvement helped the team avoid many of the later-stage issues that oftenarise when the manufactur<strong>in</strong>g function is not an active participant <strong>in</strong> the early<strong>in</strong>novation stages. In this way, they were able to <strong>in</strong>fluence the design so itallows a more robust manufactur<strong>in</strong>g process (see Figure 2.3).While market<strong>in</strong>g conducted an extensive study to identify <strong>and</strong> quantify thecustomers’ requirements, manufactur<strong>in</strong>g def<strong>in</strong>ed the performance range ofAdvanced Display processes, so that technology was able to identify the variouscompositions that would not only meet customer needs, but would alsowork with<strong>in</strong> manufactur<strong>in</strong>g’s current <strong>and</strong> expected parameters.EvaluateopportunityEvaluateconceptConfirmconceptConfirmprofitabilityI.BuildknowledgeII.Determ<strong>in</strong>efeasibilityIII.TestpracticalityIV.ProveprofitabilityV.Managelife cycleConceptplan<strong>Development</strong>planProfitabilityplanCommercializeplanLife cycleplanFigure 2.3 Manufactur<strong>in</strong>g Process.Source: Copyright © Corn<strong>in</strong>g Incorporated. Repr<strong>in</strong>ted by permission.
CORNING 33The EAGLE 2000TM product team noted the follow<strong>in</strong>g additional benefits ofus<strong>in</strong>g the <strong>in</strong>novation process:• The common language <strong>and</strong> underst<strong>and</strong><strong>in</strong>g of the five stages made iteasier to accommodate the many personnel changes that occurredthroughout the project. It also provided the framework to hold theirglobal team together.• The cross-functional team from the start enabled all functions to activelyparticipate <strong>in</strong> the development of the project objectives. The sharedownership of the project objectives helped guide the project effectivelythroughout the five stages• The team, by proactively us<strong>in</strong>g risk management, had the ability to f<strong>in</strong>da balance between market requirements, manufactur<strong>in</strong>g capabilities, <strong>and</strong>technical competencies. The key for EAGLE 2000TM was to f<strong>in</strong>d commondenom<strong>in</strong>ators for all three areas.• The five-stage suggested activities helped outl<strong>in</strong>e the required work <strong>and</strong>deliverables for their plann<strong>in</strong>g process.ON-THE-JOB SUPPORT: REINFORCINGTHE REINFORCEMENTSThe <strong>in</strong>novation process has evolved well beyond the rudimentary model weadopted two decades ago . . . <strong>and</strong> is now embedded <strong>in</strong> our culture.—Joe MillerOn an ongo<strong>in</strong>g <strong>and</strong> consistent basis, Corn<strong>in</strong>g requires employees on projectteams to take its <strong>in</strong>novation tra<strong>in</strong><strong>in</strong>g <strong>and</strong> follow a comprehensive set of guidel<strong>in</strong>es<strong>and</strong> tools toward product <strong>in</strong>novation. The company has progressively broadenedthe tra<strong>in</strong><strong>in</strong>g to more teams <strong>and</strong> functional units, “spread<strong>in</strong>g the languageof our bus<strong>in</strong>ess.” Corn<strong>in</strong>g also renews its <strong>in</strong>novation process periodically—mostrecently, for <strong>in</strong>stance, to manage the <strong>in</strong>novation “pipel<strong>in</strong>e” for new opportunities,g risk assessment, costs, <strong>and</strong> value added (see Figure 2.4).Innovation EffectivenessThese <strong>in</strong>novation effectiveness processes are the underp<strong>in</strong>n<strong>in</strong>g for thegrowth of our company.—Charles “Skip” Deneka, CTO, 1996–2001Innovation effectiveness is the umbrella term for Corn<strong>in</strong>g’s <strong>in</strong>novation effort.“Innovation effectiveness encompasses identify<strong>in</strong>g opportunities (roadmapp<strong>in</strong>g),select<strong>in</strong>g opportunities (portfolio decision mak<strong>in</strong>g), deliver<strong>in</strong>g opportunities(<strong>in</strong>novation project management) <strong>in</strong> order to realize benefit (dollars), <strong>and</strong>
34 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEKnowledge Build<strong>in</strong>g <strong>and</strong> Organizational Learn<strong>in</strong>g - All Along Pipel<strong>in</strong>eLicens<strong>in</strong>gSp<strong>in</strong>-out/SellIdeasMajoropportunitiesExternaltechnology sourcesExternal partnerships/acquisitionsFigure 2.4 Corn<strong>in</strong>g Innovation Pipel<strong>in</strong>e.Source: Copyright © Corn<strong>in</strong>g Incorporated. Repr<strong>in</strong>ted by permission.stay<strong>in</strong>g closely connected to customers <strong>and</strong> markets” (Bruce Kirk, corporate<strong>in</strong>novation effectiveness leader).Innovation effectiveness requires• Underst<strong>and</strong><strong>in</strong>g the overall corporate <strong>and</strong> bus<strong>in</strong>ess strategies• Develop<strong>in</strong>g sound roadmaps based on underst<strong>and</strong><strong>in</strong>g customers,markets, competitors, <strong>and</strong> Corn<strong>in</strong>g’s strengths <strong>and</strong> weaknesses <strong>and</strong>estimat<strong>in</strong>g resources required for each project submitted to the portfoliomanagement process for fund<strong>in</strong>g• Apply<strong>in</strong>g the portfolio management process to evaluate, prioritize, <strong>and</strong>select projects• Execut<strong>in</strong>g the selected projects wellIdeas <strong>in</strong>to DollarsThe follow<strong>in</strong>g list <strong>and</strong> Figure 2.5 describe Corn<strong>in</strong>g’s best practice for enabl<strong>in</strong>gsuccessful <strong>and</strong> <strong>in</strong>novative projects.• Roadmapp<strong>in</strong>g. Anticipat<strong>in</strong>g <strong>and</strong> plann<strong>in</strong>g for future opportunities.Requires customer focus <strong>and</strong> forward-look<strong>in</strong>g th<strong>in</strong>k<strong>in</strong>g.• Project portfolio. Select<strong>in</strong>g the best opportunities, balanc<strong>in</strong>g the risks <strong>and</strong>benefits, <strong>and</strong> allocat<strong>in</strong>g critical resources. Apply<strong>in</strong>g process rigor whilereta<strong>in</strong><strong>in</strong>g flexibility to exercise judgment.• Innovation project management. Mov<strong>in</strong>g a product, process, orservice idea iteratively through the stages of <strong>in</strong>novation to successfulcommercialization (dollars). Reduces development time, <strong>in</strong>creasesthe number of commercially successful products, <strong>and</strong> cancels the
CORNING 35OpportunitiesSelectionsExecutionsRoadmapp<strong>in</strong>gProjectportfolioInnovationprojectmanagement$Customer <strong>and</strong> market underst<strong>and</strong><strong>in</strong>gFigure 2.5 Ideas <strong>in</strong>to Dollars.Source: Copyright © Corn<strong>in</strong>g Incorporated. Repr<strong>in</strong>ted by permission.Table 2.1. Innovation Delivery788482838857301995 1998 1999 2000 2001 2002 2003New Corn<strong>in</strong>g products (less than four years old) as a percentage of market shareSource: Copyright © Corn<strong>in</strong>g Incorporated. Repr<strong>in</strong>ted by permission.
36 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEless-promis<strong>in</strong>g projects earlier. This is the five-stage Stage-Gate TM<strong>in</strong>novation process, referenced earlier.• Customer <strong>and</strong> market underst<strong>and</strong><strong>in</strong>g. Truly underst<strong>and</strong><strong>in</strong>g customers,markets, competitors, <strong>and</strong> anticipat<strong>in</strong>g their actions <strong>and</strong> reactions. Theunderp<strong>in</strong>n<strong>in</strong>g of the other three <strong>in</strong>novation elements.EvaluationAt Corn<strong>in</strong>g, a significant measurement of the <strong>in</strong>novation effectiveness processis the percentage of sales of new products from R&D. S<strong>in</strong>ce 1998, Corn<strong>in</strong>g hasdelivered no less than 57 percent of its products to the marketplace with<strong>in</strong> fouryears. That is a remarkable accomplishment by any corporate st<strong>and</strong>ard.THE LEARNING MACHINE: DRIVING SUSTAINABLEVALUE AND GROWTHThe <strong>in</strong>novation process is a learn<strong>in</strong>g mach<strong>in</strong>e that drives the company’s susta<strong>in</strong>ablevalue <strong>and</strong> growth (see Figure 2.6). Corn<strong>in</strong>g’s focus on quality <strong>and</strong>knowledge-shar<strong>in</strong>g tools <strong>and</strong> practices provides the “rate-change enablers” thatSusta<strong>in</strong>ablevalue <strong>and</strong> growthInnovationKnowledgemanagementOrganizationallearn<strong>in</strong>gFigure 2.6 Innovation Process.Source: Copyright © Corn<strong>in</strong>g Incorporated. Repr<strong>in</strong>ted by permission.
CORNING 37<strong>in</strong>crease the rate of organizational learn<strong>in</strong>g—br<strong>in</strong>g<strong>in</strong>g Corn<strong>in</strong>g differential value<strong>and</strong> competitive advantage—<strong>and</strong>, <strong>in</strong> turn, <strong>in</strong>creases the rate of <strong>in</strong>novation.The Learn<strong>in</strong>g Mach<strong>in</strong>e: Provid<strong>in</strong>g New Angles on InsightWithout be<strong>in</strong>g overly prescriptive or bureaucratic, Corn<strong>in</strong>g encourages shar<strong>in</strong>gof knowledge <strong>in</strong> the follow<strong>in</strong>g ways. This has promoted a short cycle “learn<strong>in</strong>gmach<strong>in</strong>e,” which allows colleagues to share <strong>and</strong> test data <strong>and</strong> best practices.• Morn<strong>in</strong>g meet<strong>in</strong>gsA forum to share proprietary research results <strong>in</strong> progressThirty-m<strong>in</strong>ute talk on work or current state of the science or projectAdditional time scheduled for Q&A <strong>and</strong> discussionAudience <strong>and</strong> speaker exchange ideas <strong>and</strong> ga<strong>in</strong> <strong>in</strong>sights• Technical tutorialsEducation on a technology, <strong>in</strong>clud<strong>in</strong>g orientation, strategy, technicalcomponentsOffered at multiple levelsEncourages tacit knowledge exchange• Research reviewsEnable bus<strong>in</strong>ess leaders <strong>and</strong> technology community members to stayabreast of rapidly chang<strong>in</strong>g technologies <strong>and</strong> market trendsTwo hours <strong>in</strong> length, with time for <strong>in</strong>teraction with<strong>in</strong> the technologycommunity, as well as with the bus<strong>in</strong>ess partnersBeg<strong>in</strong> with open<strong>in</strong>g remarks by the specific project leader, followed bypresentations by key project members• Communities of practiceIndividuals who come together over a common <strong>in</strong>terest, one that couldbe directly or <strong>in</strong>directly related to their current workFormal (sanctioned); for example, Centers of ExcellenceInformal (grass roots); for example, software programmersKnowledge Management <strong>and</strong> Organizational Learn<strong>in</strong>gThese knowledge-shar<strong>in</strong>g tools <strong>and</strong> practices are only a few of many examplesthat have emanated from with<strong>in</strong> the technology community. They demonstratehow <strong>in</strong>novation is coupled with other ongo<strong>in</strong>g Corn<strong>in</strong>g bus<strong>in</strong>ess practices <strong>in</strong>toeveryday activities <strong>and</strong> processes, provid<strong>in</strong>g new <strong>in</strong>sights for Corn<strong>in</strong>g. Scientists,eng<strong>in</strong>eers, technicians, <strong>and</strong> commercial managers share knowledge, experience,
38 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE<strong>and</strong> perspective on a regular basis. In do<strong>in</strong>g so, they optimize, leverage, <strong>and</strong>re-use this key knowledge, experience, <strong>and</strong> perspective—all critical componentsof learn<strong>in</strong>g—with<strong>in</strong> a technology context. For Corn<strong>in</strong>g, this translates <strong>in</strong>to newproduct <strong>and</strong> process <strong>in</strong>novation—ideas <strong>in</strong>to dollars.A key ongo<strong>in</strong>g goal of Corn<strong>in</strong>g’s learn<strong>in</strong>g mach<strong>in</strong>e is to <strong>in</strong>crease its knowledgere-use quotient. To do this, the company <strong>in</strong>creases the number of perspectives(people <strong>and</strong> discipl<strong>in</strong>es) with<strong>in</strong> the organization, improves <strong>in</strong>terdiscipl<strong>in</strong>aryshar<strong>in</strong>g (the number of <strong>in</strong>teractions that occur among discipl<strong>in</strong>es), <strong>and</strong> providesthe necessary tools to synthesize all those <strong>in</strong>teractions to reformulate the company’sknowledge for re-use. Corn<strong>in</strong>g also <strong>in</strong>cludes tactical elements such asergonomics <strong>and</strong> facilities design to ensure that these <strong>in</strong>teractions occur; forexample, secure video conferenc<strong>in</strong>g, facilities, <strong>and</strong> <strong>in</strong>formal meet<strong>in</strong>g areas.Increas<strong>in</strong>g the knowledge re-use quotient means the real-time tapp<strong>in</strong>g of <strong>in</strong>stitutionalknowledge <strong>and</strong> memory through people <strong>in</strong> a global culture <strong>and</strong> <strong>in</strong>everyday circumstances with<strong>in</strong> the workplace.Another key element is build<strong>in</strong>g the knowledge (technology) warehouse.This is basically an archive—a technology cupboard—from which one canresearch, identify, <strong>and</strong> access technology for re-use. At Corn<strong>in</strong>g, technology<strong>in</strong>vestments are never lost: they are either shelved as tangible objects(samples, patents, technical reports, lab notebooks) or accessed through the<strong>in</strong>tangible, tacit corporate memory through storytell<strong>in</strong>g, oral histories, <strong>and</strong>other everyday means. The company constantly builds its knowledge cache,“packages” it <strong>in</strong> a complete, relevant form, <strong>and</strong> tra<strong>in</strong>s its employees how toaccess it for further use—a way to preserve <strong>and</strong> build upon its core competencies<strong>and</strong> critical capabilities. The <strong>in</strong>novation process—an iterative process—is the learn<strong>in</strong>g catalyst; it is what ties together both modes of learn<strong>in</strong>g <strong>in</strong>to a“learn<strong>in</strong>g mach<strong>in</strong>e.”Enhanc<strong>in</strong>g the Learn<strong>in</strong>g Culture: Build<strong>in</strong>g Bridgesto Enable InnovationIn order to create <strong>and</strong> susta<strong>in</strong> the learn<strong>in</strong>g culture to enable <strong>in</strong>novation, bridgesmust be built. An example would be a move toward bridg<strong>in</strong>g manufactur<strong>in</strong>geffectiveness with <strong>in</strong>novation effectiveness through process eng<strong>in</strong>eer<strong>in</strong>g (seeFigure 2.7). Another lead<strong>in</strong>g example would be the bridg<strong>in</strong>g of two traditionallydisparate <strong>in</strong>ternal <strong>in</strong>itiatives—manufactur<strong>in</strong>g process improvement <strong>and</strong> theknowledge management <strong>and</strong> organizational learn<strong>in</strong>g effort—focus<strong>in</strong>g onthe unify<strong>in</strong>g theme of <strong>in</strong>novation. Do<strong>in</strong>g so will provide a real-time opportunityto address press<strong>in</strong>g process technology issues fac<strong>in</strong>g Corn<strong>in</strong>g today—<strong>in</strong> short,an opportunity to drive improved profitability now, re<strong>in</strong>vigorate quality, <strong>and</strong> be“ready” for the next upturn.This type of <strong>in</strong>teractive, dynamic collaboration will yield for the company notonly the st<strong>and</strong>ard cost conta<strong>in</strong>ment, greater resource availability, <strong>and</strong> larger<strong>in</strong>ternal target audiences, but will also help ensure the company’s stability
CORNING 39CommercialLegal/IntellectualpropertyProductdevelopment/DesignManufactur<strong>in</strong>geffectivenessProcesseng<strong>in</strong>eer<strong>in</strong>gInnovationeffectivenessIndustrial <strong>and</strong>Labor relationsSafety <strong>and</strong>environmentalOperationaloptimizationFigure 2.7 Accelerat<strong>in</strong>g Learn<strong>in</strong>g by Build<strong>in</strong>g Bridges Across Organizations.Source: Copyright © Corn<strong>in</strong>g Incorporated. Repr<strong>in</strong>ted by permission.<strong>and</strong> growth. It will help rebuild the network, enhance the learn<strong>in</strong>g culture, <strong>and</strong>exp<strong>and</strong> technical know-how through optimiz<strong>in</strong>g synergies.Learn<strong>in</strong>g Coaches: Establish<strong>in</strong>g a New CoreCompetency <strong>in</strong> R&DThe only way to make sure the culture <strong>and</strong> discipl<strong>in</strong>e aresusta<strong>in</strong>ed is to have an experienced advisor present.Our Learn<strong>in</strong>g Coach Center of Excellence will ensurecompany wide implementation <strong>and</strong> learn<strong>in</strong>g.—Charlie CraigOnce the elements of the learn<strong>in</strong>g culture are <strong>in</strong> place, <strong>and</strong> the organizationunderst<strong>and</strong>s how it learns most effectively, the process is catalyzed with learn<strong>in</strong>gcoaches, similar to Six Sigma black belts. These are <strong>in</strong>dividuals whose role itis to become knowledge network<strong>in</strong>g “agents” or learn<strong>in</strong>g facilitators with<strong>in</strong> theorganization. Part of a Learn<strong>in</strong>g Coach “center of excellence” or virtual communityof practice, they are tra<strong>in</strong>ed as <strong>in</strong>novation project managers <strong>and</strong> are highlyskilled at process excellence around <strong>in</strong>novation effectiveness <strong>and</strong> how peoplelearn. These learn<strong>in</strong>g coaches jo<strong>in</strong> teams <strong>and</strong> prompt them to share knowledge,cross boundaries, learn together, <strong>and</strong> become more effective collaborators.
40 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEA member of several project teams at once, a learn<strong>in</strong>g coach cross-fertilizesthe teams with new knowledge on an ongo<strong>in</strong>g basis <strong>and</strong> provides a learn<strong>in</strong>gbridge between projects for shar<strong>in</strong>g best practices <strong>and</strong> lessons learned. Thelearn<strong>in</strong>g coach also <strong>in</strong>stills “the thrill of a hobby” <strong>in</strong>to the <strong>in</strong>novation environment,thus stimulat<strong>in</strong>g deeper <strong>and</strong> quicker learn<strong>in</strong>g <strong>and</strong> enabl<strong>in</strong>g greatersatisfaction through work.By <strong>in</strong>tegrat<strong>in</strong>g capabilities <strong>and</strong> competencies <strong>and</strong> recycl<strong>in</strong>g learn<strong>in</strong>g, Corn<strong>in</strong>gis constantly optimiz<strong>in</strong>g the process. This is a virtuous cycle—it is all aboutprompt<strong>in</strong>g <strong>and</strong> leverag<strong>in</strong>g change, build<strong>in</strong>g knowledge, convert<strong>in</strong>g <strong>in</strong>tellectualassets <strong>in</strong>to productive use, <strong>and</strong> learn<strong>in</strong>g better together to <strong>in</strong>novate better. Corn<strong>in</strong>gis thus able to realize <strong>in</strong> unique ways new opportunities <strong>and</strong> solutions itnever before thought possible—discont<strong>in</strong>uous improvement <strong>and</strong> breakthrough<strong>in</strong>vention. It is, <strong>in</strong> the end, about competitive advantage <strong>and</strong> sett<strong>in</strong>g the pacefor <strong>in</strong>novation.LESSONS LEARNEDInnovation is about flexible management <strong>and</strong> good judgment.—Roger AckermanLessons learned is a shared practice some call after action review that takes formto reta<strong>in</strong> organizational memory of important RD&E projects. This practice<strong>in</strong>cludes the follow<strong>in</strong>g actions:• Start with a strong, visible, <strong>in</strong>fluential champion, one who has a true passionfor <strong>in</strong>novation, who acts as a rally<strong>in</strong>g po<strong>in</strong>t <strong>and</strong> a change agent, <strong>and</strong> who<strong>in</strong>spires a cadre of true believers at all levels of the organization. MacAvoy wasable to br<strong>in</strong>g together market<strong>in</strong>g, manufactur<strong>in</strong>g, technology, <strong>and</strong> humanresources to “fix” the problem. Champions will change over time, but their presence<strong>and</strong> level of support cannot change. Corn<strong>in</strong>g has ma<strong>in</strong>ta<strong>in</strong>ed its <strong>in</strong>novationchampions for two decades; for example, MacAvoy, Deneka, Ackerman,Miller, Craig, Houghton.• Establish a strategic l<strong>in</strong>k between the <strong>in</strong>itiative <strong>and</strong> the company’s corevalues <strong>and</strong> goals. From the outset, MacAvoy <strong>and</strong> his team underscored thesignificant tie to Total Quality Management, profitability, <strong>and</strong> growth.• Establish a progressive, formal yet fluid <strong>and</strong> iterative process with built-<strong>in</strong>flexibility. The process cannot be reduced to the check<strong>in</strong>g-off of boxes, as <strong>in</strong> acookbook—that’s the fastest way to <strong>in</strong>troduce bureaucracy <strong>and</strong> stifle creativity.Today’s model emphasizes judgment by the project leader <strong>and</strong> the sponsor todeterm<strong>in</strong>e the rigor needed at any specific <strong>in</strong>novation stage, as opposed to theorig<strong>in</strong>al model, a l<strong>in</strong>ear one, <strong>in</strong> which the ma<strong>in</strong> activity was do<strong>in</strong>g everyth<strong>in</strong>gthat the <strong>in</strong>novation guide <strong>in</strong>dicated.
CORNING 41• Encourage cross-functional, cross-discipl<strong>in</strong>ary project teams, <strong>in</strong> which peopleopenly collaborate, share, cross boundaries, <strong>and</strong> act on their collective knowledge,experience, <strong>and</strong> perspective. By def<strong>in</strong>ition, there should be a great degreeof communication <strong>and</strong> “overlap” between project teams.• Learn from both best practices <strong>and</strong> lessons learned. When Corn<strong>in</strong>g effectivelyuses the <strong>in</strong>novation process, it allows management to overcome a natural <strong>in</strong>cl<strong>in</strong>ationnot to stop a project that is far down the pipel<strong>in</strong>e due to resource expenditure.Corn<strong>in</strong>g is learn<strong>in</strong>g that it isn’t best practices alone, but also lessons learnedthat stimulate <strong>in</strong>novation. (At Corn<strong>in</strong>g, <strong>in</strong>vestment <strong>in</strong> technology is never lost;technology is re-used to develop new materials <strong>and</strong> processes to exploit new markets.For example, a material that failed at its <strong>in</strong>itial target market—sunglasses—has become a steady, profitable bus<strong>in</strong>ess for the semi-conductor <strong>in</strong>dustry.)• Know who the customer is <strong>and</strong> what their requirements are. Never forgetthat market <strong>and</strong> customer underst<strong>and</strong><strong>in</strong>g is the underp<strong>in</strong>n<strong>in</strong>g of the three coreelements of <strong>in</strong>novation effectiveness: roadmapp<strong>in</strong>g, portfolio management, <strong>and</strong><strong>in</strong>novation project management.As Corn<strong>in</strong>g re<strong>in</strong>vents itself for the future, Chairman <strong>and</strong> CEO Jamie Houghtonpo<strong>in</strong>ts out that unlike when he first became chairman <strong>in</strong> 1983, Corn<strong>in</strong>g’s technologycupboard is full. He <strong>and</strong> others attribute this competitive advantage toa rigorous, dynamic, <strong>and</strong> fluid <strong>in</strong>novation process. This is all well <strong>and</strong> good, butthe fact of the matter is that Corn<strong>in</strong>g, <strong>in</strong> this time of crisis due to the telecommdebacle, is about to f<strong>in</strong>d out, real-time, just how good it is at <strong>in</strong>novation effectiveness.Given Corn<strong>in</strong>g’s long history of <strong>in</strong>novation <strong>and</strong> re<strong>in</strong>vention, theattitude of the organization is to step up <strong>and</strong> welcome the challenge.POSTLOGUE: CONTINUOUS IMPROVEMENTFocus on a few areas that truly <strong>in</strong>fluence <strong>in</strong>novation’s process effectiveness:• Focus on the selection <strong>and</strong> prioritization of opportunities <strong>and</strong> projects:what to work on (<strong>in</strong>novation opportunities) is just as important as howwell the <strong>in</strong>novation work is done (<strong>in</strong>novation projects).• Capture <strong>and</strong> share lessons learned at each diamond decision <strong>in</strong> the fivestageStage-Gate (process).• Ensure senior leadership <strong>in</strong>volvement to drive consistent use of theprocess.• Put the right people <strong>in</strong> the right roles <strong>in</strong> the critical elements for success:Quality of <strong>in</strong>novation project leadershipEngaged <strong>in</strong>novation project sponsorsTeam skills matched to project objective
42 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE• Install learn<strong>in</strong>g coaches to develop the skills of <strong>in</strong>novation projectsponsors, team leaders, <strong>and</strong> team members.ABOUT THE CONTRIBUTORRichard A. O’Leary is the director of human resources <strong>and</strong> diversity for science<strong>and</strong> technology at Corn<strong>in</strong>g Incorporated. He is also responsible for ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>gthe strength of the technology community across both the centralized <strong>and</strong>decentralized organizations. Previously, he was vice president of humanresources at Cytometrics, Inc., a biomedical high-technology start-up. He hasheld director-level human resource positions at the Public Services Electric &Gas Corporation <strong>and</strong> at Owens-Corn<strong>in</strong>g Corporation. He is nationally recognizedfor his expertise <strong>in</strong> organizational development <strong>and</strong> learn<strong>in</strong>g. Dr. O’Leary is anadjunct faculty member of the <strong>University</strong> of New Jersey School of Medic<strong>in</strong>e, aLt. Col. <strong>in</strong> the Air National Guard, <strong>and</strong> serves on the board of directors atUrsul<strong>in</strong>e Academy. Dr. O’Leary was awarded the President’s Excellence Award <strong>in</strong>2001 <strong>and</strong> Dist<strong>in</strong>guished Alumni Award from Western Michigan <strong>in</strong> 2002.
SCHAPTER THREEDelnor HospitalSA cultural change model for achiev<strong>in</strong>g excellence <strong>in</strong> the five pillars of service,people, quality, growth, <strong>and</strong> f<strong>in</strong>ancial performance through balanced scorecard,customer service <strong>in</strong>terventions, accountability <strong>in</strong>terventions, <strong>and</strong> emphasis onmeasurement of satisfaction for all stakeholders.OVERVIEW 44INTRODUCTION 45IT STARTS WITH A TOP-DOWN COMMITMENT TO BECOME THE 46“BEST OF THE BEST”Select<strong>in</strong>g the Right Coach Is Key 46Implement<strong>in</strong>g the Right Model for Organizational Change 47THE NINE PRINCIPLES 48Pr<strong>in</strong>ciple 1: Commit to Excellence 48Pr<strong>in</strong>ciple 2: Build a Culture Around Service 49Pr<strong>in</strong>ciple 3: Build Accountability 52Pr<strong>in</strong>ciple 4: Create <strong>and</strong> Develop Leaders 53Pr<strong>in</strong>ciple 5: Recognize <strong>and</strong> Reward Success 55Pr<strong>in</strong>ciple 6: Focus on Employee Satisfaction 56Pr<strong>in</strong>ciple 7: Measure the Important Th<strong>in</strong>gs 57Pr<strong>in</strong>ciple 8: Communicate at All Levels 59Pr<strong>in</strong>ciple 9: Align Behaviors with Goals <strong>and</strong> Values 59LESSONS LEARNED 60Exhibit 3.1: Structure for Delnor’s Customer Service Teams 62Exhibit 3.2: Delnor Script<strong>in</strong>g for Nurses 63Exhibit 3.3: Sample of Delnor’s Monthly Performance Scorecard 64Exhibit 3.4: Sample Agenda for One of the Two-Day <strong>Leadership</strong> 65Tra<strong>in</strong><strong>in</strong>g SessionsExhibit 3.5: Accountability Grid for <strong>Best</strong> Cost <strong>and</strong> People, 69March 2003–May 2003, Delnor-Community HospitalExhibit 3.6: Heart Rhythms Before HeartMath “Freeze Frame” 70Intervention43
44 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 3.7: Heart Rhythms After HeartMath “Freeze Frame” 70InterventionExhibit 3.8: <strong>Best</strong> of the <strong>Best</strong> (a.k.a. “BoB”) Award Form 71Exhibit 3.9: Hospital Employee Satisfaction Results 72Exhibit 3.10: Dashboard of Indicators 73Exhibit 3.11: Patient <strong>and</strong> Physician Satisfaction Surveys 74Exhibit 3.12: Team Goals 75Exhibit 3.13: N<strong>in</strong>ety-Day Work/Action Plan 77ABOUT THE CONTRIBUTORS 78OVERVIEWThis case study describes the key pr<strong>in</strong>ciples <strong>and</strong> adm<strong>in</strong>istrative structure usedby Delnor-Community Hospital to• Transform its organizational culture• Improve <strong>in</strong>ternal <strong>and</strong> external customer service• Achieve growth <strong>in</strong> patient volumes <strong>and</strong> operat<strong>in</strong>g marg<strong>in</strong>s• Enhance the quality of patient careUnder the leadership of a visionary senior management team <strong>and</strong> throughthe coach<strong>in</strong>g of a lead<strong>in</strong>g health care consultant, the hospital has emerged as anational leader <strong>in</strong> service excellence <strong>and</strong> patient, employee, <strong>and</strong> physiciansatisfaction.The hospital has also enjoyed significant growth <strong>in</strong> <strong>in</strong>patient admissions <strong>and</strong>outpatient visits, while improv<strong>in</strong>g its operat<strong>in</strong>g marg<strong>in</strong> to near record levels.Quality measures have been steadily on the rise, <strong>and</strong> the entire Delnor culturehas been revitalized <strong>in</strong> ways that many beleaguered hospitals can only hope toachieve <strong>in</strong> today’s challeng<strong>in</strong>g health care environment.How has Delnor done it? By structur<strong>in</strong>g the adm<strong>in</strong>istration, patient care, <strong>and</strong>operations of the hospital around the five pillars of service, people, quality,growth, <strong>and</strong> f<strong>in</strong>ancial performance, <strong>and</strong> by <strong>in</strong>tegrat<strong>in</strong>g the follow<strong>in</strong>g n<strong>in</strong>epr<strong>in</strong>ciples <strong>in</strong>to the fabric of the organization:1. Commit to excellence2. Build a culture around service3. Build accountability4. Create <strong>and</strong> develop leaders5. Recognize <strong>and</strong> reward success6. Focus on employee satisfaction
DELNOR HOSPITAL 457. Measure the important th<strong>in</strong>gs8. Communicate at all levels9. Align behaviors with goals <strong>and</strong> valuesDelnor’s experience <strong>in</strong> implement<strong>in</strong>g these pillars <strong>and</strong> pr<strong>in</strong>ciples provides afasc<strong>in</strong>at<strong>in</strong>g case study <strong>and</strong> valuable <strong>in</strong>sights for other health care <strong>and</strong> non-healthcare organizations attempt<strong>in</strong>g to transform their culture to achieve higher levelsof performance.INTRODUCTIONIt was January 1999, <strong>and</strong> Delnor-Community Health System President <strong>and</strong> CEOCraig Livermore knew his hospital had reached a critical po<strong>in</strong>t <strong>in</strong> its history. Foryears, Delnor had enjoyed a reputation <strong>in</strong> its service area as a “good” communityhospital. Patient satisfaction was good. The quality of patient care wasgood. Employee relations were good. And the hospital’s f<strong>in</strong>ancial picturewas good. The problem was that “good” was no longer good enough.“Simply put, we made the decision that we wanted to become the ‘best ofthe best,’” recalls Livermore. “As a Board of Directors <strong>and</strong> senior managementteam, we committed ourselves to tak<strong>in</strong>g Delnor to the next level <strong>and</strong> becom<strong>in</strong>gone of the top hospitals not just <strong>in</strong> our region or state, but <strong>in</strong> the entire UnitedStates.”What was the driver for this ambitious goal? “First <strong>and</strong> foremost,” saysLivermore, “we felt we had a responsibility to provide our community with notjust good, but exceptional patient care <strong>and</strong> service. That’s the heart of our mission<strong>and</strong> is our fundamental reason for be<strong>in</strong>g. But beyond that, we knew that<strong>in</strong> order to cont<strong>in</strong>ue to be successful <strong>in</strong> the future we were go<strong>in</strong>g to have toestablish the right niche for ourselves <strong>in</strong> the marketplace—someth<strong>in</strong>g thatwould dist<strong>in</strong>guish Delnor from other area hospitals,” Livermore said.After careful deliberation, the senior management team chose “service excellence,”<strong>and</strong> began focus<strong>in</strong>g their energies on improv<strong>in</strong>g patient satisfactionthroughout the hospital. But as they embarked on their journey, they quicklylearned that achiev<strong>in</strong>g this goal was go<strong>in</strong>g to take much more than implement<strong>in</strong>gquick fixes or a “customer service program.”“The deeper we got <strong>in</strong>to the process, the more clear it became that what weneeded to do was far bigger than focus<strong>in</strong>g strictly on how to improve patientsatisfaction,” recalls Vice President <strong>and</strong> Chief Nurs<strong>in</strong>g Officer L<strong>in</strong>da Deer<strong>in</strong>g.“To become the excellent hospital we were striv<strong>in</strong>g to be, we realized that weneeded to make major organizational changes that would transform the veryculture of the hospital <strong>and</strong> impact every aspect of patient care <strong>and</strong> operations. Itwas a huge challenge, with the future success of the hospital rid<strong>in</strong>g on the
46 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEoutcome. But I knew we were up to the challenge <strong>and</strong> had the determ<strong>in</strong>ationit would take to get the job done,” said Deer<strong>in</strong>g.Over the next three years, Delnor implemented a w<strong>in</strong>n<strong>in</strong>g formula for successthat propelled the hospital <strong>in</strong>to the spotlight as a national leader <strong>in</strong> patient,employee, <strong>and</strong> physician satisfaction. The follow<strong>in</strong>g case study will provide<strong>in</strong>sight <strong>in</strong>to the key elements of this formula <strong>and</strong> offer a “how to” approach forimplement<strong>in</strong>g “built to last” changes <strong>in</strong> your organization.IT STARTS WITH A TOP-DOWN COMMITMENT TO BECOMETHE “BEST OF THE BEST”When discuss<strong>in</strong>g organizational change, many bus<strong>in</strong>esses make the mistake offocus<strong>in</strong>g first on f<strong>in</strong>d<strong>in</strong>g the right change management model, but at DelnorHospital leaders found its first key to success was someth<strong>in</strong>g far more basic <strong>and</strong>fundamental. Observes Livermore,The best system or model <strong>in</strong> the world isn’t go<strong>in</strong>g to do your organization a bitof good unless you have a top-down commitment to mak<strong>in</strong>g it work. To me,that’s where it all starts. Your board of directors, CEO, <strong>and</strong> senior managementteam have to be firmly <strong>and</strong> passionately committed to becom<strong>in</strong>g the “best of thebest.” They set the tone <strong>and</strong> direction for the entire organization. It’s absolutelyimperative that they recognize the need for major change <strong>and</strong> be the catalystsfor mak<strong>in</strong>g it happen. This creates a trickle-down effect throughout the organization.Once mid-level management <strong>and</strong> l<strong>in</strong>e-level employees see top executiveslead<strong>in</strong>g the way, most of them will beg<strong>in</strong> to support the <strong>in</strong>itiative as well.“When our CEO <strong>and</strong> other top adm<strong>in</strong>istrators began the drive to become the‘best of the best’ what most impressed me was their dedication to tak<strong>in</strong>g Delnorto the next level,” says Hasi Smith, director of <strong>in</strong>formation systems. “I th<strong>in</strong>k itreally showed us, as managers, that they were totally committed to the changesthat were be<strong>in</strong>g implemented. Their enthusiasm was contagious. Not onlydid that help us buy-<strong>in</strong>to what was happen<strong>in</strong>g, it also helped our staff buy <strong>in</strong>toit as well,” Smith says.Select<strong>in</strong>g the Right Coach Is KeyJust as <strong>in</strong> sports, hav<strong>in</strong>g the right coach to guide your organization through culturalchange is a vital key to success. At Delnor, the adm<strong>in</strong>istration turned toQu<strong>in</strong>t Studer, who was build<strong>in</strong>g a national reputation as a service excellence<strong>and</strong> change management consultant. Studer, who is president of the Pensacola,Florida-based Studer Group, had helped guide Holy Cross Hospital <strong>in</strong> Chicago<strong>and</strong> Baptist Hospital <strong>in</strong> Pensacola to new heights <strong>in</strong> patient satisfaction as CEOdur<strong>in</strong>g the late 1990s.
DELNOR HOSPITAL 47Studer offered a proven model for change, <strong>and</strong>, just as important, hebrought a dynamic coach<strong>in</strong>g style that made him the right fit for Delnor.“Qu<strong>in</strong>t has a real passion for improv<strong>in</strong>g health care <strong>and</strong> patient satisfaction,”said Deer<strong>in</strong>g. “And that really sh<strong>in</strong>es through <strong>in</strong> his work with clients. He hasa motivational way of present<strong>in</strong>g to groups that really captures their attention<strong>and</strong> makes his message compell<strong>in</strong>g. That really helped us <strong>in</strong> roll<strong>in</strong>g our<strong>in</strong>itiative out to hospital leadership <strong>and</strong> staff <strong>and</strong> gave credibility to what wewere do<strong>in</strong>g.”Implement<strong>in</strong>g the Right Model for Organizational ChangeDelnor’s success <strong>in</strong> achiev<strong>in</strong>g cultural change <strong>and</strong> nationally recognized resultscan be attributed to the hospital’s adoption of Studer’s n<strong>in</strong>e key pr<strong>in</strong>ciples <strong>and</strong>five organizational pillars.N<strong>in</strong>e Pr<strong>in</strong>ciples• Commit to excellence• Build a culture around service• Build accountability• Create <strong>and</strong> develop leaders• Recognize <strong>and</strong> reward success• Focus on employee satisfaction• Measure the important th<strong>in</strong>gs• Communicate at all levels• Align behaviors with goals <strong>and</strong> valuesFive Pillars• Service• Quality• Cost• People• GrowthExpla<strong>in</strong>s Livermore,Once you have a top-down commitment <strong>and</strong> have selected the right coach, thenext essential element is implement<strong>in</strong>g the right model, or system, for change.Qu<strong>in</strong>t’s n<strong>in</strong>e pr<strong>in</strong>ciples <strong>and</strong> five pillars proved to be the right fit for Delnor.They provided us with the roadmap for improv<strong>in</strong>g every aspect of hospitalperformance <strong>and</strong> operations. From a communications st<strong>and</strong>po<strong>in</strong>t, the simplicityof the “pr<strong>in</strong>ciples” <strong>and</strong> “pillars” helped us <strong>in</strong> communicat<strong>in</strong>g the model to both
48 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEleaders <strong>and</strong> staff. It was someth<strong>in</strong>g everyone could underst<strong>and</strong>, remember, <strong>and</strong>relate to. And I th<strong>in</strong>k that was very important. If the design of your changemanagement system is too complex, your leaders <strong>and</strong> staff won’t “get it,” letalone be able to implement it.THE NINE PRINCIPLESPr<strong>in</strong>ciple 1: Commit to ExcellenceWhen Studer began work<strong>in</strong>g with Delnor, he told hospital leaders thatestablish<strong>in</strong>g “a championship culture” beg<strong>in</strong>s with a commitment to excellence.“When excellence is reached,” he said, “employees feel valued, physicians feelan organization is the best, <strong>and</strong> the patients feel the service is extraord<strong>in</strong>ary.”One of the first th<strong>in</strong>gs Livermore <strong>and</strong> the board of directors did to “hardwire”this first pr<strong>in</strong>ciple <strong>in</strong>to the organization was build a commitment to excellence<strong>in</strong>to the hospital’s mission, vision, values, <strong>and</strong> strategic plan.Mission statement: To provide excellence <strong>in</strong> health care <strong>and</strong> to promote lifelongwellness <strong>in</strong> the communities we serve.Vision statement: Our community will turn to us first for health care <strong>and</strong>wellness. We will develop a tradition of service excellence. Patients <strong>and</strong>consumers will experience their care as connected <strong>and</strong> whole. Physicianswill regard us as a trusted partner. Together, we will build a regionalreputation for cl<strong>in</strong>ical excellence.Values: Excellence, service, compassion, respect, <strong>and</strong> <strong>in</strong>tegrity.Strategic plan: Service excellence became one of the eight driv<strong>in</strong>g strategies<strong>in</strong> the hospital’s new strategic plan.“By <strong>in</strong>tegrat<strong>in</strong>g this pr<strong>in</strong>ciple so deeply <strong>in</strong>to the fabric of the organization,we sent a clear message to leaders <strong>and</strong> staff that our commitment to excellencewas go<strong>in</strong>g to be fundamental to the new hospital culture we were build<strong>in</strong>g,”Livemore said.To facilitate this process, the adm<strong>in</strong>istration used a variety of strategies,<strong>in</strong>clud<strong>in</strong>g• Employee forums led by the chief executive officer <strong>and</strong> chief operat<strong>in</strong>gofficer• Employee, volunteer, <strong>and</strong> physician newsletters• Banners, posters, <strong>and</strong> flyers• Presentations to leadership <strong>and</strong> unit <strong>and</strong> departmental meet<strong>in</strong>gs• A contest <strong>in</strong> which employees throughout the hospital were challengedto creatively display the word “excellence” <strong>in</strong> their departments
DELNOR HOSPITAL 49“We wanted leaders, staff, volunteers, <strong>and</strong> physicians to hear <strong>and</strong> see ourcommitment to excellence everywhere they went <strong>in</strong> the hospital. This was thefirst step <strong>in</strong> gett<strong>in</strong>g them to live the pr<strong>in</strong>ciple <strong>and</strong> make it a reality <strong>in</strong> everyth<strong>in</strong>gthey do,” Livermore said.Pr<strong>in</strong>ciple 2: Build a Culture Around ServiceIn today’s competitive health care environment, most hospitals are offer<strong>in</strong>g basicallythe same menu of services for their patients. So how can a hospital differentiateitself <strong>in</strong> the marketplace <strong>and</strong> break ahead of the pack? One of the mosteffective strategies, accord<strong>in</strong>g to Studer, is to build a culture around service.“A nationwide survey of hospital executives a few years ago found that thepriorities at the top of most CEOs’ ‘to do’ lists were th<strong>in</strong>gs like buy<strong>in</strong>g moreup-to-date technology <strong>and</strong> improv<strong>in</strong>g payer reimbursement rates,” says Studer.“What was miss<strong>in</strong>g from this list was a very basic <strong>and</strong> fundamental priority:patient satisfaction.”This revelation struck a chord with leaders at Delnor, <strong>and</strong> confirmed a strategicdirection they had already decided to pursue. “We knew that for our hospitalto cont<strong>in</strong>ue to be successful <strong>in</strong> the future we had to f<strong>in</strong>d the right niche <strong>in</strong>our local market. And for us, the one that made the most sense <strong>and</strong> was themost consistent with our mission was service excellence,” said Livermore. “Sowe established an organizational goal to become the best hospital <strong>in</strong> the area<strong>and</strong> one of the top hospitals <strong>in</strong> the country <strong>in</strong> patient satisfaction.”To achieve this lofty goal, Delnor implemented a service excellence <strong>in</strong>itiative<strong>in</strong>spired by Studer that comprised five critical elements: (1) creat<strong>in</strong>g customersatisfaction teams, (2) script<strong>in</strong>g “words that work” for employees <strong>in</strong> their <strong>in</strong>teractionswith patients <strong>and</strong> visitors, (3) round<strong>in</strong>g by cl<strong>in</strong>ical leaders, (4) follow-upcalls to discharged patients, <strong>and</strong> (5) service recovery.Creat<strong>in</strong>g Customer Satisfaction Teams. To put the necessary organizationalfocus <strong>and</strong> resources beh<strong>in</strong>d the patient satisfaction <strong>in</strong>itiative, Delnor establisheda series of seven action teams, each charged with address<strong>in</strong>g a different aspectof the customer experience (see Exhibit 3.1 for a diagram of the structure forDelnor’s customer service teams):• Behavior st<strong>and</strong>ards. This team established st<strong>and</strong>ards of performance thatsupport the mission <strong>and</strong> values of the hospital <strong>and</strong> foster excellent customerservice. (For more about the behavior st<strong>and</strong>ards, see Pr<strong>in</strong>ciple 9: Align Behaviorswith Goals <strong>and</strong> Values.)• Remov<strong>in</strong>g irritants. Identify<strong>in</strong>g <strong>and</strong> address<strong>in</strong>g barriers to provid<strong>in</strong>gexceptional service to hospital patients <strong>and</strong> visitors is the focus of this team. “Sooften, there are th<strong>in</strong>gs—big <strong>and</strong> small—that we do <strong>in</strong> the course of provid<strong>in</strong>gpatient care that are irritants to our customers. But unless an organization has a
50 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEmeans of identify<strong>in</strong>g these <strong>and</strong> correct<strong>in</strong>g them, noth<strong>in</strong>g gets done about them,”says Deer<strong>in</strong>g, team chairman. “It makes so much sense to have a team <strong>in</strong> placewhose mission is to look for these barriers <strong>and</strong> do whatever we can to work withhospital departments to remove them. It’s a w<strong>in</strong>, w<strong>in</strong>—it makes the patient’s experienceat Delnor better, <strong>and</strong> helps to improve our patient satisfaction scores.”• Reward <strong>and</strong> recognition. Reward<strong>in</strong>g <strong>and</strong> recogniz<strong>in</strong>g top performers isvital to both encourag<strong>in</strong>g employees to provide excellent service <strong>and</strong> achiev<strong>in</strong>ghigh levels of employee satisfaction with<strong>in</strong> an organization. At Delnor, this teamis responsible for develop<strong>in</strong>g <strong>and</strong> oversee<strong>in</strong>g the hospital’s formal reward <strong>and</strong>recognition programs. (For more <strong>in</strong>formation, see Pr<strong>in</strong>ciple 5: Recognize<strong>and</strong> Reward Success.)• Physician satisfaction. “At Delnor, doctors are viewed as important customersjust like patients,” says Livermore. “Without our physicians, we wouldn’thave any patients. So we felt it was important to establish a team whose solefocus is to enhance the physician experience at Delnor, whether that’s mak<strong>in</strong>git easier for them to practice medic<strong>in</strong>e here, or recogniz<strong>in</strong>g their contributionsto patient care <strong>and</strong> the hospital.” To accomplish the former, the team has workedwith doctors to identify <strong>and</strong> address barriers they face at the hospital. To achievethe latter, the team <strong>in</strong>stituted an <strong>in</strong>novative “Dist<strong>in</strong>guished Physicians Awards”program.• Measurement. To monitor the hospital’s progress <strong>in</strong> improv<strong>in</strong>g patientsatisfaction, the hospital formed a measurement team that is responsible foradm<strong>in</strong>ister<strong>in</strong>g all patient satisfaction surveys <strong>and</strong> publish<strong>in</strong>g <strong>and</strong> <strong>in</strong>terpret<strong>in</strong>gweekly, monthly <strong>and</strong> quarterly data.“It’s our job to analyze <strong>and</strong> report the data at a hospitalwide <strong>and</strong> <strong>in</strong>dividualdepartment level,” says Michael Kittoe, a vice president <strong>and</strong> team chairman.“We help hospital leaders <strong>and</strong> staff underst<strong>and</strong> their surveys <strong>and</strong> results so theycan proactively take action on the data <strong>and</strong> work on areas that need improvement.We make the whole patient satisfaction survey process very visiblethroughout the organization. That keeps it top-of-m<strong>in</strong>d for everyone <strong>and</strong> helpshold leaders <strong>and</strong> teams accountable for their scores,” Kittoe says.• <strong>Leadership</strong> development. This <strong>in</strong>itiative is led by a steer<strong>in</strong>g committee <strong>and</strong>three subcommittees that are responsible for putt<strong>in</strong>g together the tra<strong>in</strong><strong>in</strong>g<strong>and</strong> tools managers need to improve their leadership skills. (For more <strong>in</strong>formation,see Pr<strong>in</strong>ciple 4: Create <strong>and</strong> Develop Leaders.)Script<strong>in</strong>g. Another key element of build<strong>in</strong>g a culture around service is provid<strong>in</strong>gstaff with script<strong>in</strong>g, or “words that work,” for critical <strong>in</strong>teractions withcustomers. (See Exhibit 3.2 show<strong>in</strong>g a sample of Delnor script<strong>in</strong>g for staff.) “Thegoal is to teach employees how to use the words or phrases with patients,visitors, physicians, <strong>and</strong> <strong>in</strong>ternal customers that are conducive to customersatisfaction,” says Deer<strong>in</strong>g. “By st<strong>and</strong>ardiz<strong>in</strong>g how staff <strong>in</strong>teract with customers
DELNOR HOSPITAL 51<strong>in</strong> certa<strong>in</strong> situations, we’re able to provide better service more consistentlythroughout the organization.”The most widely used example of script<strong>in</strong>g at Delnor is the phrase, “Is thereanyth<strong>in</strong>g else I can do for you? I have the time.” Nurses, aides, housekeepers,<strong>and</strong> others ask a variation of this question every time they leave a patient room.The phrase has even caught on among employees <strong>in</strong> adm<strong>in</strong>istrative departmentswhen deal<strong>in</strong>g with their own <strong>in</strong>ternal customers.Round<strong>in</strong>g by Cl<strong>in</strong>ical Leaders. At Delnor, nurs<strong>in</strong>g leaders make it a priority everyday to visit with patients, families, <strong>and</strong> staff on their units. “There is no better wayfor me to stay <strong>in</strong> touch with what’s happen<strong>in</strong>g <strong>in</strong> my area <strong>and</strong> ensure that patient<strong>and</strong> family needs are be<strong>in</strong>g met than to do regular round<strong>in</strong>g,” says Deborah Dyrek,a nurs<strong>in</strong>g manager for one of the hospital’s medical floors. “By proactively look<strong>in</strong>g<strong>in</strong> on patients <strong>and</strong> ask<strong>in</strong>g them <strong>and</strong> their families how th<strong>in</strong>gs are go<strong>in</strong>g it helps meto address concerns before they become major problems.”Dyrek adds that patients <strong>and</strong> families are often surprised that a nurs<strong>in</strong>g adm<strong>in</strong>istratorwould take the time to stop by their room <strong>and</strong> talk with them. “Thismakes a strong impression <strong>and</strong> says a lot about the importance we place onpatient <strong>and</strong> family satisfaction with the quality of care <strong>and</strong> service at Delnor.”Just as vital, says Dyrek, is the round<strong>in</strong>g she does with her staff. “It’s importantto be visible, to show you care, to provide coach<strong>in</strong>g, <strong>and</strong> to f<strong>in</strong>d out whatyour team members need to do their jobs to the best of their ability—those arethe benefits of round<strong>in</strong>g for me.”Patient Call-Backs. Pretend for a moment that you’ve just returned home fromhav<strong>in</strong>g outpatient surgery. You’re <strong>in</strong> pa<strong>in</strong>, you’re nervous about your recovery,<strong>and</strong> a dozen questions are runn<strong>in</strong>g through your head that you wish you wouldhave remembered to ask someone before you left the hospital. Imag<strong>in</strong>e what acomfort <strong>and</strong> relief it would be if you received a follow-up phone call from yournurse ask<strong>in</strong>g you how you’re feel<strong>in</strong>g <strong>and</strong> whether there’s anyth<strong>in</strong>g she can dofor you. This scenario is precisely why nurs<strong>in</strong>g leadership at Delnor decided to<strong>in</strong>stitute patient call-backs to every outpatient <strong>and</strong> <strong>in</strong>patient follow<strong>in</strong>g theirdischarge from the hospital.“It’s one more way we can add that personal touch to our patient care,” saysDeer<strong>in</strong>g. “To some, mak<strong>in</strong>g call-backs may not seem like a big deal. But youwouldn’t believe how important it is to the patient to hear from us. Most callsdon’t last five m<strong>in</strong>utes. But dur<strong>in</strong>g that time we’re able to strengthen our bondwith the patient, listen to their concerns, answer their questions, <strong>and</strong> reassurethem that everyth<strong>in</strong>g is go<strong>in</strong>g to be OK. It’s an <strong>in</strong>credibly powerful patientsatisfaction tool.”The other important th<strong>in</strong>g to note about patient callbacks, says Deer<strong>in</strong>g isthat it’s good medical practice. “By follow<strong>in</strong>g-up with our patients, we’re able
52 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEto identify complications that may have developed s<strong>in</strong>ce they were dischargedbefore they become serious problems. It also provides us with the opportunityto make sure they understood their discharge <strong>in</strong>structions for self-care, oranswer questions they may have about tak<strong>in</strong>g their pa<strong>in</strong> medication. From acl<strong>in</strong>ical quality st<strong>and</strong>po<strong>in</strong>t, it’s the right th<strong>in</strong>g to do. There’s no question that ithelps to lower readmission rates,” adds Deer<strong>in</strong>g.Service Recovery. “No matter how hard you try, no organization provides perfectcustomer service,” po<strong>in</strong>ts out Deer<strong>in</strong>g. “We’re all human <strong>and</strong> make mistakes.But if those mistakes are h<strong>and</strong>led <strong>in</strong> the right way, you can quickly turna negative <strong>in</strong>to a positive <strong>and</strong> convert unhappy customers <strong>in</strong>to loyal ones byfollow<strong>in</strong>g a service recovery process we call ACT.”ACT is an acronym for apologize, correct, <strong>and</strong> take action. And at Delnor, ithas become the st<strong>and</strong>ard process by which staff respond to patient <strong>and</strong> visitorcompla<strong>in</strong>ts. When faced with a dissatisfied customer, the first step <strong>in</strong> servicerecovery is to apologize for fail<strong>in</strong>g to meet his or her expectations. This immediatelysets a conciliatory tone <strong>and</strong> lets the customer know you take the compla<strong>in</strong>tseriously. The next step is to work with the customer to determ<strong>in</strong>e howbest to correct the situation <strong>in</strong> an acceptable way. The f<strong>in</strong>al step is to moveswiftly <strong>in</strong> tak<strong>in</strong>g action to resolve the problem.“At Delnor, we tra<strong>in</strong> our employees to view compla<strong>in</strong>ts as a gift,” says Deer<strong>in</strong>g.“It may sound strange, but customers are actually do<strong>in</strong>g us a favor whenthey step forward with legitimate compla<strong>in</strong>ts. It sends up a red flag that a customerprocess is broken <strong>and</strong> needs to be fixed.” This becomes even more important,accord<strong>in</strong>g to Deer<strong>in</strong>g, <strong>in</strong> light of consumer studies <strong>in</strong>dicat<strong>in</strong>g that for everycustomer who compla<strong>in</strong>s about a problem, there are n<strong>in</strong>e more who don’t compla<strong>in</strong>but simply choose to go elsewhere for service.“On the positive side, research has also shown that most customers whosecompla<strong>in</strong>ts are promptly addressed will return to a company or bus<strong>in</strong>ess for service.These statistics really underscore the importance of service recovery. It’samaz<strong>in</strong>g how powerful the three simple steps of ACT can be <strong>in</strong> turn<strong>in</strong>g anegative customer experience <strong>in</strong>to a positive one,” Deer<strong>in</strong>g says.Pr<strong>in</strong>ciple 3: Build AccountabilityBuild<strong>in</strong>g a championship culture requires creat<strong>in</strong>g an environment of ownership<strong>and</strong> accountability at every level of the organization. “This pr<strong>in</strong>ciple isabsolutely critical,” says Livermore. “From top adm<strong>in</strong>istrators to l<strong>in</strong>e-level staff,we needed a team that was go<strong>in</strong>g to act like ‘owners,’ as opposed to ‘renters’ <strong>in</strong>their areas. And we needed to put systems <strong>in</strong> place that would hold everyoneaccountable for their <strong>in</strong>dividual <strong>and</strong> team performance, as well as theperformance of the organization as a whole.”
DELNOR HOSPITAL 53To help foster an environment of ownership, the importance of this pr<strong>in</strong>ciplewas communicated extensively throughout the hospital to both leaders<strong>and</strong> staff <strong>in</strong> a variety of ways. It also was emphasized <strong>in</strong> the employee hir<strong>in</strong>g <strong>and</strong>orientation process.Greater accountability was <strong>in</strong>tegrated <strong>in</strong>to the culture through the developmentof monthly scorecards monitor<strong>in</strong>g progress <strong>in</strong> achiev<strong>in</strong>g organizational <strong>and</strong> teamgoals. (See Exhibit 3.3 show<strong>in</strong>g a sample of Delnor’s monthly performance scorecard.)Performance toward these goals was also factored heavily <strong>in</strong>to year-endperformance reviews for leadership <strong>and</strong> staff, <strong>and</strong> is a key barometer by whichthe board of directors evaluates the hospital’s executive team. Hospitalwide <strong>and</strong>unit- <strong>and</strong> department-specific patient satisfaction scores are widely publicized<strong>and</strong> posted throughout the build<strong>in</strong>g, as are the results of <strong>in</strong>ternal customer surveys(<strong>in</strong> which departments rate the service they provide to each other). Leaders<strong>and</strong> staff are also held accountable for the number of process-improvement <strong>and</strong>cost-sav<strong>in</strong>gs ideas they generate annually through the Bright Ideas program.Pr<strong>in</strong>ciple 4: Create <strong>and</strong> Develop Leaders“In one of our first coach<strong>in</strong>g sessions with Qu<strong>in</strong>t Studer,” recalls Livermore, “heasked our leadership team how many of them had received formal tra<strong>in</strong><strong>in</strong>g tobecome managers. Very few h<strong>and</strong>s went up. And that was a real eye-open<strong>in</strong>gexperience for me.“I realized that we, like so many hospitals <strong>and</strong> bus<strong>in</strong>esses, often promotepeople to management roles based on their knowledge, technical skills <strong>and</strong> pastperformance <strong>in</strong> other positions without provid<strong>in</strong>g them with tools they need tobecome great leaders. That’s why this fourth pr<strong>in</strong>ciple has become one of themost important factors <strong>in</strong> creat<strong>in</strong>g a new culture at Delnor,” Livermore said.To implement this pr<strong>in</strong>cipal, Delnor followed the Studer Group’s model forestablish<strong>in</strong>g an <strong>in</strong>-house leadership <strong>in</strong>stitute. The <strong>in</strong>stitute’s goals are to teachboth new <strong>and</strong> exist<strong>in</strong>g managers new skills, competencies, <strong>and</strong> behaviors thatwill help them become better leaders <strong>and</strong> serve as catalysts for organizationalchange. (See Exhibits 3.4 <strong>and</strong> 3.5 show<strong>in</strong>g a sample agenda for one of the twodayleadership tra<strong>in</strong><strong>in</strong>g sessions, along the “accountability grid” each leaderreceives as a guide for action steps to take back to their teams to implement.)The <strong>in</strong>stitute is charged with creat<strong>in</strong>g customized, quarterly, two-day tra<strong>in</strong><strong>in</strong>gsessions for the hospital’s leadership team. Each session has a unique theme <strong>and</strong>is focused on one of the five pillars of growth, service, people, quality, <strong>and</strong> f<strong>in</strong>ance.Presentations are given by a comb<strong>in</strong>ation of Delnor leaders <strong>and</strong> professionaloutside speakers. Program content covers issues such as• Lead<strong>in</strong>g versus manag<strong>in</strong>g• Deal<strong>in</strong>g with poor performers• Reward<strong>in</strong>g <strong>and</strong> recogniz<strong>in</strong>g employees
56 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEAt Delnor, top management began <strong>in</strong>tegrat<strong>in</strong>g this pr<strong>in</strong>ciple through leadershiptra<strong>in</strong><strong>in</strong>g. “We educated our leaders about the importance of prais<strong>in</strong>gtheir staff <strong>and</strong> taught them skills for how to do it effectively,” says Deer<strong>in</strong>g. “Itsounds simple, but it’s amaz<strong>in</strong>g how many managers don’t take the time to telltheir employees they’re do<strong>in</strong>g a good job unless you build it <strong>in</strong>to your cultureas an expectation.”The hospital also formed a team to develop new reward <strong>and</strong> recognitionprograms, <strong>in</strong>clud<strong>in</strong>g the follow<strong>in</strong>g (see Exhibit 3.8 show<strong>in</strong>g a <strong>Best</strong> of the <strong>Best</strong>,or “BoB,” award form):• The <strong>Best</strong> of the <strong>Best</strong> (BoB) program. This program <strong>in</strong>volved creat<strong>in</strong>g rewardcertificates that patients, visitors, leaders, coworkers, volunteers, or physicianscan fill out to recognize an employee for provid<strong>in</strong>g excellent customer service.Staff members receiv<strong>in</strong>g the certificates can redeem them with their managerfor prizes that <strong>in</strong>clude meal passes for the cafeteria or gift cards for local stores<strong>and</strong> restaurants.“It’s great when someone gives me a ‘BoB,’ says C<strong>in</strong>dy Masa, a registerednurse. “It really makes me feel like I’m appreciated for tak<strong>in</strong>g extra time with apatient or do<strong>in</strong>g someth<strong>in</strong>g nice for a coworker. And the gift certificates are likegett<strong>in</strong>g a little bonus. I love it.” Masa’s comments are representative of the entirestaff’s response to the program, which has become one of the most successfulaspects of Delnor’s reward <strong>and</strong> recognition efforts.• Monthly Excellence Awards. This is the next level of recognition. Employeeswho go above <strong>and</strong> beyond what’s expected <strong>in</strong> customer service receive specialrecognition at a monthly awards ceremony attended by hospital leaders <strong>and</strong> staff.• Annual Excellence Awards. A select few employees who do someth<strong>in</strong>gextraord<strong>in</strong>ary for customers or the organization receive these awards, which aregiven out once a year at an employee recognition banquet. First, second, <strong>and</strong>third place plaques <strong>and</strong> cash prizes of up to $1,000 come with this highest levelof recognition. As Livermore said, “The awards d<strong>in</strong>ner is our most celebratedemployee event <strong>and</strong> is always one of the highlights of the year at the hospital.It’s a tremendous way to recognize the very ‘best of the best’ at Delnor.”Pr<strong>in</strong>ciple 6: Focus on Employee Satisfaction“What we have found is that there is a direct correlation between employee satisfaction<strong>and</strong> patient <strong>and</strong> physician satisfaction,” says Livermore. “By constantlywork<strong>in</strong>g to keep our staff satisfied, we have been able to improve morale, whileat the same time dramatically <strong>in</strong>creas<strong>in</strong>g our patient satisfaction <strong>and</strong> physiciansatisfaction scores. It just st<strong>and</strong>s to reason that happy employees are go<strong>in</strong>g toprovide better care <strong>and</strong> service to customers.”At the macro-level, achiev<strong>in</strong>g high levels of employee satisfaction depends,<strong>in</strong> large part, upon an organization’s success <strong>in</strong> <strong>in</strong>tegrat<strong>in</strong>g the other eight
DELNOR HOSPITAL 57pr<strong>in</strong>ciples described <strong>in</strong> this chapter. “All these elements must work <strong>in</strong> concertto create an environment <strong>and</strong> culture that differentiates you <strong>and</strong> makes yourhospital or bus<strong>in</strong>ess a place where employees feel valued <strong>and</strong> want to come towork each day,” observes Livermore.At the microlevel, the hospital has taken a number of steps to <strong>in</strong>tegrate thispr<strong>in</strong>ciple, <strong>in</strong>clud<strong>in</strong>g establish<strong>in</strong>g an organizational goal to become the tophospital <strong>in</strong> Chicago’s western suburbs for employee satisfaction. “We builtthat goal <strong>in</strong>to our strategic plan <strong>and</strong> formed an Employer of Choice team toserve as a catalyst for help<strong>in</strong>g us get there,” says Livermore. Over the pastthree years, this group has researched <strong>and</strong> implemented the follow<strong>in</strong>g successfulstrategies:• Develop<strong>in</strong>g programs to help staff achieve greater work–life balance• Enhanc<strong>in</strong>g opportunities for career development• Improv<strong>in</strong>g the competitiveness of the hospital’s wage <strong>and</strong> benefitsprogram• Offer<strong>in</strong>g health <strong>and</strong> wellness opportunities for employees• Organiz<strong>in</strong>g fun activities that build employee spiritThanks to these efforts <strong>and</strong> the hospital’s cultural transformation, Delnorrecently achieved the highest score for employee morale <strong>in</strong> a national survey ofhospitals <strong>and</strong> health care organizations conducted by Sperduto & Associates, anational research firm. (See Exhibit 3.9 show<strong>in</strong>g the hospital’s employee satisfactionresults as documented by Sperduto & Associates.) The hospital was alsothe 2002 w<strong>in</strong>ner of the Institute for Health <strong>and</strong> Productivity Management’sCorporate Health <strong>and</strong> Productivity Award.In addition to earn<strong>in</strong>g national acclaim, Delnor’s “employer of choice”<strong>in</strong>itiatives are also produc<strong>in</strong>g bottom-l<strong>in</strong>e results for the hospital. Staff turnoverhas decl<strong>in</strong>ed from 20.5 percent <strong>in</strong> FY2001 to 11 percent <strong>in</strong> FY2002, result<strong>in</strong>g <strong>in</strong> asav<strong>in</strong>gs of hundreds of thous<strong>and</strong>s of dollars to the hospital <strong>in</strong> recruitment,tra<strong>in</strong><strong>in</strong>g, <strong>and</strong> other expenses related to hir<strong>in</strong>g new employees.Pr<strong>in</strong>ciple 7: Measure the Important Th<strong>in</strong>gs“If you set a goal but don’t bother to measure your progress along the way,how will you know whether you achieve it?” asks Livermore <strong>in</strong> underscor<strong>in</strong>gthe importance of Pr<strong>in</strong>ciple #7. The keys, he says, are determ<strong>in</strong><strong>in</strong>g the mostimportant <strong>and</strong> mean<strong>in</strong>gful data elements to measure, <strong>and</strong> mak<strong>in</strong>g sure someth<strong>in</strong>gis done with the <strong>in</strong>formation once it’s collected. At Delnor, the hospitalfocuses on measur<strong>in</strong>g data closely related to strategic priorities <strong>and</strong> organizationalgoals.
58 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEDashboard of Indicators. “We selected key data under the five pillars of service,people, growth, quality, <strong>and</strong> f<strong>in</strong>ance <strong>and</strong> developed a “dashboard of<strong>in</strong>dicators” to help senior management <strong>and</strong> the board of directors monitorthe hospital’s performance,” says Gretchen Parker, director of plann<strong>in</strong>g. “Eachmeasure is tied to an objective <strong>in</strong> our strategic plan, such as patient satisfaction,patient volumes, market share, quality of care, f<strong>in</strong>ancial performance,<strong>and</strong> so on.” (See Exhibit 3.10 show<strong>in</strong>g the hospital’s “dashboard of<strong>in</strong>dicators”.)Customer Satisfaction. After mak<strong>in</strong>g “service excellence” a strategic priority<strong>and</strong> establish<strong>in</strong>g an organizational goal to reach the n<strong>in</strong>ety-n<strong>in</strong>th percentile <strong>in</strong>patient satisfaction, Delnor implemented a rigorous system for measur<strong>in</strong>g <strong>and</strong>report<strong>in</strong>g patient satisfaction data.Us<strong>in</strong>g Press Ganey, a professional, <strong>in</strong>dependent, national research firm, thehospital surveys every type of patient it serves (<strong>in</strong>patients, outpatients, emergencydepartment patients, <strong>and</strong> so on) cont<strong>in</strong>uously dur<strong>in</strong>g the year. Patientsatisfaction reports are generated <strong>and</strong> shared throughout the hospital on aweekly, monthly, quarterly, <strong>and</strong> annual basis. (See Exhibit 3.11 show<strong>in</strong>gpatient <strong>and</strong> physician satisfaction survey results from national market researchfirms.)“Establish<strong>in</strong>g a measurement system this extensive is a huge undertak<strong>in</strong>gthat requires considerable staff <strong>and</strong> f<strong>in</strong>ancial resources, but we have found it tobe well worthwhile,” says Michael Kittoe, vice president <strong>and</strong> chairman of thehospital’s Data Measurement Team. “By publish<strong>in</strong>g this data so frequently itreally helps our leaders <strong>and</strong> staff focus on patient satisfaction. What’s more,leaders <strong>and</strong> teams are held accountable for their scores <strong>and</strong> are expected toutilize the data to identify gaps <strong>in</strong> patient satisfaction so they can implementprocess improvements.”Top-scor<strong>in</strong>g teams are recognized <strong>and</strong> rewarded, creat<strong>in</strong>g a celebratory atmospherethat’s <strong>in</strong>fectious, says Kittoe. “It creates a healthy competition with<strong>in</strong> thehospital among teams, <strong>and</strong> constantly challenges them to improve.”Achiev<strong>in</strong>g the n<strong>in</strong>ety-n<strong>in</strong>th percentile (or top 1 percent) <strong>in</strong> patient satisfactionhas become the hospital’s rally<strong>in</strong>g cry, <strong>and</strong> top management emphasizesthis goal at every opportunity with both leaders <strong>and</strong> staff. “Senior managementsets the focus <strong>and</strong> tone for the organization,” says Barker. “When we see <strong>and</strong>hear how passionate they are about this goal it really fires up the rest of us towork hard to achieve it.”In addition to measur<strong>in</strong>g patient satisfaction, the hospital also conductsphysician <strong>and</strong> employee satisfaction surveys <strong>and</strong> community-based marketresearch. As customer service action plans have been developed <strong>and</strong> implementedfor each of those groups, the hospital has experienced dramatic ga<strong>in</strong>s<strong>in</strong> those scores as well.
DELNOR HOSPITAL 59“Without a doubt, our achievement of national rank<strong>in</strong>gs <strong>in</strong> patient, employee,<strong>and</strong> physician satisfaction has co<strong>in</strong>cided with our emphasis on measur<strong>in</strong>g theimportant th<strong>in</strong>gs <strong>and</strong> be<strong>in</strong>g committed to tak<strong>in</strong>g action on the results,” saysLivermore.Pr<strong>in</strong>ciple 8: Communicate at All LevelsEffective corporate communication is always important, especially dur<strong>in</strong>g timesof major cultural change. “Let’s face it, change is uncomfortable, <strong>and</strong>, at times,even scary,” says Livermore. “That’s why it’s so important for top managementto clearly communicate their organization’s vision, goals, <strong>and</strong> strategic direction toleaders <strong>and</strong> staff. We have an obligation to expla<strong>in</strong> where the organization isheaded <strong>and</strong> why. To fail to do so causes confusion <strong>and</strong> paralysis.”To achieve this pr<strong>in</strong>ciple at Delnor the adm<strong>in</strong>istration used a variety ofcommunications tactics, <strong>in</strong>clud<strong>in</strong>g• <strong>Leadership</strong> meet<strong>in</strong>gs• Employee forums• Memos <strong>and</strong> e-mails• The employee newsletterIn addition, team leaders communicated the changes <strong>and</strong> addressed employeequestions at department meet<strong>in</strong>gs.“You can’t communicate someth<strong>in</strong>g as radical as a new vision <strong>and</strong> strategicdirection once <strong>and</strong> expect leaders <strong>and</strong> staff to ‘get it,’” says Livermore. “Our goalwas to get the word out as often <strong>and</strong> <strong>in</strong> as many different ways as possible us<strong>in</strong>gconsistent themes <strong>and</strong> messages. In situations like this, it’s virtually impossibleto over-communicate.”In addition to top-down communication, Delnor also employs a technique called“manag<strong>in</strong>g-up,” <strong>in</strong> which employees are encouraged to proactively communicatewith their supervisor on important issues. “We tell our staff to put themselves <strong>in</strong>their boss’s shoes <strong>and</strong> ask themselves, ‘What does he or she need to knowabout what I’m do<strong>in</strong>g <strong>and</strong> how can I help the hospital be more successful?’” saysDeer<strong>in</strong>g. “Manag<strong>in</strong>g-up is also an important way employees can make sure theirpriorities are <strong>in</strong> l<strong>in</strong>e with their boss’s expectations <strong>and</strong> team <strong>and</strong> organizationalgoals.”Pr<strong>in</strong>ciple 9: Align Behaviors with Goals <strong>and</strong> Values“Develop<strong>in</strong>g an organizational vision, values, <strong>and</strong> strategic plan is vital,” saysLivermore, “but just as important is putt<strong>in</strong>g systems <strong>in</strong> place that <strong>in</strong>tegrate them<strong>in</strong>to the daily behaviors, decisions, <strong>and</strong> activities of leaders <strong>and</strong> staff.” Delnoraccomplished this most notably by adopt<strong>in</strong>g a series of behavior st<strong>and</strong>ards <strong>and</strong>by ty<strong>in</strong>g department <strong>and</strong> <strong>in</strong>dividual goals to organizational objectives.
60 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEBehavior St<strong>and</strong>ards. To clearly def<strong>in</strong>e what’s expected of employees, the adm<strong>in</strong>istrationdeveloped a series of behavior st<strong>and</strong>ards that emphasize the hospital’svalues <strong>and</strong> address issues such as <strong>in</strong>terpersonal communications, commitmentto coworkers, personal appearance, <strong>and</strong> patient privacy.“At Delnor, we strive to be the ‘best of the best’ <strong>in</strong> customer service,” saysDeer<strong>in</strong>g. “This means we must be consistently excellent dur<strong>in</strong>g every contactwith every customer on a daily basis. The behavior st<strong>and</strong>ards help us achievethis by mak<strong>in</strong>g it very clear to employees how we want them to treat ourpatients, visitors, <strong>and</strong> coworkers. They set the st<strong>and</strong>ard for what we expect.”The behavior st<strong>and</strong>ards are spelled out <strong>in</strong> a manual that’s required read<strong>in</strong>gfor all new hires. They’re also publicized <strong>and</strong> reviewed monthly with all hospitalstaff through department meet<strong>in</strong>gs, bullet<strong>in</strong> boards, the employee newsletter,<strong>and</strong> other means.Goal Sett<strong>in</strong>g. “One of the most effective strategies we’ve employed to achievethe eighth pr<strong>in</strong>ciple is to require every department <strong>in</strong> the hospital to developteam goals that are aligned with our organizational goals,” says Livermore.“Then we take the process one step further by hav<strong>in</strong>g managers work with eachemployee to set <strong>in</strong>dividual goals that are focused on achiev<strong>in</strong>g the team <strong>and</strong>organizational goals. This ensures that the entire organization is work<strong>in</strong>g <strong>in</strong>concert to accomplish our vision <strong>and</strong> strategic plan,” Livermore says. (SeeExhibits 3.12 <strong>and</strong> 3.13 show<strong>in</strong>g a sample of team goals <strong>and</strong> the n<strong>in</strong>ety-dayaction work plan format used by Delnor leaders.)To help teams stay on track, department heads are required to develop n<strong>in</strong>etydayplans that outl<strong>in</strong>e specific actions to be taken each quarter <strong>in</strong> work<strong>in</strong>g towardannual goals. “These plans are a great tool to help leaders <strong>in</strong> focus<strong>in</strong>g on goals<strong>and</strong> measur<strong>in</strong>g their progress dur<strong>in</strong>g the year,” says Livermore.This pr<strong>in</strong>ciple is also built <strong>in</strong>to the hospital’s review-evaluation system soeveryone is held accountable for their performance <strong>in</strong> achiev<strong>in</strong>g <strong>in</strong>dividual,team, <strong>and</strong> organizational goals.LESSONS LEARNEDThrough the journey of creat<strong>in</strong>g a championship culture at Delnor, the managementteam learned many valuable lessons along the way, <strong>in</strong>clud<strong>in</strong>g1. Organizational transformation starts with a top-down commitment.The board of directors, CEO, <strong>and</strong> senior management team set the tone<strong>and</strong> direction for the organization.2. A commitment to excellence must be built <strong>in</strong>to the organization’smission, vision, strategic plan, <strong>and</strong> values.
DELNOR HOSPITAL 613. The successful implementation of major organizational change doesnot happen overnight. It takes time, determ<strong>in</strong>ation, <strong>and</strong> a will<strong>in</strong>gnessto transform the very culture of your organization.4. There is no one right formula for becom<strong>in</strong>g the “best of the best.” Anymodel for change <strong>and</strong> improvement must be customized to fit an organization’sunique characteristics, culture, <strong>and</strong> market conditions.5. Build<strong>in</strong>g a championship culture requires creat<strong>in</strong>g an environment ofownership <strong>and</strong> accountability at every level of the organization.6. Creat<strong>in</strong>g <strong>and</strong> develop<strong>in</strong>g leaders is key to organizational success.7. Provid<strong>in</strong>g tra<strong>in</strong><strong>in</strong>g <strong>and</strong> support <strong>in</strong> stress management <strong>and</strong> work–lifebalance is vital to help<strong>in</strong>g leaders <strong>and</strong> employees susta<strong>in</strong> peak performancedur<strong>in</strong>g time of major organizational change.8. Never let great work go unnoticed. Recogniz<strong>in</strong>g <strong>and</strong> reward<strong>in</strong>g topperformers is a powerful motivator <strong>and</strong> a key factor <strong>in</strong> employeesatisfaction.9. Focus on employee satisfaction. Happy, loyal workers provide betterservice to customers.10. Measure the important th<strong>in</strong>gs. If an organization doesn’t track itsprogress toward reach<strong>in</strong>g goals, how will it know whether it everachieves them?11. Be flexible. The implementation of any change management model isa difficult <strong>and</strong> imperfect process. Be prepared to modify your plansto overcome unanticipated obstacles <strong>and</strong> adjust to ever-chang<strong>in</strong>gconditions.
62 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 3.1. Structure for Delnor’s Customer Service TeamsService steer<strong>in</strong>g team(SOS team)BoB TeamIntensivesBehavior st<strong>and</strong>ardsJim ElsnerBright IdeasDiane Blake-FischerInpatient SatisfactionL<strong>in</strong>da Deer<strong>in</strong>gOutpatient SatisfactionJohn HubbeCustomerPatientsFamily membersVisitorsPhysiciansEmployeesVolunteersCommunicationJim ElsnerRecognition <strong>and</strong> rewardMichele McClell<strong>and</strong>MeasurementMichael KittoeLogisticsBOLDBoard of <strong>Leadership</strong><strong>Development</strong>L<strong>in</strong>kageCurriculumEngagement
DELNOR HOSPITAL 63Exhibit 3.2. Delnor Script<strong>in</strong>g for NursesSITUATIONIf a patient asks you when he or she can expect to see the doctor, please use thefollow<strong>in</strong>g script<strong>in</strong>g (pick one):Script<strong>in</strong>g• “Your doctor usually makes rounds about ________.”• “I am not sure when to expect him but I will call his (or her) office <strong>and</strong> askthe receptionist as to when you can expect him (her).”• If the physician’s office staff cannot provide a time, ask them to check withthe doctor <strong>and</strong> call you back. Respond to the patient with: “I have left amessage with Dr. ________ office <strong>and</strong> I am await<strong>in</strong>g a call back. Is thereanyth<strong>in</strong>g I can do for you <strong>in</strong> the meantime?”SITUATIONIf you need to close a patient’s door to ensure their privacy while perform<strong>in</strong>g anexam, chang<strong>in</strong>g a dress<strong>in</strong>g, giv<strong>in</strong>g a bath, or similar procedure, please use thefollow<strong>in</strong>g script<strong>in</strong>g:Script<strong>in</strong>g• “I am clos<strong>in</strong>g your door for your privacy. Is there anyth<strong>in</strong>g else I can do foryou? I have the time.”SITUATIONTo ensure prompt response to patient needs <strong>and</strong> m<strong>in</strong>imize the use of call lights,please use the follow<strong>in</strong>g script<strong>in</strong>g:Script<strong>in</strong>g• “This is my phone number. Please call me if you need anyth<strong>in</strong>g. I will beable to meet your request more quickly if you call me directly. Is thereanyth<strong>in</strong>g I can do for you? I have the time.SITUATIONDur<strong>in</strong>g high-census periods, patients may become concerned about whethernurs<strong>in</strong>g units are adequately staffed to provide excellent care <strong>and</strong> meet theirneeds. Should a patient or family member <strong>in</strong>quire about this, please use thefollow<strong>in</strong>g script<strong>in</strong>g:Script<strong>in</strong>g• “Th<strong>in</strong>gs are active today, but we have adequate staff<strong>in</strong>g <strong>and</strong> we have thetime to care for you. Feel free to call me at anytime. Is there anyth<strong>in</strong>g I c<strong>and</strong>o for you now? I have the time.”SITUATIONSometimes patients or families will ask questions that you may not have an immediateanswer for. Here’s some script<strong>in</strong>g to help you respond <strong>in</strong> such situations.Script<strong>in</strong>g• “I don’t know. That is a good question. Let me check <strong>in</strong>to it <strong>and</strong> I will getback to you by ________ today with an answer.”
64 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 3.3. Sample of Delnor’s Monthly Performance ScorecardSection A. Hospitalwide performance As of:_________ Period:_________Indicator/Def<strong>in</strong>itionResultsService:Average percentile rank<strong>in</strong>g of the patient satisfactionsurveys for Inpatient, Outpatient/Home health care,Emergency services, <strong>and</strong> Same day surgery.5 = Average equal to or exceed<strong>in</strong>g the 96th percentile4 = Average from 93rd to 95th percentile3 = Average from 90th to 92nd percentile2 = Average from 87th to 89th percentile1 = Average equal to or below 86th percentileFY 2004 year-to-date averagePeople:Measured by the employee turnover rate annualized.5 = Turnover rate 15.0% or lower4 = Turnover rate of 15.1 – 17.0%3 = Turnover rate of 17.1 – 19.0%2 = Turnover rate of 19.1 – 21.0%1 = Turnover rate greater than 21.0%FY 2004 year-to-dateQuality:Surgical site <strong>in</strong>fection (SSI) rate performanceimprovement.5 = Implement at least three systemwide evidence-based<strong>in</strong>terventions AND a statistically significant reduction <strong>in</strong> SSI rate4 = Implement at least three systemwide evidence-based<strong>in</strong>terventions AND a reduction <strong>in</strong> SSI rate3 = Implement at least three systemwide evidence-based<strong>in</strong>terventions2 = Implement at least two systemwide evidence-based<strong>in</strong>terventions1 = Implement one or more systemwide evidence-based<strong>in</strong>terventionsFY 2004 year-to-dateF<strong>in</strong>ancial:F<strong>in</strong>ancial:The actual operat<strong>in</strong>g <strong>in</strong>come as compared to budgetyear-to-date.5 = Exceed<strong>in</strong>g budgeted <strong>in</strong>come by 10.0% or more4 = 5.0% to 9.9% above budgeted <strong>in</strong>come3 = 0.0% to 4.9% above budgeted <strong>in</strong>come2 = 0.1% to 4.9% below budgeted <strong>in</strong>come1 = Below budgeted <strong>in</strong>come by 5.0% or moreMeasured by the total <strong>in</strong>patient <strong>and</strong> outpatient visitscompared to budget year-to-date.5 = Exceed<strong>in</strong>g budgeted volume by 3.0% or more4 = 1.5% to 2.9% above budget3 = 0.0% to 1.4% above budget2 = 0.1% to 1.4% below budget1 = Below budgeted volume by 1.5% or greaterFY 2004 year-to-dateFY 2004 year-to-dateYear-to-date average score of Section A:_________Note: 5 (Exceptional), 4 (Exceeds expectations), 3 (Achieves expectations), 2 (Below expectations), or 1 (Needsimprovement).
DELNOR HOSPITAL 65Exhibit 3.4. Sample Agenda for One of the Two-Day <strong>Leadership</strong> Tra<strong>in</strong><strong>in</strong>g SessionsWDCH Live from Fox Valley Tri-CitiesChannel 300 on Your Dial!Program Guide – Wednesday, March 19th, 2003MC’s – Chad Gillil<strong>and</strong> & Kar<strong>in</strong> PodolskiProgramm<strong>in</strong>g List<strong>in</strong>g Radio & Television PersonalitiesEarly AM additionCommercial welcomeCheck your score cards- Review accountability grid (new)Register to w<strong>in</strong>DramaChad Gillil<strong>and</strong> & Kar<strong>in</strong> PodolskiChad Gillil<strong>and</strong> & Kar<strong>in</strong> PodolskiHeart Time (Live)Public Service AnnouncementE-learn<strong>in</strong>g <strong>and</strong> TrendsBreakDecreas<strong>in</strong>g Cost Through Better SupplyHealth WiseHIPPAUnderst<strong>and</strong><strong>in</strong>g of Delnor’sf<strong>in</strong>ancial position, current, <strong>and</strong>futureNeed for leaders to achieveexcellence <strong>in</strong> f<strong>in</strong>ancialoperations managementExerciseTo <strong>in</strong>crease efficiencyDiane BallHIPPA Task ForceMichael Kittoe & Dan YunkerHFMACha<strong>in</strong> managementBreakSubstance Abuse <strong>in</strong> the WorkplaceRefer to 1st item on yourAccountability GridExerciseBetter knowledge <strong>and</strong>underst<strong>and</strong><strong>in</strong>g ofsubstance abuse <strong>and</strong>work policyDr. WoodwardRefer to 2nd item on yourAccountability GridAdvertisementHIPPAHIPPA Task Force(Cont<strong>in</strong>ued)
66 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 3.4. Sample Agenda for One of the Two-Day <strong>Leadership</strong> Tra<strong>in</strong><strong>in</strong>g Sessions (Cont<strong>in</strong>ued)Late Lunch Eat<strong>in</strong>g Enigma Weight WatchersWould You Believe It! Mak<strong>in</strong>g the Year 2002“Graduation”All Star AwardsTo Tell the Truth Game Show Audience ParticipationManag<strong>in</strong>g Labor Costs: Deal<strong>in</strong>g withwork force shortages <strong>and</strong> the need togrow revenues with exist<strong>in</strong>g FTE targets.Refer to 3rd & 4th item on your GridTo improve productivitywithout <strong>in</strong>creas<strong>in</strong>gresourcesHFMAQuick run - the program starts <strong>in</strong>5 m<strong>in</strong>utesExerciseStation News Flash HIPPA HIPPA Task ForceDelnor Highlights News You Can Use Anchor C. LivermoreCom<strong>in</strong>g Attractions
DELNOR HOSPITAL 67Program Guide — Thursday, March 20, 2003Programm<strong>in</strong>g List<strong>in</strong>g Radio & Television PersonalitiesGood Morn<strong>in</strong>g WDCH First On Your Dial Him & HerA Day <strong>in</strong> the Mak<strong>in</strong>gExhibit 3.4. (Cont<strong>in</strong>ued)Learn where you arego<strong>in</strong>gChad & KPMov<strong>in</strong>g Mounta<strong>in</strong>sIncreas<strong>in</strong>g confidence <strong>and</strong>self assuredness whentak<strong>in</strong>g emotional risksnecessary to forge aheadfor significant achievementDiane BallFamily Feud Game Show The LogisticsWhether ForecastYes, whether this or thatF<strong>in</strong>ancial Projectsthrough 2006Tom & MichaelStretch, Wet, Chew TimeCalories by Pipefitters.Sweet rolls, fruit, bagelscoffee, tea or peeWe Fit It to Your HipsCommercial Break HIPPA HIPPA Task ForceThe Gardeners6 Secrets to Effective <strong>Leadership</strong>Refer to 5th item on your AccountabilityGrid!PCC & DischargePlanners – See howactions speak louderthan words <strong>in</strong> today'sepisodeV- visionO- opennessI- <strong>in</strong>fluenceC- competenceE- ethicsS- social skillsM. Schoolfield, L. Pertl,J. Joseph, K. Kal<strong>in</strong>, L. AdamsBrian Smith(Cont<strong>in</strong>ued)
68 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 3.4. Sample Agenda for One of the Two-Day <strong>Leadership</strong> Tra<strong>in</strong><strong>in</strong>g Sessions (Cont<strong>in</strong>ued)Rehab RenegadesOP Rehab – RealityProgramJ. Polkow, K. Penn<strong>in</strong>gton, D.Hamilton, S. BlackLunch<strong>in</strong>g with the <strong>Best</strong>Talk Show VarietyThe Oldies but GoodiesDelnor Glen – the storyBEHIND the storyD.W<strong>in</strong>ecke, P. Faught, L. Spang,D. Sprovieri, C. DuerPublic Service Announcement HIPPA HIPPA Task Force6 Secrets to Effective <strong>Leadership</strong>cont<strong>in</strong>uedRefer to # 5 on theAccountability GridBrian SmithRoll<strong>in</strong>g Three Kidney Stones 3 North – Talk Show C. Johnson, B. Nelson,W. PerezRope WarriorTh<strong>in</strong>k<strong>in</strong>g Out of theLoopDavid FisherWright Show - variety Connect the Dots Tom Wright
Exhibit 3.5. Accountability Grid for <strong>Best</strong> Cost <strong>and</strong> People, March 2003–May 2003, Delnor-Community HospitalComplete CompletedWho What by Y N Progress NoteTeam Leader <strong>and</strong>Coord<strong>in</strong>atorsShare with your team the challengesrelated to non-labor resources management.Create an action plan with 2–3<strong>in</strong>terventions.04/17/03Meet with Center Leaders. Identify yourpersonal knowledge/practice changesrelated to new <strong>in</strong>formation on substanceabuse.05/01/03Share with your team the challengesrelated to labor resources management.Create an action plan with 2–3<strong>in</strong>terventions.04/17/03Def<strong>in</strong>e a desired 7.5 percent improvedproductivity or supply cha<strong>in</strong> cost result tobe achieved <strong>and</strong> the related measure ofthe results. Timel<strong>in</strong>e to be set with yourCenter Leader with<strong>in</strong> the first 2 weeks.04/03/03Select one of the 3 simple keys, create apersonal action plan <strong>and</strong> share with yourCenter Leader.04/03/03Center LeadersMeet with your team leaders/coord<strong>in</strong>atorsto develop a tra<strong>in</strong><strong>in</strong>g goal to ensureproper work<strong>in</strong>g knowledge of labormanagement software.
70 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 3.6. Heart Rhythms Before HeartMath “Freeze Frame” Intervention100AngerHeart Rate (BPM)9080706050150 100(Time <strong>in</strong> seconds)150 200Exhibit 3.7. Heart Rhythms After HeartMath “Freeze Frame” Intervention100AppreciationHeart Rate (BPM)9080706050150 100(Time <strong>in</strong> seconds)150 200
We would like to recognize those <strong>in</strong>dividualswho exceed your expectations.Leader:Please write <strong>in</strong> the level of recognition:Level of GiftLeader’s InititalsExhibit 3.8. <strong>Best</strong> of the <strong>Best</strong> (a.k.a. “BoB”) Award Form<strong>Best</strong>Of theI commendof Department,for the follow<strong>in</strong>g reason(s):<strong>Best</strong>Your Name:Your Department: Patient Staff VisitorPlease return this card to your Team Leader, Coord<strong>in</strong>ator or Nurs<strong>in</strong>g Supervisor.Team Leader, etc.: Please send completed card to Maryann Russ, Information Systems
6%10.8%Exhibit 3.9. Hospital Employee Satisfaction ResultsEmployee RetentionMonthly Annualized Turnover RateEmployee Positive MoraleSperduto Annual Survey30.0%26.4%26.4%25.0%81%20.0%Actual18.0%22.8%13.2%18.0%15.0%13.2%14.4%12.0%12.0%10.8%12.0%13.2%14.4%13.2%10.8%12.0%10.8%12.0%10.0%Meets Expectations>76%10.8%3.6%9.6%10.8%7.2%5.0%Exceeds Expectations>80%0.0%New results for 2002!Delnor had highest score <strong>in</strong>Sperduto data base this year.Sep 03Aug 03Jul 03Jun 03May 03Apr 03Mar 03Feb 03Jan 03Dec 02Nov 02Oct 02Sep 02Total Annualized Turnover R.N. Annualized Turnover2002Meets Expectations
Exhibit 3.10. Dashboard of IndicatorsService People Quality Growth F<strong>in</strong>ancialPatient satisfaction(Press-Ganey)Employee satisfaction(Sperduto Survey)Pressure ulcer<strong>in</strong>cidencePatient volumesOperat<strong>in</strong>g marg<strong>in</strong>Physician satisfaction(PRC Survey)Employee retention(turnover rate)Surgical site<strong>in</strong>fection <strong>in</strong>dexMarket shareCompensation ratioEmployee recruitment(vacancy rate)ER LOS foradmitted patientsReturn to ERConsumer preferenceDays cash on h<strong>and</strong>Medication report rateDebt service coverageFallsReadmitsRestra<strong>in</strong>t usageSpecimen occurrencesMeasures identified with a pillar are tied to performance evaluations <strong>and</strong> compensation for all staff.Note: Possible scores: At or better than target; Near or trend<strong>in</strong>g toward target; Far from target; <strong>and</strong> Under development.
Exhibit 3.11. Patient <strong>and</strong> Physician Satisfaction SurveysPatient SatisfactionQuarterly Percentile Rank<strong>in</strong>gPatient SatisfactionMonthly Mean Score(Press Ganey avg of Inpatient, ER, SDS, Test<strong>in</strong>g/Therapy)(Press Ganey avg of Inpatient, ER, SDS, Test<strong>in</strong>g/Therapy)8185929395Start of New Press-Ganey Survey878986948987.988.1 89.5 89.789.788.6 8989.9 90.7 88.6 89.56031.957.561.5Jan–Mar 02 Apr–June 02 Jul–Sep 0210090807060Percentile ScoreMean Score89ActualMeets Expect>90thExceeds Expect>95th100989694929088868487.5Q3 00Q4 00Q1 01Q2 01Q3 01Q4 01Q1 02Q2 02Q3 02Q4 02Sep FY02Oct FY02Nov FY02Dec FY02Jan FY03Feb FY03Mar FY03Apr FY03May FY03Jun FY03Jul FY03Aug FY03Sep FY03Physician Satisfaction — PRC SurveyRat<strong>in</strong>g of "DCH as a Place to Practice Medic<strong>in</strong>e"Physician Satisfaction — PRC SurveyRat<strong>in</strong>g of "Overall Quality of Care"31.9 31.9- New score ranks us at 98th percentile!- 59 question telephone survey.- 30–40 physicians <strong>in</strong>terviewed quarterly.- 177 hospitals <strong>in</strong> PRC database.6050403052.531.457.5 48.7 48.731.4 31.4New score ranks us at92nd percentile!DCH % ExcellentPRC % Excellent2010DCH % ExcellentPRC % Excellent0Jan–Mar 02 Apr–June 02 Jul–Sep 02706050403020100
DELNOR HOSPITAL 75B. TEAM PERFORMANCE. Team performance can be measured at various levels. Forexample, it can be measured at the center (division), team (department), or the workunit level. Below are four or more team-based performance objectives <strong>and</strong> measuresthat were established by your team <strong>in</strong> collaboration with the organization’s leadership.One of the measures has to be a f<strong>in</strong>ancial measure of team success. Two or moreteams with<strong>in</strong> the same center may share a common measure <strong>and</strong> each team with<strong>in</strong>the center may have one or more measures unique to their team. A check mark will<strong>in</strong>dicate your team’s achievement on each measure.Your Team Is: Emergency Department ____________________________________<strong>Best</strong> Service: Patient satisfaction as measured by average quarterly mean scoresfor ER.[] 3 mean score equal to or greater than 87.8[] 2 mean score between 86.3–87.7[] 1 mean score below 86.3<strong>Best</strong> People: Management of turnover as measured by twelve-month average for ER(Current 5 6.1%).[] 3 less than 10.0%[] 2 between 10.0 <strong>and</strong> 12.0%[] 1 greater than 12.0%<strong>Best</strong> Quality: Bright Ideas implemented <strong>in</strong> ER Team. Ideas must be forimprovements on the team.[] 3 One Bright Idea implemented per FTE on the team (34)[] 2 0.5 FTE Bright Idea implemented per FTE on the team (17–33)[] 1 Less than 0.5 Bright Idea implemented per FTE on the team (17)<strong>Best</strong> Quality: Sk<strong>in</strong> Care as measured by time of admission documentation of sk<strong>in</strong>condition for patients be<strong>in</strong>g admitted as <strong>in</strong>patient.[] 3 90% or greater documented[] 2 80–89% documented[] 1 79% or less documentedExhibit 3.12. Team Goals(Cont<strong>in</strong>ued)
76 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE<strong>Best</strong> F<strong>in</strong>ancial: Management of team f<strong>in</strong>ancial performance as measured by theF<strong>in</strong>ancial Accountability Scorecard (FAS) for ER.[ ] 3 Score of 90 or better[ ] 2 Score of 80–89[ ] 1 Score of 79 or less<strong>Best</strong> Growth: Increase <strong>in</strong> volume as measured by number of patient visits.[ ] 3 3% or greater above budget[ ] 2 0–2% above budget[ ] 1 less than budgetComments <strong>and</strong> Goals (Optional):Exhibit 3.12. Team Goals (Cont<strong>in</strong>ued)Average Score of Section B: _________ (Add each score <strong>in</strong> this section <strong>and</strong> divide by thenumber of measures.)Note: 3 (Exceptional), 2 (Achieves expectations), or 1 (Needs improvement).
Exhibit 3.13. N<strong>in</strong>ety-Day Work/Action Plan90 DAY WORK/ACTION PLAN FY2003 Quarter: Leader’s name: Dept:% Priority Support/Goal Action Steps Time* (1–3)* Direction (1–3)* 90 Day Result Report<strong>Best</strong> People<strong>Best</strong> ServiceQualityCostGrowthNote: *% Time: Percentage of leader’s time to be spent on goal. Priority (1–3): 1 high; 2 medium; 3 low. Support/Direction (1–3): 1 supervisor approvalneeded; 2 supervisor <strong>in</strong>put needed; 3 move forward on own.
78 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEABOUT THE CONTRIBUTORSCraig A. Livermore is president <strong>and</strong> chief executive officer for Delnor-Community Health System <strong>and</strong> Delnor-Community Hospital <strong>in</strong> Geneva, Ill<strong>in</strong>ois.He earned his B.S. degree <strong>in</strong> bus<strong>in</strong>ess from Eastern Ill<strong>in</strong>ois <strong>University</strong> <strong>and</strong> aMaster of Hospital <strong>and</strong> Health Care Adm<strong>in</strong>istration degree from Sa<strong>in</strong>t Louis<strong>University</strong>. He is past-chairman of the Metropolitan Chicago Healthcare CouncilBoard of Directors <strong>and</strong> a member of the American College of Healthcare Executives.He is also actively <strong>in</strong>volved <strong>in</strong> numerous health care <strong>and</strong> communityorganizations. Prior to jo<strong>in</strong><strong>in</strong>g Delnor, Mr. Livermore was president <strong>and</strong> chiefexecutive officer of Augustana Hospital <strong>and</strong> Health Care Center <strong>in</strong> Chicago.Thomas L. Wright is chief operat<strong>in</strong>g officer for Delnor-Community HealthSystem <strong>and</strong> Delnor-Community Hospital <strong>in</strong> Geneva, Ill<strong>in</strong>ois. He also serves aschief f<strong>in</strong>ancial officer of Delnor-Community Health Care Foundation <strong>and</strong> Delnor-Community Residential Liv<strong>in</strong>g. He holds a B.S. degree <strong>in</strong> mathematics <strong>and</strong> anM.B.A. degree with a concentration <strong>in</strong> f<strong>in</strong>ance from Loyola <strong>University</strong> ofChicago. He is an advanced member of the Healthcare F<strong>in</strong>ancial ManagementAssociation, a member <strong>and</strong> past chairman of the Metropolitan Chicago HealthcareCouncil F<strong>in</strong>ance Committee, <strong>and</strong> a Diplomat of the American College ofHealthcare Executives. Mr. Wright is also very active <strong>in</strong> support<strong>in</strong>g local healthcare <strong>and</strong> community organizations.L<strong>in</strong>da Deer<strong>in</strong>g is vice president <strong>and</strong> chief nurs<strong>in</strong>g officer for Delnor-CommunityHospital <strong>in</strong> Geneva, Ill<strong>in</strong>ois. She holds a B.A. degree from Northern Ill<strong>in</strong>ois<strong>University</strong>, <strong>and</strong> an M.S. degree from Northern Ill<strong>in</strong>ois <strong>University</strong>. She is an activemember of the American Organization of Nurse Executives, Ill<strong>in</strong>ois Organizationof Nurse Leaders, <strong>and</strong> Ill<strong>in</strong>ois Coalition for Nurs<strong>in</strong>g Resources. In addition toher work at Delnor, she works with other hospitals across the nation to facilitateorganizational excellence <strong>and</strong> culture transformation.
SCHAPTER FOUREmmis CommunicationsSA change management process is for creat<strong>in</strong>g <strong>and</strong> implement<strong>in</strong>g a dist<strong>in</strong>ctivefirm br<strong>and</strong> <strong>and</strong> foster<strong>in</strong>g a unique employer-of-choice culture while driv<strong>in</strong>gperformance, accountability <strong>and</strong> <strong>in</strong>novation to higher levels. Initiative leveragesexecutive strategic plann<strong>in</strong>g <strong>and</strong> alignment, leadership-development programs,performance-management systems, employee-commitment strategies, targetedorganizational communications, <strong>and</strong> special events <strong>and</strong> recognition.OVERVIEW 80INTRODUCTION: RAPID GROWTH TO A MEDIA MID-CAP 81Dist<strong>in</strong>ctive Culture 82Internal Growth <strong>and</strong> Economic Pa<strong>in</strong>s 82COMPASSIONATE EMPLOYER OF CHOICE 83ASSESSMENT: ON THE AIR 85DIAGNOSIS: PLUGGED IN? 86New Bus<strong>in</strong>ess Realities: Drivers for Change 87Change Objective 88APPROACH 88DESIGN: WHO’S OUR CUSTOMER? 89INTERVENTION: GETTING TUNED IN 89Executive Alignment 89Malicious Compliance 91Lead<strong>in</strong>g for Results 91PROGRAM PROMOTION AND MULTIMEDIA 92BUILDING A HIGH-PERFORMANCE DISCIPLINE: CRANKING IT UP! 94Balanced Scorecards 94Note: Some <strong>in</strong>formation <strong>in</strong> this case study was taken with permission from Emmis Communications<strong>in</strong>ternal <strong>and</strong> public documents.79
80 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEEmmis Competency Model 95Performance <strong>and</strong> Reward Management 95Employee Tra<strong>in</strong><strong>in</strong>g 95WHAT ABOUT INNOVATION? 96EVALUATION: MEASURING SIGNAL STRENGTH 97January 12, 2004, Q&A with Emmis Communications CEO 98Jeff SmulyanLESSONS LEARNED 99Exhibit 4.1: The Eleven Comm<strong>and</strong>ments of Emmis Communications 101Exhibit 4.2: Dual-Path Results Model 102Exhibit 4.3: Executive Session FAST Agenda 103Exhibit 4.4: Internal Communications Matrix 105Exhibit 4.5: Balanced Scorecard Sample 108Exhibit 4.6: Competency Feedback 109Exhibit 4.7: Competency L<strong>in</strong>kage to Culture 110Exhibit 4.8: Emmis Competency Model 116Exhibit 4.9: Performance Management Insights 117Exhibit 4.10: Performance <strong>and</strong> Reward Management Overview 118Exhibit 4.11: Performance <strong>and</strong> Reward Management 118Implementation PlanABOUT THE CONTRIBUTOR 119OVERVIEWI was certa<strong>in</strong> that we could build a company that would st<strong>and</strong> for someth<strong>in</strong>gdifferent. Twenty years ago, radio was an <strong>in</strong>dustry characterized by short-termrelationships—very few people ever thought of work<strong>in</strong>g long-term for onecompany, <strong>and</strong> absolutely no thought was given to build<strong>in</strong>g careers withoutmov<strong>in</strong>g around. I thought Emmis could create a different atmosphere.—Jeff Smulyan, CEO Emmis Communications, excerpt from twenty-yearanniversary letterEmmis Communications is a small entrepreneurial radio company mak<strong>in</strong>g theleap to be<strong>in</strong>g a much larger <strong>in</strong>ternational company with hold<strong>in</strong>gs <strong>in</strong> variousmedia. This change-management case study describes the systematic approachused by Emmis Communications to successfully create a dist<strong>in</strong>ctive firm br<strong>and</strong><strong>and</strong> performance culture while extend<strong>in</strong>g the positive employer-of-choice reputationit had earned. Rapid growth required greater corporate structure <strong>and</strong>strategy clarification. Assimilation of newly acquired bus<strong>in</strong>esses required greateralignment <strong>and</strong> proactive strategies for “Emmisiz<strong>in</strong>g” the entire organization.
EMMIS COMMUNICATIONS 81Under the leadership of a visionary <strong>and</strong> entrepreneurial CEO, Jeff Smulyan, theorganization undertook a process of further def<strong>in</strong><strong>in</strong>g its strategies, corporate structure,<strong>and</strong> culture. Us<strong>in</strong>g a variety of processes, Emmis drove clarity <strong>and</strong> focuscompanywide to drive bus<strong>in</strong>ess results <strong>and</strong> build the dist<strong>in</strong>ctive Emmis Br<strong>and</strong><strong>and</strong> culture. In partnership with Results-Based <strong>Leadership</strong>, Emmis implemented acascad<strong>in</strong>g <strong>and</strong> collaborative process of focus, education, communication, <strong>and</strong> performanceaccountability. The <strong>in</strong>itiative used many change techniques <strong>and</strong> focusedon a systemwide approach.The lessons learned at Emmis Communications are important for any organizationundergo<strong>in</strong>g a major change <strong>in</strong>itiative that affects the organization’sbr<strong>and</strong>, culture, performance, <strong>and</strong> bus<strong>in</strong>ess results. Companies experienc<strong>in</strong>grapid growth, overcom<strong>in</strong>g entitlement behaviors, want<strong>in</strong>g to drive a dist<strong>in</strong>ctiveculture through the company, build<strong>in</strong>g an employer-of-choice reputation, orevolv<strong>in</strong>g from a smaller company to a mid-sized company will particularly f<strong>in</strong>dthese lessons useful.INTRODUCTION: RAPID GROWTH TO A MEDIA MID-CAPEmmis Communications Corporation (Nasdaq: EMMS) is the sixth largest publiclytraded radio portfolio <strong>in</strong> the United States based on total listeners. Emmisowns eighteen FM <strong>and</strong> three AM radio stations that serve the nation’s largestmarkets of New York, Los Angeles, <strong>and</strong> Chicago, as well as Phoenix, St. Louis,Indianapolis, <strong>and</strong> Terre Haute, Indiana. In addition, Emmis owns two radionetworks, fifteen television stations, regional <strong>and</strong> specialty magaz<strong>in</strong>es, <strong>and</strong>ancillary bus<strong>in</strong>esses <strong>in</strong> broadcast sales <strong>and</strong> publish<strong>in</strong>g.Founded <strong>in</strong> 1980, Emmis Communications launched its first radio station,WENS-FM, <strong>in</strong> July 1981. As Emmis (the Hebrew word for “truth”) acquiredmore radio stations across the nation, it established a reputation for sound operations<strong>and</strong> emerged as a radio <strong>in</strong>dustry leader <strong>and</strong> <strong>in</strong>novator. Emmis was thefirst broadcast company to own top-rated radio stations <strong>in</strong> both L.A. <strong>and</strong> NewYork, <strong>and</strong> it pioneered such concepts as the Rhythmic Top 40 <strong>and</strong> all-sportsradio formats.The company launched its magaz<strong>in</strong>e division <strong>in</strong> 1988 with the purchase ofIndianapolis Monthly, <strong>and</strong> later acquired magaz<strong>in</strong>es such as Texas Monthly <strong>and</strong>Los Angeles Magaz<strong>in</strong>e. Emmis became a public company <strong>in</strong> 1994, <strong>and</strong> moved<strong>in</strong>to the world of <strong>in</strong>ternational radio <strong>in</strong> 1997, when it was awarded a license tooperate a national radio network <strong>in</strong> Hungary. In 1998, Emmis exp<strong>and</strong>ed <strong>in</strong>totelevision by buy<strong>in</strong>g six television stations <strong>in</strong> markets throughout the UnitedStates. In the last three years, the company has added properties <strong>in</strong> each of itsdivisions. In fiscal 2000, the company <strong>in</strong>vested more than $1.5 billion <strong>in</strong> acquisitions.Annual net revenues have grown from $140 million <strong>in</strong> fiscal year 1998
82 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEto over $562 million <strong>in</strong> fiscal year 2003. Employee population <strong>in</strong> that sameperiod grew from under 500 to over 3,100. Emmis ma<strong>in</strong>ta<strong>in</strong>s its worldwide headquarters<strong>in</strong> Indianapolis, where the company was founded.Dist<strong>in</strong>ctive CultureWhile I never could have imag<strong>in</strong>ed that Emmis would grow to its current size, Iwas certa<strong>in</strong> that it could be a company with a culture that separated it from itspeers. I believed we could create great radio while treat<strong>in</strong>g employees well <strong>and</strong>lett<strong>in</strong>g them profit from our successes. I believed we could draw great ideas fromevery person <strong>in</strong> the company, not just the ones at the top. I believed we couldw<strong>in</strong> by tak<strong>in</strong>g risks. I believed—<strong>and</strong> this might be the most important th<strong>in</strong>g—thatwe could have fun <strong>and</strong> still make a difference. I cont<strong>in</strong>ue to believe those th<strong>in</strong>gs.As a result, the approach that made Emmis unique <strong>in</strong> the media world oftwenty years ago makes us even more unusual today.—Jeff SmulyanWith its emphasis on sound operations, <strong>in</strong>tegrity, community <strong>in</strong>volvement,<strong>in</strong>novation, <strong>and</strong> fun, Emmis’s culture has been lauded by both its employees<strong>and</strong> its peers. Trade publications have regularly cited the company’s leaders asbe<strong>in</strong>g among the best <strong>in</strong> the bus<strong>in</strong>ess. In 2001, Radio Ink magaz<strong>in</strong>e named CEOJeff Smulyan its Executive of the Year. Jeff Smulyan has also earned a reputation<strong>in</strong> professional baseball from his ownership of the Seattle Mar<strong>in</strong>ers from1989 to 1992. He is regularly <strong>in</strong>terviewed by sports <strong>and</strong> news media about baseball<strong>and</strong> the economics of the game. In 2001, he appeared as a guest on the BobCostas Show on HBO, <strong>and</strong> <strong>in</strong> 2002, as baseball appeared to be headed for astrike, he was <strong>in</strong>terviewed by a number of media.The EMMIS culture carries at its heart the belief that <strong>in</strong> order to succeed, acompany must take risks, treat its people well, <strong>and</strong> give them the tools theyneed to w<strong>in</strong>. This culture has as its foundation the CEO-authored Emmis ElevenComm<strong>and</strong>ments. (See Exhibit 4.1.) The orig<strong>in</strong>al Ten Comm<strong>and</strong>ments were writtenas part of a speech CEO Jeff Smulyan delivered at an annual managers’meet<strong>in</strong>g; the Eleventh Comm<strong>and</strong>ment, “Admit your mistakes,” was added later,after Jeff’s experience with own<strong>in</strong>g the Seattle Mar<strong>in</strong>ers.Internal Growth <strong>and</strong> Economic Pa<strong>in</strong>sIt’s hard to describe what start<strong>in</strong>g the company was like <strong>in</strong> those days. I waspick<strong>in</strong>g all of our music, writ<strong>in</strong>g our commercials, buy<strong>in</strong>g the equipment, mak<strong>in</strong>gsales calls . . . <strong>in</strong> short, be<strong>in</strong>g <strong>in</strong>volved <strong>in</strong> every aspect of the station.—Jeff SmulyanBy 2000, Emmis began to feel the pa<strong>in</strong>s of its tremendous growth. Thecompany had historically let the divisions <strong>and</strong> entities run mostly <strong>in</strong>dependently,albeit with Jeff’s leadership <strong>and</strong> strong values always be<strong>in</strong>g visible <strong>and</strong>
EMMIS COMMUNICATIONS 83<strong>in</strong>fluential. But size <strong>and</strong> resource-management needs made it prudent to establishgreater governance <strong>and</strong> professionalize corporate functions. Jeff Smulyanbelieved that the human resource (HR) function especially needed to beprofessionalized <strong>and</strong> staffed adequately to help drive the unique culture <strong>in</strong>to allof the newly acquired bus<strong>in</strong>esses. This change would require new HR leadership,the establishment of Emmis Learn<strong>in</strong>g, <strong>and</strong> the hir<strong>in</strong>g <strong>and</strong> budget<strong>in</strong>g of resourcesto develop processes <strong>and</strong> systems to drive the culture <strong>in</strong>to the organization.As this process of change began, another factor began to draw attention: theeconomic downturn that developed <strong>in</strong> 2001, hitt<strong>in</strong>g the media <strong>in</strong>dustry especiallyhard. On September 10, 2001, when Jeff Smulyan was with a group ofmedia <strong>and</strong> advertis<strong>in</strong>g executives <strong>in</strong> New York City, one executive commentedthat 2001 was the “worst advertis<strong>in</strong>g environment he had seen s<strong>in</strong>ce the 1940s.”The historic attacks on New York <strong>and</strong> Wash<strong>in</strong>gton, D.C., just one day later, obviouslyexacerbated the already gloomy situation. Throughout the year <strong>and</strong> <strong>in</strong>to2002, the division heads (Radio President Rick Cumm<strong>in</strong>gs, TV President R<strong>and</strong>yBongarten, <strong>and</strong> Publish<strong>in</strong>g President Gary Thoe) asked their direct reports (generalmanagers for TV <strong>and</strong> radio, <strong>and</strong> publishers <strong>and</strong> editors for magaz<strong>in</strong>es) toprovide f<strong>in</strong>ancial reforecasts <strong>and</strong> aggressively review their cost structures.In March 2001, the company launched ESAP (Emmis Sales Assault Plan), an <strong>in</strong>itiativedesigned to <strong>in</strong>crease the size <strong>and</strong> capability of the sales organizationsthroughout the company. This required new recruitment, hir<strong>in</strong>g <strong>and</strong> tra<strong>in</strong><strong>in</strong>g, aswell as the implementation of performance-<strong>and</strong>-reward processes. This launchfollowed closely after the creation of a number of other significant <strong>in</strong>itiatives,<strong>in</strong>clud<strong>in</strong>g profit improvement, procurement <strong>in</strong>itiatives, IT/systems implementations,sales excellence programs <strong>and</strong> additional corporate approval-<strong>and</strong>-report<strong>in</strong>grequests. As a result of these <strong>in</strong>itiatives <strong>and</strong> other factors driven by growth, the relationshipbetween Emmis’s corporate headquarters <strong>and</strong> the entities <strong>in</strong> the field hadbeen gradually chang<strong>in</strong>g, with 2001 <strong>and</strong> 2002 f<strong>in</strong>d<strong>in</strong>g some <strong>in</strong> the field feel<strong>in</strong>g thecorporate headquarters was becom<strong>in</strong>g <strong>in</strong>creas<strong>in</strong>gly <strong>in</strong>trusive.COMPASSIONATE EMPLOYER OF CHOICEAlthough this case is about the build<strong>in</strong>g of a dist<strong>in</strong>ctive <strong>and</strong> higher-perform<strong>in</strong>gculture, it easily could have been a case of best practices for build<strong>in</strong>g a strongemployment br<strong>and</strong>. You will see, however, that the development <strong>and</strong> foster<strong>in</strong>g ofsuch a culture could also br<strong>in</strong>g with it some un<strong>in</strong>tended challenges.Emmis’s leadership realized that the development of an employment br<strong>and</strong>requires much more than slogans or value statements such as the ElevenComm<strong>and</strong>ments. To establish such a strong reputation, the company recognizedthe need to <strong>in</strong>vest <strong>in</strong> programs <strong>and</strong> practices that touch its employees <strong>and</strong>community <strong>in</strong> a regular <strong>and</strong> consistent manner. It would be the leadership’s
84 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE<strong>in</strong>vestments, behaviors, <strong>and</strong> decisions regard<strong>in</strong>g its people that would demonstratethe <strong>in</strong>tegrity <strong>and</strong> genu<strong>in</strong>eness of the organization’s values.The follow<strong>in</strong>g are some of the factors that have earned Emmis the reputationof a “great place to work”:• Commitment to employee stock ownership programs. The “One Share”program delivers one Emmis stock certificate to every new employee.Annual stock option events are designed to ensure that every employee<strong>in</strong> good st<strong>and</strong><strong>in</strong>g gets a mean<strong>in</strong>gful grant of options.• Employee benefit <strong>and</strong> welfare programs. Emmis has always had at thecore of its HR programs a commitment to be<strong>in</strong>g highly competitive <strong>in</strong>employee health <strong>and</strong> benefit programs. The goal is to be generally“more generous” than its’ peers. Programs are reviewed annually, <strong>and</strong>visible changes are made based on solicited employee feedback.• Response to attacks of September 11. While employees at Emmis’sstrategic radio cluster <strong>in</strong> New York City were particularly affected by theevents of September 11, the company recognized that this was an eventthat touched every employee <strong>in</strong> the company. The organization’sresponse to the employee’s needs was swift <strong>and</strong> compassionate. Forexample, on September 13, Emmis Human Resources <strong>in</strong>troduced anemployee assistance program to all employees. Furthermore, JeffSmulyan sent out an emotional <strong>and</strong> heartfelt e-mail that reflected on theevents <strong>and</strong> described his personal feel<strong>in</strong>gs about how the tragedytouched the bus<strong>in</strong>ess <strong>and</strong> everyone’s life.• Employment policies <strong>and</strong> practices. Emmis has had a philosophy thatemployment policies should allow employees flexibility <strong>and</strong> freedom <strong>in</strong>their relationship with the company. It assumes an adult relationshipbetween employee <strong>and</strong> employer.• H<strong>and</strong>l<strong>in</strong>g the economic downturn <strong>in</strong> 2001 <strong>and</strong> 2002. Emmis was forced totake cost-cutt<strong>in</strong>g actions to h<strong>and</strong>le its debt-leverage situation. In total,Emmis had to reduce the workforce by approximately 8 percent—a newexperience for Emmis. To address this situation, an enhanced severancepackage was created <strong>and</strong> outplacement services were created. With<strong>in</strong>hours of considerable TV division layoffs, Jeff Smulyan <strong>and</strong> TV DivisionPresident R<strong>and</strong>y Bongarten participated <strong>in</strong> a live TV satellite feed to speakabout the events, state of the bus<strong>in</strong>ess, <strong>and</strong> concern for affected employees.• Ma<strong>in</strong>ta<strong>in</strong>ed <strong>in</strong>vestments. Aga<strong>in</strong> dur<strong>in</strong>g this difficult time Emmis executiveshad to make critical decisions about resources <strong>and</strong> <strong>in</strong>vestments.Two controversial <strong>in</strong>vestments were susta<strong>in</strong>ed dur<strong>in</strong>g this difficult time:(1) Emmis Learn<strong>in</strong>g’s <strong>Leadership</strong> <strong>Development</strong> Workshops, <strong>and</strong> (2) theAnnual Emmis Managers Meet<strong>in</strong>g & Emmi Awards Ceremony.
EMMIS COMMUNICATIONS 85• Annual Employee Survey. Emmis has conducted an annual employeesurvey s<strong>in</strong>ce 1986. Not only does it <strong>in</strong>clude the st<strong>and</strong>ard scaledresponses, but it also gathers verbatim comments, all of which are readby Jeff Smulyan. The organization has a formalized Employee SurveyReaction Plan process that ensures review <strong>and</strong> appropriate accountabilityfor action on areas of concern.• Creative Stock Compensation Program. Probably most impressive is the<strong>in</strong>novative stock compensation program created to protect jobs <strong>and</strong>wages dur<strong>in</strong>g one of the company’s most difficult f<strong>in</strong>ancial periods. Aprogram was designed to reduce payroll by 10 percent (approximately$14 million), while ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g employees’ monthly net <strong>in</strong>come througha special stock program adm<strong>in</strong>istered every payroll period.This is not an exhaustive list of events, programs, practices, <strong>and</strong> decisions madeat Emmis dur<strong>in</strong>g the recent past, but simply a sample list to provide a sense ofthe general culture <strong>and</strong> genu<strong>in</strong>e compassion for the employees of EmmisCommunications.ASSESSMENT: ON THE AIRBy January of 2001, the HR function was <strong>in</strong> place <strong>and</strong> a period of assessmentbegan. Two primary areas were evaluated: (1) the state of the Emmis culturethroughout the company, <strong>and</strong> (2) the presence of appropriate HR processimplementations to support the bus<strong>in</strong>ess’s strategies <strong>and</strong> operational needs.The data-gather<strong>in</strong>g period was conducted formally <strong>and</strong> <strong>in</strong>formally throughMarch 2001.Formal Data Collection• Employee demographic profiles <strong>and</strong> turnover trends from HRIS report<strong>in</strong>g• Annual employee survey data results <strong>and</strong> trends• Focus groups at the Annual Emmis Managers Meet<strong>in</strong>g (March, LasVegas)• Aggregated leadership 360 feedback results conducted for all 300participants at the 2001 Annual Emmis Managers Meet<strong>in</strong>g• Exit <strong>in</strong>terview data <strong>and</strong> trends• Emmis Learn<strong>in</strong>g tra<strong>in</strong><strong>in</strong>g-needs assessmentInformal Data Collection• HR leadership visits to a large representative group of entities, wherediscussions <strong>and</strong> <strong>in</strong>terviews were conducted with general managers,
86 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEdepartment heads, <strong>and</strong> key employees; also <strong>in</strong>cluded all-employeegeneral communication meet<strong>in</strong>gs with Q&A sessions• Interviews <strong>and</strong> numerous discussions with Jeff Smulyan <strong>and</strong> executiveteam members on state of the bus<strong>in</strong>ess <strong>and</strong> culture <strong>and</strong> perceivedorganizational needs• Review of all prior bus<strong>in</strong>ess plans <strong>and</strong> strategies• HR staff identification of morale, employee-relations, <strong>and</strong> leadershipissues <strong>and</strong> trends• Review of all current HR processes, policies, <strong>and</strong> practices.DIAGNOSIS: PLUGGED IN?As h<strong>in</strong>ted to earlier, over a number of years Emmis’s paternalistic, employeefriendlyculture had created someth<strong>in</strong>g of an entitlement culture among someemployees who did not feel encouraged to perform at higher levels, but <strong>in</strong>steadoften felt that if they simply did their jobs consistently <strong>and</strong> reliably they wouldbe rewarded at <strong>in</strong>creas<strong>in</strong>g levels. Rather than feel<strong>in</strong>g loyal to the company, theseemployees often felt that the company should be loyal to them regardless oftheir levels of productivity.In addition to this observation, some other clear themes emerged. The follow<strong>in</strong>gis the <strong>in</strong>itial summary of f<strong>in</strong>d<strong>in</strong>gs that would shape the focus <strong>and</strong>approach to the organizational change <strong>in</strong>itiative:• No clear, common, <strong>in</strong>ternal strategic plann<strong>in</strong>g process existed, mak<strong>in</strong>gthe prioritization of the <strong>in</strong>vestments, projects, <strong>and</strong> <strong>in</strong>itiatives functionallydriven <strong>and</strong> “opportunistic.”• Underst<strong>and</strong><strong>in</strong>g <strong>and</strong> <strong>in</strong>tegration of the culture throughout the organizationwas greatly mixed. Most of the newly acquired bus<strong>in</strong>esses did nothave a work<strong>in</strong>g underst<strong>and</strong><strong>in</strong>g of, or buy-<strong>in</strong> for, the Eleven Comm<strong>and</strong>ments<strong>and</strong> Emmis culture.• The executive team had mixed <strong>in</strong>terpretations <strong>and</strong> beliefs of the bus<strong>in</strong>ess<strong>in</strong>vestment priorities, as well as the Emmis culture <strong>and</strong> ElevenComm<strong>and</strong>ments.• The divisions <strong>and</strong> entities preferred to operate as <strong>in</strong>dependent bodies,whereas the corporate strategy was <strong>in</strong>creas<strong>in</strong>gly focused on ga<strong>in</strong><strong>in</strong>g costadvantages <strong>and</strong> synergies through centralization <strong>and</strong> bus<strong>in</strong>ess<strong>in</strong>volvement.• There was general concern about the negative effects of growth (risk oflos<strong>in</strong>g small-family company feel) <strong>and</strong> about the st<strong>and</strong>ardization,
EMMIS COMMUNICATIONS 87processes, <strong>and</strong> formality associated with growth <strong>and</strong> <strong>in</strong>creased corporategovernance.• Among the corporate <strong>and</strong> entity groups that had been with the companyfor many years, elements of entitlement <strong>and</strong> “job protection” h<strong>in</strong>deredperformance, accountability, <strong>and</strong> <strong>in</strong>novation.• Morale <strong>and</strong> employee commitment was generally lower <strong>in</strong> the entitiesthat did not underst<strong>and</strong>, or had not been exposed to, the Emmisculture.• Employees who had had more exposure to, <strong>and</strong> underst<strong>and</strong><strong>in</strong>g of, theEmmis culture had high levels of pride.• Performance management <strong>and</strong> accountability was underdeveloped,<strong>in</strong>consistent, <strong>and</strong> sometimes nonexistent. Pay decisions weremore often based on <strong>in</strong>ternal equity <strong>and</strong> time-<strong>in</strong>-job thanperformance.• Jeff Smulyan was committed to cont<strong>in</strong>u<strong>in</strong>g acquisition growth,build<strong>in</strong>g higher levels of performance <strong>and</strong> <strong>in</strong>novation, <strong>and</strong> foster<strong>in</strong>ga high-loyalty culture created through the found<strong>in</strong>g values. Not allmembers of the executive team had appropriate levels of alignmentwith this vision.New Bus<strong>in</strong>ess Realities: Drivers for ChangeThe economy, competitive pressures, <strong>and</strong> debt-leverage issues created a necessary<strong>and</strong> compell<strong>in</strong>g motive to maximize the company’s performance. Themedia <strong>in</strong>dustry is undergo<strong>in</strong>g radical changes. Consolidation, acquisitions, <strong>and</strong>property swapp<strong>in</strong>g is redef<strong>in</strong><strong>in</strong>g the l<strong>and</strong>scape.This consolidation is be<strong>in</strong>g driven <strong>in</strong> part by new technologies that createopportunities that could be considered conflicts of <strong>in</strong>terest. For example, withrecent FCC changes, a media company could easily squelch unfavorable newsitems about itself <strong>in</strong> areas where it has market dom<strong>in</strong>ance. The larger, morepowerful media forces could restrict distribution of a competitor’s products.F<strong>in</strong>ally, the big players can cross-promote their products from one platform toanother. Not long ago, this would have been considered outrageous. Today it’spart of the new bus<strong>in</strong>ess reality—although there is always the chance of FCC<strong>in</strong>tervention until Wash<strong>in</strong>gton steps <strong>in</strong>.These new bus<strong>in</strong>ess realities are forc<strong>in</strong>g Emmis to re<strong>in</strong>vent itself <strong>in</strong> radio <strong>and</strong>TV <strong>and</strong> develop nontraditional revenue sources while cont<strong>in</strong>u<strong>in</strong>g to acquire newproperties when feasible. Mak<strong>in</strong>g this effort more challeng<strong>in</strong>g is the company’songo<strong>in</strong>g desire to complete this transformation <strong>and</strong> growth while also ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>gthe <strong>in</strong>dustry-dist<strong>in</strong>guish<strong>in</strong>g Emmis culture.
88 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEChange ObjectiveTo drive bus<strong>in</strong>ess performance, Emmis needed more underst<strong>and</strong><strong>in</strong>g <strong>and</strong>agreement on its structure, strategy, <strong>and</strong> cultural def<strong>in</strong>ition, start<strong>in</strong>g at thetop of the company. Processes needed to be put <strong>in</strong>to place to drive thisnew clarity <strong>and</strong> focus throughout the organization. The company needed<strong>in</strong>creased accountability <strong>and</strong> a balance between the deploymentof strategies, goals, <strong>and</strong> objectives <strong>and</strong> the ma<strong>in</strong>tenance of the culture,Eleven Comm<strong>and</strong>ments <strong>and</strong> behavioral expectations.So the hypothesis beh<strong>in</strong>d the evolv<strong>in</strong>g organizational change <strong>in</strong>itiative was thatclear strategy, firm br<strong>and</strong>, <strong>and</strong> culture def<strong>in</strong>ition with support<strong>in</strong>g communication<strong>and</strong> performance systems would result <strong>in</strong> higher levels of employeeproductivity <strong>and</strong> commitment, as well as dist<strong>in</strong>ctiveness <strong>and</strong> value to customers<strong>and</strong> <strong>in</strong>vestors.APPROACHA key pr<strong>in</strong>ciple HR partner, Victor Agruso, was brought <strong>in</strong> as the strategy, organizationaldevelopment, <strong>and</strong> HR effectiveness consultant. With the HR leadership,Agruso helped assess the best way to further clarify <strong>and</strong> implement Emmisvalues <strong>and</strong> strategies, <strong>and</strong> advise how best for human resources to make apositive contribution. A network of consultants were then appropriatelyengaged to support the develop<strong>in</strong>g change effort. Agruso helped create <strong>and</strong>implement the bluepr<strong>in</strong>t for achiev<strong>in</strong>g the external consultant’s project goalsoutl<strong>in</strong>ed <strong>in</strong> this case.Specific change approaches would <strong>in</strong>clude• An executive team def<strong>in</strong>ition of company structure, strategies, <strong>and</strong>culture• Strategies for widely communicat<strong>in</strong>g the direction of the company• Performance management systems for driv<strong>in</strong>g performance <strong>and</strong>behavior expectations <strong>and</strong> accountability• Communications, forums, <strong>and</strong> events to extend the unique Emmisculture companywide• Executive <strong>and</strong> leadership development programs to build underst<strong>and</strong><strong>in</strong>g<strong>and</strong> capability to execute accord<strong>in</strong>g to the strategy <strong>and</strong> culture• Measurement processes to <strong>in</strong>fluence performance <strong>and</strong> behaviors <strong>and</strong>guide the change <strong>in</strong>itiative• Programs, symbolic events, <strong>and</strong> recognition to re<strong>in</strong>force direction of thecompany <strong>and</strong> accountability
DESIGN: WHO’S OUR CUSTOMER?EMMIS COMMUNICATIONS 89In the media work of radio, TV <strong>and</strong> publish<strong>in</strong>g, the customers are traditionallyconsidered to be listeners, viewers, <strong>and</strong> readers. Emmis challenged this paradigm<strong>in</strong> the course of its organizational alignment process, recogniz<strong>in</strong>g the need todef<strong>in</strong>e its <strong>in</strong>ternal audience <strong>and</strong> decide how to get its attention, commitment, <strong>and</strong>energy around the company’s “programm<strong>in</strong>g.” To do this, Emmis needed to takea dual approach to alignment. The model below portrays the def<strong>in</strong>ition <strong>and</strong> translationof the mission/vision <strong>and</strong> firm br<strong>and</strong> of Emmis <strong>in</strong>to two parallel What <strong>and</strong>How paths to achiev<strong>in</strong>g results. The What column demonstrates the alignmentof strategies, goals, objectives, <strong>and</strong> results measures; the How column demonstratesthe alignment of the culture, competencies, <strong>and</strong> behaviors. The customer<strong>in</strong> this model is every employee <strong>in</strong> the company <strong>and</strong> the support<strong>in</strong>g systems, orpo<strong>in</strong>ts of <strong>in</strong>fluence, are identified <strong>in</strong> the middle of the What/How model.The model helps create a sequential approach to align<strong>in</strong>g the organizationfrom the top down. It requires the executive audience to def<strong>in</strong>e the “programm<strong>in</strong>g”from the top <strong>and</strong> processes to cascade that programm<strong>in</strong>g down to theentire organization. Opportunity exists <strong>in</strong> the process to get audience feedbackto ensure some level of collaboration <strong>and</strong> listen<strong>in</strong>g to the voice of the <strong>in</strong>ternalcustomer. The true “customers” of this change <strong>in</strong>itiative are those who ga<strong>in</strong>value through the success of the <strong>in</strong>itiative: CEO Smulyan, <strong>in</strong>vestors, employees,<strong>and</strong> customers (Emmis’s advertisers).INTERVENTION: GETTING TUNED INHow clear, consistent, <strong>and</strong> strong is the signal about what the company is try<strong>in</strong>gto accomplish, <strong>and</strong> how will it get there? It was clear that Emmis was an organizationfull of the <strong>in</strong>dustry’s best operators—<strong>in</strong>novat<strong>in</strong>g new successful formats<strong>and</strong> turn<strong>in</strong>g around underperform<strong>in</strong>g operations. It was the strength ofthese operators that allowed the company to permit its divisions to operate so<strong>in</strong>dependently. However, it was no longer the same company of just a few yearsago. A larger, now <strong>in</strong>ternational media mix, significant acquisitions, <strong>and</strong> thedevelopment of a corporate structure required new focus <strong>and</strong> operational def<strong>in</strong>itions.As the company grew, the unique culture was becom<strong>in</strong>g diluted <strong>and</strong>more difficult to extend to new acquisitions.Executive AlignmentWith Emmis’s partners, Agruso <strong>and</strong> Results-Based <strong>Leadership</strong> (RBL), anapproach to def<strong>in</strong><strong>in</strong>g <strong>and</strong> align<strong>in</strong>g the executive team <strong>and</strong> organization wascreated. Jim Dowl<strong>in</strong>g with RBL customized a RBL FAST workshop <strong>in</strong>to anexecutive two-day, off-site which was then scheduled (Exhibit 4.3). Norm
90 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGESmallwood, author of Results-Based <strong>Leadership</strong>, facilitated a session with thecompany’s sixteen top executives, who engaged <strong>in</strong> a challeng<strong>in</strong>g <strong>and</strong> sometimesemotional process of education, debate, <strong>and</strong> decision mak<strong>in</strong>g.A second, follow-up FAST workshop was scheduled to cont<strong>in</strong>ue the passionatediscussions whereby the company’s strategic direction was verified <strong>and</strong>implications for leaders identified. The FAST workshop set anchor po<strong>in</strong>ts forhow Emmis chooses to conduct bus<strong>in</strong>ess <strong>and</strong> how it wants its leaders to be seenby their best customers.Several significant steps where achieved as a result of the workshops:• Corporate <strong>and</strong> divisional strategy was further developed• Allied corporate structure was established, with operational def<strong>in</strong>itionstak<strong>in</strong>g shape.• A new era was def<strong>in</strong>ed: Establish<strong>in</strong>g a new st<strong>and</strong>ard for performance<strong>and</strong> <strong>in</strong>novation.• A firm br<strong>and</strong> was created: Great Media, Great People, Great Service.• Scorecard development was addressed, <strong>and</strong> commitment, process, <strong>and</strong>designated teams established.• Critical strategic content was created for the next-level RBL leadershipprogram: Lead<strong>in</strong>g for Results.• A need for additional executive development, alignment, <strong>and</strong> teambuild<strong>in</strong>g was identified.Worth not<strong>in</strong>g is the conclusion of the company’s value cha<strong>in</strong>:• The customer: the advertiser (<strong>in</strong> some cases the reader, wheresubscriber fees exist)• The product: desirable demographic pool for the advertiser• The production process: programm<strong>in</strong>g <strong>and</strong> editorial content that buildsthe product—the attention of desirable watchers, listeners, <strong>and</strong> readersThe company’s firm br<strong>and</strong> then represents desired dist<strong>in</strong>ctiveness <strong>in</strong> thesekey areas:• Great Media: driver <strong>in</strong> production of audiences that are sold to advertisers• Great Service: attention to super-serv<strong>in</strong>g the advertisers, the primarycustomer• Great People: Emmis culture demonstrated through every employee <strong>and</strong><strong>in</strong> their <strong>in</strong>teractions with customers, audiences, <strong>in</strong>vestors, <strong>and</strong> otheremployeesThe new era—Establish<strong>in</strong>g a new st<strong>and</strong>ard of performance <strong>and</strong> <strong>in</strong>novation—represents the company’s <strong>in</strong>tention to focus the culture <strong>in</strong> a way that leverages
EMMIS COMMUNICATIONS 91the positive <strong>in</strong>tended elements of its culture while address<strong>in</strong>g grow<strong>in</strong>g concernsaround performance <strong>and</strong> accountability.Malicious ComplianceDur<strong>in</strong>g the first two-day off-site workshop, signs of executive disagreement <strong>and</strong>resistance arose <strong>in</strong> a few key areas: (1) bus<strong>in</strong>ess portfolio makeup <strong>and</strong> decisionmak<strong>in</strong>g, (2) allied corporate structure versus a hold<strong>in</strong>g-company model, <strong>and</strong>(3) customer def<strong>in</strong>ition as the advertiser versus the listeners, watchers, <strong>and</strong> readersof the content. By the conclusion, the group seemed to be <strong>in</strong> agreement onthe items listed above. After the event, however, there were signs that some keyexecutives <strong>and</strong> some of their direct reports lacked confidence <strong>in</strong> their statementsof support <strong>and</strong> communications of the work. This was later labeled “maliciouscompliance,” an effort to support what was decided as an executive team butwith reservations <strong>and</strong> disagreement show<strong>in</strong>g through <strong>in</strong> their communications.A few chose to cont<strong>in</strong>ue to behave as though operat<strong>in</strong>g <strong>in</strong> a hold<strong>in</strong>g companystructure, for example, <strong>and</strong> tak<strong>in</strong>g different courses of action, contradict<strong>in</strong>g theexecutive team’s commitment, <strong>and</strong> send<strong>in</strong>g mixed messages to the field.Dr. Jim Intagliata of the Northstar Group was engaged early <strong>in</strong> the change<strong>in</strong>itiative to provide executive coach<strong>in</strong>g to Smulyan <strong>and</strong> the executive team. Thiscoach<strong>in</strong>g <strong>and</strong> assessment work would play a role <strong>in</strong> shap<strong>in</strong>g future executiveteam-build<strong>in</strong>g <strong>and</strong> alignment sessions, as well as support<strong>in</strong>g Smulyan’s managementof the executives. Intagliata’s <strong>in</strong>volvement <strong>in</strong> the strategy <strong>and</strong> behavioralwork provided the coach tremendous <strong>in</strong>sight to guide the alignment <strong>and</strong>“malicious compliance” concerns that had evolved. Intagliata was furtherengaged to conduct a competency model<strong>in</strong>g process, described later, a key tool<strong>in</strong> assist<strong>in</strong>g <strong>in</strong> the focus the executive team.Lead<strong>in</strong>g for ResultsThe next level of leadership consisted of seventy-five general managers, publishers,divisional vice presidents, <strong>and</strong> corporate directors. For consistency,Results-Based <strong>Leadership</strong> delivered workshops designed to build leadershipalignment, commitment, <strong>and</strong> capabilities. A highly <strong>in</strong>teractive workshop, Lead<strong>in</strong>gfor Results, was delivered to these next-level leaders to underst<strong>and</strong> Emmisstrategy <strong>and</strong> exam<strong>in</strong>e how they will deliver results both <strong>in</strong>dividually <strong>and</strong>through others.The underl<strong>in</strong><strong>in</strong>g philosophy was that key organizational leaders would bemost <strong>in</strong>fluential <strong>in</strong> driv<strong>in</strong>g <strong>and</strong> extend<strong>in</strong>g the Emmis culture to the field locations.To do this, Emmis needed leaders throughout the company that understoodthe company’s strategies, firm br<strong>and</strong>, <strong>and</strong> culture <strong>in</strong>timately. Theseleaders need also to have the commitment <strong>and</strong> capabilities to deliver thesemessages <strong>and</strong> priorities to their respective staffs with passion. The follow<strong>in</strong>g
92 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEis a high-level agenda of the Emmis Lead<strong>in</strong>g for Results workshops:Day One: Develop Case for ChangeOpen<strong>in</strong>g: CEO <strong>and</strong> Executive Team overview <strong>and</strong> presentation of Emmisstrategies, corporate structure, firm br<strong>and</strong>, <strong>and</strong> cultureFocus: How leaders accelerate changeTopics covered:New Bus<strong>in</strong>ess RealitiesOrganization ChangeWhy Quality of <strong>Leadership</strong> Matters<strong>Leadership</strong> Value PropositionStatement of <strong>Leadership</strong> Br<strong>and</strong>Day Two: Build Organization CapabilityFocus: How leaders get th<strong>in</strong>gs doneTopics covered:Shared M<strong>in</strong>dsetTalentCollaborationSpeedAccountabilityLearn<strong>in</strong>gDay Three: Individual Leader ImplicationsFocus: Personal skill <strong>and</strong> accountability to deliver resultsTopics covered:Leader as CoachPersonal <strong>Leadership</strong> PlanThese participants were also responsible for translat<strong>in</strong>g the firm br<strong>and</strong>, culture,<strong>and</strong> leadership requirements <strong>in</strong>to a def<strong>in</strong>ition of the Emmis leadership br<strong>and</strong>.The <strong>Leadership</strong> Br<strong>and</strong> is a statement of what leaders st<strong>and</strong> for at Emmis; it isl<strong>in</strong>ked to strategy <strong>and</strong> how Emmis wants to be known by its best customers <strong>and</strong>provides a focus for leadership development activities. These leaders createdthe follow<strong>in</strong>g leadership br<strong>and</strong>:Emmis leaders embody deep customer underst<strong>and</strong><strong>in</strong>g <strong>and</strong> quality productfocus, communicate well, <strong>and</strong> turn vision <strong>in</strong>to action.PROGRAM PROMOTION AND MULTIMEDIAAs with Emmis audiences, repetition <strong>and</strong> mixed media help drive messages<strong>and</strong> <strong>in</strong>fluence buyer behavior. A key strategy for the Emmis change <strong>in</strong>itiative<strong>in</strong>volved us<strong>in</strong>g many communication vehicles for build<strong>in</strong>g br<strong>and</strong> awareness
EMMIS COMMUNICATIONS 93<strong>and</strong> <strong>in</strong>fluenc<strong>in</strong>g the culture. All corporate communication mediums wereidentified with appropriate applications <strong>and</strong> objectives (Exhibit 4.4). Thesevehicles were strategically identified with timed announcements, stories, <strong>and</strong>special events.Emmis’s annual managers meet<strong>in</strong>g is the company’s largest event, br<strong>in</strong>g<strong>in</strong>gtogether its top employees for tra<strong>in</strong><strong>in</strong>g, network<strong>in</strong>g, <strong>and</strong> recognition. The 2002meet<strong>in</strong>g was held <strong>in</strong> Indianapolis to reduce costs <strong>and</strong> give the noncorporate managersgreater visibility to the Emmis corporate offices <strong>and</strong> staff. The event wastimed to follow up on <strong>in</strong>itial companywide communications (such as the Emmissary)regard<strong>in</strong>g the new focus <strong>and</strong> direction of the company. The theme <strong>and</strong>agenda for the managers meet<strong>in</strong>g revolved around the new firm br<strong>and</strong> <strong>and</strong> era,“Crank It Up! Establish<strong>in</strong>g a New St<strong>and</strong>ard for Performance <strong>and</strong> Innovation.”The program was structured to communicate the company’s strategies, firmbr<strong>and</strong>, <strong>and</strong> cultural focus. Results-Based <strong>Leadership</strong> set the tone for the two-dayconference. Additional speakers <strong>and</strong> events followed to re<strong>in</strong>force specific elementsof the era <strong>and</strong> culture. The speakers had all been previously <strong>in</strong>troduced,shared program materials, <strong>and</strong> worked to ensure a common thread throughouttheir respective presentations. The program was designed to keep all the participantstogether <strong>and</strong> networked dur<strong>in</strong>g the beg<strong>in</strong>n<strong>in</strong>g, so all heard the sameEmmis messages:• Jeff’s State of the Union—focus on new Emmis “era”• Norm Smallwood: firm br<strong>and</strong>, leadership br<strong>and</strong>, Balanced Scorecards,Emmis competencies, <strong>and</strong> performance management• Division head presentations on bus<strong>in</strong>ess strategy• Mark Williams of the Diversity Channel: great people <strong>and</strong> diversityawareness• Robert Spector, author of the Nordstrom Way: world-class customerservice• Wall Street perspective from <strong>in</strong>dustry analysts <strong>and</strong> former FCCcommissionerPost-meet<strong>in</strong>g surveys <strong>in</strong>dicated a clearer underst<strong>and</strong><strong>in</strong>g of Emmis’s companystrategy <strong>and</strong> firm br<strong>and</strong> <strong>and</strong> that managers could now comfortably communicatethis strategy <strong>and</strong> firm br<strong>and</strong> to their respective staffs.The Emmi Awards are Emmis’s coveted annual awards for employees <strong>and</strong>entities to recognize the highest levels of achievement <strong>in</strong> a number of categories.In 2002, the award categories were altered to better reflect the company’sshift to a more performance-based management system <strong>and</strong> restatedobjectives. In mak<strong>in</strong>g nom<strong>in</strong>ations, managers were encouraged to considerresults more heavily than <strong>in</strong> the past, <strong>and</strong> to consider how well the employeemet stated objectives. This was a new approach <strong>and</strong> a significant signal to the
94 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEorganization. The executive team spent hours review<strong>in</strong>g the nom<strong>in</strong>ations <strong>and</strong>made objective, fact-based decisions about the w<strong>in</strong>ners, which were previouslymore emotionally based.The 2002 Annual Report <strong>in</strong>troduced the new firm br<strong>and</strong> to the <strong>in</strong>vestor community.This was another significant step <strong>in</strong> clearly signal<strong>in</strong>g to the employeesthat this was the new focus of Emmis <strong>and</strong> the commitment was strong. Emmiswould be known for its Great Media, Great Service, <strong>and</strong> Great People.BUILDING A HIGH-PERFORMANCE DISCIPLINE:CRANKING IT UP!A clear need for a stronger performance <strong>and</strong> accountability discipl<strong>in</strong>e was apparent.From the executive team to front-l<strong>in</strong>e employees, opportunities existed toimprove clarity about what was expected of them <strong>and</strong> development of an appropriatelevel of accountability <strong>and</strong> recognition. Now that the strategies were <strong>in</strong>place, the Balanced Scorecards <strong>and</strong> performance management systems wouldbe developed.The new performance system would consist of• Balanced scorecards forCorporateCorporate functional groupsDivisions• Developed competency model that comb<strong>in</strong>ed strategically needed attributes,behaviors needed to off-set gaps, <strong>and</strong> Eleven Comm<strong>and</strong>mentre<strong>in</strong>forcement• New <strong>in</strong>dividual performance documents that comb<strong>in</strong>e “what” <strong>and</strong>“how” goals <strong>and</strong> objectives <strong>and</strong> behavioral competencies.• Performance based stock <strong>and</strong> merit compensation programs.Balanced ScorecardsA key process for focus<strong>in</strong>g the strategies <strong>and</strong> creat<strong>in</strong>g accountability would bebuilt through the balanced scorecard. Results-Based <strong>Leadership</strong> consultants(<strong>in</strong>clud<strong>in</strong>g balanced scorecard pioneer, Rich Lynch) facilitated a process thatbuilt on the work that the executive team had completed. Teams were identifiedfor each scorecard to be developed at corporate <strong>and</strong> divisional levels. Teams weremade up of managers <strong>and</strong> key contributors with<strong>in</strong> their respective organizations.The makeup of the teams was critical <strong>in</strong> the change process; competent <strong>and</strong><strong>in</strong>fluential formal <strong>and</strong> <strong>in</strong>formal leaders were sought out. The teams spent severaldays <strong>in</strong> workshops <strong>and</strong> participated <strong>in</strong> a number of follow-up events to
EMMIS COMMUNICATIONS 95def<strong>in</strong>e measures to track strategic performance <strong>in</strong> four key result areas: <strong>in</strong>vestor,customer, employee, <strong>and</strong> organization. The RBL consultants supplemented thedata through direct <strong>in</strong>terviews with highly valued customers (Exhibit 4.5).Emmis Competency ModelCore to the culture-change process was the development of detailed Emmisbehaviors that both helped drive the new strategic direction of the company <strong>and</strong>supported the extension of the desired Emmis culture <strong>and</strong> Eleven Comm<strong>and</strong>ments.Jim Intagliata led the competency model<strong>in</strong>g process that became animportant element of the performance management process. S<strong>in</strong>ce this was sucha critical <strong>and</strong> visible tool companywide, significant <strong>in</strong>volvement of the executiveteam would be required. One such document dur<strong>in</strong>g the developmentprocess attempted to gather further feedback <strong>and</strong> participation for key membersof the executive team <strong>in</strong> addition to the <strong>in</strong>terviews <strong>and</strong> data gather<strong>in</strong>g that theywere engaged <strong>in</strong> (Exhibit 4.6).Particular attention was given to the <strong>in</strong>tegration of the Eleven Comm<strong>and</strong>ments<strong>in</strong>to the competency model (Exhibit 4.7). The model<strong>in</strong>g resulted <strong>in</strong> eight corecompetencies for all employees, <strong>and</strong> five additional leadership competencies(Exhibit 4.8). As a result of the participation from the executives, the draft competencieswere utilized almost immediately by a few of the executives with theirdirect reports.Performance <strong>and</strong> Reward ManagementAgruso <strong>and</strong> Results-Based <strong>Leadership</strong> conducted <strong>in</strong>terviews, focus groups, <strong>and</strong>a survey with the executive team that provided current state <strong>and</strong> preferredresults <strong>in</strong> four areas: design <strong>and</strong> control pr<strong>in</strong>ciples, plann<strong>in</strong>g performance,improv<strong>in</strong>g performance, <strong>and</strong> reward<strong>in</strong>g performance. In addition, <strong>in</strong>sightswere provided relative to the maturity <strong>and</strong> current state of the process comparedto Stage 3 (Discipl<strong>in</strong>ed) organizations (Exhibit 4.9). As a result of this<strong>in</strong>volvement <strong>and</strong> assessment, an annual cycle was designed <strong>in</strong>corporat<strong>in</strong>gcompensation systems, organizational development, <strong>and</strong> talent forecast<strong>in</strong>g(Exhibit 4.10).The Performance <strong>and</strong> Reward Management Implementation Plan was createdto outl<strong>in</strong>e the sequence of all support<strong>in</strong>g communications <strong>and</strong> performancemanagement events (Exhibit 4.11). Exhibit 4.11 visually presents the scope ofthe performance management implementation <strong>and</strong> the change events that werescheduled <strong>in</strong> phases to re<strong>in</strong>force the overall change agenda.Employee Tra<strong>in</strong><strong>in</strong>gIn February <strong>and</strong> March, 100 percent of all employees <strong>and</strong> managers went throughperformance management <strong>and</strong> cultural tra<strong>in</strong><strong>in</strong>g. In addition to the traditionalperformance-management <strong>and</strong> SMART goal development <strong>in</strong>struction, someunique, <strong>and</strong> “Emmis-like” tra<strong>in</strong><strong>in</strong>g was delivered: two exercises, one centered
96 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEon underst<strong>and</strong><strong>in</strong>g the Eleven Comm<strong>and</strong>ments <strong>and</strong> another focused on build<strong>in</strong>ga strong underst<strong>and</strong><strong>in</strong>g of the new Emmis behaviors. For example, the ElevenComm<strong>and</strong>ments card game was <strong>in</strong>troduced to create an exercise of underst<strong>and</strong><strong>in</strong>g<strong>and</strong> dialogue around the Emmis culture. Cards represented various symbols<strong>and</strong> clip art that were related to a particular comm<strong>and</strong>ment. Teams matched thecards to the related value <strong>and</strong> talked about examples of the values at work <strong>in</strong>their environments.The second exercise required <strong>in</strong>novative exercises around the eight coreEmmis behaviors. New teams were formed <strong>and</strong> each was asked to portray abehavior <strong>in</strong> one of three mediums that Emmis operates <strong>in</strong>: visual design (draw<strong>in</strong>gs),radio spots, or acted-out commercials. This was an enterta<strong>in</strong><strong>in</strong>g, fun, <strong>and</strong>lively learn<strong>in</strong>g experience. The other groups would identify the team’s portrayal,<strong>and</strong> there would be some dialogue about their choice <strong>and</strong> art form. This specificexercise generated mean<strong>in</strong>gful discussions about the new culture, accountability,<strong>and</strong> leadership. Further, the creative portrayals are certa<strong>in</strong> to improveunderst<strong>and</strong><strong>in</strong>g, retention, <strong>and</strong> transfer of learn<strong>in</strong>g.WHAT ABOUT INNOVATION?“Establish<strong>in</strong>g a new st<strong>and</strong>ard for performance <strong>and</strong> <strong>in</strong>novation,” so where’s the<strong>in</strong>novation? In addition to the Emmis core competency, <strong>in</strong>novation <strong>and</strong> agility,additional programs, systems, <strong>and</strong> events were developed to facilitate organizationalemphasis on this important cultural value.The Great Ideas Contest had been <strong>in</strong> place for several years to help generatecreative <strong>and</strong> <strong>in</strong>novative bus<strong>in</strong>ess solutions. However, it traditionally did notrequire actual results or implementation. In many cases the ideas were recognizedwith stock, but noth<strong>in</strong>g was implemented <strong>and</strong> noth<strong>in</strong>g was returned tothe organization. In some regards the program slowed <strong>in</strong>novation, because ideaswere held for the contest <strong>and</strong> not shared. The program was changed to encouragegroup <strong>in</strong>volvement <strong>and</strong> results. Start<strong>in</strong>g <strong>in</strong> 2002, <strong>in</strong> order for ideas to berecognized at the highest levels, efforts must be <strong>in</strong> the works to implement themor actual results must exist. In addition, teams were recognized for shared developmentof ideas <strong>and</strong> implementation. This further drove the message <strong>and</strong> focusaround results <strong>and</strong> accountability.A symbolic “th<strong>in</strong>k tank” was created at corporate from an old soundproofproduction studio. The new meet<strong>in</strong>g room was filled with beanbag chairs, toys,costume accessories, games, lava lamps <strong>and</strong> other bright <strong>and</strong> creative props.The room was designed for groups to use for bra<strong>in</strong>storm<strong>in</strong>g, team-build<strong>in</strong>g, orjust to have fun <strong>in</strong>. It provides a place where employees <strong>and</strong> teams can step outof the corporate environment <strong>and</strong> th<strong>in</strong>k out of the box.Additional steps are be<strong>in</strong>g taken to use technology to drive <strong>in</strong>formation shar<strong>in</strong>g,best practices, <strong>and</strong> a knowledge network through the <strong>in</strong>tranet, employee
EMMIS COMMUNICATIONS 97portals, or other systems. Technology will provide the organization an advantage<strong>in</strong> quality <strong>and</strong> speed of decision mak<strong>in</strong>g. Ties to the Balanced Scorecard couldprovide executives <strong>and</strong> the organization real-time data through an enterpriseguidance system.EVALUATION: MEASURING SIGNAL STRENGTHAnd so it was that, on July 4, 1981, WENS began to broadcast. I spent my first dayas a station owner driv<strong>in</strong>g around the city try<strong>in</strong>g to figure if our signal was strongenough to serve the market. It became apparent fairly quickly that we had found aniche <strong>in</strong> the market, <strong>and</strong> the station went on to become a big success. When I lookback on those days, I realize that what made this company special back then iswhat makes it special twenty years later: We have always attracted great peoplewith a passion for our bus<strong>in</strong>ess <strong>and</strong> a passion for the way we operate. If therehas been one consistent theme from that first night until today, it has beenthat EMMIS st<strong>and</strong>s for a different way of do<strong>in</strong>g bus<strong>in</strong>ess.—Jeff SmulyanThe question now is whether a “different way of do<strong>in</strong>g bus<strong>in</strong>ess” was <strong>in</strong>tegratedthroughout the organization. Smulyan had consistently dem<strong>and</strong>ed through thisprocess that employees be “all on one page” <strong>and</strong> “know what is expected ofthem from their manager.” Dur<strong>in</strong>g the development of the corporate <strong>and</strong> divisionalscorecards, three employee result areas consistently emerged:• Productivity: revenue per employee• Passionate <strong>and</strong> committed employees: employee survey results• Retention of key employees: undesired turnoverOver time these would become the high-level measures of this <strong>in</strong>itiative’s impacton the organization.The survey says? Well, there are tell<strong>in</strong>g results on the annual employee surveycompleted <strong>in</strong> May 2002. Keep<strong>in</strong>g <strong>in</strong> m<strong>in</strong>d that the change <strong>in</strong>itiative was not veryfar <strong>in</strong>to implementation <strong>and</strong> several of the performance management elements hadnot yet been developed, the result showed positive signs. The first percentage representsthe average employee response to questions on the company’s annualemployee survey; the second number represents the average score on similar questionsfor companies listed on the “Fortune 100 <strong>Best</strong> Companies to Work For.”• I underst<strong>and</strong> the importance of my job <strong>and</strong> how it relates to ourmission/goals: 91 percent, 73 percent• I have a clear description of my job <strong>and</strong> I underst<strong>and</strong> what is expectedof me: 83 percent, 88 percent• I really like the people I work with: 86 percent, 84 percent
98 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE• I’m not a number here, I’m treated as a whole person with life outsidework: 78 percent, 77 percent• In the past year, I have discussed my performance review with amanager: 76 percent, 78 percent• My work has special mean<strong>in</strong>g, this is not “just a job”: 77 percent,79 percent• I’ll work for Emmis a year from now: 76 percent, 66 percent• Tak<strong>in</strong>g everyth<strong>in</strong>g <strong>in</strong>to account, I would say Emmis is a great placeto work: 77 percent, 88 percentThe company is cont<strong>in</strong>ually assess<strong>in</strong>g its annual survey <strong>and</strong> is consider<strong>in</strong>gadditional questions that would determ<strong>in</strong>e a general employee commitment<strong>in</strong>dex score. There are survey questions that the organization would actuallyexpect to decl<strong>in</strong>e <strong>in</strong> some areas as a result of new accountability <strong>and</strong> employeeacceptance of clearly def<strong>in</strong>ed st<strong>and</strong>ards.Other measures will beg<strong>in</strong> to track important performance trends on thescorecards. Productivity can be measured by revenue <strong>and</strong> earn<strong>in</strong>g per employee.Undesired turnover, or retention of key employees, will be tracked moreeffectively after a talent review <strong>and</strong> succession-plann<strong>in</strong>g process is <strong>in</strong> place.Technology is be<strong>in</strong>g developed to effectively measure <strong>and</strong> present this keyperformance data.January 12, 2004, Q&A with Emmis CommunicationsCEO Jeff SmulyanQ: When you announced your third quarter earn<strong>in</strong>gs, you said the pastyear was the best <strong>in</strong> the company’s twenty-four-year history. Why?A: In our early days, as a private company, we succeeded <strong>in</strong> part becausewe had that start-up enthusiasm <strong>and</strong> entrepreneurial spirit. We hadsome truly great years. What makes this past year even greater is thatwe turned <strong>in</strong> a strong performance as a mature company compet<strong>in</strong>gaga<strong>in</strong>st much bigger, tougher competitors <strong>in</strong> <strong>in</strong>dustries that are muchmore mature. We demonstrated that we can compete <strong>in</strong> any environmentaga<strong>in</strong>st anybody.In every area of the bus<strong>in</strong>ess, we’re more professionally run than everbefore. I’m proud of what’s go<strong>in</strong>g on <strong>in</strong> our markets, where our peopleare f<strong>in</strong>d<strong>in</strong>g new ways to succeed, <strong>and</strong> I’m proud of the services our corporateteam provides—our HR, f<strong>in</strong>ance, legal, IT, eng<strong>in</strong>eer<strong>in</strong>g, supportstaff . . . everybody is contribut<strong>in</strong>g. I th<strong>in</strong>k there is a genu<strong>in</strong>e feel<strong>in</strong>gthat we aspire to be as good as anyone’s ever been <strong>in</strong> these bus<strong>in</strong>esses,<strong>and</strong> I th<strong>in</strong>k we’re mak<strong>in</strong>g good on that goal.
EMMIS COMMUNICATIONS 99LESSONS LEARNEDLesson #1—Study the impact of previous corporate <strong>in</strong>itiatives on this change <strong>in</strong>itiative.Your change <strong>in</strong>itiative may have to start with damage control of previous<strong>in</strong>itiatives. Be aware of all previous corporate <strong>in</strong>itiatives, their successes,failures, <strong>and</strong>, most important, impact or impression on the operations. Workwith all corporate functions to collaborate on the new <strong>in</strong>itiatives, start<strong>in</strong>g witha postmortem of the previous “corporate” <strong>in</strong>itiative list. Full engagement <strong>and</strong>support of all corporate functions will have to be achieved prior to mov<strong>in</strong>g sucha key <strong>in</strong>itiative <strong>in</strong>to the field.Lesson #2—Constantly monitor <strong>and</strong> re<strong>in</strong>force executive team alignment <strong>and</strong><strong>in</strong>volvement <strong>in</strong> the <strong>in</strong>itiative. Hav<strong>in</strong>g CEO support <strong>and</strong> confidence is not goodenough. If any key leadership changes occur, <strong>in</strong>vest a lot of time with the newleader to ga<strong>in</strong> their sponsorship. Incorporate as much of their feedback <strong>in</strong>to theproduct as possible. Provide enough focus on the bus<strong>in</strong>ess needs <strong>and</strong> executive<strong>in</strong>put to ensure that it feels like their work. Do not assume that executive alignmentwill ensure next-level leadership alignment.Lesson #3—Leverage technology to drive communications <strong>and</strong> create constantreal-time visibility of key company <strong>in</strong>formation, measures, <strong>and</strong> performance.Intranet, employee portals, <strong>and</strong> bus<strong>in</strong>ess <strong>in</strong>telligence <strong>and</strong> knowledge managementsystems should be built <strong>and</strong> implemented <strong>in</strong> concert with the change <strong>in</strong>itiative.Make these parallel corporate support systems part of one corporate<strong>in</strong>itiative.Lesson #4—Engage <strong>in</strong> visible beta tests <strong>and</strong> leverage field executives to drivesponsorships of program <strong>in</strong>itiatives—upward, laterally, <strong>and</strong> downward. Ga<strong>in</strong>next-level support through education, such as the Lead<strong>in</strong>g for Results workshopsbut, more important, through <strong>in</strong>volvement <strong>in</strong> the design <strong>and</strong> implementationof programs before companywide rollout. Use the field beta tests asexamples <strong>and</strong> utilize the field leadership to communicate to peers <strong>and</strong> employeestheir experiences.Lesson #5—Monitor <strong>and</strong> adjust the language, don’t scare them away at theonset with “consultant-speak” or “MBA-speak.” Integrate the unique culture ofyour organization <strong>in</strong>to the new common strategy <strong>and</strong> performance language youare try<strong>in</strong>g to create. A common language must be created, especially if one doesnot currently exist around performance <strong>and</strong> strategy. But be cautious: the mereimpression of the language <strong>and</strong> formality may slow your <strong>in</strong>itiative significantly.Recruit an organizational translator onto your change team, <strong>and</strong> use him or herat every step of the process.Lesson #6—Implement with patience <strong>and</strong> never take shortcuts. Utilize thechange model <strong>and</strong> do not shortcut buy-<strong>in</strong> steps for the sake of speed. Recognizethat an effort of this scale will take two to three years to yield measurable<strong>and</strong> consistent results. Set executive <strong>and</strong> employee expectations
100 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEappropriately—undercommit <strong>and</strong> overdeliver. Credibility will be lost if expectationsof a one- or two-year success are established or that success will beeasy to achieve. This may be the most difficult process an executive team willever need to execute; it will be met with resistance to change <strong>and</strong> will requireconsistency, tenacity, <strong>and</strong> visible alignment.Lesson #7—Monitor outside events <strong>and</strong> decisions that might contradict the<strong>in</strong>itiative or dilute leadership’s credibility. Over the course of bus<strong>in</strong>ess, th<strong>in</strong>gshappen. Decisions have to be made to adapt to the market, economy, <strong>and</strong> <strong>in</strong>ternalfactors. It requires courage to portray to management how certa<strong>in</strong> decisions<strong>and</strong> actions will be <strong>in</strong>terpreted by the rest of the organization. Be<strong>in</strong>g the leaderof an <strong>in</strong>itiative that some may not be ready for, while also be<strong>in</strong>g the voice ormessenger regard<strong>in</strong>g contradictions or potential credibility issues, creates a delicatesituation at times. Have courage, rem<strong>in</strong>d the organization of your role, <strong>and</strong>prove that it is <strong>in</strong> the best <strong>in</strong>terest of the whole company <strong>and</strong> is not just be<strong>in</strong>ggenerated by self-<strong>in</strong>terest.Lesson #8—Do not let politics get <strong>in</strong> the way. Ensure corporate functions arefocused on what is best for the company, not on functional agendas, politics,or leadership egos. Such an <strong>in</strong>itiative must <strong>in</strong>clude a strategic <strong>and</strong> proactivealignment of the corporate functions. It would be prudent to acknowledge <strong>and</strong>respect the <strong>in</strong>ternal peck<strong>in</strong>g order <strong>and</strong> provide special attention to the <strong>in</strong>ternalop<strong>in</strong>ion leaders. The creation of positive corporate results will speak for themselveslater <strong>in</strong> the change <strong>in</strong>itiative. Work to be the example of selfless leadership<strong>in</strong> the best <strong>in</strong>terest of the corporation.
EMMIS COMMUNICATIONS 101Exhibit 4.1. The Eleven Comm<strong>and</strong>ments of Emmis CommunicationsXI.X.IX.VIII.VII.VI.V.IV.III.II.I.Admit your mistakes.Be flexible—keep an open m<strong>in</strong>d.Be rational—look at all the options.Have fun—don’t take this too seriously.Never get smug.Don’t underprice yourself or your medium—don’t attack the <strong>in</strong>dustry,build it up.Believe <strong>in</strong> yourself—if you th<strong>in</strong>k you can make it happen, you will.Never jeopardize your <strong>in</strong>tegrity—we’ll w<strong>in</strong> the right way or we won’t w<strong>in</strong>at all.Be good to your people—get them <strong>in</strong>to the game <strong>and</strong> give them a pieceof the pie.Be passionate about what you do <strong>and</strong> compassionate about how you do it.Take care of your audiences <strong>and</strong> your advertisers—th<strong>in</strong>k of them <strong>and</strong>you’ll w<strong>in</strong>.
102 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 4.2. Dual-Path Results ModelMission/VisionFirm Br<strong>and</strong>WHAT• Corporate <strong>and</strong> DivisionalStrategy Formulation• Balanced Scorecards- Customers - Employees- Investors - Organization• Entity <strong>and</strong> MarketScorecards• Department/WorkgroupGoals <strong>and</strong> Objectives• Individual Goals <strong>and</strong>ObjectivesNew "Era": 2–3 Year FocusSupport<strong>in</strong>g systems,processes, <strong>and</strong> events:Special ProjectsPerformance Mgmt.Internal CommunicationsTechnologyTalent Review <strong>and</strong>Succession Plann<strong>in</strong>gReward SystemsEmmis Learn<strong>in</strong>gStaff<strong>in</strong>g/SelectionSt<strong>and</strong>ards <strong>and</strong> ProcessesExecutive Coach<strong>in</strong>g <strong>and</strong><strong>Development</strong>Employee SurveysAnnual Manager's Meet<strong>in</strong>g• Desired Emmis Culture• 11 Comm<strong>and</strong>ments• <strong>Leadership</strong> Br<strong>and</strong>• Organizational Messages,Events, <strong>and</strong> Symbolic Acts• Management <strong>and</strong>Individual CompetencyModels• Individual BehaviorsHOWDesired Results
EMMIS COMMUNICATIONS 103Exhibit 4.3. Executive Session FAST AgendaR esults- Based<strong>Leadership</strong>Bus<strong>in</strong>ess & <strong>Leadership</strong>Agenda• Strategic direction• <strong>Leadership</strong> roles• Decision-mak<strong>in</strong>gprocess• Accountability• MeasuresFAST Workshop• Focus<strong>in</strong>g <strong>and</strong> Align<strong>in</strong>g StrategiesTogetherINTRODUCTIONNEW BUSINESS REALITIESCorporate strategyBus<strong>in</strong>ess strategySome organization disablersCan we change <strong>in</strong>side the w<strong>in</strong>dow of opportunity?FAST NOTES & TAKE-AWAYSRole of leadership<strong>Leadership</strong> dur<strong>in</strong>g transformationDesirable outcomes of the workshopChange agendaWhat Emmis is aboutNew bus<strong>in</strong>ess realitiesForces act<strong>in</strong>g upon the companyNorm’s <strong>in</strong>ventory of paradoxes<strong>Leadership</strong> value proposition(Cont<strong>in</strong>ued)
104 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEResponse to environmentCorporate strategyHow an allied model would impact bonus plan deploymentBus<strong>in</strong>ess strategyAccountability <strong>in</strong> an allied bus<strong>in</strong>essThe <strong>in</strong>tellectual agendaTypes of workAdvantage capabilitiesScorecardAttributesBalanc<strong>in</strong>g short- & long-term goals<strong>Leadership</strong> br<strong>and</strong>Enabl<strong>in</strong>g systemsSCORECARDSEmployeeOrganizationNEXT STEPSExhibit 4.3. Executive Session FAST Agenda (Cont<strong>in</strong>ued)
EMMIS COMMUNICATIONS 105Exhibit 4.4. Internal Communications MatrixPrimary Communication Vehicles, Their Content <strong>and</strong> ObjectivesVehicle Medium <strong>and</strong> Frequency Objective/UseEmmis WeeklyUpdateEmmissaryTwo-page memo sent to allemployees by e-mail everyweek; it is wait<strong>in</strong>g for themwhen they arrive on Mondaymorn<strong>in</strong>gTwo-color newsletter sent toall employees each quarterThe Emmis Weekly Update isused to communicate toemployees any <strong>in</strong>formationthat will help them feel moreconnected to the company <strong>and</strong><strong>in</strong>formed about its operations.It is used for special massagesfrom the CEO <strong>and</strong> other officers,but also to communicateabout company news, mediacoverage of the company,analysts’ views of thecompany <strong>and</strong> its <strong>in</strong>dustries,<strong>and</strong> employee benefit news.The Emmissary is used tocommunicate bigger-picture<strong>in</strong>formation about the companyto employees. It uses longerstories than would be possible<strong>in</strong> the Weekly Update to deliverstrategic messages to employees,provide deeper <strong>in</strong>formationabout employee benefits<strong>and</strong> company programs, highlightpromotional activities of<strong>in</strong>dividual stations <strong>and</strong> publications,applaud successes, <strong>and</strong>,through fun features, <strong>in</strong>troduceemployees to each other <strong>and</strong> totheir leadership.(Cont<strong>in</strong>ued)
106 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGECEO memosExhibit 4.4. Internal Communications Matrix (Cont<strong>in</strong>ued)Primary Communication Vehicles, Their Content <strong>and</strong> ObjectivesVehicle Medium <strong>and</strong> Frequency Objective/UseE-mails sent to all employeesas neededCEO Jeff Smulyan occasionallylikes to communicatedirectly with employeesthrough <strong>in</strong>formal e-mail messagesto <strong>in</strong>form them aboutmajor company <strong>in</strong>itiatives,comment on company, <strong>in</strong>dustry,or national events, or justboost morale. Smulyan alsooften communicates directlyto <strong>in</strong>dividuals, <strong>in</strong>dividualstations, or specific divisions.“EmmisAnnouncements”Division e-mailsCompanywideconference callsE-mails sent to all employeesas neededE-mails sent to all employees<strong>in</strong> a s<strong>in</strong>gle division as neededAnnual (or more frequently ifneeded) conference call <strong>and</strong>PowerPo<strong>in</strong>t presentation“Emmis Announcements” isthe e-mail address for e-mails<strong>in</strong>tended for all employees.“Emmis Announcements” isused only for important communicationsto employeesabout company news or benefit<strong>in</strong>formation.To <strong>in</strong>form employees of a specificdivision about companynews or <strong>in</strong>itiativesFor particularly importantevents or news, the companycan host conference calls withall employees <strong>and</strong> providethem with PowerPo<strong>in</strong>t presentationsthrough the Web. Usedonly once so far, this was thevehicle for <strong>in</strong>troduc<strong>in</strong>gemployees to the Stock CompensationProgram, whichgave all employees a 10 percentcut <strong>in</strong> pay but at thesame time gave all employeesa 10 percent stock award.
EMMIS COMMUNICATIONS 107Exhibit 4.4. (Cont<strong>in</strong>ued)Primary Communication Vehicles, Their Content <strong>and</strong> ObjectivesVehicle Medium <strong>and</strong> Frequency Objective/UseNews releasesAnnual ReportQuarterly conferencecall withWall StreetNews releases sent via e-mailas neededCompany annual reportQuarterlyAll major news releases,<strong>in</strong>clud<strong>in</strong>g quarterly f<strong>in</strong>ancialreports, are e-mailed to allemployees along with a shortnote from CEO Jeff Smulyan.Because virtually all employeesare shareholders, Emmisviews its Annual Report toShareholders as an employeecommunication as well as areport to shareholders.Because virtually all employeesare shareholders, Emmisviews its quarterly calls withWall Street analysts to also bea form of communication toemployees <strong>and</strong> all stakeholders.Employees are specifically<strong>in</strong>vited to listen to theconference calls.
Data Source:Where can we getthe dataBased on datafrom . . .• Nielsen(availableelectronically)• Magid• AR&D• Scarborough• Media Audit• Marshall• TV scan• Ad connectionsViews:How we would wantto slice the dataViewable by . . .• Total review allday•News• Show• Syndicated• Network• Time of day•Age•Sex• Lifestyle• Behavior• Viewer habits• Consumer habitsBy key desireddemographic ofadvertiserExhibit 4.5. Balanced Scorecard SampleFormula:How we would calculatethe measureFrequency:When we need tomonitor this dataComputes as . . .Reported . . .HUTS shareNielsen formulabased on stations’targetsPUTS share• Daily• QuarterlyNumber withdecided characteristicdivided by totaldemographicTwo times a yearTarget demographic;GRPs over a specifiedscheduleBeg<strong>in</strong>n<strong>in</strong>g <strong>in</strong>completion ofscheduleOperational Def<strong>in</strong>ition:How we would def<strong>in</strong>ethe measure clearly tostakeholdersTell us about . . .Percentage of viewersreached based on theuniverse of marketProfile of viewers whowatch programsReach of commercial totargeted viewers or thenumber of target audiencereachedTelevision ScorecardMeasure:Results, dimension,quantity or capacityof a bus<strong>in</strong>essprocess outputOur measures . . .CustomerRat<strong>in</strong>gsQualitative demographicresearchDemographic hitratio—reach
EMMIS COMMUNICATIONS 109Exhibit 4.6. Competency FeedbackEMMIS ATTRIBUTE MODELAttached is a draft of the Emmis Attribute model that has been developed based onour work with RBL <strong>and</strong> the <strong>in</strong>put that you provided <strong>in</strong>dividually <strong>in</strong> your conversationswith Jim Intagliata.To produce this model, Jim has streaml<strong>in</strong>ed the st<strong>and</strong>ard RBL attribute architecturefrom twenty-seven attributes down to a more manageable twelve. He has also workedto <strong>in</strong>corporate all of the Emmis Comm<strong>and</strong>ments <strong>and</strong> Rules for Managers <strong>in</strong>to the proposedmodel so that it is clear that these values are not be<strong>in</strong>g forgotten or discardedas we work to build a more performance-oriented culture (you will see these itemsbolded <strong>and</strong> noted throughout the text where they fit). F<strong>in</strong>ally, on the <strong>in</strong>itial page ofthe attachment he has provided a matrix that <strong>in</strong>dicates which roles the attributesapply to <strong>and</strong> the key reasons these attributes have been <strong>in</strong>corporated <strong>in</strong>to the model.As you will see, the proposed model has these key design features:1. There are eight core attributes that will be expected to be demonstrated by allEmmis employees at all levels, <strong>and</strong> an additional four attributes that will beexpected to be demonstrated by <strong>in</strong>dividuals who directly manage other people(managers) <strong>and</strong> by <strong>in</strong>dividuals who manage entire divisions or functions(executives).2. For each attribute that is <strong>in</strong> the Emmis model there is a separate set of behavioral<strong>in</strong>dicators, depend<strong>in</strong>g on the role the <strong>in</strong>dividual is play<strong>in</strong>g <strong>in</strong> the organization. Forexample, with regard to Innovation <strong>and</strong> Agility, what someone is expected to do todemonstrate this attribute varies depend<strong>in</strong>g upon whether they are <strong>in</strong> a position ofan <strong>in</strong>dividual contributor, a manager, or an executive. The <strong>in</strong>tent of this design isto highlight that the way <strong>in</strong> which people are expected to add value to the organizationchanges over time as they grow <strong>and</strong> advance <strong>in</strong> their career.What We Need From YouIn order to ref<strong>in</strong>e <strong>and</strong> f<strong>in</strong>alize this model we would greatly appreciate your <strong>in</strong>put.Please take the time to read through the model <strong>and</strong> consider the follow<strong>in</strong>g questionsas you do:• Do you feel that any of the attributes <strong>in</strong>cluded <strong>in</strong> the model are unnecessary <strong>and</strong>add no value?• Are there any important attributes that you feel are not represented at all <strong>in</strong> themodel <strong>and</strong> need to be added?• As you read each attribute, do the differentiation <strong>and</strong> progression of expectationfrom <strong>in</strong>dividual contributor to manager to executive levels make sense to you?• F<strong>in</strong>ally, as you review the word<strong>in</strong>g of each competency, do you have any specificsuggestions regard<strong>in</strong>g how we might express the same idea but “Emmisize” the languagemore?We will be follow<strong>in</strong>g up shortly to schedule a phone conversation <strong>in</strong> which we cangather your feedback. The deadl<strong>in</strong>e we are work<strong>in</strong>g to meet is to have the modelf<strong>in</strong>alized by _________ so that the Emmis Attribute model can be <strong>in</strong>troduced as partof the Performance Management System roll-out.
Exhibit 4.7. Competency L<strong>in</strong>kage to CultureKEY ATTRIBUTES FOR EMMISRole <strong>in</strong> EmmisIndividual Middle SeniorBehavioral Attributes Contributor Manager Executive Why Needed?High-Priority Core1. Innovation <strong>and</strong> flexibilityXXX• To keep up with pace of change <strong>in</strong> <strong>in</strong>dustry<strong>and</strong> outmaneuver the giants/gorillas• A new <strong>in</strong>novation st<strong>and</strong>ard for all aspectsof bus<strong>in</strong>ess (not just product/content)• Consistent with “out of the box” elementof Emmis culture2. Passion to reach a higherst<strong>and</strong>ardXXX• To help Emmis compete <strong>and</strong> get to the nextlevel• Consistent with “never get smug”—“bepassionate about what you do” values• Consistent with theme “Sets a new st<strong>and</strong>ardfor performance <strong>and</strong> <strong>in</strong>novation”3. Personal <strong>in</strong>tegrityXXX• Ma<strong>in</strong>ta<strong>in</strong> <strong>and</strong> strengthen a fundamentalEmmis pr<strong>in</strong>ciple/comm<strong>and</strong>ment• Differentiates Emmis with employees/customers (quality people <strong>and</strong> service)4. Informed decision mak<strong>in</strong>gXXX• Consistent with Emmis research expertise• Needed to discipl<strong>in</strong>e decisions more broadly
Exhibit 4.7. (Cont<strong>in</strong>ued)KEY ATTRIBUTES FOR EMMISRole <strong>in</strong> EmmisIndividual Middle SeniorBehavioral Attributes Contributor Manager Executive Why Needed?5. Accountability forperformanceXXX• To improve overall results <strong>and</strong> deliver forshareholders• To be fair to those who really deliver/addvalue <strong>and</strong> attract/reta<strong>in</strong> top performers6. Teamwork <strong>and</strong> collaborationXXX• To support shar<strong>in</strong>g of ideas, practices,people across organizational l<strong>in</strong>es• Consistent with value for treat<strong>in</strong>g otherswith respect/hav<strong>in</strong>g fun while work<strong>in</strong>g7. Turns vision <strong>in</strong>to actionXXX• Builds on current value of buy-<strong>in</strong> to sharedEmmis vision• Takes it the next step to ensur<strong>in</strong>g ittranslates <strong>in</strong>to aligned action/execution• Responsive to felt need for sharper focus<strong>in</strong> the bus<strong>in</strong>ess8. Delivers the Emmis customerexperienceXXX• Create the Emmis customer experience—partner to deliver results/success• Quality service <strong>and</strong> people—differentiatesEmmis from competition(Cont<strong>in</strong>ued)
Exhibit 4.7. Competency L<strong>in</strong>kage to Culture (Cont<strong>in</strong>ued)KEY ATTRIBUTES FOR EMMISRole <strong>in</strong> EmmisIndividual Middle SeniorBehavioral Attributes Contributor Manager Executive Why Needed?Managerial/Executive9. Motivates <strong>and</strong> manages<strong>in</strong>dividualsXX• Consistent with values/comm<strong>and</strong>ments—“have fun, get people <strong>in</strong> the game”• Ma<strong>in</strong>ta<strong>in</strong> the personal touch emphasiswith<strong>in</strong> Emmis culture• Be the employer of choice10. Builds <strong>and</strong> leads teamsXX• Creates climate of teamwork <strong>and</strong> <strong>in</strong>teraction<strong>in</strong> unit/across units• Leverages people resources effectively—work<strong>in</strong>g together vs. lone rangers11. Recruits, develops, <strong>and</strong>reta<strong>in</strong>s talentXX• Required for better results <strong>and</strong> execut<strong>in</strong>gallied strategy• Re<strong>in</strong>force/strengthen quality people—adifferentiator for Emmis12. Manages resourceseffectivelyXX• Contribute to f<strong>in</strong>ancial vitality of thebus<strong>in</strong>ess• To prioritize <strong>and</strong> focus use of key resources13. Strategic perspectiveXX• Bus<strong>in</strong>ess-unit heads need to underst<strong>and</strong>their own challenges/opportunities <strong>and</strong>chart a course for success• Jeff can’t be the only visionary
Exhibit 4.7. (Cont<strong>in</strong>ued)ATTRIBUTE LINKAGE TO EMMIS COMMANDMENTS/RULES FOR MANAGERSAttribute Emmis Comm<strong>and</strong>ments Emmis Manager RulesInnovation <strong>and</strong> agility• Is flexible <strong>and</strong> keeps an open m<strong>in</strong>d(Comm<strong>and</strong>ment #10)• Believes <strong>in</strong> self <strong>and</strong> ability to make th<strong>in</strong>gshappen (Comm<strong>and</strong>ment #5)• Th<strong>in</strong>ks out of the box <strong>and</strong> fosters creativity <strong>in</strong>others (Manager Rule #8)Drive to excel• Is passionate about what he or she does(Comm<strong>and</strong>ment #2)• Never gets smug or complacent(Comm<strong>and</strong>ment #7)• Has a passion for everyth<strong>in</strong>g he or she does(Manager Rule #6)Personal <strong>in</strong>tegrity• Never jeopardizes <strong>in</strong>tegrity; <strong>in</strong>sists onw<strong>in</strong>n<strong>in</strong>g the right way or not at all.(Comm<strong>and</strong>ment #4)• Is able to identify <strong>and</strong> admit own mistakes(Comm<strong>and</strong>ment #11)• Has a good sense of balance <strong>and</strong> perspective aboutwhat’s important <strong>in</strong> life (Manager Rule #5)Fact-based decision mak<strong>in</strong>g• Is rational <strong>and</strong> looks at all the options(Comm<strong>and</strong>ment #9)Accountability for results• Values relationships <strong>and</strong> treats others withdignity <strong>and</strong> compassion (Comm<strong>and</strong>ment #2)Fosters alignment <strong>and</strong>collaboration• Focuses on do<strong>in</strong>g what it takes to add value tothe overall organization, not on protect<strong>in</strong>g turf orplay<strong>in</strong>g politics (Manager Rule #7)Turns vision to focusedaction• Models personal buy-<strong>in</strong> <strong>and</strong> commitment to theEmmis vision/strategy (Manager Rule #1)• Focuses on the work to be managed—leavespolitics to the politicians (Manager Rule #7)(Cont<strong>in</strong>ued)
Exhibit 4.7. Competency L<strong>in</strong>kage to Culture (Cont<strong>in</strong>ued)ATTRIBUTE LINKAGE TO EMMIS COMMANDMENTS/RULES FOR MANAGERSAttribute Emmis Comm<strong>and</strong>ments Emmis Manager RulesDelivers the Emmis customerexperience• Knows who his or her customers are, th<strong>in</strong>ksabout, <strong>and</strong> takes personal responsibility fortak<strong>in</strong>g care of them (Comm<strong>and</strong>ment #1)• Doesn’t underprice self or medium; buildsup the <strong>in</strong>dustry <strong>in</strong> deal<strong>in</strong>g with others(Comm<strong>and</strong>ment #6)• Believes everyday that he/she <strong>and</strong> Emmiscan make a difference (Manager Rule #11)• Is will<strong>in</strong>g to “go the extra mile” for others(Manager Rule #9)• Is able to have fun, laugh at self(Manager Rule #10)Motivates <strong>in</strong>dividuals <strong>and</strong> teams• Is good to his or her people—gets them“<strong>in</strong>to the game” <strong>and</strong> ensures they have apiece of the pie (Comm<strong>and</strong>ment #3)• Is able to have fun, laugh at self,(Comm<strong>and</strong>ment #8)Recruits, develops, <strong>and</strong> reta<strong>in</strong>stalent• Hires energetic people who believe <strong>in</strong> theEmmis vision <strong>and</strong> are smarter than himselfor herself (Manager Rules #2, 3, <strong>and</strong> 4)Manages resources effectivelyStrategic Perspective
Exhibit 4.7. (Cont<strong>in</strong>ued)ATTRIBUTE LINKAGE TO KEY RESULT CATEGORIESAttribute Employee Organization Customer InvestorSets Direction1. Strategic perspective X2. Turns vision <strong>in</strong>to focused action XMobilizes Individual Commitment3. Motivates <strong>in</strong>dividuals <strong>and</strong> teams X4. Recruits, develops, <strong>and</strong> reta<strong>in</strong>s talent XEngenders Organizational Capability5. Holds self <strong>and</strong> others accountable X6. Manages resources effectively X7. Delivers the Emmis customer experience X8. Fosters alignment <strong>and</strong> collaboration X9. Innovation <strong>and</strong> agility XDemonstrates Personal Character10. Personal <strong>in</strong>tegrity X X X X11. Drive to excel X X X X12. Fact-based decision mak<strong>in</strong>g X X X X
116 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 4.8. Emmis Competency ModelCore Competencies for All1. Informed decision mak<strong>in</strong>g. Approach<strong>in</strong>g situations objectively, gather<strong>in</strong>g thefacts <strong>and</strong> <strong>in</strong>formation necessary for clear underst<strong>and</strong><strong>in</strong>g, <strong>and</strong> us<strong>in</strong>g logic <strong>and</strong>common-sense to make <strong>in</strong>formed decisions2. Innovation <strong>and</strong> agility. Work<strong>in</strong>g to develop <strong>in</strong>novative ideas, search forcreative approaches <strong>and</strong> solutions, <strong>and</strong> adapt to change quickly so thatEmmis can cont<strong>in</strong>ue to excel <strong>and</strong> be dist<strong>in</strong>ctive with<strong>in</strong> the <strong>in</strong>dustry3. Passion to reach a higher st<strong>and</strong>ard. Be<strong>in</strong>g passionate about one’s work, neverhav<strong>in</strong>g or accept<strong>in</strong>g an “entitlement” mentality, <strong>and</strong> consistently expect<strong>in</strong>gmore of self, others, <strong>and</strong> Emmis4. Personal <strong>in</strong>tegrity. Demonstrat<strong>in</strong>g the fundamental beliefs <strong>and</strong> values ofEmmis <strong>in</strong> all of one’s actions, decisions, <strong>and</strong> deal<strong>in</strong>gs with others5. Teamwork <strong>and</strong> collaboration. Tak<strong>in</strong>g <strong>in</strong>itiative to communicate actively <strong>and</strong>share resources, ideas, <strong>and</strong> best practices across organizational boundariesso that Emmis overall benefits6. Deliver<strong>in</strong>g of the Emmis customer experience. Know<strong>in</strong>g who one’s customersare, be<strong>in</strong>g clear about what they expect <strong>and</strong> value most, <strong>and</strong> deliver<strong>in</strong>g it7. Vision <strong>in</strong>to action. Be<strong>in</strong>g responsible for underst<strong>and</strong><strong>in</strong>g not only the overallEmmis vision but also what specific actions one <strong>in</strong>dividually needs to taketo make it a reality8. Accountability for performance. Tak<strong>in</strong>g personal responsibility for meet<strong>in</strong>gall commitments, deliver<strong>in</strong>g results that meet or exceed one’s goals, <strong>and</strong>identify<strong>in</strong>g <strong>and</strong> resolv<strong>in</strong>g performance issues <strong>in</strong> a timely mannerAdditional <strong>Leadership</strong> Competencies1. Strategic perspective. Be<strong>in</strong>g able to take a broad, long-term view of thebus<strong>in</strong>ess <strong>and</strong> its future <strong>and</strong> act<strong>in</strong>g <strong>in</strong> ways that contribute to Emmis’s longaswell as short-term success2. Motivation <strong>and</strong> management of <strong>in</strong>dividuals. Manag<strong>in</strong>g people <strong>in</strong> a positiveway that “gets them <strong>in</strong>to the game” by shar<strong>in</strong>g responsibility <strong>and</strong> authorityfor accomplish<strong>in</strong>g mean<strong>in</strong>gful work <strong>and</strong> credit for success3. Build<strong>in</strong>g <strong>and</strong> leadership of teams. Assembl<strong>in</strong>g teams of <strong>in</strong>dividuals with strong<strong>and</strong> complementary skills <strong>and</strong> lead<strong>in</strong>g them <strong>in</strong> ways that help them workeffectively as a unit4. Recruit<strong>in</strong>g, development, <strong>and</strong> reta<strong>in</strong><strong>in</strong>g of talent. Identify<strong>in</strong>g <strong>and</strong> recruit<strong>in</strong>gonly the highest-quality talent for Emmis, coach<strong>in</strong>g people so that they getthe most out of their potential, <strong>and</strong> reward<strong>in</strong>g people <strong>in</strong> a way that reflectstheir level of contribution5. Effective resource management. Plann<strong>in</strong>g <strong>and</strong> organiz<strong>in</strong>g work, manag<strong>in</strong>gresources efficiently, <strong>and</strong> underst<strong>and</strong><strong>in</strong>g what is most important <strong>in</strong>contribut<strong>in</strong>g to grow<strong>in</strong>g the revenues <strong>and</strong> profitability of Emmis.
Exhibit 4.9. Performance Management Insights<strong>Leadership</strong> Br<strong>and</strong> InsightsPerformance <strong>and</strong> Reward ManagementLow process <strong>and</strong> content ownership for corporate <strong>and</strong> for divisions. M<strong>in</strong>imalsystems <strong>in</strong>tegration <strong>and</strong> virtually no accountability for execution. Absence ofexplicit criteria for process excellence. Low correlation between bus<strong>in</strong>ess results<strong>and</strong> performance evaluation outcomes. No enterprise guidance/knowledgemanagement system capabilities.5.4525Individual performance plans generally not created, thus absent specific measures,attributes, or key projects that l<strong>in</strong>k well to bus<strong>in</strong>ess priorities. Very limitedtra<strong>in</strong><strong>in</strong>g capabilities. No way to differentiate performers via results-baseddocumentation.3.214.5Performance coach<strong>in</strong>g occurr<strong>in</strong>g more frequently <strong>in</strong> real time. No dedicatedmethods for evaluat<strong>in</strong>g <strong>and</strong> develop<strong>in</strong>g attributes. <strong>Leadership</strong> program providesbasic tra<strong>in</strong><strong>in</strong>g. Extensive multi-rater feeback program; albeit without connectionsto performance management system. No automated knowledge managementcapabilities.7.320.9Performancce reviews generally do not occur at least once a year. Decisive,constructive action is perceived not to be taken to address problem performance.Low l<strong>in</strong>kages between appraisal outcomes <strong>and</strong> employment-related actions. Soliduse of direct cash variable pay systems with l<strong>in</strong>kages to Corporate/SBU results (vs.<strong>in</strong>dividual), <strong>and</strong> without tight connections to performance management system.Some use of non-cash reward programs for both group <strong>and</strong> <strong>in</strong>dividual performance<strong>and</strong> reward management.8.618.20 10.0 20.0 30.0Stage 3 AvgEmmis ScoresDesign <strong>and</strong> ControlPr<strong>in</strong>ciplesPlann<strong>in</strong>gPerformanceImprov<strong>in</strong>gPerformanceReward<strong>in</strong>gPerformance
118 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEMarchFY 2003Operat<strong>in</strong>g PlanExhibit 4.10. Performance <strong>and</strong> Reward Management OverviewMarchFY 2003PerformancePlansJuneQ1 Results <strong>and</strong>RecognitionProgramsSeptemberQ2 Results, Mid-YearPerformance Reviews<strong>and</strong> Job MarketPric<strong>in</strong>g ResearchNovemberOrganization<strong>Development</strong> <strong>and</strong>Talent Forecast<strong>in</strong>gMarchQ4 Results, AnnualPerformance Reviews<strong>and</strong> Cash/StockReward ProgramsDecemberQ3 Results <strong>and</strong>RecognitionProgramsDecemberFY 2004Strategic PlanMarchFY 2004Operat<strong>in</strong>g PlanExhibit 4.11. Performance <strong>and</strong> Reward Management Implementation PlanNovember December January February March AprilImplementation CommunicationLetter fromJeff SmulyanLFRworkshopsScorecard measuresattribute architectureValidation <strong>and</strong> ref<strong>in</strong>ementof executive <strong>and</strong> LFRSpecial editionof NewsletterSpecial editionof NewsletterSpecial editionof NewsletterRoll out Tra<strong>in</strong> the Tra<strong>in</strong>erManagers'meet<strong>in</strong>gEmmis Announcements, Smulyan e-mails, <strong>and</strong> “blurbs” <strong>in</strong> weekly/biweekly conference calls• Work group scorecards• Corollary attributesManager alignmentbrief<strong>in</strong>gsTop downbottomupreview ofcomprehensivemeasures,attributes,<strong>and</strong> strategicprojectsManagerworkshopsReviewed withFY2002 actualsEmployeeworkshopsSpecial editionof NewsletterF<strong>in</strong>al FY2003performanceplans withobjectives,attributes,<strong>and</strong> projectsPerformance <strong>and</strong> Rewardmanagement task forcesOngo<strong>in</strong>g executive team follow-up dur<strong>in</strong>g regular meet<strong>in</strong>gs
EMMIS COMMUNICATIONS 119ABOUT THE CONTRIBUTORJohn S. Nelson (jnelson@od-source.com) is president of OD Source Consult<strong>in</strong>g,Inc., which specializes <strong>in</strong> bus<strong>in</strong>ess <strong>and</strong> human resource strategy development,culture <strong>and</strong> change management, performance improvement strategies,<strong>and</strong> human resource excellence. Prior to this, Nelson was a company officer <strong>and</strong>vice president of human resources for Emmis Communications, where he wasbrought <strong>in</strong> to build strategy <strong>and</strong> <strong>in</strong>frastructure, <strong>and</strong> professionalize the humanresource function to manage the significant growth of the corporation <strong>and</strong> drivethe unique culture companywide. Nelson has experience <strong>in</strong> a variety of entrepreneurial,general management, consult<strong>in</strong>g, <strong>and</strong> strategic human resource <strong>and</strong>organizational development roles. He has been a key contributor <strong>and</strong> a soughtout advisor with some of the most respected companies <strong>in</strong> their <strong>in</strong>dustries, suchas InterCont<strong>in</strong>ental Hotels Group, Honeywell (AlliedSignal), Apple Computer,ARAMARK Bus<strong>in</strong>ess Services, Ceridian Employer Services, Hallmark Cards,HarvestMap Systems, Medtronic, PeopleStrategy, 1.0 & Company, <strong>and</strong> Results-Based <strong>Leadership</strong>. Nelson received his bachelor of science degree at Iowa State<strong>University</strong> <strong>in</strong> <strong>in</strong>dustrial relations <strong>and</strong> completed graduate studies with honors<strong>in</strong> <strong>in</strong>dustrial relations from the <strong>University</strong> of M<strong>in</strong>nesota’s Carlson School ofManagement. For more <strong>in</strong>formation visit www.od-source.com.
SCHAPTER FIVEFirst Consult<strong>in</strong>g GroupSThis leadership development case study describes the <strong>in</strong>novative approach usedby First Consult<strong>in</strong>g Group to design <strong>and</strong> implement a unique skill, knowledgepersonal growth program for the firm’s mid <strong>and</strong> senior level executives.OVERVIEW 121INTRODUCTION 121DIAGNOSIS: THE CASE FOR LEADERSHIP DEVELOPMENT 122Situational Assessment 123Program Objectives 123Risk-Reward Analysis 124Barriers: Anticipat<strong>in</strong>g <strong>and</strong> Address<strong>in</strong>g Them 125ASSESSMENT 126Gap Assessment 126Participant Assessment 126Figure 5.1: Gap Assessment 127PROGRAM DESIGN 128Design Team 128Process, Vision, <strong>and</strong> Framework 128Critical Success Factors 130Figure 5.2: Competency Model with Behavioral Indicators 131Detailed Design: Key Elements 132IMPLEMENTATION 134LESSONS LEARNED 135Participant Feedback 135Facilitator Observations <strong>and</strong> Insights 136BEYOND THE CLASSROOM 137EVALUATING LEADERSHIP FIRST 138120
FIRST CONSULTING GROUP 121EXHIBITSExhibit 5.1: Program Overview Schematic 141Exhibit 5.2: Program Session Outl<strong>in</strong>es 141Exhibit 5.3: Nom<strong>in</strong>ation <strong>and</strong> Selection Process Schematic 142Exhibit 5.4: Self-Nom<strong>in</strong>ation Form 143Exhibit 5.5: Sample 360-Degree Feedback Report 145Exhibit 5.6: Learn<strong>in</strong>g Contract 150Exhibit 5.7: Bus<strong>in</strong>ess Model Exercise 152Exhibit 5.8: Manag<strong>in</strong>g Acquisitions <strong>and</strong> Mergers Exercise 157Exhibit 5.9: Effective Communication Exercise 158Exhibit 5.10: Sample Homework Assignment 159ABOUT THE CONTRIBUTOR 160OVERVIEWThis leadership development case study describes the <strong>in</strong>novative approach usedby First Consult<strong>in</strong>g Group to design <strong>and</strong> implement a unique skill, knowledge personalgrowth program for the firm’s mid <strong>and</strong> senior level executives. First Consult<strong>in</strong>gGroup is an acknowledged market leader <strong>in</strong> provid<strong>in</strong>g <strong>in</strong>formation technology<strong>and</strong> bus<strong>in</strong>ess transformation solutions to clients <strong>in</strong> the health care <strong>in</strong>dustry.The <strong>Leadership</strong> <strong>Development</strong> Committee (the CEO <strong>and</strong> two vice presidents) createda task team of vice presidents <strong>and</strong> directors whose responsibility, with counselfrom Warren Bennis, would be to conduct an organizational assessment <strong>and</strong> abenchmark<strong>in</strong>g survey <strong>and</strong> to recommend a program design to the firm’s executivecommittee for the accelerated development of current <strong>and</strong> future leaders.Incorporat<strong>in</strong>g the task force’s design recommendations, the <strong>Leadership</strong> <strong>Development</strong>Committee created <strong>and</strong> implemented a highly focused <strong>and</strong> unique program,based exclusively on their consult<strong>in</strong>g <strong>in</strong>dustry environment <strong>and</strong> FCG’s vision,strategy, <strong>and</strong> culture, <strong>and</strong> employ<strong>in</strong>g extensive <strong>in</strong>-depth action learn<strong>in</strong>g techniques.Work generated by participants <strong>in</strong> complet<strong>in</strong>g the program’s assignments <strong>and</strong>case problems has exceeded the firm’s expectations <strong>and</strong> contributed to key strategicdecisions. The design <strong>and</strong> implementation process has generated broad support<strong>and</strong> enthusiasm by the entire organization <strong>in</strong> less than two years. The approach,process, <strong>and</strong> design logic <strong>and</strong> rationale are valuable lessons for any organization.INTRODUCTIONExplosive growth over three years had tripled the size of the organization. A verysuccessful, whirlw<strong>in</strong>d <strong>in</strong>itial public offer<strong>in</strong>g (IPO) had taken the previously privatefirm <strong>in</strong>to the public sector, <strong>and</strong> an acquisition not only doubled the
122 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEorganization but also brought <strong>in</strong> another culture <strong>and</strong> another market opportunity.FCG was well positioned, <strong>and</strong> the future looked excit<strong>in</strong>g.Then, the untimely loss of the firm’s young CEO <strong>and</strong> founder createdovernight the need for second-generation leadership.Hav<strong>in</strong>g previously been a private partnership that fostered a highly collegialculture <strong>and</strong> value system, the team of vice presidents collaborated on whatcourse of action the firm should take go<strong>in</strong>g forward <strong>and</strong> which of their memberswould lead the organization. Although the founder had expressed longertermthoughts about who the future leaders might be, succession plann<strong>in</strong>g was<strong>in</strong> the early stages, <strong>and</strong> each potential CEO possessed certa<strong>in</strong> specific strengths.The question became which particular strengths did the firm need at thisparticular time.With the collective good <strong>in</strong> m<strong>in</strong>d <strong>and</strong> heart, <strong>and</strong> with the future of First Consult<strong>in</strong>gGroup <strong>in</strong> the balance, discussions took place that were pa<strong>in</strong>fully honestbut without malice. After several meet<strong>in</strong>gs to generate <strong>and</strong> evaluate alternatives,consensus was reached <strong>and</strong> the vice presidents’ recommendation was sent tothe board. The board concurred with both the action plan <strong>and</strong> the team’s selectionof its future CEO, president, <strong>and</strong> bus<strong>in</strong>ess unit leaders.The assessment process had been an amaz<strong>in</strong>g experience, exhibit<strong>in</strong>g the verybest of one of FCG’s values: Firm First. But it also elevated develop<strong>in</strong>g leaders<strong>and</strong> creat<strong>in</strong>g a strong talent bench to one of the firm’s top priorities.DIAGNOSIS: THE CASE FOR LEADERSHIP DEVELOPMENTAs a twenty-year-old bus<strong>in</strong>ess <strong>in</strong> 1998, First Consult<strong>in</strong>g Group found itself fac<strong>in</strong>ga number of challenges: the organization had grown from a $25 million firmwith 200 associates to a $300 million firm with over 2,000 employees <strong>in</strong> lessthan six years; it had evolved from a privately held partnership model <strong>in</strong>to apublicly held entity through a 1997 IPO; <strong>and</strong> the founder/CEO had passedaway suddenly <strong>in</strong> his mid-forties, leav<strong>in</strong>g a strong vision for the firm but also aleadership team <strong>and</strong> a succession plan early <strong>in</strong> their development.In addition to the <strong>in</strong>ternal challenges, a number of external competitive threatswere develop<strong>in</strong>g as well. The market focus was shift<strong>in</strong>g: the rise of the Internet<strong>and</strong> the variety of technological advances changed the rules on the play<strong>in</strong>gfield <strong>and</strong> the old consult<strong>in</strong>g model (number of staff number of hours bill<strong>in</strong>grate) was no longer enough. Clients were look<strong>in</strong>g for someth<strong>in</strong>g more creative<strong>and</strong> more measurable: they were look<strong>in</strong>g for solutions rather than process, <strong>and</strong>they expected that FCG, as their chosen consultant, would share <strong>in</strong> the riskrewardopportunity of any consult<strong>in</strong>g engagement.Further new threats were develop<strong>in</strong>g. The advent of e-consultancies<strong>and</strong> e-vendors <strong>and</strong> the rise <strong>in</strong> popularity of partnerships <strong>and</strong> jo<strong>in</strong>t venture
FIRST CONSULTING GROUP 123agreements was <strong>in</strong>tensify<strong>in</strong>g competition <strong>in</strong> the market. Clients were dem<strong>and</strong><strong>in</strong>gthe capability to form <strong>and</strong> manage partnerships, jo<strong>in</strong>t ventures, <strong>and</strong> other<strong>in</strong>novative relationships <strong>and</strong> organizational structures as a part of the solutionto their issues.As a technology solutions provider, First Consult<strong>in</strong>g Group’s technical skill <strong>and</strong>knowledge expertise was required to be “state of the art” on a daily basis. Outpac<strong>in</strong>gthe technology explosion <strong>and</strong> underst<strong>and</strong><strong>in</strong>g where the trends were headedwas difficult. Even more difficult was locat<strong>in</strong>g, hir<strong>in</strong>g, <strong>and</strong> reta<strong>in</strong><strong>in</strong>g talented technologyprofessionals as a fierce competition for high-tech talent raged <strong>in</strong> theemployment market. Although consult<strong>in</strong>g had always been a well-paid profession,it was beg<strong>in</strong>n<strong>in</strong>g to lose its former “glamour” appeal. Extensive travelrequirements placed on “road warriors” made the lifestyle less appeal<strong>in</strong>g <strong>and</strong> lesscompatible with the expectations of today’s younger technical professionals.The growth <strong>and</strong> challenges of manag<strong>in</strong>g a larger, more complex organization,<strong>in</strong>creas<strong>in</strong>g competition <strong>in</strong> the market place, <strong>and</strong> <strong>in</strong>creas<strong>in</strong>g dem<strong>and</strong>s <strong>and</strong> expectationsof clients made it obvious that the current level of leadership skill <strong>and</strong>knowledge <strong>and</strong> the numbers of potential future leaders might be adequate forthe firm’s immediate requirements, but the future dem<strong>and</strong>s would prove to beoverwhelm<strong>in</strong>g if not addressed immediately. Future growth projections anticipatedan organization of 5,000 to 7,000 associates, generat<strong>in</strong>g the need for over300 leaders <strong>in</strong> the com<strong>in</strong>g four-year period. Historically, many leadership hirescame from outside the firm, <strong>and</strong> the cost of projected leadership hires <strong>in</strong> a shortperiod produced stagger<strong>in</strong>g multimillion dollar recruitment-cost projections. Itbecame very clear to FCG’s executive committee that failure to develop the requisiteleadership bench strength would dim<strong>in</strong>ish the firm’s ability to grow.Situational AssessmentWith these issues <strong>and</strong> challenges well <strong>in</strong> m<strong>in</strong>d, FCG’s executive committee, athree-member leadership development committee <strong>and</strong> a task force of eighteendirector <strong>and</strong> vice-president-level staff, with the guidance of Warren Bennis, setout to def<strong>in</strong>e the skill requirements for future leaders <strong>and</strong> to build a leadershipdevelopment program that would provide for the firm’s future. The future programwas christened <strong>Leadership</strong> First.Program ObjectivesSpecific objectives were established with the expectation that these objectiveswould be <strong>in</strong>corporated not only <strong>in</strong>to the program’s design, but also, over time,<strong>in</strong>to the firm’s culture <strong>and</strong> value set (see Exhibit 5.1). The targeted objectivesdirected that <strong>Leadership</strong> First should• Elim<strong>in</strong>ate barriers to the achievement of FCG’s Vision 2004 byArticulat<strong>in</strong>g <strong>and</strong> propagat<strong>in</strong>g a widely understood vision
124 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGECreat<strong>in</strong>g an enhanced cross-<strong>in</strong>dustry awarenessDevelop<strong>in</strong>g well-rounded leadership traits with self-awareness <strong>and</strong> selfdevelopmentsupportMak<strong>in</strong>g the event a true “leadership celebration,” someth<strong>in</strong>g much morethan a tra<strong>in</strong><strong>in</strong>g program• Build succession plans; identify, tra<strong>in</strong>, <strong>and</strong> support future generations ofFCG leadership• Create an environment that causes leaders to <strong>in</strong>teract <strong>and</strong> depend uponone another• Instill <strong>Leadership</strong> First’s values until they are as <strong>in</strong>gra<strong>in</strong>ed <strong>in</strong> FCG’s cultureas our universal personal characteristics-behavioral characteristicsthat are <strong>in</strong> keep<strong>in</strong>g with FCG’s culture <strong>and</strong> values <strong>and</strong> are common tohighly successful employees• Be truly substantive rather than a “touchy-feely” philosophical or conceptualprogram• Ensure that the <strong>in</strong>itiative is not a short-term “fad” remedy for currentproblems but someth<strong>in</strong>g to be kept alive for a multiyear period.Risk-Reward AnalysisIn spite of the firm’s name, FCG was not simply a consult<strong>in</strong>g firm: the organizationwas a public-partnership blend with multiple <strong>and</strong> constantly evolv<strong>in</strong>gbus<strong>in</strong>ess models (consult<strong>in</strong>g, management services, jo<strong>in</strong>t ventures, <strong>and</strong> soon). Historical data reflected that many mid <strong>and</strong> senior level leaders hadadvanced largely on the basis of their project-based consult<strong>in</strong>g <strong>and</strong> “partnership”competencies—a bus<strong>in</strong>ess model that had been established over ten years ago.The organization, the market, <strong>and</strong> the technology had changed significantly<strong>in</strong> that period, <strong>and</strong> it was clear that new <strong>and</strong> emerg<strong>in</strong>g leaders were not preparedto lead <strong>and</strong> manage the current <strong>and</strong> future firm. The task force quickly drew twosignificant observations:• The firm’s changes highlighted FCG’s weaknesses, as a leadershipgroup, to articulate a vision <strong>and</strong> motivate a follow<strong>in</strong>g.• The firm’s historical under<strong>in</strong>vestment <strong>in</strong> develop<strong>in</strong>g leadership skillsneeded immediate correction.Fail<strong>in</strong>g to address the issue <strong>and</strong> build the leadership <strong>and</strong> bus<strong>in</strong>ess skills hadcreated substantial risks: loss of market share if the competition moved morequickly <strong>in</strong> deal-mak<strong>in</strong>g <strong>and</strong> respond<strong>in</strong>g to the market’s dem<strong>and</strong>s; <strong>in</strong>ability togenerate the sheer number of leaders required to meet the organization’s growthestimates; <strong>in</strong>creased risk that good leaders might leave the firm; <strong>in</strong>ability tostimulate excitement <strong>in</strong> FCG’s market valuation; cont<strong>in</strong>ued reliance on the same
FIRST CONSULTING GROUP 125names to solve all the problems <strong>and</strong> meet every opportunity; dilution of FCG’sculture <strong>and</strong> vision if it became necessary to go outside for many key positions;<strong>and</strong> potentially excessive recruitment costs (potential sav<strong>in</strong>gs of $16 million overa four-year period by develop<strong>in</strong>g 160 leaders <strong>in</strong>ternally).The potential benefits <strong>and</strong> ga<strong>in</strong>s appeared to far outweigh any risks:• Improved market valuation <strong>and</strong> customer satisfaction• Increased ability to navigate <strong>and</strong> take advantage of the changes be<strong>in</strong>gfaced• Ability to scale the organization to meet the challenge• Succession plann<strong>in</strong>g vehicle• Increased <strong>in</strong>dividual (leader) satisfaction• Improved associate retention via a shared sense of common vision <strong>and</strong>strong leaders• Survival of the organizationBarriers: Anticipat<strong>in</strong>g <strong>and</strong> Address<strong>in</strong>g ThemThe Task Force then anticipated what potential barriers might impede <strong>Leadership</strong>First’s effectiveness, with the <strong>in</strong>tent of remov<strong>in</strong>g or at least m<strong>in</strong>imiz<strong>in</strong>gthem to smooth the program’s implementation <strong>and</strong> success. The lack of afully shared vision for FCG’s future was identified, as was leadership’s tendencytoward a shorter-term rather than a longer-term perspective. These keyconsiderations would need to be resolved by the executive committee prior tothe program’s implementation. Although the professional compensation <strong>and</strong>development system <strong>in</strong>corporated <strong>in</strong>dividual project evaluations, annual evaluationfeedback <strong>and</strong> personal coach<strong>in</strong>g for associates, the absence of <strong>in</strong>strumentationtools, <strong>and</strong> a 360-degree feedback process suggested that a generallack of self-awareness probably existed among many of the firm’s mid <strong>and</strong>senior leadership. It was clear that one key design element would have to bethe <strong>in</strong>corporation of comprehensive assessment <strong>and</strong> feedback for participants.It was also obvious that the vehicles for collect<strong>in</strong>g the feedback data <strong>and</strong> conduct<strong>in</strong>gthe assessment did not exist with<strong>in</strong> the current processes <strong>and</strong> wouldhave to be developed.Although these largely mechanical items required attention, the larger issueof reward systems seemed a potentially more difficult barrier for the program.Historically, while emphasis was placed on leadership behaviors as they relatedto FCG’s core values, rewards at the senior levels of the firm tended to recognizeclient performance <strong>and</strong> revenue generation. It was apparent that rewardsystems would need to be modified to value the targeted leadership skills <strong>and</strong>behaviors equally with client <strong>and</strong> f<strong>in</strong>ancial performance. The last potentialbarrier identified was the selection process for participation <strong>in</strong> the program. The
126 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEselection of participants <strong>and</strong> the associated message that might be <strong>in</strong>advertentlycommunicated to the firm would be highly sensitive <strong>and</strong> potentially political.Those who were selected might be seen as the “heirs apparent,” whereasdeferred or nonselected participants might feel that they had no future with thefirm. The selection <strong>and</strong> communication processes would have to be objectively<strong>and</strong> carefully managed. Selection criteria would need to be def<strong>in</strong>ed <strong>and</strong> communicationto selectees <strong>and</strong> nonselectees alike would need to be crafted withgreat sensitivity to ensure proper perspective <strong>and</strong> encouragement.ASSESSMENTGap AssessmentIn their efforts to assess the leadership gap, the task force confirmed that thenews was not all bad—<strong>in</strong> fact, good solid leadership skills were be<strong>in</strong>g evidencedevery day at every level. FCG’s professional compensation <strong>and</strong> development systemhad a structured progression of skill <strong>and</strong> competency career path <strong>and</strong> compensation,<strong>and</strong> personal coaches provided guidance <strong>and</strong> mentor<strong>in</strong>g for everyassociate at every level. The question was, Would it be enough?The task force’s summary analysis yielded the follow<strong>in</strong>g assessment of FCG’scurrent leadership skills <strong>and</strong> the gap areas to be addressed (Figure 5.1):Participant AssessmentFCG’s professional compensation <strong>and</strong> development system (PCADs), acomprehensive skill <strong>and</strong> career development ladder, served as an excellentfoundation for an <strong>in</strong>itial assessment process. Incorporat<strong>in</strong>g annual skill evaluation,formal development plann<strong>in</strong>g, <strong>and</strong> the assignment of a personal coachfor every associate, the system had provided clear direction <strong>and</strong> guidance forFCG’s associates <strong>and</strong> also a good perspective on the firm’s various strengths <strong>and</strong>weaknesses.Dur<strong>in</strong>g 1999, us<strong>in</strong>g the <strong>in</strong>sights provided by the PCADs <strong>and</strong> the counsel ofWarren Bennis, the FCG <strong>Leadership</strong> <strong>Development</strong> Committee conducted its ownassessment of the leadership needs of the firm. Solicit<strong>in</strong>g <strong>in</strong>put from the firm’svice presidents at one of its off-site plann<strong>in</strong>g meet<strong>in</strong>gs, review<strong>in</strong>g the overallstrengths <strong>and</strong> weaknesses of the organization <strong>and</strong> its senior-level leaders, <strong>and</strong>then consolidat<strong>in</strong>g the <strong>in</strong>ternal <strong>in</strong>formation for comparison aga<strong>in</strong>st externalbenchmark knowledge generated a credible work<strong>in</strong>g database. This <strong>in</strong>itialassessment was later ref<strong>in</strong>ed by the task force’s work <strong>and</strong> <strong>in</strong>put from WarrenBennis. The actual assessment of <strong>in</strong>dividual participants <strong>in</strong> <strong>Leadership</strong> First wasone of the program’s design elements but was not used as an <strong>in</strong>put to the structur<strong>in</strong>gof the program. Rather, it was <strong>in</strong>itially adm<strong>in</strong>istered to participants afterthey had been selected <strong>and</strong> immediately before their attendance <strong>in</strong> the program,
FIRST CONSULTING GROUP 127Current FCG <strong>Leadership</strong> Skills• Bus<strong>in</strong>ess <strong>and</strong> plann<strong>in</strong>g skills• Management experience lead<strong>in</strong>galliances, partnerships <strong>and</strong> jo<strong>in</strong>tventures• Bus<strong>in</strong>ess savvy that translatesmarket opportunity <strong>in</strong>to valuecreation• Hardcore f<strong>in</strong>ancial managementskills <strong>in</strong> metrics <strong>and</strong> report<strong>in</strong>g• Breadth of perspective about the<strong>in</strong>dustry• Ability to build a follow<strong>in</strong>g <strong>and</strong>then let go when the time is right• Ability to focus, prioritize, <strong>and</strong> cutlosses quickly when required• Ability <strong>and</strong> desire to collaborateSkill Deficiencies for FutureOrganizational Success• Ability to create <strong>and</strong> communicatevision• Ability to demonstrate a level ofpassion that creates <strong>and</strong> motivatesa follow<strong>in</strong>g• Courage to take risks <strong>and</strong> createchange• Ability to create a team <strong>and</strong> <strong>in</strong>spireteam play• Ability to develop others <strong>and</strong> to beseen as a sensei• Underst<strong>and</strong><strong>in</strong>g of f<strong>in</strong>ancial<strong>in</strong>tricacies• Broad bus<strong>in</strong>ess acumen• Strength of character, ethics <strong>and</strong><strong>in</strong>tegrity• Emotional competencyFigure 5.1 Gap Assessment.<strong>and</strong> was also to be re-adm<strong>in</strong>istered n<strong>in</strong>e to twelve months follow<strong>in</strong>g theirparticipation.Although the PCADs process provided feedback <strong>and</strong> career <strong>and</strong> performancecoach<strong>in</strong>g to associates, it did not employ any sort of <strong>in</strong>strumentation or360-degree assessment. In order to provide maximum self-awareness <strong>and</strong><strong>in</strong>sight, a multifaceted assessment process was adm<strong>in</strong>istered to all participantsprior to their attendance <strong>in</strong> the program. This comprehensive assessment wouldserve as a “study” focus for participants dur<strong>in</strong>g <strong>Leadership</strong> First <strong>and</strong> also as thefoundation for the creation of their formal “learn<strong>in</strong>g contract.” The assessmentpackage comprised data from five <strong>in</strong>put vehicles:• Participant self-assessment versus the FCG targeted leadership behaviors(a key aspect of the self-nom<strong>in</strong>ation process)• Participant 360 degree assessment versus the targeted leadership behaviorsby FCG peers, subord<strong>in</strong>ates, <strong>and</strong> superiors• External benchmark—the participant’s behavioral profile versus 600comparably positioned managerial <strong>and</strong> professional staff• Managerial style profile, as measured by the Atk<strong>in</strong>s Kacher LIFO• Behavioral needs profile, as measured by the FIRO-B
128 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEConsolidated assessment feedback was then provided to each participant, <strong>in</strong>clud<strong>in</strong>ggraphic representation of the data, narrative comments, <strong>and</strong> discussion of theassessment feedback with a member of the <strong>Leadership</strong> <strong>Development</strong> Committee.As of this writ<strong>in</strong>g, six groups of participants (sixty) have completed participation<strong>in</strong> <strong>Leadership</strong> First: no assessment trends have become evident asyet based on this limited population. Issues to date have been largely <strong>in</strong>dividuallyfocused. Not surpris<strong>in</strong>g, typical results <strong>in</strong>dicate subord<strong>in</strong>ate rat<strong>in</strong>gs trend<strong>in</strong>ghigher than participants’ self-rat<strong>in</strong>gs <strong>and</strong> those of other assessors. It is<strong>in</strong>terest<strong>in</strong>g, however, that there were very few areas where participants’ selfassessmentsdiffered significantly from those of their assessors—FCG credits thefeedback <strong>and</strong> coach<strong>in</strong>g aspects of its PCADs for this level of self-awareness.PROGRAM DESIGNDesign TeamCommitted effort toward the creation of a leadership development programbegan with the formation of a three-person <strong>Leadership</strong> <strong>Development</strong> Committeeof FCG’s CEO, the VP of human resources <strong>and</strong> a key operat<strong>in</strong>g vice presidentwho served as chairman of FCG’s Quality Initiative. After conduct<strong>in</strong>g theirassessment of FCG’s leadership strengths <strong>and</strong> weaknesses, the <strong>Leadership</strong><strong>Development</strong> Committee conducted an external benchmark<strong>in</strong>g study of the bestpractice leadership programs <strong>and</strong> characteristics be<strong>in</strong>g used at several ofAmerica’s top organizations. The f<strong>in</strong>d<strong>in</strong>gs yielded twenty commonly identifiedbehaviors <strong>and</strong> characteristics considered to be key leadership success behaviors.There was little variation <strong>in</strong> the list of twenty behaviors. What did varysomewhat was the specific order of importance of the items, depend<strong>in</strong>g uponthe <strong>in</strong>dustry <strong>and</strong> organizational culture.Armed with the results of their <strong>in</strong>ternal assessment <strong>and</strong> their benchmarkanalysis, the <strong>Leadership</strong> <strong>Development</strong> Committee held several discussions with<strong>University</strong> of Southern California professor, author, <strong>and</strong> leadership developmentguru Warren Bennis. The discussions soon led to collaboration <strong>and</strong> a moreformal strategy for FCG’s leadership development <strong>in</strong>itiative.Process, Vision, <strong>and</strong> FrameworkThe <strong>in</strong>itially critical step <strong>in</strong> the design process was the education of the executivecommittee regard<strong>in</strong>g issues associated with the implementation of such a program<strong>and</strong> to obta<strong>in</strong> their commitment <strong>and</strong> ownership for the requisite f<strong>in</strong>ancial<strong>and</strong> personal commitments that would be required for the program’s success.FCG had always fostered broad participation <strong>in</strong> the firm’s issues by its associates,<strong>and</strong> the culture was heavily collegial. Many of the firm’s organizationalprocesses, such as the professional compensation <strong>and</strong> development system <strong>and</strong>
FIRST CONSULTING GROUP 129the client satisfaction survey process, had been created by cross-functional, multidiscipl<strong>in</strong>ary task teams. It was not unusual, then, that the organization onceaga<strong>in</strong> elected this process to address the leadership development project.In June of 2000, the <strong>Leadership</strong> <strong>Development</strong> Task Force was formed, madeup of eighteen vice president <strong>and</strong> director-level members. This task force wouldthen work with the <strong>Leadership</strong> <strong>Development</strong> Committee <strong>and</strong> Warren Bennis tomore deeply assess the firm’s leadership issues <strong>and</strong> to formulate a programdesign recommendation. (See Exhibit 5.2.)With the <strong>in</strong>itial work <strong>in</strong> h<strong>and</strong> <strong>and</strong> the guidance of Warren Bennis, the taskforce held three, two-day, off-site work sessions, <strong>in</strong>terspersed with <strong>in</strong>dividualresearch <strong>and</strong> subgroup conference calls, to conduct a comprehensive assessmentof the organization’s leadership strengths <strong>and</strong> weaknesses <strong>and</strong> its futurerisks, challenges, opportunities, <strong>and</strong> requirements. The f<strong>in</strong>al product was therecommended framework for the <strong>Leadership</strong> First Program.The follow<strong>in</strong>g recommendations for the pilot program were presented to theexecutive committee for discussion <strong>and</strong> approval:• Create a program <strong>in</strong>frastructureAppo<strong>in</strong>t a program stewardL<strong>in</strong>k leadership attributes to PCADsSelect 360-degree tools <strong>and</strong> classroom tra<strong>in</strong><strong>in</strong>gImmediately beg<strong>in</strong> us<strong>in</strong>g leadership attributes <strong>in</strong> the recruitment process• Implement leadership succession plann<strong>in</strong>g <strong>in</strong>corporat<strong>in</strong>gNeeds assessment <strong>and</strong> bus<strong>in</strong>ess unit plansCompliance with diversity <strong>in</strong>itiatives• Structure a nom<strong>in</strong>ation <strong>and</strong> selection process (see Exhibit 5.3)Structure nom<strong>in</strong>ation process around required FCG leadershipbehaviorsPublish program guidel<strong>in</strong>es, timel<strong>in</strong>es, <strong>and</strong> selection processes <strong>and</strong>criteria widelyAllow for self, coach, <strong>and</strong> bus<strong>in</strong>ess unit nom<strong>in</strong>ations (see Exhibit 5.4)Select c<strong>and</strong>idates based on a def<strong>in</strong>ed set of criteria: ten to twelve VP <strong>and</strong>director participants for the pilot• Structure development plans based on assessmentsEmploy 360-degree assessment to def<strong>in</strong>e participant skills <strong>and</strong> growthareas (see Exhibit 5.5)Provide an objective or external assessment analysis to reviewfeedback reports
130 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEProvide assessment feedback tra<strong>in</strong><strong>in</strong>g for those who provide assessment<strong>in</strong>putInclude coaches <strong>in</strong> the assessment process; provide tra<strong>in</strong><strong>in</strong>g <strong>in</strong>underst<strong>and</strong><strong>in</strong>g resultsBuild <strong>in</strong>dividual development plans <strong>in</strong>volv<strong>in</strong>g coaches <strong>and</strong> <strong>in</strong>corporat<strong>in</strong>gfeedback• Incorporate formal classroom learn<strong>in</strong>g<strong>Leadership</strong> development classes—<strong>in</strong>ternal <strong>and</strong> externalExecutive MBA style us<strong>in</strong>g bus<strong>in</strong>ess problem projects• Utilize Action Learn<strong>in</strong>g to supplement the classroom by useof Mentor<strong>in</strong>gBus<strong>in</strong>ess projectsCross tra<strong>in</strong><strong>in</strong>g <strong>and</strong> job rotationSpecific read<strong>in</strong>gsCont<strong>in</strong>uous 360-degree feedback• Re<strong>in</strong>force learn<strong>in</strong>g <strong>in</strong> group <strong>and</strong> <strong>in</strong>dividual programsProvide a cont<strong>in</strong>uous feedback loop via progress assessment, mentor<strong>in</strong>g,360-feedback, <strong>and</strong> performance reviews• Utilize alumni functions, periodic learn<strong>in</strong>g activities, <strong>and</strong> social eventsfor a cont<strong>in</strong>ued sense of teamCritical Success FactorsHav<strong>in</strong>g established the objectives <strong>and</strong> framework for <strong>Leadership</strong> First, the f<strong>in</strong>alundertak<strong>in</strong>g of the task force was the def<strong>in</strong>ition of FCG’s targeted leadershipskills <strong>and</strong> behaviors. Review of external benchmark behaviors, <strong>in</strong> conjunctionwith FCG’s strategic plan <strong>and</strong> the members’ knowledge of the firm’s markets <strong>and</strong>clients, led to the identification of eleven specific leadership skills <strong>and</strong> behaviorsthat would be critical to the firm’s future success. These eleven behaviors (<strong>in</strong>alphabetical order) would form the program agenda for <strong>Leadership</strong> First (seeFigure 5.2).Follow<strong>in</strong>g executive committee approval of <strong>Leadership</strong> First’s conceptual design,the <strong>Leadership</strong> <strong>Development</strong> Committee embarked on the detailed design of theprogram. Us<strong>in</strong>g the task force’s conceptual design, the committee def<strong>in</strong>ed parametersthat would guide the formal structure <strong>and</strong> content of the program:• Active <strong>in</strong>volvement of four executives as tra<strong>in</strong><strong>in</strong>g facilitators (CEO; oneexecutive committee member, bus<strong>in</strong>ess unit manag<strong>in</strong>g VP; VP of humanresources/program adm<strong>in</strong>istrator; <strong>and</strong> operat<strong>in</strong>g VP, leader of QualityInitiative)
Targeted FCG <strong>Leadership</strong> Behavior FCG Behavior Def<strong>in</strong>itionBus<strong>in</strong>ess acumenBus<strong>in</strong>ess developmentCitizenshipClient relationshipsCourageEmotional competencyFCG operationsMotivationSenseiTeam playVisionDemonstrates the ability to be a great th<strong>in</strong>ker <strong>and</strong> bus<strong>in</strong>ess expert who leverages his or her experience,education, connections, <strong>and</strong> other resources to obta<strong>in</strong> results; personally demonstrates an unquenchablethirst for knowledgeDemonstrates keen underst<strong>and</strong><strong>in</strong>g of FCG’s <strong>in</strong>dustry, competitors, markets, <strong>and</strong> market trends; leveragesthat knowledge to develop <strong>and</strong> close new bus<strong>in</strong>ess to consistently meet annual revenue <strong>and</strong> profitabilitytargetsDemonstrates the ability to evoke trust <strong>and</strong> respect because he or she embodies the qualities associatedwith character (<strong>in</strong>tegrity, humility, will<strong>in</strong>gness to serve, honesty, <strong>and</strong> empathy); demonstratesbalance <strong>in</strong> personal, bus<strong>in</strong>ess, <strong>and</strong> civic responsibilities <strong>and</strong> is viewed as a model citizen, not just amodel bus<strong>in</strong>esspersonDemonstrates the ability to identify <strong>and</strong> develop strategic client or vendor relationships; creates excellentrelationships with client leadership through delivery of quality serviceDemonstrates the ability to be bold <strong>and</strong> <strong>in</strong>novative, <strong>in</strong>spir<strong>in</strong>g trust <strong>in</strong> associates because their ideasare not necessarily the safest or most logical but because they are ideas which everyone would like tosee come to fruitionDemonstrates ability to manage <strong>and</strong> <strong>in</strong>fluence nearly any situation because he or she <strong>in</strong>tuitively senseswhat others are feel<strong>in</strong>g <strong>and</strong> underst<strong>and</strong>s what makes each player “tick”; demonstrates his or her ownself-awareness by constantly evaluat<strong>in</strong>g <strong>and</strong> work<strong>in</strong>g with his or her own motivations <strong>and</strong> drivesDemonstrates knowledge of <strong>in</strong>ternal FCG bus<strong>in</strong>ess policies <strong>and</strong> processes such as budget<strong>in</strong>g, humanresources policies, <strong>and</strong> legal restrictions; applies these guidel<strong>in</strong>es <strong>in</strong> his or her own decisions <strong>and</strong>develops underst<strong>and</strong><strong>in</strong>g <strong>and</strong> application of them among othersDemonstrates ability to create passion <strong>and</strong> excitement, often without be<strong>in</strong>g able to articulate anyth<strong>in</strong>gmore than faith <strong>and</strong> trust, so that people are compelled to follow him or herDemonstrates the ability to teach <strong>and</strong> transfer knowledge by draw<strong>in</strong>g out associates’ strengths whilepav<strong>in</strong>g the way for them to correct weaknesses; people follow this <strong>in</strong>dividual with great confidence,not fear, know<strong>in</strong>g that their development is a mutual goalDemonstrates the ability to evoke the best from a team by appreciat<strong>in</strong>g the responsibilities, dreams,<strong>and</strong> contributions of each <strong>in</strong>dividual <strong>in</strong> the group; demonstrates the ability to create a team even whensuch discussions create friction <strong>and</strong> changeDemonstrates ability to see “the big picture” (the long-term benefit to the team or firm <strong>in</strong> the next fiveto ten years of hard work) <strong>and</strong> is able to communicate this picture to others <strong>in</strong> a way that generateshope <strong>and</strong> excitement regardless of their position.Figure 5.2 Competency Model with Behavioral Indicators.
132 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE• Maximum group size of twelve; participation restricted to VPs <strong>and</strong>directors for first two to three sessions to maximize return on<strong>in</strong>vestment <strong>and</strong> ga<strong>in</strong> critical acceptance• Participants must be immersed <strong>in</strong> senior-executive level issues <strong>and</strong>decisions <strong>and</strong> must be pressed to broaden their th<strong>in</strong>k<strong>in</strong>g <strong>and</strong> stretchtheir mental capacity• Program must be heavily experiential <strong>and</strong> based on active learn<strong>in</strong>g• Case studies <strong>and</strong> team exercises must be mean<strong>in</strong>gful <strong>in</strong> FCG’senvironment• Lecture, as a learn<strong>in</strong>g methodology, will be m<strong>in</strong>imized dur<strong>in</strong>g sem<strong>in</strong>ars:extensive use of preread<strong>in</strong>gs (contemporary <strong>and</strong> classic books <strong>and</strong>articles) will provide the foundation knowledge <strong>and</strong> conceptual basisfor learn<strong>in</strong>g <strong>and</strong> discussion• Primary learn<strong>in</strong>g methodology to be small group break-out caseexercises <strong>and</strong> application problems• Homework assignments between sessions will require applicationof concepts, research, <strong>and</strong> analysis with<strong>in</strong> participant’s ownbus<strong>in</strong>ess unit• Program will employ spaced learn<strong>in</strong>g: three multiple-day sessions (threedays, three days, two days over a five-month period) <strong>and</strong> attendance <strong>in</strong>all sessions will be m<strong>and</strong>atory.Detailed Design: Key ElementsHav<strong>in</strong>g personally participated <strong>in</strong> various leadership programs dur<strong>in</strong>g theircareers, the <strong>Leadership</strong> <strong>Development</strong> Committee felt strongly that to be successfulwith FCG’s <strong>in</strong>tellectually talented <strong>and</strong> highly motivated associates <strong>and</strong>to be maximally beneficial for the firm, the program had to be truly relevant<strong>and</strong> applicable to FCG’s environment. Case studies <strong>and</strong> problems based on manufactur<strong>in</strong>gor other <strong>in</strong>dustries would not serve <strong>and</strong> virtually all sem<strong>in</strong>ar componentswould have to be created “from scratch.” To achieve this objective, thecommittee <strong>in</strong>corporated the follow<strong>in</strong>g:• FCG’s vision, values, <strong>and</strong> strategy documents <strong>and</strong> statements as thebasis for case studies <strong>and</strong> discussions• Actual FCG bus<strong>in</strong>ess operations situations <strong>and</strong> decisions for case studies<strong>and</strong> analysis, <strong>in</strong>clud<strong>in</strong>gFCG bus<strong>in</strong>ess unit competitive situations <strong>and</strong> market deviationsFCG service strategies that failed to meet expectations
FIRST CONSULTING GROUP 133Potential strategic opportunities for FCG assessment <strong>and</strong>recommendationPotential FCG acquisition <strong>and</strong> merger c<strong>and</strong>idates for evaluationFCG balance sheet <strong>and</strong> f<strong>in</strong>ancials analysesHypothetical promotion to bus<strong>in</strong>ess unit head; identification <strong>and</strong>analysis of bus<strong>in</strong>ess unit issues <strong>and</strong> board of directors presentationCEO challenges to be h<strong>and</strong>led—board of directors, public marketanalysts, <strong>and</strong> shareholder legal issues• Selected preread<strong>in</strong>gs to provide the foundation knowledge versus<strong>in</strong>-session lectures: active learn<strong>in</strong>g <strong>in</strong>volvement through participant<strong>in</strong>teraction, facilitator <strong>in</strong>teraction, <strong>and</strong> case-problem work sessions• Homework assignments requir<strong>in</strong>g application of concepts to FCG’sbus<strong>in</strong>ess unit structure, staff<strong>in</strong>g, <strong>and</strong> strategies, with <strong>in</strong>dividual analysis<strong>and</strong> recommendations from participantsThe ultimate program design <strong>in</strong>corporated three multiple-day sessions spacedout over a five-month period. The content was sequenced from issues associatedwith the creation of an organization (vision, mission, structure) to thoseassociated with grow<strong>in</strong>g <strong>and</strong> manag<strong>in</strong>g the organization (grow<strong>in</strong>g the bus<strong>in</strong>ess,manag<strong>in</strong>g f<strong>in</strong>ancials), <strong>and</strong> from a broad, conceptual perspective to a highlytargeted focus on <strong>in</strong>dividual personal leadership style.In execut<strong>in</strong>g this design, the <strong>Leadership</strong> <strong>Development</strong> Committee <strong>in</strong>corporateda variety of vehicles, tools, <strong>and</strong> techniques.• Assessment <strong>in</strong>struments were used, <strong>in</strong>clud<strong>in</strong>g <strong>in</strong>ternal self-assessment<strong>and</strong> 360-degree assessment conducted by participants’ colleagues, <strong>and</strong> theexternal benchmark assessment conducted by Resource Associates.The adm<strong>in</strong>istration of the FIRO-B <strong>and</strong> the Atk<strong>in</strong>s Kacher LIFOcompleted the assessment.• Preread<strong>in</strong>gs were drawn from Harvard Bus<strong>in</strong>ess Review articles <strong>and</strong>various books on leadership. Internally prepared read<strong>in</strong>gs <strong>and</strong> backgroundmaterials were distributed to participants thirty days prior toeach session to provide a basic conceptual framework for allparticipants <strong>and</strong> to m<strong>in</strong>imize <strong>in</strong>-session time dedicated to lectures.• LDC presentations summarized or targeted discussions of key preread<strong>in</strong>gconcepts.• Break-out work sessions, FCG-based case studies, <strong>and</strong> work problemsprovided deep participant <strong>in</strong>volvement. After detailed work sessions,participants were required to make LCD projector presentations back tothe larger group regard<strong>in</strong>g their analysis <strong>and</strong> recommendations.
134 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE• Learn<strong>in</strong>g contracts were drafted <strong>and</strong> discussion of participants’ assessmentfeedback <strong>and</strong> presentation of their personal learn<strong>in</strong>g contractcontent <strong>and</strong> goals provided opportunities for mutual support <strong>and</strong> <strong>in</strong>put(see Exhibit 5.6).• Homework assignments given between sessions drove immediate applicationof learn<strong>in</strong>gs to participants’ daily work environment <strong>in</strong> the formof bus<strong>in</strong>ess problem analysis, the results of which they presented backto their colleagues at the next session.• Relationship build<strong>in</strong>g through structured work sessions, homeworkassignments, learn<strong>in</strong>g contract work, <strong>and</strong> off-site d<strong>in</strong>ners after dailysessions were of key longer-term benefit to the firm <strong>in</strong> creat<strong>in</strong>g <strong>in</strong>ternalteamwork.• Open, honest discussion <strong>and</strong> responses from all facilitators—whocommitted to reply to issues <strong>and</strong> questions raised by participants, nomatter how challeng<strong>in</strong>g, personal, or sensitive—quickly built trust <strong>and</strong>confidence <strong>in</strong> facilitators <strong>and</strong> a genu<strong>in</strong>e level of respect for the firm thatit would support <strong>and</strong> encourage such openness.IMPLEMENTATIONWhile design of the program’s actual curriculum was thought provok<strong>in</strong>g<strong>and</strong> time consum<strong>in</strong>g for the <strong>Leadership</strong> <strong>Development</strong> Committee, it was clearthat the communication, ownership, <strong>and</strong> adm<strong>in</strong>istration of the program wouldbe the critical aspects <strong>in</strong> the program’s success <strong>and</strong> these aspects would alsorequire considerable time <strong>and</strong> effort. This awareness led to the creation of aseparate implementation strategy <strong>and</strong> process.• Creat<strong>in</strong>g ownership <strong>and</strong> buy-off with the executive committee was crucial,<strong>and</strong> significant time was spent with them to ensure their underst<strong>and</strong><strong>in</strong>g of <strong>and</strong>comfort with the program, its content, <strong>and</strong> the commitment of organizationalresources that it would require.• Visible participation <strong>and</strong> support of the program would cement the commitmentof the executive committee with the rest of the organization. It wastherefore agreed that the program’s learn<strong>in</strong>g facilitators would be the threemembers of the <strong>Leadership</strong> <strong>Development</strong> Committee (<strong>in</strong>clud<strong>in</strong>g the full participationof the CEO) plus one member of the executive committee, who wouldserve as both a facilitator <strong>and</strong> as the designated sponsor or mentor for that<strong>Leadership</strong> First group.• Creat<strong>in</strong>g excitement <strong>and</strong> <strong>in</strong>terest among the firm’s mid <strong>and</strong> senior levelleadership led to presentations at off-site plann<strong>in</strong>g meet<strong>in</strong>gs as well as e-mail
FIRST CONSULTING GROUP 135<strong>and</strong> voice mail communiqués from the CEO regard<strong>in</strong>g <strong>Leadership</strong> First’s rationale,development, <strong>and</strong> importance. Additional market<strong>in</strong>g by executive committeemembers to their respective organizations re<strong>in</strong>forced these messages <strong>and</strong>demonstrated the commitment of potential participants’ superiors.• Adm<strong>in</strong>istrative process clarity <strong>and</strong> fairness added to the program’s acceptance<strong>and</strong> credibility. The VPHR was designated as the program adm<strong>in</strong>istrator, whowould set the path for the program, f<strong>in</strong>alize processes, adm<strong>in</strong>ister programmechanics, <strong>in</strong>tegrate tools <strong>and</strong> processes <strong>in</strong>to FCG’s <strong>in</strong>frastructure, schedule programlogistics, presentations, <strong>and</strong> participants, adm<strong>in</strong>ister the nom<strong>in</strong>ation <strong>and</strong>selection process (<strong>in</strong> conjunction with the <strong>Leadership</strong> <strong>Development</strong> <strong>and</strong> executivecommittees), provide verbal <strong>and</strong> written notification to all selected or deferredapplicants, adm<strong>in</strong>ister assessment tools, consolidate feedback <strong>in</strong>put, prepareassessment feedback reports, <strong>and</strong> conduct feedback discussion with participants.• A self-nom<strong>in</strong>ation process <strong>in</strong>corporat<strong>in</strong>g the completion of documents profil<strong>in</strong>gthe nom<strong>in</strong>ee’s education, background, <strong>and</strong> experience, along with anexplanation of why he or she should be selected over others <strong>and</strong> a descriptionof what the nom<strong>in</strong>ee hoped to ga<strong>in</strong> from participation, was required. Althoughmuch of this <strong>in</strong>formation was available from FCG files, the self-nom<strong>in</strong>ation(which required concurrence from the nom<strong>in</strong>ee’s bus<strong>in</strong>ess unit head), alongwith the self-assessment versus the targeted FCG leadership behaviors, providedkey <strong>in</strong>formation to the <strong>Leadership</strong> <strong>Development</strong> Committee about thenom<strong>in</strong>ee’s self-perception, writ<strong>in</strong>g ability, thought processes, <strong>and</strong> maturity.• Selection of ten to twelve participants for each group was based on areview of all self-nom<strong>in</strong>ations <strong>and</strong> assessments by the <strong>Leadership</strong> <strong>Development</strong>Committee, consideration of cross organizational representation, diversity representation,<strong>and</strong> the immediacy of need for the participant’s growth, based onhis or her current role. The Committee’s f<strong>in</strong>al recommendation for participationwas then submitted to the FCG Executive Committee for concurrence.LESSONS LEARNEDParticipant FeedbackBear<strong>in</strong>g <strong>in</strong> m<strong>in</strong>d that the participant population is still very small, <strong>in</strong>put solicitedfrom graduates <strong>in</strong>dicates that they found three particular aspects of <strong>Leadership</strong>First to have the most impact:• The assessment process, with its breadth <strong>and</strong> depth of assessment <strong>and</strong>feedback, was felt to be the s<strong>in</strong>gle most effective aspect of the programfor all participants.• Relevant <strong>and</strong> applicable FCG-based case studies for analysis was mostimpressive to participants. Many participants said they had attended
136 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEdevelopment programs of one sort or another but none of thoseprograms had been based on “real world” situations they encounter<strong>in</strong> their daily work environment <strong>and</strong> no program had been so closelyaligned with their organization as this program.• Immersion <strong>in</strong> <strong>and</strong> challenge of senior executive <strong>and</strong> CEO issues, problems,<strong>and</strong> decisions; role plays of board of directors presentations; <strong>and</strong>exposure to corporate legal implications provided by <strong>Leadership</strong> Firstafforded participants key <strong>in</strong>sights <strong>and</strong> underst<strong>and</strong><strong>in</strong>g of the leadershipdem<strong>and</strong>s faced by bus<strong>in</strong>ess unit heads <strong>and</strong> the executive committee atFCG. Such underst<strong>and</strong><strong>in</strong>g will facilitate read<strong>in</strong>ess to assume similarresponsibilities when the time comes <strong>and</strong> will provide perspective whenparticipants are faced with organizational decisions <strong>and</strong> <strong>in</strong>itiatives,which they may not have understood, accepted, or supported so quicklyprior to attendance <strong>in</strong> this program.When queried about which aspects of the program were most memorable<strong>and</strong> useful for them personally, participants listed the assessment process feedback<strong>and</strong> the creation of their learn<strong>in</strong>g contract, the shar<strong>in</strong>g of concerns <strong>and</strong>needs with others <strong>in</strong> the group <strong>and</strong> learn<strong>in</strong>g from them, <strong>and</strong> the compulsory<strong>and</strong> dem<strong>and</strong><strong>in</strong>g analysis <strong>and</strong> decision mak<strong>in</strong>g of case studies <strong>and</strong> bus<strong>in</strong>essproblems.Facilitator Observations <strong>and</strong> InsightsAlthough the structure <strong>and</strong> tim<strong>in</strong>g of each day of every session had been wellformatted by the <strong>Leadership</strong> <strong>Development</strong> Committee <strong>in</strong> the design phase of theprogram, the facilitators realized that the program would need ongo<strong>in</strong>g ref<strong>in</strong>ementas the program <strong>and</strong> its content “settled <strong>in</strong>.” In particular, the facilitatorsencountered four challenges that necessitated attention:• Manag<strong>in</strong>g time. Beg<strong>in</strong>n<strong>in</strong>g with a heavy content agenda to be covered<strong>and</strong> then encounter<strong>in</strong>g tangential <strong>in</strong>terests, questions <strong>and</strong> issues created aconflict for the facilitators, who had to balance the need to cover the materialwith the need to help participants develop perspective <strong>and</strong> deeper underst<strong>and</strong><strong>in</strong>g.Balanc<strong>in</strong>g these two needs at times was costly <strong>in</strong> terms of time management.Some topics <strong>and</strong> work sessions were <strong>in</strong>advertently cut short due tolack of time, <strong>and</strong> some discussions, although of value, deviated from the programagenda <strong>and</strong> had to be curtailed. This conflict generated the addition ofanother day to the previous format <strong>in</strong> order to allow for the supplementaldiscussions without detract<strong>in</strong>g from the time allocated to other importantactivities <strong>and</strong> exercises.• Assess<strong>in</strong>g <strong>and</strong> manag<strong>in</strong>g group energy levels throughout the sessionsbecame one of the facilitators’ challenges. With daily sessions packed with participation,case problem work, presentations <strong>and</strong> observation, the participant’s
FIRST CONSULTING GROUP 137energy levels varied throughout the day. At times, facilitators needed to juggleagenda items slightly or defer certa<strong>in</strong> work sessions for an early morn<strong>in</strong>g startrather than cont<strong>in</strong>ue with a mentally tired group.• Balanc<strong>in</strong>g motivational levels <strong>and</strong> capacities of participants with<strong>in</strong> the grouppresented a somewhat surpris<strong>in</strong>g challenge for the facilitators. Although theywere not so naïve to believe that all participants would be equally capable ormotivated, there was a feel<strong>in</strong>g that given a group of people at the director <strong>and</strong>VP levels, most people would fall with<strong>in</strong> a set range on both dimensions. It wassurpris<strong>in</strong>g to see how each participant actually did perform <strong>and</strong> respond, giventhe dem<strong>and</strong>s of the situation. Some who were anticipated to excel appeared tolose some of their desire <strong>and</strong> motivation to master the concepts, <strong>and</strong> others whowere seen as “solid” performers, but who had not previously shown exceptionalabilities, were truly challenged by the opportunity <strong>and</strong> rose to demonstrate theirtrue capacity <strong>and</strong> potential.• Guid<strong>in</strong>g <strong>and</strong> maximiz<strong>in</strong>g case study <strong>and</strong> break-out group work necessitateda greater presence from facilitators than was anticipated. Because participantswere at times deal<strong>in</strong>g with problems <strong>and</strong> issues to which they had no previousexposure, there was a need to clarify organizational position <strong>and</strong> bus<strong>in</strong>ess philosophy,<strong>and</strong> some <strong>in</strong>put or guidance was required. The value for the facilitatorswas the <strong>in</strong>sight that the organization really needed to communicate or makeclear certa<strong>in</strong> bus<strong>in</strong>ess philosophies so that all the firm’s leadership would befully aligned.BEYOND THE CLASSROOMAside from the challenges associated with the actual conduct of the sessions,the other major challenge for the facilitators was that of keep<strong>in</strong>g the grouptogether <strong>and</strong> ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g the learn<strong>in</strong>g process after the formal program sessionswere over. In an effort to ma<strong>in</strong>ta<strong>in</strong> group identity <strong>and</strong> re<strong>in</strong>force growth<strong>and</strong> learn<strong>in</strong>g, the facilitators had designed vehicles <strong>in</strong>to the framework of<strong>Leadership</strong> First. A group sponsor/mentor (executive committee member <strong>and</strong>session facilitator) had been identified. The role of the mentor/sponsor wasto provide participants with post-session feedback regard<strong>in</strong>g their participation<strong>in</strong> the program <strong>and</strong> to work with the group <strong>and</strong> each <strong>in</strong>dividual on learn<strong>in</strong>gplans <strong>and</strong> other issues as requested by the group or <strong>in</strong>dividual. Conferencecalls with all group members on an as-needed, but at least quarterly basis,were <strong>in</strong>corporated as a means of ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g the group’s identity, as wellas perpetuat<strong>in</strong>g a support network <strong>and</strong> mutual problem-solv<strong>in</strong>g vehicle <strong>and</strong>safe environment for shar<strong>in</strong>g <strong>and</strong> test<strong>in</strong>g progress on <strong>in</strong>dividual learn<strong>in</strong>g contracts.Last, an annual group reunion was planned as another re<strong>in</strong>forcement of<strong>Leadership</strong> First.
138 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEFollow<strong>in</strong>g participation, each <strong>in</strong>dividual has been encouraged to share theirlearn<strong>in</strong>g <strong>and</strong> personal goals with their respective bus<strong>in</strong>ess unit head. Thiscoach<strong>in</strong>g process will further serve to l<strong>in</strong>k the <strong>Leadership</strong> First program structure<strong>and</strong> process <strong>in</strong>to the firm’s PCADs process to maximize the value of bothprograms.Cont<strong>in</strong>ual monitor<strong>in</strong>g <strong>and</strong> revision of the participant’s <strong>in</strong>dividual learn<strong>in</strong>gcontract is re<strong>in</strong>forced on an ongo<strong>in</strong>g basis <strong>in</strong> the follow-up work with the groupmentor <strong>and</strong> the other participants <strong>in</strong> his or her group, some of whom will havecommitted to help each other on specific issues, <strong>and</strong> through the PCADs processitself. To assist <strong>in</strong> this ongo<strong>in</strong>g development effort, each participant is providedwith a <strong>Development</strong> Resources List of courses, books, <strong>and</strong> articles as a referencetool. In order to track <strong>and</strong> evaluate the participant’s growth <strong>and</strong> behavioralprogress as observed <strong>in</strong> the work environment, a follow-up 360-degree assessmentprocess is to be conducted n<strong>in</strong>e to twelve months after completion of <strong>Leadership</strong>First, us<strong>in</strong>g the same self-assessment <strong>and</strong> the same colleagues to providefeedback to the participants.Provid<strong>in</strong>g the structure <strong>and</strong> vehicles to susta<strong>in</strong> <strong>and</strong> re<strong>in</strong>force the <strong>Leadership</strong>First Program’s objectives with participants was a critically important aspect ofthe orig<strong>in</strong>al program design. The <strong>Leadership</strong> <strong>Development</strong> Committee saw theneed to <strong>in</strong>corporate a vehicle to ensure the organization’s cont<strong>in</strong>ued underst<strong>and</strong><strong>in</strong>g<strong>and</strong> support. In addition to participant feedback to respective bus<strong>in</strong>essunit heads <strong>and</strong> colleagues, cont<strong>in</strong>u<strong>in</strong>g communications were to be provided tothe FCG organization to keep associates <strong>in</strong>formed about <strong>and</strong> <strong>in</strong>volved <strong>in</strong> theprogram’s progress <strong>and</strong> success. Periodic status reports <strong>and</strong> feedback were alsoto be provided to FCG’s vice presidents, the executive committee, <strong>and</strong> the firm’sboard of directors.EVALUATING LEADERSHIP FIRSTIn order to monitor feedback <strong>and</strong> results <strong>and</strong> to evaluate the effectiveness of<strong>Leadership</strong> First, the <strong>Leadership</strong> <strong>Development</strong> Committee <strong>in</strong>corporated a numberof measurement vehicles <strong>and</strong> methodologies, <strong>in</strong>clud<strong>in</strong>g the follow<strong>in</strong>g:• Participant assessment rat<strong>in</strong>gs <strong>and</strong> feedback (<strong>in</strong>itial versus postattendance)• Behavioral changes be<strong>in</strong>g observed or reported for participants—both asa result of assessment feedback <strong>and</strong> skill <strong>and</strong> knowledge growth• Feedback from participants’ bus<strong>in</strong>ess unit head on participants’behavior <strong>and</strong> performance improvement• External benchmark feedback from Warren Bennis on program quality• Performance effectiveness <strong>and</strong> advancement of participants (longer term)
FIRST CONSULTING GROUP 139• Encouragement of attendance <strong>and</strong> verbal market<strong>in</strong>g of program by pastparticipants• Progress toward achievement of documented personal learn<strong>in</strong>g contractmeasurable goals <strong>and</strong> time framesThe first six groups (sixty participants) have completed the program. If thislimited participant population’s feedback <strong>and</strong> enthusiasm for the program is anyreliable measure, the program is extremely successful. Over time, as the participantpopulation grows, the <strong>in</strong>-place evaluation methodologies <strong>in</strong>corporated <strong>in</strong>tothe program will provide a reliable metric.Although the relatively short period <strong>and</strong> small participant population restrictstangible evaluation, the firm has already experienced a number of <strong>in</strong>tangiblega<strong>in</strong>s from the program:• Improved cross-organization communication, an un<strong>in</strong>tended benefit, hasbeen dramatic as a result of the program• Valuable thought <strong>and</strong> work <strong>in</strong> case problems <strong>and</strong> bus<strong>in</strong>ess unitanalysis gave the executive committee additional <strong>in</strong>sights <strong>and</strong> <strong>in</strong>putfor consideration• Stronger unity of purpose at senior levels has resulted from discussion<strong>and</strong> ownership of the program <strong>and</strong> its objectives• Deeper underst<strong>and</strong><strong>in</strong>g of values, mission, <strong>and</strong> strategy (as well as theirrationale) <strong>and</strong> stronger buy-<strong>in</strong> <strong>and</strong> commitment to them by programparticipants• An <strong>in</strong>crease <strong>in</strong> the firmwide <strong>and</strong> strategic perspective of many has beenvery noticeable• Deeper appreciation of the stress <strong>and</strong> dem<strong>and</strong>s be<strong>in</strong>g faced by seniorleaders with<strong>in</strong> FCG• Sense among most FCG associates that the firm is committed to grow itsown, that it has a vision, <strong>and</strong> that it will have a long <strong>and</strong> strong futurewith experienced <strong>and</strong> tra<strong>in</strong>ed talent to manage the future organizationas a result of <strong>Leadership</strong> FirstBased on <strong>in</strong>ternal <strong>and</strong> external benchmark comparisons <strong>and</strong> feedback, FCG’s<strong>Leadership</strong> First appears to be a unique program <strong>in</strong> that its design <strong>in</strong>corporatesactual FCG case studies <strong>and</strong> problems (see Exhibits 5.7 through 5.10) <strong>and</strong> itemploys a situational approach to leadership tra<strong>in</strong><strong>in</strong>g versus the traditional topicalor subject matter approach. Unlike many programs that focus on communicationor motivation as a learn<strong>in</strong>g topic, <strong>Leadership</strong> First’s premise is that variousskills are simultaneously required <strong>in</strong> specific bus<strong>in</strong>ess situations. In h<strong>and</strong>l<strong>in</strong>g amerger or acquisition, for example, a leader must assess the f<strong>in</strong>ancial <strong>and</strong> legalissues <strong>in</strong>volved, the bus<strong>in</strong>ess <strong>and</strong> revenue implications, <strong>and</strong> the emotional,
140 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEmotivational, <strong>and</strong> communication requirements for employees, <strong>and</strong> must drawupon a variety of leadership behaviors <strong>and</strong> skills to address all these varioussituational needs with<strong>in</strong> the context of the merger. <strong>Leadership</strong> First approachesthe learn<strong>in</strong>g process from this perspective.The program is also unique <strong>in</strong> that <strong>in</strong>stead of assign<strong>in</strong>g the development taskto the tra<strong>in</strong><strong>in</strong>g <strong>and</strong> development staff, it employs active participation of thefirm’s CEO <strong>and</strong> executive committee members as facilitators <strong>in</strong> all sessions<strong>and</strong> requires one member of the executive committee to serve as the groupmentor/sponsor for each group of participants.Last, the program is tied closely <strong>in</strong>to other FCG processes such as PCADs <strong>and</strong>the coach<strong>in</strong>g process, <strong>and</strong> is totally <strong>in</strong>tegrated with the firm’s emphasis onbecom<strong>in</strong>g well managed, both f<strong>in</strong>ancially <strong>and</strong> <strong>in</strong> the h<strong>and</strong>l<strong>in</strong>g of people.Evaluat<strong>in</strong>g <strong>Leadership</strong> First <strong>in</strong> any truly measurable way at this early stageof its adm<strong>in</strong>istration is difficult. There are, however, a few <strong>in</strong>itial results thatmerit recognition:• The discipl<strong>in</strong>es of preparation for the <strong>Leadership</strong> First sessions arehav<strong>in</strong>g an immediate impact on practice units’ focus <strong>and</strong> profitability.Because several key members of one practice unit were <strong>in</strong> the samegroup, they have been able to make some significant <strong>and</strong> very differentdecisions about cutt<strong>in</strong>g costs, chang<strong>in</strong>g bus<strong>in</strong>ess models, <strong>and</strong> recruit<strong>in</strong>gpeople.• Shar<strong>in</strong>g bus<strong>in</strong>ess unit models <strong>and</strong> strategy documents with all VPs <strong>and</strong>directors has made a significant impact on several groups.• One vice president has changed his approach to his practice unit,result<strong>in</strong>g <strong>in</strong> significant improvements <strong>in</strong> growth.• Another key practice unit has significantly improved its performance asa result of the attendance of its leader <strong>in</strong> the program.The true measure of the program’s tangible ga<strong>in</strong>s <strong>and</strong> success, however, willbe demonstrated <strong>in</strong> the com<strong>in</strong>g years through the firm’s “bench strength” depth<strong>and</strong> read<strong>in</strong>ess, <strong>and</strong> ultimately through FCG’s market position, revenue stream, <strong>and</strong>recognition as an <strong>in</strong>dustry leader.
FIRST CONSULTING GROUP 141Exhibit 5.1. Program Overview Schematic<strong>Leadership</strong> First — Program OverviewProgram Evaluation <strong>and</strong>Cont<strong>in</strong>uous EnvironmentSelectionprocessAssessmentprocessSem<strong>in</strong>ars/WorksessionsIndividualdevelopmentplann<strong>in</strong>g• Episodicexecution• Actionlearn<strong>in</strong>gFeedback LoopsSystematic <strong>in</strong>dividual performance <strong>and</strong>Progress track<strong>in</strong>g <strong>and</strong> monitor<strong>in</strong>gExhibit 5.2. Program Session Outl<strong>in</strong>esSession One (3 days) Session Two (3 days) Session Three (2 days)• Group expectations• Personal growth <strong>and</strong> trust• The assessment process<strong>and</strong> the learn<strong>in</strong>g contract• Program mechanics <strong>and</strong>structure• Creat<strong>in</strong>g the organization’svision, mission, <strong>and</strong>values• Strategy plann<strong>in</strong>g—thebroad view• Design<strong>in</strong>g the organizationstructure• Select<strong>in</strong>g people <strong>and</strong>creat<strong>in</strong>g teams• Bus<strong>in</strong>ess models <strong>and</strong> theirimplications• Underst<strong>and</strong><strong>in</strong>g <strong>and</strong> manag<strong>in</strong>gthe balance sheet• Measurements <strong>and</strong> <strong>in</strong>centives—performancemetrics<strong>and</strong> reward systems• Session One recap• Personal learn<strong>in</strong>gcontracts• Identify<strong>in</strong>g <strong>and</strong> creat<strong>in</strong>gbig impact changeagendas• Homework presentations—bus<strong>in</strong>essunitassessment <strong>and</strong>recommendations• Merger <strong>and</strong> acquisitionmanagement• Underst<strong>and</strong><strong>in</strong>g publiccompany status• Big game hunt<strong>in</strong>g(how to grow theorganization)• Session Two recap• Homework presentations—boardpresentationson 6-monthstrategy for their bus<strong>in</strong>essunit• Communicat<strong>in</strong>geffectively—<strong>in</strong>side <strong>and</strong>outside theorganization• Manag<strong>in</strong>g ahead—lead<strong>in</strong>g multiple quarters<strong>and</strong> years ahead• Personal leadership—underst<strong>and</strong><strong>in</strong>g <strong>and</strong>develop<strong>in</strong>g your style• Revisitation of groupexpectations• Personal action plans• Go<strong>in</strong>g forward—groupmentor, group status,<strong>and</strong> identity; 9–12-month reassessmentprocess
142 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE<strong>Leadership</strong> First ParticipantApplication Process• Self-nom<strong>in</strong>ation• Coach approval• Bus<strong>in</strong>ess unit head concurrence• Participant self-nom<strong>in</strong>ation <strong>and</strong> selfassessmentformsSelection Process—St<strong>and</strong>ardizedYardstick Firmwide10 participants per quarter• Group 2—February 7–8–9; April 12–13;June 21–22, 2002• Initial focus on high impact players for fasterresults—restricted to VP <strong>and</strong> Director levels(leverage development dollar <strong>in</strong>vestment tofullest at start)• 12 month's m<strong>in</strong>imum service requirement• Performance requirement• Diversity consideration• Bus<strong>in</strong>ess unit leader review/approval• Selection committee <strong>and</strong> executive committeereview/approval• Make them feel "special"• Make them a "class" for identification/network<strong>in</strong>g/collegialityAssessment/IndividualizedParticipant FeedbackExhibit 5.3. Nom<strong>in</strong>ation <strong>and</strong> Selection Process SchematicAction Learn<strong>in</strong>g Contract/Process• Completion of Learn<strong>in</strong>g Contract basedon feedback from assessment phase• Clear goals with measurable results, targets,<strong>and</strong> time frames• Most development will/should occur <strong>in</strong> theparticipant's current position/job• Largely self-managed vs. structured program• Consolidated group sessions with casestudies, simulations, <strong>and</strong> lectures by <strong>in</strong>dustryleaders <strong>and</strong> FCG staff—develop "class"identity <strong>and</strong> address common needs• <strong>Development</strong> resource reference list —external programs, distance learn<strong>in</strong>g,sem<strong>in</strong>ars, university• Internal resource designation as "ExecutiveSponsor" for each "group/class" for mentor<strong>in</strong>g<strong>and</strong> ownership<strong>Development</strong> Contract Execution/Re-Assessment• Three meet<strong>in</strong>gs of Group 2 as a "class"for group development <strong>and</strong> feedback onprogram• 3/6/9/12-month follow-up with participants• Reassessment of development needs toassess degree of growth• Adm<strong>in</strong>istration of <strong>in</strong>strumentation,<strong>in</strong>terpretation, <strong>and</strong> feedback• 360 Degree <strong>Leadership</strong> Assessment, dataconsolidation, <strong>and</strong> feedback (<strong>Leadership</strong> FirstAssessment Feedback Form) with writtenreport/profile• Resource Associate <strong>Leadership</strong> TraitsBenchmark assessment report• Aggregate (for FCG) <strong>and</strong> <strong>in</strong>dividual key strengths<strong>and</strong> development area profil<strong>in</strong>g• Pre- <strong>and</strong> post-360 degree assessment (after6–9–12 months) for participant progress <strong>and</strong>feedback• Emphasis is development—not performance—this process is a complement to FCG's exist<strong>in</strong>gsystems—not a replacement for PCADsProgram Evaluation• Pre- <strong>and</strong> post-assessment analysis• Review/dialog with executivecommittee on organizational issues(current <strong>and</strong> future strategy, cultural,organizational, <strong>and</strong> leadership changes)<strong>and</strong> development needs• Individual participant experienceevaluation• Classroom/structured learn<strong>in</strong>gexperience evaluation
FIRST CONSULTING GROUP 143Exhibit 5.4. Self-Nom<strong>in</strong>ation FormNom<strong>in</strong>ee InformationNom<strong>in</strong>ee Name:Bus<strong>in</strong>ess Unit:Current Position:Hire Date:Education Completed/Year/School(s):Bachelor’s Master’s MBA OtherSpecial Certifications:Speeches/Articles:Briefly describe your experience with <strong>in</strong>ternational assignments/travel:Recent Significant Achievements/ContributionsBriefly describe what you believe are your most significant achievements/contributions to FCG dur<strong>in</strong>g the past twelve to eighteen months.Nom<strong>in</strong>ation RationaleBriefly expla<strong>in</strong> why you (as opposed to others) should be considered forparticipation <strong>in</strong> <strong>Leadership</strong> First.(Cont<strong>in</strong>ued)
144 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE<strong>Development</strong>al ValueExhibit 5.4. Self-Nom<strong>in</strong>ation Form (Cont<strong>in</strong>ued)What particular learn<strong>in</strong>gs/value do you believe you will ga<strong>in</strong> from participation<strong>in</strong> <strong>Leadership</strong> First? How will these learn<strong>in</strong>gs benefit you? How will theybenefit FCG?Career FocusIn what specific capacity/position do you see yourself <strong>in</strong> the next two years<strong>and</strong> why that one as opposed to some other? What particular contributions doyou feel you can make there (as opposed to someone else)?Bus<strong>in</strong>ess Unit Head Comments/ConcurrenceBriefly describe why you recommend (do not recommend) this person’sparticipation <strong>in</strong> <strong>Leadership</strong> First at this time. What capacity/position do youenvision this person hold<strong>in</strong>g <strong>in</strong> two years? In five years?SignaturesApplicant _______________________________________(Signature here confirmsyour absolute commitment to attend ALL sessions of <strong>Leadership</strong> First—ifyou are not able to make this commitment, you should not apply at thistime.)Bus<strong>in</strong>ess Unit Leader ___________________________ (Your signature here<strong>in</strong>dicates your recommendation, without reservation, for this c<strong>and</strong>idate’sparticipation <strong>in</strong> <strong>Leadership</strong> First.)Participation Disposition (to be completed by <strong>Leadership</strong> First SelectionCommittee)
FIRST CONSULTING GROUP 1455.35.0Exhibit 5.5. Sample 360-Degree Feedback Report<strong>Leadership</strong> Attributes/Behaviors Assessment4.84.54.34.03.83.53.33.02.8360-Degree Feedback2.52.32.01.81.51.31.00.80.50.30.0VisionMotivationCourage Teamplay Sensei Bus<strong>in</strong>essacumenCitizenshipEmotionalcompetencyClientrelationshipsBus<strong>in</strong>essdevelopmentFCGoperations<strong>Leadership</strong> Values/BehaviorsSelf PeerSuperior Subord<strong>in</strong>ateLevel 1Almost never demonstratedLevel 2Occasionally demonstratedLevel 3Often demonstratedLevel 4Usually demonstratedLevel 5Almost always demonstratedVision —demonstrates abilityto see "the big picture" (thelong-term benefit to theteam/firm <strong>in</strong> the next 5–10years of hard work) <strong>and</strong> isable to communicate thispicture to others <strong>in</strong> a way thatgenerates hope <strong>and</strong> excitementregardless of their position.Motivation —demonstratesability to create passion <strong>and</strong>excitement, often without be<strong>in</strong>gable to articulate anyth<strong>in</strong>g morethan faith <strong>and</strong> trust, so thatpeople are compelled to followhim/her.Courage—demonstratesability to be bold <strong>and</strong><strong>in</strong>novative, <strong>in</strong>spir<strong>in</strong>g trust <strong>in</strong>associates because his/her ideasare not necessarily the safestor most logical but becausethey are ideas that everyonewould like to see come tofruition.Teamplay—demonstratesthe ability to evoke the bestfrom a team by appreciat<strong>in</strong>gthe responsibilities, dreams,<strong>and</strong> contributions of each<strong>in</strong>dividual <strong>in</strong> the group;demonstrates the ability tocreate a team environment<strong>in</strong> which people arecomfortable communicat<strong>in</strong>g<strong>and</strong> discuss<strong>in</strong>g new ideas,even when suchdiscussions cause friction <strong>and</strong>change.Sensei—demonstrates theability to teach <strong>and</strong> transferknowledge by draw<strong>in</strong>g outassociates' strengths whilepav<strong>in</strong>g the way for them tocorrect weaknesses; peoplefollow this <strong>in</strong>dividual withgreat confidence, not fear,know<strong>in</strong>g that theirdevelopment is a mutualgoal.Bus<strong>in</strong>ess acumen —demonstrates the ability to bea great th<strong>in</strong>ker <strong>and</strong> bus<strong>in</strong>essexpert who leverages his/herexperience, educationconnections, <strong>and</strong> otherresources to obta<strong>in</strong> results;personally demonstrates anunquenchable thirst forknowledge.Citizenship —demonstratesthe ability to evoke trust <strong>and</strong>respect because he/sheembodies the qualitiesassociated with character(<strong>in</strong>tegrity, humility, will<strong>in</strong>gnessto serve, honesty, <strong>and</strong> empathy);demonstrates balance <strong>in</strong>personal, bus<strong>in</strong>ess, <strong>and</strong> civicresponsibilities <strong>and</strong> is viewed asa "model citizen," not just amodel bus<strong>in</strong>essperson.Emotional competency—demonstrates ability tomanage <strong>and</strong> <strong>in</strong>fluence nearlyany situation, because he/she<strong>in</strong>tuitively senses what othersare feel<strong>in</strong>g <strong>and</strong> underst<strong>and</strong>swhat makes each player"tick"; demonstrates his/herown self-awareness byconstantly evaluat<strong>in</strong>g <strong>and</strong>work<strong>in</strong>g with his/her ownmotivations <strong>and</strong> drives.Client relationships—demonstrates the ability toidentify <strong>and</strong> develop strategicclient <strong>and</strong>/or vendorrelationships; createsexcellent relationships withclient leadership throughdelivery of quality service.Bus<strong>in</strong>ess development—demonstrates keenunderst<strong>and</strong><strong>in</strong>g of FCG's<strong>in</strong>dustry, competitors, <strong>and</strong>markets/market trends;leverages that knowledge todevelop <strong>and</strong> close newbus<strong>in</strong>ess to consistently meetannual revenue <strong>and</strong>profitability targets.(Cont<strong>in</strong>ued)
146 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 5.5. Sample 360-Degree Feedback Report (Cont<strong>in</strong>ued)Summary Observations of Assessment FeedbackOverall, your rat<strong>in</strong>gs from all assessors were quite variable <strong>and</strong> <strong>in</strong>consistent <strong>in</strong> howpeers, subord<strong>in</strong>ates, <strong>and</strong> superiors perceive your leadership behaviors, <strong>and</strong> there aresome significant differences <strong>in</strong> how your colleagues view your leadership behaviorsas compared to how you perceive your own behavior. While you rated yourself atlevel 4 <strong>and</strong> level 5 (“Usually Demonstrated” <strong>and</strong> “Almost Always Demonstrated”) <strong>in</strong>all behaviors except “Vision,” “Motivation,” <strong>and</strong> “Sensei,” your assessors generallyviewed your demonstrated leadership behavior anywhere from 0.5 to 3.0 levels lowerthan your rat<strong>in</strong>gs.Your subord<strong>in</strong>ates tended to rate you lower than you rated yourself <strong>and</strong> lower thanthe rat<strong>in</strong>gs of either your peers or your superiors. This pattern is a bit unusual, <strong>in</strong>that subord<strong>in</strong>ates generally see their boss as more experienced <strong>and</strong> hav<strong>in</strong>g moreexpertise than themselves <strong>and</strong> as a result they tend to rate the boss much higherthan either peers or superiors do. Your subord<strong>in</strong>ates’ rat<strong>in</strong>gs were mostly <strong>in</strong> the“level 2—Occasionally Demonstrated” category except <strong>in</strong> the area of “FCG operations,”where they rated your behavior the “level 3—Often Demonstrated.” Thispattern may suggest that your subord<strong>in</strong>ates are fairly sophisticated <strong>in</strong> observ<strong>in</strong>gleadership behaviors <strong>and</strong> therefore have some basis for their comparison ofyour leadership versus their past experience with other managers; or it may suggestthat they have not had close enough exposure to you to observe some skills<strong>and</strong> behaviors <strong>in</strong> the given sett<strong>in</strong>gs. Of particular note are areas where your subord<strong>in</strong>atesrated you 2.5 to 3 levels lower than you rated yourself: “Bus<strong>in</strong>ess development”(self-rat<strong>in</strong>g 5.0—subord<strong>in</strong>ate rat<strong>in</strong>g 2.0); “Citizenship” (self-rat<strong>in</strong>g5.0—subord<strong>in</strong>ate rat<strong>in</strong>g 2.5); “Courage” (self-rat<strong>in</strong>g 4.0—subord<strong>in</strong>ate rat<strong>in</strong>g 1.5);“Bus<strong>in</strong>ess acumen” (self-rat<strong>in</strong>g 4.0—subord<strong>in</strong>ate rat<strong>in</strong>g 1.5); “Emotional competency”(self-rat<strong>in</strong>g 4—subord<strong>in</strong>ate rat<strong>in</strong>g 1.5). These differences clearly <strong>in</strong>dicate thatthere is a significant disconnect between the behavior others are see<strong>in</strong>g you exhibit<strong>and</strong> how you perceive yourself. Your demonstration of certa<strong>in</strong> leadership traitsseems to be <strong>in</strong>visible to others at times. It may also be that what you are demonstrat<strong>in</strong>gdiffers from others’ def<strong>in</strong>ition or expectations of that leadership skill orbehavior, but your knowledge <strong>and</strong> mastery of FCG’s leadership behaviors are notas broadly developed or demonstrated as you believe they are.Your peers’ <strong>and</strong> superiors’ perceptions of your leadership skills are more closelyrelated to your own self-perception, but they are also generally lower than your ownself-perception of your leadership skills. There is strong consistency around“Vision,” where range of rat<strong>in</strong>gs varies from 3.0 to 3.5 (your self-rat<strong>in</strong>g was 3.0);“Motivation” (peers’ <strong>and</strong> superiors’ rat<strong>in</strong>g 3.0 <strong>and</strong> 2.5; your self-rat<strong>in</strong>g 3.0) “Clientrelationships” <strong>and</strong> “FCG Operations” (peers’ <strong>and</strong> superiors’ rat<strong>in</strong>g 2.5 <strong>and</strong> 3.5; yourself-rat<strong>in</strong>g 4.0).
FIRST CONSULTING GROUP 147Exhibit 5.5. (Cont<strong>in</strong>ued)Your peers perceive your greatest strength is “Courage” (rated 4.0) <strong>and</strong> your weakestarea is “Team play” (rated 2.0), while your superiors see your greatest strength as“Client relationships” (rated 3.5) <strong>and</strong> your biggest weaknesses as “Sensei” (rated 2.0).These data imply that you may be do<strong>in</strong>g a better job of manag<strong>in</strong>g upward <strong>and</strong> laterallythan you are <strong>in</strong> manag<strong>in</strong>g downward to your staff. It also suggests that “Teamplay” <strong>and</strong> “Sensei” are critical areas for your reflection <strong>and</strong> focus.<strong>Development</strong>al feedback comments <strong>in</strong>dicate three primary th<strong>in</strong>gs you may want tostart do<strong>in</strong>g: (1) better communication with FCG team <strong>and</strong> client, (2) <strong>in</strong>vest <strong>in</strong> yourrelationship with your team members; spend time with them, nurture them, <strong>and</strong>help them work through problems so they can learn; assess <strong>and</strong> give them mean<strong>in</strong>gful<strong>and</strong> constructive but sensitive <strong>and</strong> empathetic feedback, <strong>and</strong> (3) work tomake sure the big picture is solidly <strong>and</strong> consistently presented <strong>in</strong> our deliverables.There are many behaviors people want you to cont<strong>in</strong>ue do<strong>in</strong>g, which <strong>in</strong>dicates thatmuch of your effort <strong>and</strong> activity is seen as be<strong>in</strong>g of value <strong>and</strong> as a positive contribution.Your thoughtful leadership <strong>and</strong> calm demeanor are appreciated, along withyour enthusiastic attitude <strong>and</strong> encouragement of others to th<strong>in</strong>k out of the box.People want you to improve your communication skills—(1) improve <strong>in</strong>fluenc<strong>in</strong>gskills with clients <strong>and</strong> <strong>in</strong>ternally so people can take advantage of the <strong>in</strong>novative <strong>and</strong>creative ideas you have, (2) ensure consistent communication so projects don’t strayoff track, <strong>and</strong> (3) communicate any bill<strong>in</strong>g (or other) problems early on with theappropriate people.You should compare your own priorities <strong>in</strong> the START, CONTINUE, <strong>and</strong> STOP DOINGcategories with the feedback recommendations from your assessor group to ensurethat you have <strong>in</strong>corporated their <strong>in</strong>put <strong>in</strong>to your developmental plann<strong>in</strong>g, <strong>and</strong>record your priorities <strong>and</strong> goals on your Personal Learn<strong>in</strong>g Contract.For improved effectiveness,this <strong>in</strong>dividualshould START do<strong>in</strong>g thefollow<strong>in</strong>g 3 th<strong>in</strong>gs:<strong>Development</strong>al FeedbackAccept healthy conflict as exactly that—healthyRecognize that I can affect a situationBe more accept<strong>in</strong>g of my role <strong>and</strong> level of expertisewhile us<strong>in</strong>g this recognition to build <strong>and</strong>/or uncoveropportunitiesBe more direct <strong>and</strong> forthright <strong>in</strong> communicationswith superiors, especially when it is tough (don’tavoid call<strong>in</strong>g it like you see it)F<strong>in</strong>d more opportunities to spread your knowledge.Create the next generation of youTh<strong>in</strong>k <strong>in</strong> the context of the firm <strong>in</strong>stead of just yourbus<strong>in</strong>ess unit or group(Cont<strong>in</strong>ued)
148 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 5.5. Sample 360-Degree Feedback Report (Cont<strong>in</strong>ued)Focus more on manag<strong>in</strong>g/coord<strong>in</strong>at<strong>in</strong>g deliverables,<strong>and</strong> less on contribut<strong>in</strong>g to themUpdate technical skills—stay conversant on newtechnology, st<strong>and</strong>ards, methodologiesSpread credit around where it is due for good workOffer solutions to the problem not just stat<strong>in</strong>g thereare problems <strong>and</strong> embrace or become a proponent ofother <strong>and</strong> perhaps more appropriate solutionsEmbrace <strong>and</strong> manage diversity with<strong>in</strong> a teamStick<strong>in</strong>g on a project from beg<strong>in</strong>n<strong>in</strong>g to endDevelop<strong>in</strong>g better <strong>in</strong>terpersonal skills with the clientDevelop better speak<strong>in</strong>g skillsBecome more aware of project f<strong>in</strong>ancials <strong>and</strong> theirrelationship with overall FCG f<strong>in</strong>ancial performanceBe more aware of his ability to <strong>in</strong>fluence client/staff—both positively <strong>and</strong> negativelyF<strong>in</strong>ish <strong>in</strong>ternal assignments—too often has best<strong>in</strong>tentions to start but seldom f<strong>in</strong>ishesBecome more active develop<strong>in</strong>g literature <strong>and</strong>publicationsFocus on long term versus short termFor improved effectiveness,this <strong>in</strong>dividualshould CONTINUE TO DOthe follow<strong>in</strong>g 3 th<strong>in</strong>gs:Ma<strong>in</strong>ta<strong>in</strong> current levels of fervor <strong>and</strong> dedicationBuild my knowledge base <strong>in</strong> terms of technical <strong>and</strong>leadership rolesMa<strong>in</strong>ta<strong>in</strong> a healthy work/family balanceBroaden <strong>in</strong>fluence with<strong>in</strong> his bus<strong>in</strong>ess unit <strong>and</strong>the firmLook for new ways to contribute <strong>and</strong> new th<strong>in</strong>gsto learnKeep calm <strong>in</strong> the face of crisis or adversity (you aregood at this)Allow team members face time with the clientEstablish client relationships <strong>and</strong> confidence<strong>in</strong> FCG’s technical capabilitiesLook for creative ways to <strong>in</strong>volve the client <strong>in</strong>technical decisionsApply your excellent consult<strong>in</strong>g skills to exp<strong>and</strong>FCG bus<strong>in</strong>essNetwork among diverse FCG bus<strong>in</strong>ess unitsMa<strong>in</strong>ta<strong>in</strong> enthusiastic attitudeEncourage the team to th<strong>in</strong>k out of the box
FIRST CONSULTING GROUP 149Exhibit 5.5. (Cont<strong>in</strong>ued)Develop additional knowledge through <strong>in</strong>dustryleadershipShare <strong>and</strong> leverage this strong technical skills <strong>and</strong>vision with other FCG associatesDemonstrate his creativity <strong>and</strong> strong work ethic, <strong>and</strong>commitment to his clientsRema<strong>in</strong> will<strong>in</strong>g to do what it takes to get the job doneFocus on add<strong>in</strong>g value to clientsFor improved effectiveness,this <strong>in</strong>dividualshould STOP do<strong>in</strong>g thefollow<strong>in</strong>g 3 th<strong>in</strong>gs:Listen<strong>in</strong>g to snip<strong>in</strong>g <strong>and</strong> grip<strong>in</strong>g that is unfocused ordestructiveFocus<strong>in</strong>g on what can happen given the situation,not what could have happenedWorry<strong>in</strong>g about my longevity with FCG (spend energyon what we can do to ensure this question goes away)Th<strong>in</strong>k<strong>in</strong>g of himself as an associate of the firm,<strong>in</strong>stead of a leader of the firmTh<strong>in</strong>k<strong>in</strong>g someone else will come up with the answerto the firms/bus<strong>in</strong>ess unit’s problemsManag<strong>in</strong>g <strong>in</strong> absentiaRecommend<strong>in</strong>g outdated technologies where theydon’t applyPush<strong>in</strong>g his own agenda, <strong>and</strong> listen harder to hisclient’s needs <strong>and</strong> team’s suggestionsTak<strong>in</strong>g issues <strong>and</strong> problems personallyLook<strong>in</strong>g for hidden motives which might be caus<strong>in</strong>gdisruptive behaviors on the team, take the issuehead onPutt<strong>in</strong>g his own <strong>in</strong>terests ahead of the team’sAvoid<strong>in</strong>g conflicts that may require him to “take ast<strong>and</strong>”Participat<strong>in</strong>g <strong>in</strong> gossipShar<strong>in</strong>g associate confidences with subord<strong>in</strong>ate staff,or vent<strong>in</strong>g personal issues he has with senior levelFCG associates to subord<strong>in</strong>ate level associatesVent<strong>in</strong>g to subord<strong>in</strong>ate staff regard<strong>in</strong>g thebus<strong>in</strong>ess/f<strong>in</strong>ancial issues of the Firm, which creates<strong>in</strong>security among the staffOverwork<strong>in</strong>g his network to f<strong>in</strong>d out how he’s do<strong>in</strong>g<strong>in</strong> the organization
Exhibit 5.6. Learn<strong>in</strong>g ContractParticipant InformationName: Current Position:Service L<strong>in</strong>e: Hire Date:Learn<strong>in</strong>g Contract Date: Participant Initials: <strong>Leadership</strong> Steward Initials:Career Advancement TargetsWhat do I want to achieve?What obstacles st<strong>and</strong> <strong>in</strong> the way?What am I do<strong>in</strong>g now to get what I want?(focus on cont<strong>in</strong>u<strong>in</strong>g what is work<strong>in</strong>g <strong>and</strong>ceas<strong>in</strong>g what isn’t)Is my behavior help<strong>in</strong>g? (Why/why not?What behaviors need chang<strong>in</strong>g?)
Exhibit 5.6. (Cont<strong>in</strong>ued)Assessment Feedback Action PlanHow Will I Ga<strong>in</strong> This Skill/Identified Knowledge? How Does This How Will I<strong>Development</strong>al My Learn<strong>in</strong>g Action Address My Evidence My Growth Resource/Help TargetNeed Objective <strong>Development</strong> Need? <strong>in</strong> This Area Required Completion DateSource: ©Confidential <strong>and</strong> Proprietary to First Consult<strong>in</strong>g Group. Repr<strong>in</strong>ted with permission.
152 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 5.7. Bus<strong>in</strong>ess Model ExerciseLEADERSHIP FIRST SESSION ONETeam Exercise—Bus<strong>in</strong>ess Models <strong>and</strong> Their ImplicationsYou have been provided with <strong>in</strong>formation cover<strong>in</strong>g the recent history of FCG’sHealth Delivery Practice. Us<strong>in</strong>g this material <strong>and</strong> draw<strong>in</strong>g upon the <strong>in</strong>formationpresented <strong>and</strong> discussed <strong>in</strong> this afternoon’s session:• Identify the bus<strong>in</strong>ess forces act<strong>in</strong>g on the HD model <strong>in</strong> late 1999 <strong>and</strong> early2000 <strong>and</strong> determ<strong>in</strong>e how it was positioned to either respond or not respond tothe chang<strong>in</strong>g environment.• What were the exist<strong>in</strong>g bus<strong>in</strong>ess model levers <strong>and</strong> how were they structuredto either respond or not respond to the market changes?• Which l<strong>in</strong>es of bus<strong>in</strong>ess or services should be reduced or not emphasized?• Which segments would you <strong>in</strong>vest <strong>in</strong> <strong>and</strong> how would you fund those<strong>in</strong>vestments?• How will you <strong>in</strong>crease market<strong>in</strong>g <strong>and</strong> market<strong>in</strong>g effectiveness?• What key processes <strong>and</strong> reports must you put <strong>in</strong> place immediately tomanage the bus<strong>in</strong>ess?• The ultimate goal is to return the unit to profitability over the shortest periodpossible: with<strong>in</strong> what time frame will you accomplish this?• How will you position <strong>and</strong> structure the unit to both deal with the immediatechallenges while position<strong>in</strong>g for a return to acceptable growth rates?Be prepared to make a twenty-five-m<strong>in</strong>ute presentation of your team’s analysis<strong>and</strong> strategy, cover<strong>in</strong>g the questions identified above.Time Frame for Team Exercise: 1 hour 45 m<strong>in</strong>utes
FIRST CONSULTING GROUP 153Exhibit 5.7. (Cont<strong>in</strong>ued)The Health Delivery Bus<strong>in</strong>ess Unit Background InformationBackgroundThrough the year 2000, the Health Delivery Bus<strong>in</strong>ess Unit had been one of thema<strong>in</strong>stays of FCG’s practice. This bus<strong>in</strong>ess unit, <strong>and</strong> the related service offer<strong>in</strong>gs,had its roots <strong>in</strong> the found<strong>in</strong>g practices of the firm. The portfolio of servicescomprised two major l<strong>in</strong>es of bus<strong>in</strong>ess: IT consult<strong>in</strong>g services <strong>and</strong> implementationservices. In addition, there was a small process improvement l<strong>in</strong>e of bus<strong>in</strong>ess thathad a spotty past history <strong>in</strong> terms of market penetration <strong>and</strong> success, <strong>and</strong> hadlimited <strong>in</strong>ternal acceptance with<strong>in</strong> the overall HD group. As shown below, therewere sub or component offer<strong>in</strong>gs <strong>in</strong> each of these major l<strong>in</strong>es of bus<strong>in</strong>ess.FCG's 1999Health Delivery Bus<strong>in</strong>ess UnitHealthdeliveryConsult<strong>in</strong>gservicesImplementationservicesProcessimprovementservices• Systems plann<strong>in</strong>g• Vendor selection• Executive studies• System configuration• Implementation• System test• System <strong>in</strong>tegration• Process analysis• Process redesign• Benefits realizationIn addition to the delivery group, there was an overlay “sales” or go-to-marketstructure. The regional sales force was made up of geographic-based VPs <strong>and</strong> severalnew bus<strong>in</strong>ess directors, whose major responsibility was to sell the full l<strong>in</strong>e ofthe firm’s services <strong>in</strong>to the health delivery market (this <strong>in</strong>cluded not only the coreservice offer<strong>in</strong>gs provided by the HD bus<strong>in</strong>ess unit, but also HD applicable servicesprovided by other bus<strong>in</strong>ess units such as technology <strong>and</strong> <strong>in</strong>tegration services,network<strong>in</strong>g design <strong>and</strong> implementations, <strong>and</strong> e-health services). The sales force(Cont<strong>in</strong>ued)
154 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 5.7. Bus<strong>in</strong>ess Model Exercise (Cont<strong>in</strong>ued)was responsible for identify<strong>in</strong>g <strong>and</strong> prioritiz<strong>in</strong>g “target” accounts, develop<strong>in</strong>gmarket<strong>in</strong>g <strong>and</strong> sales strategies, <strong>and</strong> ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g “strategic” relationships with keyaccounts.The delivery components of the HD bus<strong>in</strong>ess unit were organized on a service-l<strong>in</strong>eor service-offer<strong>in</strong>g basis <strong>and</strong> did not have specific assigned geographies or specificaccount sales responsibilities. Their focus was to support the “sales” process byprovid<strong>in</strong>g specific functional expertise to support the proposal process, identify<strong>in</strong>g<strong>and</strong> sell<strong>in</strong>g add-on work, manag<strong>in</strong>g the quality <strong>and</strong> economics of the projects,develop<strong>in</strong>g additional service offer<strong>in</strong>gs or products, manag<strong>in</strong>g overall utilization fortheir groups, <strong>and</strong> related hir<strong>in</strong>g <strong>and</strong> HR management issues.The bus<strong>in</strong>ess unit was designed <strong>and</strong> structured to capitalize on what had been atwenty-year trend <strong>in</strong> the HD marketplace:• Ma<strong>in</strong>ta<strong>in</strong> strong relationships at exist<strong>in</strong>g or new HD accounts <strong>and</strong> use the consult<strong>in</strong>gservices to drive systems plann<strong>in</strong>g <strong>and</strong> vendor selection services <strong>in</strong>tothe client base.• Use the plann<strong>in</strong>g <strong>and</strong> system selection process to “tee up” subsequent, largescale,<strong>and</strong> multimonth or multiyear implementation engagements.• Sell additional “consult<strong>in</strong>g” services <strong>in</strong> the areas of process improvement if wehad the skills <strong>and</strong> expertise.• Repeat the cycle every three to five years at the client when the old systems nolonger meet their needs.Years 1999 <strong>and</strong> Early 2000 HD Market DynamicsThe majority of 1999 cont<strong>in</strong>ued the successive str<strong>in</strong>g of strong quarters for theHD bus<strong>in</strong>ess unit. Buoyed by the tremendous dem<strong>and</strong> fueled by the Y2K problem,almost all the HD organizations began an accelerated cycle of systemsreplacements. The Y2K phenomenon also created additional dem<strong>and</strong> for “bodyshop” Y2K test<strong>in</strong>g <strong>and</strong> remediation support. This dem<strong>and</strong> resulted <strong>in</strong> the follow<strong>in</strong>g1999 revenue <strong>and</strong> project marg<strong>in</strong> performance for all services delivered <strong>in</strong>to the HDmarketplace.Beg<strong>in</strong>n<strong>in</strong>g <strong>in</strong> 1999 <strong>and</strong> cont<strong>in</strong>u<strong>in</strong>g <strong>in</strong>to early 2000, there was an abrupt <strong>and</strong>precipitous decl<strong>in</strong>e <strong>in</strong> market dem<strong>and</strong>. The factors contribut<strong>in</strong>g to this were• The Balanced Budget Act (BBA) began to seriously erode health delivery organizations’operat<strong>in</strong>g marg<strong>in</strong>s. BBA went <strong>in</strong>to effect <strong>in</strong> 1998, <strong>and</strong> the full impact beganto be felt through reduced federal reimbursement <strong>in</strong> 1999. BBA was a permanentreduction <strong>in</strong> the level of government reimbursement for health care services.
FIRST CONSULTING GROUP 155Exhibit 5.7. (Cont<strong>in</strong>ued)35,000,00030,000,00025,000,00020,000,00015,000,00010,000,0005,000,00001stQtr'992ndQtr'993rdQtr'994thQtr'99Net revenueProject marg<strong>in</strong>• The overspend<strong>in</strong>g <strong>in</strong> 1998 <strong>and</strong> 1999 on systems for Y2K read<strong>in</strong>ess shut downcapital for IT <strong>in</strong> 2000.• Executive management seriously questioned the “value” received for past ITexpenditures <strong>and</strong> the need for future <strong>in</strong>vestments.• All major IT vendors (except Cerner <strong>and</strong> several smaller firms) experiencedsignificant sales <strong>and</strong> revenue decl<strong>in</strong>es.As a result, the 1st <strong>and</strong> 2nd Q FY 2000 operat<strong>in</strong>g performance of the HD bus<strong>in</strong>essunit “tanked.” The overall structure, personnel assignments, <strong>and</strong> report<strong>in</strong>g formatswere realigned start<strong>in</strong>g <strong>in</strong> FY 2000. However, the relative operat<strong>in</strong>g metricsstill reflected a significant decl<strong>in</strong>e <strong>in</strong> performance.FY 200 HD Operat<strong>in</strong>g MetricsQuarter Revenue COS GM % Sell<strong>in</strong>g G&A Op. Inc. Op. Inc. (%)Q1 $13,347 $8,044 $5,303 39.7% $1,784 $1,454 $2,065 15.5%Q2 $10,914 $6,955 $3,959 36.3% $1,617 $1,574 $768 7.0%Fact Gather<strong>in</strong>g ResultsThe leadership of the HD bus<strong>in</strong>ess unit began a series of fact-gather<strong>in</strong>g <strong>and</strong> analysisexercises beg<strong>in</strong>n<strong>in</strong>g <strong>in</strong> March 2000. This fact gather<strong>in</strong>g focused on garner<strong>in</strong>g<strong>in</strong>put on current <strong>and</strong> projected market dem<strong>and</strong>, analysis of the operat<strong>in</strong>g statistics,review of the services portfolio <strong>and</strong> offer<strong>in</strong>gs, <strong>and</strong> review of the exist<strong>in</strong>g sales <strong>and</strong>(Cont<strong>in</strong>ued)
156 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEdelivery organization structures. Throughout the process, there was significantdebate, conflict<strong>in</strong>g op<strong>in</strong>ion, <strong>and</strong> contradictory recommendations. A summary of thesalient facts <strong>and</strong> op<strong>in</strong>ions <strong>in</strong>clude• There were no firm data on what the market was currently dem<strong>and</strong><strong>in</strong>g orlikely to dem<strong>and</strong> <strong>in</strong> the immediate future. Data from the vendors <strong>in</strong>dicated thatfor the rema<strong>in</strong>der of 2000, <strong>and</strong> potentially well <strong>in</strong>to 2001, dem<strong>and</strong> for software<strong>and</strong> new implementation bus<strong>in</strong>ess would be weak. The number of FCG drivensystems plans <strong>and</strong> vendor selections fell to an average of one to two newengagements per month.• There was a grow<strong>in</strong>g “rift” between the HD sales <strong>and</strong> delivery organizations.The delivery components of the organization felt that the sales side was noteffectively pursu<strong>in</strong>g the market opportunities, <strong>and</strong> the sales side felt that therewas limited market dem<strong>and</strong> <strong>and</strong> the HD service offer<strong>in</strong>gs no longer met themarket dem<strong>and</strong> they were pursu<strong>in</strong>g.• Many of the old vendor-based implementation services were no longer“sell<strong>in</strong>g” <strong>in</strong> the marketplace. The dem<strong>and</strong> for McKesson Robb<strong>in</strong>s HBOCsoftware, IDX software, <strong>and</strong> SMS software was <strong>in</strong> significant decl<strong>in</strong>e. Thesehad been ma<strong>in</strong>stays of the implementation services bus<strong>in</strong>ess.• Given the fall<strong>in</strong>g dem<strong>and</strong> <strong>in</strong> the marketplace, significant price-cutt<strong>in</strong>gbegan to appear. The vendors <strong>and</strong> other consult<strong>in</strong>g firm’s began to cut ratesby 20 to 40 percent <strong>in</strong> an effort to offset fixed costs.• The exist<strong>in</strong>g measurement <strong>and</strong> monitor<strong>in</strong>g systems were not strong orsufficient to analyze current or future performance. Specifically:The sales forecast process was imperfect <strong>and</strong> at best showed that futuredem<strong>and</strong> was weak or nonexistent.There were no clear l<strong>in</strong>es of accountability or measurement of sales <strong>and</strong>delivery effectiveness.There were no tools or practices <strong>in</strong> place to monitor the controllable costcomponents of the bus<strong>in</strong>ess unit; e.g. practice development direct expenses,other nonchargeable expenses, sales cost, <strong>and</strong> time by client type orgeography.Account plans were nonexistent.Exhibit 5.7. Bus<strong>in</strong>ess Model Exercise (Cont<strong>in</strong>ued)Use the facts, data, <strong>and</strong> op<strong>in</strong>ions detailed above to support your analyses <strong>and</strong>recommendations for the exercise.Source: © Confidential <strong>and</strong> Proprietary to First Consult<strong>in</strong>g Group. Repr<strong>in</strong>ted with permission.
FIRST CONSULTING GROUP 157Exhibit 5.8. Manag<strong>in</strong>g Acquisitions <strong>and</strong> Mergers ExerciseDraw<strong>in</strong>g upon the assigned preread<strong>in</strong>g materials, the ideas from today’s groupdiscussion, <strong>and</strong> the attached FCG Acquisition Checklists, evaluate the follow<strong>in</strong>gc<strong>and</strong>idate company as a potential FCG acquisition:• Identify what potential acquisition strategies may be possible here. Explore with thegroup not only a wholesale acquisition (if you can make the economics work) butalso other forms of acquisition or <strong>in</strong>vestment that meet both organization’s goals.• Settle on your best option <strong>and</strong> develop a short, 4–5-page PowerPo<strong>in</strong>t presentationoutl<strong>in</strong><strong>in</strong>g the follow<strong>in</strong>g:The basic structure of the dealThe strategic advantages <strong>and</strong> ga<strong>in</strong>s for both organizationsTime frame <strong>and</strong> economicsMajor “Due Diligence” tasksRisks• If, as a group, you are unable to structure a deal that leads to some form ofcomb<strong>in</strong><strong>in</strong>g (this can be a viable strategic option), prepare a 4–5-page PowerPo<strong>in</strong>tpresentation outl<strong>in</strong><strong>in</strong>g the follow<strong>in</strong>g:How the two companies will work together—the relationship structure <strong>and</strong>the leadership structure.How you will position the relationship <strong>in</strong> the marketplace.The targeted growth <strong>and</strong> profitability for the specific ERP practice.How you will manage the risks associated with not hav<strong>in</strong>g a formalizedrelationship <strong>and</strong> structure <strong>and</strong> how you will manage the potential for (companyname) sell<strong>in</strong>g (company name) to another organization.How/where does it fit with FCG’s current bus<strong>in</strong>ess strategy <strong>and</strong> structure?What particular advantages/opportunities does it provide for FCG?What are the revenue/profitability potentials?What is the “culture fit” between the two firms?Can a deal be put together? Why or why not?What would the deal structure look like?How does the staff/skills set fit <strong>in</strong>to FCG? Would we reta<strong>in</strong> everyone or wouldsome have to be released?What are the liabilities/risks associated with this acquisition?Should FCG buy this company?Be prepared to make a twenty-m<strong>in</strong>ute presentation of your team’s analysis <strong>and</strong>recommendation (be sure to address all the questions above <strong>in</strong> your presentation).Time Frame for Team Exercise: 1 hour 30 m<strong>in</strong>utesSource: © Confidential <strong>and</strong> Proprietary to First Consult<strong>in</strong>g Group. Repr<strong>in</strong>ted with permission.
158 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 5.9. Effective Communication ExerciseEffective today, you have been named CEO. You <strong>and</strong> your management teamhave gathered to def<strong>in</strong>e the communication requirements of the firm <strong>and</strong> def<strong>in</strong>ea communication strategy <strong>and</strong> plan for the firm.Draw<strong>in</strong>g upon the assigned preread<strong>in</strong>g materials, the ideas from today’s groupdiscussion, <strong>and</strong> your knowledge of the firm:• Th<strong>in</strong>k about the various constituencies <strong>and</strong> discuss their particular perspectiveregard<strong>in</strong>g FCG: What are their key communication issues <strong>and</strong> need for <strong>in</strong>formation?Spend adequate time <strong>in</strong> discuss<strong>in</strong>g the issues before proceed<strong>in</strong>g to thecreation of your plan.• Design a communications strategy <strong>and</strong> plan for your adm<strong>in</strong>istration: identifyhow many <strong>and</strong> specifically which constituencies you will communicate with,regard<strong>in</strong>g what issues, <strong>and</strong> with what frequency (consider vendors, clients,auditors, attorneys, board, market analysts, executive committee, VPC, VPDC,<strong>and</strong> any others you th<strong>in</strong>k are needed).• Describe the vehicle(s) you would employ to communicate with thosegroups/entities <strong>and</strong> def<strong>in</strong>e the manner <strong>in</strong> which you would evaluate theeffectiveness of that communication <strong>in</strong>itiative.Be prepared to make a twenty-m<strong>in</strong>ute presentation of your team’s analysis<strong>and</strong> recommendation (be sure to address all the questions above <strong>in</strong> yourpresentation).Time Frame for Team Exercise: 1 hour 30 m<strong>in</strong>utesSource: © Confidential <strong>and</strong> Proprietary to First Consult<strong>in</strong>g Group. Repr<strong>in</strong>ted with permission.
FIRST CONSULTING GROUP 159Exhibit 5.10. Sample Homework Assignment1. Between now <strong>and</strong> Session Two, <strong>in</strong>terview your bus<strong>in</strong>ess unit leader <strong>and</strong> preparean assessment of your bus<strong>in</strong>ess unit. Identify <strong>and</strong> address the follow<strong>in</strong>g:• Briefly describe the bus<strong>in</strong>ess unit’s organizational structure• Describe the current bus<strong>in</strong>ess model• Identify the current <strong>and</strong> future key bus<strong>in</strong>ess drivers <strong>and</strong> marketopportunities• Identify the unit’s relative strengths <strong>and</strong> weaknesses• Describe the unit’s skill set strengths <strong>and</strong> deficiencies• Identify the risks, exposures, <strong>and</strong> opportunities that will exist twelve totwenty-four months <strong>in</strong> the future• Outl<strong>in</strong>e how you would accelerate the growth of the unit 50 percent aboveits current level over the next twelve to eighteen months.Be prepared to make a presentation (no more than 20 m<strong>in</strong>utes <strong>in</strong> length) of youranalysis to the entire <strong>Leadership</strong> First group at the next session. This presentationshould be an orig<strong>in</strong>al-thought, focused analysis of the issues—not merely an academicexercise or a compendium of other presentations that may have been doneby members of the bus<strong>in</strong>ess unit.2. Us<strong>in</strong>g your assessment feedback <strong>in</strong>formation as the basis for your personalgrowth <strong>and</strong> learn<strong>in</strong>g strategy, complete your learn<strong>in</strong>g contract, <strong>in</strong> detail,identify<strong>in</strong>g the key developmental targets you want to set for yourself over thecom<strong>in</strong>g six to eight months. Be prepared to share your learn<strong>in</strong>g targets <strong>and</strong> todiscuss what progress you have made or are mak<strong>in</strong>g with your team atSession Two <strong>and</strong> Session Three.Source: © Confidential <strong>and</strong> Proprietary to First Consult<strong>in</strong>g Group. Repr<strong>in</strong>ted with permission.
160 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEABOUT THE CONTRIBUTORPaula Cowan, SPHR, is vice president of human resources, Emeritus, with FirstConsult<strong>in</strong>g Group, headquartered <strong>in</strong> Long Beach, California, retired <strong>in</strong> 2001. FCGdelivers strategic <strong>in</strong>formation technology solutions to clients <strong>in</strong> the health care<strong>in</strong>dustry. Jo<strong>in</strong><strong>in</strong>g the firm <strong>in</strong> 1996, she was the architect of the human resourcesorganization, structur<strong>in</strong>g <strong>and</strong> staff<strong>in</strong>g the function <strong>and</strong> design<strong>in</strong>g <strong>and</strong> implement<strong>in</strong>gmany of the organization’s HR <strong>in</strong>itiatives. She served as a member ofthe firm’s Operat<strong>in</strong>g Committee <strong>and</strong> the <strong>Leadership</strong> <strong>Development</strong> Committee,along with the CEO <strong>and</strong> the operational vice president, who chaired the firm’sQuality Initiative. Before jo<strong>in</strong><strong>in</strong>g First Consult<strong>in</strong>g Group, she held executive leadershippositions <strong>in</strong> the health care, high-tech, <strong>and</strong> consult<strong>in</strong>g <strong>in</strong>dustries. Sheholds bachelor’s <strong>and</strong> master’s degrees from California State <strong>University</strong>, LongBeach Campus, <strong>and</strong> the SPHR certification from the Society for Human ResourceManagement (SHRM). She is a recipient of the American Society for Tra<strong>in</strong><strong>in</strong>g<strong>and</strong> <strong>Development</strong>’s Torch Award <strong>and</strong> the YWCA’s Outst<strong>and</strong><strong>in</strong>g Bus<strong>in</strong>ess WomanAward. Her articles have appeared <strong>in</strong> HR Magaz<strong>in</strong>e, Personnel Journal, HR PC,<strong>and</strong> the Proceed<strong>in</strong>gs of the American Society for Tra<strong>in</strong><strong>in</strong>g <strong>and</strong> <strong>Development</strong>. Shehas served as a guest speaker at the Blue Cross Association Conference, PIRA,Los Angeles Compensation <strong>and</strong> Benefits Association, Pepperd<strong>in</strong>e <strong>University</strong>, <strong>and</strong>the Women’s Employment Options Conference.
SCHAPTER SIXGE CapitalSThis case study describes a global high-impact leadership development<strong>in</strong>tervention with real bus<strong>in</strong>ess impact that is achieved through arobust diagnostic <strong>and</strong> assessment process, GE values, the three lensesof leadership, storytell<strong>in</strong>g, futur<strong>in</strong>g, uncover<strong>in</strong>g peak performance,systems th<strong>in</strong>k<strong>in</strong>g, <strong>and</strong> follow-up forums <strong>and</strong> evaluation.OVERVIEW 162BUSINESS CASE FOR LEADERSHIP DEVELOPMENT 162GETTING STARTED 163Figure 6.1: Anchor<strong>in</strong>g the Initiative 165BUILDING THE OPERATING PHILOSOPHY 166Figure 6.2: Three Lenses of <strong>Leadership</strong> 166Design, Tools, <strong>and</strong> Techniques 167Organization Analysis Model 171Figure 6.3: Organizational Culture 171FOLLOW-UP AND RESULTS 172FINAL OBSERVATIONS 173EXHIBITSExhibit 6.1: Executive <strong>Leadership</strong> <strong>Development</strong> Symposium:Personal Challenges 174Exhibit 6.2: Executive <strong>Leadership</strong> <strong>Development</strong> Symposium:Organizational Challenges 175Exhibit 6.3: Executive <strong>Leadership</strong> <strong>Development</strong> Symposium:Additional Personal Challenges 176Exhibit 6.4: Sample Agenda: ELDS Program at a Glance 177REFERENCES 179ABOUT THE CONTRIBUTOR 179161
162 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEOVERVIEWToo many leadership <strong>in</strong>terventions are fashioned <strong>in</strong> ways that do not engage thebus<strong>in</strong>ess leaders themselves <strong>in</strong> the design <strong>and</strong> delivery of the <strong>in</strong>terventions. Asa result, the <strong>in</strong>tervention at times feels more like a tra<strong>in</strong><strong>in</strong>g exercise than anopportunity to improve from an organizational <strong>and</strong> personal perspective. Weknow from study<strong>in</strong>g leadership development <strong>in</strong>terventions that leaders learnthe most from experiences that are rooted <strong>in</strong> what they do every day (Bass,1990; Argyris, 1976; Clark, Clark, <strong>and</strong> Campbell, 1992) <strong>and</strong> that have directapplicability to their job. Too few <strong>in</strong>terventions are tracked to determ<strong>in</strong>e the realimpact they have on the performance of the organization <strong>and</strong> the participat<strong>in</strong>g<strong>in</strong>dividual.This case study will provide a “soup to nuts” process for design<strong>in</strong>g, deliver<strong>in</strong>g,<strong>and</strong> evaluat<strong>in</strong>g leadership development <strong>in</strong>itiatives that can be implemented<strong>in</strong> your organization. It lays out a process used globally <strong>in</strong> the f<strong>in</strong>ancial servicesbus<strong>in</strong>ess of the GE Company. The process is proven to work <strong>in</strong> vary<strong>in</strong>g cultures<strong>and</strong> bus<strong>in</strong>ess types, not just f<strong>in</strong>ancial organizations but also <strong>in</strong> <strong>in</strong>dustrial bus<strong>in</strong>esses<strong>and</strong> across functions as well. Proven methods are outl<strong>in</strong>ed for engag<strong>in</strong>gthe bus<strong>in</strong>ess leaders <strong>in</strong> the process—a powerful <strong>in</strong>gredient for success.BUSINESS CASE FOR LEADERSHIP DEVELOPMENTGE Capital, as it was then known, the f<strong>in</strong>ancial services arm of the GECompany, was experienc<strong>in</strong>g tremendous bus<strong>in</strong>ess expansion. It was one of thefastest grow<strong>in</strong>g f<strong>in</strong>ancial services organizations <strong>in</strong> the world, go<strong>in</strong>g from aU.S.-based organization <strong>in</strong> the early 1990s to a global organization <strong>in</strong> the midto late 1990s. One of the hallmarks of GE is driv<strong>in</strong>g a culture of know<strong>in</strong>g its keyleadership talent <strong>and</strong> ensur<strong>in</strong>g that the talent reflects the strong values thatunderscore the company. With rapid global expansion, it was feared that GEwould lose this competitive advantage if we did not act quickly to ma<strong>in</strong>ta<strong>in</strong>strong ties to our new <strong>and</strong> emerg<strong>in</strong>g leaders. And as the company exp<strong>and</strong>edglobally, ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g the culture became <strong>in</strong>creas<strong>in</strong>gly important.<strong>Leadership</strong> plays a significant role <strong>in</strong> model<strong>in</strong>g <strong>and</strong> re<strong>in</strong>forc<strong>in</strong>g the cultureof the organization, <strong>and</strong>, as the literature underscored, leaders who do notreflect the cultural values of the organization can have a disastrous impact onthe bottom l<strong>in</strong>e (F<strong>in</strong>kelste<strong>in</strong> <strong>and</strong> Hambrick, 1996). Historically, GE is known forits ability to shape <strong>and</strong> develop strong leaders, so it was only natural that withthe fast expansion of GE Capital that the bus<strong>in</strong>ess would focus on develop<strong>in</strong>gleaders. The question was exactly how we were go<strong>in</strong>g to go about grow<strong>in</strong>gleaders <strong>in</strong> a cost-effective <strong>and</strong> effective way.
GE CAPITAL 163GETTING STARTEDThe temptation for develop<strong>in</strong>g leadership <strong>in</strong>terventions is to go to those whohave experience do<strong>in</strong>g them with<strong>in</strong> the organization. Although they are a greatresource for <strong>in</strong>stitutional history, these “<strong>in</strong>siders” often can perpetuate theirown beliefs <strong>and</strong> myths about leadership development <strong>and</strong> tra<strong>in</strong><strong>in</strong>g, thus creat<strong>in</strong>gtheir own bl<strong>in</strong>ders for “out of the box th<strong>in</strong>k<strong>in</strong>g.” The real people whoknow the issues <strong>and</strong> what is miss<strong>in</strong>g <strong>in</strong> the leadership equation are the leadersthemselves. Also, it is important to build a critical mass of support for an effortto uncover the focal po<strong>in</strong>ts for significant change <strong>and</strong> to connect with the leadershipcommunity on what they believe is important about leadership.Contrary to some advice, I embarked on a massive effort to <strong>in</strong>terview all thebus<strong>in</strong>ess leaders about their views on bus<strong>in</strong>ess <strong>and</strong> leadership challenges. I also<strong>in</strong>terviewed a cross-section of potential users of the system to get a read on theirappetite for change <strong>and</strong> personal development. This was a very useful <strong>and</strong>enlighten<strong>in</strong>g exercise. Not only were the bus<strong>in</strong>ess issues identified but also thebus<strong>in</strong>ess leaders’ teachable po<strong>in</strong>ts of view on effective leadership were uncovered(Tichy <strong>and</strong> Cohen, 1997). The benefit was two-fold: learn<strong>in</strong>g that there wasconsiderable consensus about the bus<strong>in</strong>ess challenges ahead (always goodnews); <strong>and</strong> that the leaders themselves could be a critical part of the developmenteffort, s<strong>in</strong>ce they <strong>in</strong>deed had strong views about leadership <strong>and</strong> what ittakes to be a good leader. They clearly had their teachable po<strong>in</strong>ts of view—their“def<strong>in</strong><strong>in</strong>g moments” when they learned their greatest lessons—<strong>and</strong> they wereexcited to talk about them. Potential participants had a strong desire to learn<strong>and</strong> be on the cutt<strong>in</strong>g edge. They had a thirst for underst<strong>and</strong><strong>in</strong>g the bigger contextof the organization, improv<strong>in</strong>g themselves, <strong>and</strong> cont<strong>in</strong>u<strong>in</strong>g to motivatethose they led.The same series of questions were asked of both bus<strong>in</strong>ess leaders <strong>and</strong> potentialparticipants. The <strong>in</strong>terview approach was open-ended, us<strong>in</strong>g the follow<strong>in</strong>gquestions:• What are biggest challenges fac<strong>in</strong>g the bus<strong>in</strong>ess; what keeps you awakeat night?• If you had one message to future leaders of this bus<strong>in</strong>ess, what wouldit be?• What will leaders need to do to address the bus<strong>in</strong>ess challenges?• What is it that you want to be remembered for as a leader?• What was your greatest def<strong>in</strong><strong>in</strong>g moment that taught you the mostabout leadership?• What excites you most about your current role?
164 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE• Is focus<strong>in</strong>g on leadership development important? If yes, why? And ifno, why not?• If we were to launch an effort, would you be will<strong>in</strong>g to be part of thefaculty?Although these questions may seem self-evident, they led to some very <strong>in</strong>terest<strong>in</strong>gdiscussions. You will note that I never asked the obvious question—Whatskills do you th<strong>in</strong>k leaders need? That would have been too easy <strong>and</strong> would haveprovided the typical answers not necessarily rooted <strong>in</strong> the bus<strong>in</strong>ess need. Thequestions were also future focused. This was important because we were notdebat<strong>in</strong>g, justify<strong>in</strong>g, or try<strong>in</strong>g to rectify what happened <strong>in</strong> the past. We wereth<strong>in</strong>k<strong>in</strong>g proactively about what the bus<strong>in</strong>ess <strong>and</strong> leaders would need to be successfulgo<strong>in</strong>g forward. The <strong>in</strong>terviewees also had a chance to be reflective aboutthemselves <strong>and</strong> their bus<strong>in</strong>ess—an enjoyable luxury <strong>in</strong> today’s fast-paced world.I walked out of these <strong>in</strong>terviews know<strong>in</strong>g a great deal about the bus<strong>in</strong>esschallenges, leadership lessons from potential teachers, <strong>and</strong> the leadership needsfrom potential participants. The group’s energy to be <strong>in</strong>volved <strong>and</strong> engaged <strong>in</strong>the <strong>in</strong>itiative was build<strong>in</strong>g. The time spent <strong>in</strong> this activity was well worth theeffort, as it allowed us to design someth<strong>in</strong>g reflective of the bus<strong>in</strong>ess environment.A key outcome of this step was to underst<strong>and</strong> what aspects of leadershipabout which the bus<strong>in</strong>ess leaders were passionate. Each bus<strong>in</strong>ess leader had aparticular area of focus that would prove <strong>in</strong>valuable go<strong>in</strong>g forward. A great dealof group excitement was also built for the next steps through this <strong>in</strong>terviewprocess.Lesson One: Engage the leaders early <strong>in</strong> the process. In look<strong>in</strong>g back, I def<strong>in</strong>itelywould not skip this step as the first. It laid the foundation <strong>and</strong> cornerstone ofthe effort that created great momentum <strong>and</strong> buy-<strong>in</strong>. It also helped us see thatthere was tremendous enthusiasm for develop<strong>in</strong>g the next generation of seniorleaders.With the macro bus<strong>in</strong>ess issues def<strong>in</strong>ed, leadership needs determ<strong>in</strong>ed, <strong>and</strong> leadershiplessons articulated, it was time to get more granular. Now we needed todelve <strong>in</strong>to the world of competencies. If we started with competencies we wouldhave lost leaders pressured by bus<strong>in</strong>ess concerns, <strong>in</strong> OD <strong>and</strong> HR jargon (which,by the way, I would avoid at all costs).Driv<strong>in</strong>g to the micro issues became an easier task because the macro issueswere understood. The Workout process, a GE problem-solv<strong>in</strong>g technique, wasused to def<strong>in</strong>e what the specific macro characteristics looked like when theywere be<strong>in</strong>g successfully exhibited. The Workout was high-energy <strong>and</strong> fun.Teams of bus<strong>in</strong>ess leaders agreed on the def<strong>in</strong>itions of the characteristics <strong>and</strong>then drilled the characteristics down <strong>in</strong>to behavioral terms. There was considerableconsensus about what constituted successful future leadership. Through
GE CAPITAL 165Re<strong>in</strong>forc<strong>in</strong>g the GE ValuesStrategicth<strong>in</strong>kerCreatestop talentResultsorientedChampionof diversityCustomerfocusTeambuilderCommunicatorActs with<strong>in</strong>tegrityChangeagentFigure 6.1 Anchor<strong>in</strong>g the Initiative.this exercise the leadership development framework <strong>in</strong> Figure 6.1 <strong>and</strong> relatedbehaviors were def<strong>in</strong>ed.The framework was sent to all the bus<strong>in</strong>ess leaders for f<strong>in</strong>al validation. Onceendorsed it became the behavioral underp<strong>in</strong>n<strong>in</strong>g of the <strong>in</strong>tervention to come.Lesson Two: Build your own framework. It would have been easier <strong>and</strong> quickerto research the literature <strong>and</strong> come up with the framework <strong>and</strong> competencies,present them to the leadership, <strong>and</strong> ask for their endorsement, which they probablywould have done. Or worse yet have an outside consultant develop it for us.But there would have been no ownership for the behaviors, <strong>and</strong> the frameworkwould not have had the same weight with the participants as one that was developed<strong>and</strong> owned by their bus<strong>in</strong>ess leaders. The <strong>in</strong>tervention was not based uponan off-the-shelf set of behaviors but behaviors that we firmly believed <strong>in</strong> as abus<strong>in</strong>ess.An <strong>in</strong>terest<strong>in</strong>g po<strong>in</strong>t to note is that the framework tracked very closely withthe major studies relative to leadership characteristics for success (AndersenConsult<strong>in</strong>g, 1999). From a literature <strong>and</strong> research perspective it was a verydefensible, valid document. Ultimately it became the basis for a 360-survey feedback<strong>in</strong>strument to be used <strong>in</strong> the <strong>in</strong>tervention. Now we were ready for thedesign work to beg<strong>in</strong>.
166 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEBUILDING THE OPERATING PHILOSOPHYMany leadership development efforts are solely designed around leader behaviors<strong>and</strong> follower reactions. However, a more contemporary view is that leaders areresponsible at three levels: their personal behaviors that reflect their values; howthey <strong>in</strong>teract, engage their followers, <strong>and</strong> model their values; <strong>and</strong> how they buildstrong, healthy organizations that are susta<strong>in</strong>able over time. Specifically, leadersbuild organizations that provide benefit to employees, shareholders, customers,<strong>and</strong> the communities <strong>in</strong> which they reside. Keep<strong>in</strong>g organization <strong>in</strong>tegrity <strong>and</strong>ethics <strong>in</strong> the forefront of leaders’ m<strong>in</strong>ds, while a hallmark for GE leaders, wouldbecome timely <strong>in</strong> the post-Enron era. The organiz<strong>in</strong>g pr<strong>in</strong>ciples that would drivethe design would be the <strong>in</strong>terrelationship of these three levels of leadership.GE is a values-based organization <strong>and</strong> the GE values needed to be reflected.Values are much more important to true leadership than behavior <strong>and</strong> style(Clawson, 1999). In fact, as we now know leaders have many different stylesbut what truly differentiates a leader from others is strongly held values thatguide day-to-day work. Many leadership gurus agree on this po<strong>in</strong>t (Clawson,1999; Deal <strong>and</strong> Kennedy, 1982). Therefore, the program design focused on help<strong>in</strong>gparticipants undercover their underly<strong>in</strong>g values <strong>and</strong> see how those valuesmanifest themselves <strong>in</strong> their behaviors. We wanted to help participants makethe l<strong>in</strong>k between their values <strong>and</strong> assumptions <strong>and</strong> their behaviors so they couldbe aligned. The idea was to create consistent behavior congruent with theirbeliefs. Also, there would be a reflective nature to the <strong>in</strong>itiative. S<strong>in</strong>ce fairlysenior leaders would be attend<strong>in</strong>g, we did not want to assume that they did notalready have a personal theory of leadership; rather, we wanted to br<strong>in</strong>g thattheory to the conscious level to ensure they really understood what drovethem personally. We wanted participants to def<strong>in</strong>e their guid<strong>in</strong>g pr<strong>in</strong>ciples,Individual, Team, <strong>and</strong> OrganizationIndividualTeamOrganizationFigure 6.2 Three Lenses of <strong>Leadership</strong>.
GE CAPITAL 167underst<strong>and</strong> why they were important to them, <strong>and</strong> share these pr<strong>in</strong>ciples soleaders could learn from each other.It was also important that the program fit squarely with<strong>in</strong> the GE culture ofAction Learn<strong>in</strong>g through bus<strong>in</strong>ess-based experience. Thus, Action Learn<strong>in</strong>gbecame the general development pr<strong>in</strong>ciple, whereby participants would takeaction, reflect, <strong>and</strong> reframe based upon the experience (Argyris, 1976). In additionto these concepts, we also would employ the follow<strong>in</strong>g:• Storytell<strong>in</strong>g. Stories lend themselves to greater retention, <strong>and</strong> we wantedleaders to learn how to use storytell<strong>in</strong>g <strong>in</strong> their own environments(Conger, 1993).• Futur<strong>in</strong>g. One has to change <strong>in</strong> the context of the future, which is muchmore energiz<strong>in</strong>g than try<strong>in</strong>g to change the mistakes of the past(Goldsmith, 2001). The common OD approach to diagnose the past asa start<strong>in</strong>g po<strong>in</strong>t for future plann<strong>in</strong>g was ab<strong>and</strong>oned.• Uncover<strong>in</strong>g peak performance. Everyone is a leader at some po<strong>in</strong>t, <strong>and</strong>reflect<strong>in</strong>g on when you are at your best helps you see that <strong>in</strong> fact you dohave the capacity to demonstrate great leadership. But you must applythose peak experiences to every day (Cooperrider, 1997–1998).• Systems th<strong>in</strong>k<strong>in</strong>g. Every leader must have a systematic way ofview<strong>in</strong>g the whole organization from a strategic perspective so thathe or she can drive organizational alignment <strong>and</strong> systematic change(Senge, 1990).Lesson Three: Def<strong>in</strong><strong>in</strong>g your conceptual framework, such as the three levels ofleadership, is critical because the framework provides the glue that holds the programtogether. Be sure you have determ<strong>in</strong>ed your design philosophy <strong>and</strong> assumptions<strong>and</strong> that they are consistent with the culture of the organization before youset out to map content <strong>and</strong> determ<strong>in</strong>e tools <strong>and</strong> techniques to be used. A framework<strong>and</strong> operat<strong>in</strong>g assumptions provide the logic for the <strong>in</strong>itiative, <strong>and</strong> the participantswill be able to feel the congruency add<strong>in</strong>g to the power of the program.A clearly articulated philosophy proved to be essential.With this groundwork <strong>in</strong> place it was time to develop the actual materials(both pre- <strong>and</strong> post-), the sequence of events, <strong>and</strong> faculty.Design, Tools, <strong>and</strong> TechniquesThe approach needed to be flexible enough to adapt to the constant chang<strong>in</strong>gbus<strong>in</strong>ess environment yet be structured enough to be reliable <strong>and</strong> repeatablewith consistent high-quality results. The ma<strong>in</strong> components would be pre-workconsist<strong>in</strong>g of <strong>in</strong>terviews <strong>and</strong> personal surveys, a week-long symposium<strong>in</strong>clud<strong>in</strong>g personal coaches, post-program survey follow-up, <strong>and</strong> <strong>in</strong>tensive oneortwo-day specific topic events to focus on a targeted development need.
168 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEThe pre-work <strong>in</strong>cluded the follow<strong>in</strong>g:• Interviews to help with the reflective process <strong>and</strong> to set the targets fortheir <strong>in</strong>dividual development needs. Interviews were conducted withparticipants’ boss, several peers, subord<strong>in</strong>ates, <strong>and</strong> customers to get aperspective on the challenges fac<strong>in</strong>g the bus<strong>in</strong>ess <strong>and</strong> what leaders ofthe future needed to do to address these challenges (Exhibit 6.1).• Personal analysis of peak performance experience. Specifically, whatwas the event, who was <strong>in</strong>volved, <strong>and</strong> what were they do<strong>in</strong>g that madeit peak (Exhibit 6.2).• Completion of three survey <strong>in</strong>struments: a 360-feedback survey, which<strong>in</strong>cluded a question to describe this person at peak performance, theMyers Briggs Type Indicator (MBTI), <strong>and</strong> the <strong>Leadership</strong> Impact (L/I)Survey developed by Human Synergistics, a survey that correlates leaderbehavior with organization culture <strong>and</strong> values.In addition, we personally called each participant to set expectations <strong>and</strong>expla<strong>in</strong> the design pr<strong>in</strong>ciples <strong>and</strong> philosophy so they understood what they werego<strong>in</strong>g to experience. We wanted to be sure that people were well versed beforethey attended <strong>and</strong> understood that the primary focus was leadership.Lesson Four: Carefully constructed pre-work helped set the tone for the program<strong>and</strong> signal that this was not go<strong>in</strong>g to be a typical experience. It also helped buildexcitement for what partipants were to experience. The <strong>in</strong>dividual calls proved<strong>in</strong>valuable, as participants knew what to expect <strong>and</strong> felt respected as customersof the event.The program itself beg<strong>in</strong>s with a story from Killer Angels, a historical novelabout the Civil War by Michael Shaara. The story about Colonel Chamberla<strong>in</strong>,excerpted from the book, highlighted the three levels of leadership <strong>and</strong> underscoredthe notion that real leadership is based upon a moral foundation <strong>and</strong>a set of pr<strong>in</strong>ciples, not behaviors. The story depicts a def<strong>in</strong><strong>in</strong>g moment <strong>in</strong> leadership<strong>in</strong> which Chamberla<strong>in</strong> had exactly three m<strong>in</strong>utes to capture the hearts<strong>and</strong> m<strong>in</strong>ds of men to follow him <strong>in</strong>to a key battle. This segment was directlyextracted from work done by Jim Clawson, a professor at the Darden School ofBus<strong>in</strong>ess at the <strong>University</strong> of Virg<strong>in</strong>ia. Jim was k<strong>in</strong>d enough to do this segmentfor us, <strong>and</strong> it set an extremely powerful tone for what the week ahead was tobe like. It caused people to really th<strong>in</strong>k about what their guid<strong>in</strong>g pr<strong>in</strong>cipleswould be go<strong>in</strong>g forward as they exp<strong>and</strong> their leadership roles. The afternoon ofthe first day is spent debrief<strong>in</strong>g the <strong>in</strong>terviews from the pre-work to help providethe context of what leaders will be called upon <strong>in</strong> the future to do, giventhe bus<strong>in</strong>ess challenges ahead.With the future leadership imperatives def<strong>in</strong>ed, it was then time to providethe 360-feedback results so that participants could see what they might need to
GE CAPITAL 169work on to cont<strong>in</strong>ue to grow as leaders. This is an important but subtle shift <strong>in</strong>th<strong>in</strong>k<strong>in</strong>g. It helps people look ahead, not back, <strong>and</strong> puts leadership <strong>in</strong> the contextof the bus<strong>in</strong>ess world. Not surpris<strong>in</strong>g, participants love the discussionbecause it helps them learn that their bus<strong>in</strong>ess challenges are not unique, othersare <strong>in</strong> the same boat, <strong>and</strong> that we can all learn ways to improve from each other.It takes the threat out of the 360-degree processes because we are not look<strong>in</strong>g atwhat they did wrong <strong>in</strong> the past but what they need to do go<strong>in</strong>g forward. At theend of the first day participants signed up for one-on-one coach<strong>in</strong>g time withtheir personal coach to review their <strong>in</strong>dividual feedback <strong>in</strong>struments <strong>and</strong> discussaction plans. Each coach would work with a team of six to seven people <strong>and</strong> provide<strong>in</strong>dividual <strong>and</strong> team coach<strong>in</strong>g throughout the rema<strong>in</strong>der of the week.As a note, the orig<strong>in</strong>al design called for outside coaches, but as the programprogressed we switched to us<strong>in</strong>g <strong>in</strong>ternal senior human resource managers. Thiswas a vital switch because the <strong>in</strong>ternal coaches understood the context of thebus<strong>in</strong>ess <strong>and</strong> the values <strong>and</strong> culture of the company. They gave much morevaluable coach<strong>in</strong>g because they could help frame the issues <strong>in</strong> relationship tothe current bus<strong>in</strong>ess realities. In addition, the <strong>in</strong>ternal people loved be<strong>in</strong>g usedas executive coaches, <strong>and</strong> the coach<strong>in</strong>g relationships often lasted long beyondthe actual program, another added benefit.The first day ended (as does each day) with a “fireside chat” with a bus<strong>in</strong>essleader who discusses his or her views on leadership: personal def<strong>in</strong><strong>in</strong>g moment<strong>and</strong> lessons learned. The fireside chats were structured to be <strong>in</strong>formal dialoguesso that everyone could engage <strong>in</strong> a good discussion <strong>and</strong> learn from each other’sperspective. As noted, borrow<strong>in</strong>g from Noel Tichy’s teachable po<strong>in</strong>ts of view,bus<strong>in</strong>ess leaders would do presentations throughout the program on topicsrelevant to that day’s discussion. Typically, there are about ten to twelve leaderswho participate as faculty.Lesson Five: Us<strong>in</strong>g <strong>in</strong>ternal people as teachers <strong>and</strong> coaches sets a unique tone. Ithelps people see the various bus<strong>in</strong>ess leaders <strong>in</strong> a different light. The bus<strong>in</strong>essleader participation also shows a tremendous level of support that can only helpprovide credibility <strong>and</strong> build the success of the effort. Plus <strong>in</strong>ternal coaches addtremendous contextual value.Day two cont<strong>in</strong>ues to focus on the <strong>in</strong>dividual aspects of leadership by explor<strong>in</strong>gthe MBTI <strong>and</strong> debrief<strong>in</strong>g the <strong>Leadership</strong> Impact (L/I) Survey that is also360-degree <strong>in</strong> nature. The three surveys closely correlate (360, MBTI, <strong>and</strong> L/I)<strong>and</strong> provide multiple data po<strong>in</strong>ts to help people identify what they need to workon to cont<strong>in</strong>ue to be successful. Also, they see what is said about them at peakperformance <strong>and</strong> what they have said at peak performance, which tends to beclosely aligned. It is <strong>in</strong>terest<strong>in</strong>g that peak performance showed up at times ofcrisis when real focus was needed. Another <strong>in</strong>terest<strong>in</strong>g note about peakperformance is that what participants do at their peak-performance level isconsistently what they also need to do more of on a day-to-day basis. This
170 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEre<strong>in</strong>forces the po<strong>in</strong>t that leaders can demonstrate excellence when they have tobut also need to pay attention to what they do dur<strong>in</strong>g normal times, when theytend to fall back <strong>in</strong>to old habits.Lesson Six: Pick your <strong>in</strong>struments carefully <strong>and</strong> be sure to have enough datapo<strong>in</strong>ts to support change. Surveys need to closely align with the overall constructof the program. In this case the three surveys <strong>and</strong> peak performance analysis re<strong>in</strong>forcedthe three levels of leaderships both from the moral foundation perspective<strong>and</strong> from the <strong>in</strong>dividual, team, <strong>and</strong> organizational perspective. Also, be sure the<strong>in</strong>struments can correlate so they re<strong>in</strong>force what leaders may need to work on,<strong>and</strong> don’t allow leaders to walk away from the real issues.Day two closes with Marshall Goldsmith’s coach<strong>in</strong>g model that we haveadapted (Goldsmith, 2001). At this po<strong>in</strong>t participants have enough data toselect one item that they want to work on, <strong>and</strong> we apply Marshall’s coach<strong>in</strong>gmodel so that they can get ideas about how they can improve from theircolleagues. This is a great end to the experiential part of the day because theparticipants learn that they all have similar issues that they are work<strong>in</strong>g on<strong>and</strong> that they can get very practical suggestions from each other for how theycan improve. Marshall’s model is very user friendly <strong>and</strong> easy to implementwith busy executives. There is an added benefit, as this sets the tone for peercoach<strong>in</strong>g that will go on for the rest of the week. Participants not onlyget <strong>in</strong>dividual one-on-one coach<strong>in</strong>g but also an environment is created <strong>in</strong>which they are coach<strong>in</strong>g <strong>and</strong> help<strong>in</strong>g each other improve. These relationshipshave lasted well beyond the program; teams often follow up with each<strong>and</strong> have “improvement calls” with each other. In addition, many have usedthis model with their own staff to build more teamwork when they return towork.Days three <strong>and</strong> four focus on the leader-follower relationships <strong>and</strong> learn<strong>in</strong>gan Organization Analysis (OA) model—a systems th<strong>in</strong>k<strong>in</strong>g model for organizationsthat helps drive strategy. The OA model is a tool used to analyze a bus<strong>in</strong>esscase specifically selected for the program that is typically around a new change<strong>in</strong>itiative or a contemporary problem that needs to be addressed. The case is nota Harvard Case Study but rather a statement of facts written relative to the OrganizationAnalysis (OA) model—a type of organizational 360. The model buildson Six Sigma <strong>and</strong> enables a bus<strong>in</strong>ess leader or leadership team to diagnosis abus<strong>in</strong>ess situation <strong>and</strong> determ<strong>in</strong>e the areas they will need to work on to improvethe organization. (See Chapter Seven for more <strong>in</strong>formation about the Six Sigmaprogram.)Participants are also put <strong>in</strong>to <strong>in</strong>tact teams to work on the case. They contractwith each other around the team behaviors <strong>and</strong> process to be used, <strong>and</strong> thecoach plays the role of process observer <strong>and</strong> team feedback provider. The coachis empowered to po<strong>in</strong>t out when dysfunctional behavior or process is occurr<strong>in</strong>g,thus enabl<strong>in</strong>g the team to learn <strong>and</strong> self-correct. Team behaviors tend to come
GE CAPITAL 171out strongly because the teams are given a real bus<strong>in</strong>ess case to work on. Thisprovides another significant level of learn<strong>in</strong>g by do<strong>in</strong>g.Organization Analysis ModelThe case is typically twenty-five to thirty pages long <strong>and</strong> presents facts on eachaspect of the OA model. It provides sufficient data for a team to make reasonedjudgments about the issues. In addition, the bus<strong>in</strong>ess owner of the case attendsthe program <strong>and</strong> answers any questions that the teams may have about thecase. Associated with the OA are a series of questions that assist the teams <strong>in</strong>determ<strong>in</strong><strong>in</strong>g the component of the model they will have to attack first if theyare to drive susta<strong>in</strong>able improvements. Their recommendations are reported onthe f<strong>in</strong>al day of the program to the bus<strong>in</strong>ess owner <strong>and</strong> to someone from theoffice of the CEO. The teams learn the model <strong>and</strong> apply it to a real issue. Thisapproach helps them conceptualize how to drive change relative to a seriousbus<strong>in</strong>ess concern that can be applied to their own organization.Lesson Seven: Driv<strong>in</strong>g team behavior <strong>and</strong> learn<strong>in</strong>g change is most effectivearound a real, press<strong>in</strong>g bus<strong>in</strong>ess issue. This is not a game or group exercise butsometh<strong>in</strong>g that is important to the success of the company. Also, team behaviorstend to come out <strong>in</strong> a more pronounced way when people are work<strong>in</strong>g on issuesthey really care about. The lessons of how they affect others <strong>and</strong> potentially affectfollowers are even more poignant. They can take a look at their values <strong>and</strong> seehow their behavior <strong>in</strong> action is or is not consistent with the values that theyprofess—another very significant learn<strong>in</strong>g po<strong>in</strong>t. They get a bird’s eye view ofthe impact they have on their followers.EnablerManagementsystemGoal<strong>Leadership</strong>Bus<strong>in</strong>ess strategy<strong>and</strong> plann<strong>in</strong>gHuman resourcedevelopment <strong>and</strong>managementInformation<strong>and</strong> analysisCustomerfocusProcessdesign <strong>and</strong>managementPerformance resultsCustomer <strong>and</strong>employee satisfactionF<strong>in</strong>ancial <strong>and</strong> marketHuman resourcesSupplierOperationalFigure 6.3 Organizational Culture.
172 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEThe program ends on day five with pull<strong>in</strong>g all the experiences together <strong>in</strong>to acohesive whole. Participants f<strong>in</strong>alize their personal development plans <strong>and</strong> theirgroup recommendations on the bus<strong>in</strong>ess issue, <strong>and</strong> do one last round of teamcoach<strong>in</strong>g to determ<strong>in</strong>e what could they have done better as a team <strong>and</strong> as <strong>in</strong>dividualteam players. They also def<strong>in</strong>e their leadership lessons learned. The programconcludes with a report <strong>and</strong> dialogue conducted with typically the presidentor CEO or someone very senior from the office of the CEO. The conclud<strong>in</strong>g reportsare significant <strong>in</strong> that they lay the groundwork for what recommendations will beadopted by the organization go<strong>in</strong>g forward. For the record, many of the suggestionshave gone on to be implemented with<strong>in</strong> the company with great success. Aweek at a glance is provided so the readers can get a flavor of the actual flow ofthe program (Exhibit 6.4).FOLLOW-UP AND RESULTSEven though the formal program ends, there is considerable follow-up that takesplace. Participants are surveyed for actions they have taken at the <strong>in</strong>dividual,team, <strong>and</strong> organizational levels to drive change—follow<strong>in</strong>g the orig<strong>in</strong>al constructof the program around the three levels of leadership. By all accounts significantimprovements have been noted. Also, participants are queried relative to additionalsupport they might need <strong>in</strong> order to cont<strong>in</strong>ue to grow as leaders. Thesedata are used as the basis for one-day follow-up sessions around specific leadershipissues. These “<strong>Best</strong> Practice” forums are events for which we br<strong>in</strong>g <strong>in</strong>experts on specific key topics. Marshall Goldsmith did an <strong>in</strong>tensive session oncoach<strong>in</strong>g, <strong>and</strong> Jay Conger did an <strong>in</strong>-depth session on strategic communication, toname just two. This keeps the learn<strong>in</strong>g go<strong>in</strong>g.Three months <strong>and</strong> six months after the <strong>in</strong>itial program we also conduct am<strong>in</strong>i-360 around each person’s specific development need. We have found that<strong>in</strong> 95 percent of the situations participants have improved on the job as viewedby their orig<strong>in</strong>al feedback givers. This is a very important statistic. We know fora fact that the program has significant impact because the bus<strong>in</strong>ess has beenchanged as a result of the participants’ recommendations, <strong>and</strong> participantsthemselves have noted significant personal change, but most important thepeople they deal with have seen susta<strong>in</strong>ed change. We th<strong>in</strong>k the results speakfor themselves.Of course we do program evaluations to make sure that the design <strong>and</strong> contentrema<strong>in</strong> relevant <strong>and</strong> adapt to a global audience. The program consistentlygets a 4 out of 4 rat<strong>in</strong>g, <strong>in</strong>dicat<strong>in</strong>g that we have perfected an approach that isrepeatable <strong>and</strong> reliable no matter where it is conducted. The real proof ofsuccess, though, is <strong>in</strong> the quantifiable results that come from the effort.
GE CAPITAL 173Lesson Eight: Follow-up is absolutely key to demonstrat<strong>in</strong>g improvement <strong>and</strong>change. An <strong>in</strong>tervention without follow-up is just another <strong>in</strong>tervention thatcannot document real bus<strong>in</strong>ess impact beyond the smile sheets.FINAL OBSERVATIONSConstruct<strong>in</strong>g powerful leadership <strong>in</strong>terventions with last<strong>in</strong>g impact requires alot of plann<strong>in</strong>g up front. Of particular importance is a thorough underst<strong>and</strong><strong>in</strong>gof the bus<strong>in</strong>ess challenges go<strong>in</strong>g forward. This provides the context for leadershipdevelopment that is essential. <strong>Leadership</strong> development is not about skillbuild<strong>in</strong>g; it is about gett<strong>in</strong>g <strong>in</strong> touch with your values <strong>and</strong> pr<strong>in</strong>ciples <strong>and</strong> act<strong>in</strong>g<strong>in</strong> ways that are consistent with those values <strong>and</strong> pr<strong>in</strong>ciples.In construct<strong>in</strong>g global leadership development, underst<strong>and</strong> that organizationculture <strong>and</strong> leadership values are different from country cultures <strong>and</strong> values(Hofestede, 1997). At the leadership <strong>and</strong> organization level, we discovered thatthere was remarkable consistency relative to the organization cultures <strong>and</strong> personalvalues that leaders <strong>and</strong> their teams felt were optimum for excellent bus<strong>in</strong>essperformance. The data collected from around the world support thisassertion.
174 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 6.1. Executive <strong>Leadership</strong> <strong>Development</strong> Symposium: Personal ChallengesReflect upon the follow<strong>in</strong>g questions about your personal leadership challenges<strong>and</strong> br<strong>in</strong>g your written responses to the Symposium.What has been your greatest leadership challenge?1. What was the situation?2. What made it a challenge?3. How did you h<strong>and</strong>le the situation?4. What did you learn?
GE CAPITAL 175Exhibit 6.2. Executive <strong>Leadership</strong> <strong>Development</strong> Symposium: Organizational Challenges1. What do you see as the biggest strategic challenge fac<strong>in</strong>g the company <strong>in</strong> thenext two or three years?2. What leadership skills <strong>and</strong> capabilities do you consider to be key developmentpriorities for me <strong>in</strong> order to meet these challenges?
176 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 6.3. Executive <strong>Leadership</strong> <strong>Development</strong> Symposium: Additional Personal ChallengesReflect upon the follow<strong>in</strong>g questions about your personal leadership challenges<strong>and</strong> br<strong>in</strong>g your written responses to the symposium.When you look at your career, what do you see as the critical decision po<strong>in</strong>ts?How do you feel about the choices you’ve made over the years?What were your critical success factors?Describe a time when you were at your best as a leader.1. What was the situation?2. What were you do<strong>in</strong>g that made this a def<strong>in</strong><strong>in</strong>g moment?3. What do you value most from this experience?4. What characteristics of effective leadership did you demonstrate?
Exhibit 6.4. Sample Agenda: ELDS Program at a GlanceMonday, Tuesday, Wednesday, Thursday, Friday,September 30 October 1 October 2 October 3 October 49:30–10:30 A.M.Open<strong>in</strong>g & Frameworkfor the Program8:30–8:45 A.M.Morn<strong>in</strong>g Pulse Check7:30–8:30 A.M.Coach<strong>in</strong>g Breakfasts7:30–8:30 A.M.Coach<strong>in</strong>g Breakfasts7:30–8:30 A.M.Coach<strong>in</strong>g Breakfasts10:30–12:15 P.M.Foundation of <strong>Leadership</strong>8:45–10:15 A.M.The Challenges ofLead<strong>in</strong>g a NewBus<strong>in</strong>ess10:30–12:00 P.M.<strong>Leadership</strong> Behavior &OrganizationalPerformance: A Cause& Effect Relationship8:30–8:45 A.M.Morn<strong>in</strong>g Pulse Check8:45–9:45 A.M.Introduction to the OAModel <strong>and</strong> IndividualAnalysis of GEC9:45–12:15 P.M.Initial Team Discussionof Analysis of GEC8:30–8:45 A.M.Morn<strong>in</strong>g Pulse Check8:45–10:00 A.M.Q&A with Bus<strong>in</strong>essCase Owner10:15–12:00 P.M.Team Meet<strong>in</strong>gs: Analysisof Case8:30–8:45 A.M.Morn<strong>in</strong>g Pulse Check8:45–9:45 A.M.Challenge Rounds:Organiz<strong>in</strong>g for F<strong>in</strong>alRecommendations9:45–12:00 P.M.Prepare for F<strong>in</strong>al Report:— Bus<strong>in</strong>ess Case— GE Capital— <strong>Leadership</strong> LessonsLearned(Cont<strong>in</strong>ued)Morn<strong>in</strong>g
Exhibit 6.4. Sample Agenda: ELDS Program at a Glance (Cont<strong>in</strong>ued)Monday, Tuesday, Wednesday, Thursday, Friday,September 30 October 1 October 2 October 3 October 412:30–4:30 P.M. 12:00–1:45 P.M. 12:30–2:00 P.M. 12:15–2:00 P.M. 12:00–1:30 P.M.Build<strong>in</strong>g the GE First Impressions <strong>Leadership</strong> <strong>Leadership</strong> Discussion: F<strong>in</strong>al TeamBr<strong>and</strong> <strong>in</strong> Europe Exercise Challenges Driv<strong>in</strong>g Growth Feedback2:15–4:30 P.M.Discussion: Bus<strong>in</strong>essChallenges & Leader ofthe Future Requirements4:30–5:30 P.M.360° FeedbackIntroduction of ExecutiveCoaches2:00–4:00 P.M.MBTI—<strong>Leadership</strong> &Team Performance &Decision Mak<strong>in</strong>g4:15–6:00 P.M.Luxor Case &Behavioral Coach<strong>in</strong>gModel/Action PlansStarted2:15–3:00 P.M.Prepare for Report onGEC3:00–3:45 P.M.Reports4:00–5:00 P.M.Team Huddle toDiscuss Bus<strong>in</strong>essCase/QuestionsDeterm<strong>in</strong>ed to AskCase Owner5:00–6:00 P.M.Coach<strong>in</strong>g Meet<strong>in</strong>gs2:00–5:30 P.M.Bus<strong>in</strong>ess Case (cont.)5:30–6:30 P.M.Coach<strong>in</strong>g Meet<strong>in</strong>gs1:30–2:00 P.M.Rehearsal2:15–4:00 P.M.Report & Dialogue4:00–4:30 P.M.Group Photo <strong>and</strong>Program Evaluation6:00–7:30 P.M.Fireside Chat: Build<strong>in</strong>g aCareer <strong>in</strong> GE & theLeader’s Responsibility <strong>in</strong>Attract<strong>in</strong>g <strong>and</strong> Reta<strong>in</strong><strong>in</strong>gthe <strong>Best</strong>7:30 P.M.D<strong>in</strong>ner6:30–8:00 P.M.D<strong>in</strong>ner, Coach Meet<strong>in</strong>gs9:00–10:00 P.M.Coach<strong>in</strong>g Meet<strong>in</strong>gs6:00–9:00 P.M.Offsite D<strong>in</strong>ner onPescatori Isl<strong>and</strong>,Fireside Chat6:30–8:00 P.M.Fireside Chat: TheLeader’s Role <strong>in</strong>Driv<strong>in</strong>g Six Sigma8:00 P.M.D<strong>in</strong>ner/Coach<strong>in</strong>gMeet<strong>in</strong>gs9:00–10:00 P.M.Coach<strong>in</strong>g Meet<strong>in</strong>gsEven<strong>in</strong>gAfternoonLunch
GE CAPITAL 179Last, but perhaps most important, <strong>in</strong>volve your bus<strong>in</strong>ess leaders directly <strong>in</strong>your effort. Make them your partner <strong>in</strong> the design, delivery, <strong>and</strong> follow-up. Thisis how you all w<strong>in</strong> <strong>in</strong> the end.REFERENCESAndersen Consult<strong>in</strong>g. (1999). The Evolv<strong>in</strong>g Role of Executive <strong>Leadership</strong>. Wellesley,Mass.: Andersen Consult<strong>in</strong>g Institute for Strategic Change.Argyris, C. (1976). Increas<strong>in</strong>g <strong>Leadership</strong> Effectiveness. New York: Wiley.Bass, B. M. (1990). Bass <strong>and</strong> Stoghill’s H<strong>and</strong>book of <strong>Leadership</strong>: A Survey of Theory<strong>and</strong> Research. New York: Free Press.Clark, K. E., Clark, M. B., <strong>and</strong> Campbell, D. P. (1992). Impact of <strong>Leadership</strong>.Greensboro, N.C.: Center for Creative <strong>Leadership</strong>.Clawson, J. (1999). Level Three <strong>Leadership</strong>. Upper Saddle River, N.J.: Prentice Hall.Conger, J. A. (1993). “The Brave New World of <strong>Leadership</strong> Tra<strong>in</strong><strong>in</strong>g.” OrganizationalDynamics, 21 (3), 46–58.Cooperrider, D. L. (1997–1998). “Appreciative Inquiry.” (Class lecture: Benedict<strong>in</strong>e<strong>University</strong> Ph.D. program, Lisle, Ill.)Deal, T. E., <strong>and</strong> Kennedy, A. A. (1982). Corporate Cultures: The Rites <strong>and</strong> Rituals ofCorporate Life. Read<strong>in</strong>g, Mass.: Addison Wesley.F<strong>in</strong>kelste<strong>in</strong>, S., <strong>and</strong> Hambrick, D. C. (1996). Strategic <strong>Leadership</strong>: Top Executives <strong>and</strong>Their Effects on Organizations. St. Paul, M<strong>in</strong>n.: West.Goldsmith, M. (2001). “Help<strong>in</strong>g Successful People Get Even Better.” Lead<strong>in</strong>g forInnovation. San Francisco: Jossey-Bass.Hofestede, G. (1997). Cultures <strong>and</strong> Organizations. New York: McGraw Hill.Senge, P. M. (1990). The Fifth Discipl<strong>in</strong>e: The Art <strong>and</strong> Practice of the Learn<strong>in</strong>gOrganization. New York: Doubleday.Tichy, N., <strong>and</strong> Cohen, E. (1997). <strong>Leadership</strong> Eng<strong>in</strong>e. San Francisco: Jossey-Bass.ABOUT THE CONTRIBUTORL<strong>in</strong>da Sharkey is currently vice president of organization development <strong>and</strong>staff<strong>in</strong>g (O&S) for GE Commercial Equipment F<strong>in</strong>ance (CEF), a billion-dollar net<strong>in</strong>come bus<strong>in</strong>ess, part of GE Commercial F<strong>in</strong>ance. In this role L<strong>in</strong>da is responsiblefor the identification, development, <strong>and</strong> succession plann<strong>in</strong>g of CEF’sleadership talent <strong>and</strong> leads the Session C <strong>and</strong> performance managementprocesses. She also spearheads CEF’s strategic staff<strong>in</strong>g <strong>in</strong>itiatives <strong>and</strong> worksclosely with the leadership team on organizational design, restructur<strong>in</strong>g, <strong>and</strong>acquisition <strong>in</strong>tegration. L<strong>in</strong>da jo<strong>in</strong>ed CEF from GE Equity, where she served assenior vice president of human resources. Previously, she held the position of
180 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEmanager, global executive development for GE Capital. In this role, she spearheadedthe Executive <strong>Leadership</strong> <strong>Development</strong> Symposium (ELDS), a successfulprogram aimed at develop<strong>in</strong>g senior leaders. Before beg<strong>in</strong>n<strong>in</strong>g her GE career<strong>in</strong> 1998 as part of GE Capital’s <strong>Leadership</strong> <strong>Development</strong> team, L<strong>in</strong>da held varioushuman resource roles with Pa<strong>in</strong>e Webber, Chemical/Chase Bank, <strong>and</strong> severalgovernment-related offices <strong>in</strong> New York <strong>and</strong> Wash<strong>in</strong>gton, D.C. L<strong>in</strong>da holdsa bachelor of arts from Nazareth College, a masters of public adm<strong>in</strong>istrationfrom Russell Sage College, <strong>and</strong> a Ph.D. <strong>in</strong> organizational development fromBenedict<strong>in</strong>e <strong>University</strong>.
SCHAPTER SEVENHewlett-PackardSThis case study describes the dynamic transformation process of HP sanctionedby the CEO <strong>in</strong> which over 8,000 managers throughout the world were developedthrough key pr<strong>in</strong>ciples of accelerat<strong>in</strong>g high performance <strong>and</strong> alignment <strong>and</strong>execut<strong>in</strong>g with accountability. The program’s most successful key features ofon-the-job support, cont<strong>in</strong>uous evaluation, coach<strong>in</strong>g, bus<strong>in</strong>ess mapp<strong>in</strong>g, <strong>and</strong>rapid decision mak<strong>in</strong>g enabled the program to show value of fifteen times itscost, as well as contribute to the success of the merger with Compaq.OVERVIEW 182DIAGNOSIS AND ASSESSMENT 182PROGRAM DESIGN 183PROGRAM IMPLEMENTATION 185ON-THE-JOB SUPPORT 186EVALUATION 187Immediate Post-Program Evaluations 187Thematic Analysis of Follow-Through 187Three-Month Post-Program F<strong>in</strong>ancial Analysis 189CONCLUSION 191Exhibit 7.1: The Follow-Through Process for Dynamic <strong>Leadership</strong> 191Exhibit 7.2: Distribution of Follow-Through Objectives <strong>in</strong> Dynamic<strong>Leadership</strong> Programs 192Exhibit 7.3: Distribution of Most Valued Aspects of Dynamic<strong>Leadership</strong> Programs 193ENDNOTES 193ABOUT THE CONTRIBUTORS 194181
182 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEOVERVIEWIn late 1999, Carly Fior<strong>in</strong>a, the then recently appo<strong>in</strong>ted CEO at Hewlett-Packard,launched a campaign to “Re<strong>in</strong>vent HP.” This chapter describes Dynamic<strong>Leadership</strong>—an ambitious worldwide program to support the rejuvenation ofHP by help<strong>in</strong>g managers excel <strong>in</strong> an accelerat<strong>in</strong>g pace of change. More than8,000 managers were tra<strong>in</strong>ed <strong>in</strong> the first year. The return on <strong>in</strong>vestment was outst<strong>and</strong><strong>in</strong>g<strong>and</strong> generated sav<strong>in</strong>gs <strong>and</strong> new revenue more than fifteen times thecost, as well as contribut<strong>in</strong>g to the merger with Compaq.The success of Dynamic <strong>Leadership</strong> resulted from six key elements:(1) Dynamic <strong>Leadership</strong> addressed clear <strong>and</strong> compell<strong>in</strong>g company needs withwell-def<strong>in</strong>ed outcomes; (2) implementation was led jo<strong>in</strong>tly by <strong>in</strong>ternal l<strong>in</strong>e leaders<strong>and</strong> external “certified” experts; (3) rapid experimentation <strong>and</strong> ongo<strong>in</strong>gassessment were used to ensure cont<strong>in</strong>uous improvement; (4) an aggressive rolloutschedule with the full support of HP’s executive committee created a criticalmass of managers who shared common term<strong>in</strong>ology <strong>and</strong> methodology; (5) an<strong>in</strong>novative post-course follow-through system assured application, practice,coach<strong>in</strong>g, <strong>and</strong> support; (6) rigorous measurement was designed <strong>in</strong>to theprogram from the outset.DIAGNOSIS AND ASSESSMENTHewlett-Packard has enjoyed an exceptional record of <strong>in</strong>novation <strong>and</strong> growthfor more than sixty years. Susta<strong>in</strong><strong>in</strong>g that record has required the company tocont<strong>in</strong>ually re<strong>in</strong>vent itself <strong>in</strong> order to capitalize on new technologies <strong>and</strong> addressthe chang<strong>in</strong>g needs of the market. Throughout the twentieth century, 80 percentof HP revenues were generated from products it had produced <strong>in</strong> the lastthree years.The 1990s witnessed unprecedented changes <strong>in</strong> the technology sector. Thepace of change—already rapid—accelerated further. Product life cycles becameshorter <strong>and</strong> shorter even as their technologic sophistication <strong>and</strong> <strong>in</strong>tegrationneeds became <strong>in</strong>creas<strong>in</strong>gly complex. Competition became global, with highqualityproducts from Asia <strong>and</strong> Europe compet<strong>in</strong>g for market share <strong>in</strong> the UnitedStates as well as their home markets. Prices decl<strong>in</strong>ed precipitously.Hewlett-Packard, long one of the most admired companies <strong>in</strong> the world, wasshow<strong>in</strong>g signs of deceleration. Its growth curve flattened, decision mak<strong>in</strong>g slowed,<strong>and</strong> lack of alignment <strong>and</strong> shared purpose led to wasted opportunities <strong>and</strong> resources.To re<strong>in</strong>vigorate the company, HP’s board of directors named Carly Fior<strong>in</strong>a, the brilliantarchitect of Lucent Technology’s early success, as HP’s new CEO <strong>in</strong> July 1999.Later that year, Carly announced that “The company of Bill Hewlett <strong>and</strong> DavePackard is be<strong>in</strong>g re<strong>in</strong>vented. The orig<strong>in</strong>al start-up will act like one aga<strong>in</strong>.”
HEWLETT-PACKARD 183Carly <strong>and</strong> the executive team of HP recognized that compet<strong>in</strong>g successfully<strong>in</strong> the new market realities required a management culture capable of engag<strong>in</strong>g <strong>in</strong>high-speed collaboration, rais<strong>in</strong>g <strong>and</strong> resolv<strong>in</strong>g issues rapidly, <strong>and</strong> mak<strong>in</strong>g<strong>in</strong>formed cross-boundary decisions efficiently <strong>and</strong> effectively. In 2000, a re<strong>in</strong>ventionsurvey was launched for employees at all levels to assess progress. The resultsshowed a real underst<strong>and</strong><strong>in</strong>g of the company’s strategy <strong>and</strong> re<strong>in</strong>vention imperatives.Employees agreed that re<strong>in</strong>vention was necessary, particularly faster <strong>and</strong>better decision mak<strong>in</strong>g across the boundaries of the organization. They wanted<strong>in</strong>creased accountability for measurable results <strong>and</strong> greater focus on the customer.To meet these needs, HP’s Workforce <strong>Development</strong> <strong>and</strong> Organization Effectiveness(WD&OE) Group designed <strong>and</strong> implemented Dynamic <strong>Leadership</strong>—an<strong>in</strong>tensive development process specifically designed to accelerate alignment tosenior purpose, improve collaboration across boundaries, accelerate rais<strong>in</strong>g <strong>and</strong>resolv<strong>in</strong>g issues, <strong>and</strong> improve decision mak<strong>in</strong>g. The program <strong>in</strong>cludes two fulldays of <strong>in</strong>struction <strong>and</strong> work<strong>in</strong>g <strong>in</strong> groups followed by n<strong>in</strong>e weeks of on-the-jobapplication <strong>and</strong> follow through. To date, more than 8,000 managers have completedDynamic <strong>Leadership</strong> <strong>and</strong> are us<strong>in</strong>g the tools <strong>and</strong> methods. This casestudy reports the results of the <strong>in</strong>itiative, its return on <strong>in</strong>vestment for HP, <strong>and</strong>the factors critical to the success of such an ambitious undertak<strong>in</strong>g.PROGRAM DESIGNS<strong>in</strong>ce the re<strong>in</strong>vention survey <strong>in</strong>dicated the common needs across bus<strong>in</strong>ess units,functions, <strong>and</strong> geographies, HP decided that the development process had to beglobal <strong>in</strong> scope, focused on the issues of the day, <strong>and</strong> deliverable effectively <strong>in</strong>the 157 countries <strong>in</strong> which HP operates. The program had to deliver substantiveresults <strong>in</strong> the first year, s<strong>in</strong>ce it was launched with<strong>in</strong> a month of the proposedmerger announcement with Compaq. A solid value proposition was essential,otherwise HP managers would be too distracted by the impend<strong>in</strong>g merger, theproxy battle, <strong>and</strong> the cont<strong>in</strong>ued deterioration of the economy, all factorscompet<strong>in</strong>g for their most precious resource—time. To maximize the return on<strong>in</strong>vestment, HP decided to focus on a limited number of objectives that wouldhave the greatest immediate impact. Specifically, Dynamic <strong>Leadership</strong> wasdesigned to improve HP managers’ ability “to produce rapid time-to-value forHP customers first, shareholders, <strong>and</strong> employees.” 1The program focused on two key areas 2 :1. Accelerat<strong>in</strong>g high-performance collaboration <strong>and</strong> alignmentWork<strong>in</strong>g from a shared view of “value”Us<strong>in</strong>g conversation technology to ga<strong>in</strong> alignment to purpose <strong>and</strong>rapidly raise <strong>and</strong> resolve issues
184 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE2. Execut<strong>in</strong>g with accountabilityUs<strong>in</strong>g rapid decision process to make effective <strong>and</strong> efficient decisionsDesign<strong>in</strong>g accountability for actionsLearn<strong>in</strong>g <strong>and</strong> adjust<strong>in</strong>gGiven the need for credibility <strong>and</strong> rapid global rollout, HP elected to use ablended approach of external providers <strong>and</strong> <strong>in</strong>ternal facilitators. ConversantSolutions, LLC, of Boulder, Colorado, was already a partner with HP <strong>in</strong> otherareas <strong>and</strong> was selected to cocreate the solution. They also provided the leadconsultants <strong>and</strong> facilitators. In particular, their concepts of how to achievehigher value through more effective conversations had already proven valuableto senior management. 3 It was particularly well suited to the goals of Dynamic<strong>Leadership</strong> <strong>and</strong> formed the core components of the program.The f<strong>in</strong>al design owed as much to rapid prototyp<strong>in</strong>g <strong>and</strong> experimentation asit did to a formal design process. Given the tight time l<strong>in</strong>es <strong>and</strong> the need foraction, we used Carly Fior<strong>in</strong>a’s “Perfect Enough” pr<strong>in</strong>ciple to go to launch. Severalsmall pilot programs were run; the most effective ideas <strong>and</strong> approacheswere <strong>in</strong>corporated <strong>in</strong>to the ultimate design. As the rollout got under way, furtheradjustments were made based on feedback from participants <strong>and</strong> monthlyteleconferences among facilitators.The f<strong>in</strong>al program design was an <strong>in</strong>tensive two-day experience, followed byaction plann<strong>in</strong>g <strong>and</strong> n<strong>in</strong>e week follow-through. Two days of <strong>in</strong>-person dialoguewas chosen <strong>in</strong> order to provide sufficient depth <strong>and</strong> practice without overwhelm<strong>in</strong>gthe participants or requir<strong>in</strong>g excessive time away from their work.The <strong>in</strong>-person portion of Dynamic <strong>Leadership</strong> is a fast-paced program that <strong>in</strong>terspersespresentations of concepts <strong>and</strong> tools with small group work, practice,<strong>and</strong> discussions of current issues fac<strong>in</strong>g the bus<strong>in</strong>ess. The number of topics is<strong>in</strong>tentionally limited to ensure adequate time for explanation <strong>and</strong> mastery.Topics <strong>in</strong>clude• Context sett<strong>in</strong>g through bus<strong>in</strong>ess mapp<strong>in</strong>g• Laws of conversations• Conversations model• Rapid decision mak<strong>in</strong>g• RACI Model for decision mak<strong>in</strong>g• Authentically rais<strong>in</strong>g <strong>and</strong> resolv<strong>in</strong>g of issuesThe designers selected a live group format as the most effective way to <strong>in</strong>troduce<strong>and</strong> illustrate the targeted skills <strong>and</strong> concepts. Participants are provided alearn<strong>in</strong>g journal that <strong>in</strong>cludes the key concepts <strong>and</strong> ample room for personalnotes. The program cont<strong>in</strong>ues after supper on the first day, when participants
HEWLETT-PACKARD 185must practice what they have learned to create an “even<strong>in</strong>g of value.” The nextmorn<strong>in</strong>g is a feedback <strong>and</strong> coach<strong>in</strong>g session on how they did—the heart of theexperience <strong>and</strong> often an <strong>in</strong>tervention.An important part of the design is accountability for action—the idea thatdevelopment does not end on the last day of class but only when participantsput what they have learned <strong>in</strong>to action. As part of the design, participants mustcommit, <strong>in</strong> writ<strong>in</strong>g, to their goals for apply<strong>in</strong>g Dynamic <strong>Leadership</strong>. These goalsare shared with their managers (see below) to underscore accountability <strong>and</strong>management support. HP didn’t require managers who had attended the programto follow up with their reports. They counted on the HP culture of highparticipation<strong>and</strong> management support, <strong>and</strong> it worked. When they received acopy of a participant’s objectives <strong>and</strong> action plan, most managers responded toaffirm <strong>and</strong> recognize or redirect their work.PROGRAM IMPLEMENTATIONThe Dynamic <strong>Leadership</strong> program is presented either on-site or at a local hotel tom<strong>in</strong>imize travel time <strong>and</strong> expense. Group size is limited to a maximum of thirtyto ensure <strong>in</strong>dividual participation <strong>and</strong> practice. The VP of workforce development’sexecutive advisory team for the program decided to offer both open enrollment<strong>and</strong> <strong>in</strong>tact team sessions. The senior advisors believed that <strong>in</strong>tact teamparticipation was the best, because it <strong>in</strong>stitutionalized a new way of operat<strong>in</strong>g <strong>in</strong>a team, but limit<strong>in</strong>g Dynamic <strong>Leadership</strong> to <strong>in</strong>tact teams was a slower <strong>and</strong> moreexpensive way to build these skills <strong>and</strong> accelerate re<strong>in</strong>vention of the organization.Re<strong>in</strong>vent<strong>in</strong>g HP was all about <strong>in</strong>creas<strong>in</strong>g the velocity of change <strong>and</strong> decreas<strong>in</strong>gtime to valuable action. Moreover, at the time of launch (December 2001), HP was<strong>in</strong> a travel freeze <strong>in</strong> some countries <strong>and</strong> bus<strong>in</strong>esses; the open enrollment optionensured that people who could not travel could still participate.To ensure the program was immediately relevant, each session was taughtby a pair of facilitators—one external <strong>and</strong> one HP role model l<strong>in</strong>e leader whocould br<strong>in</strong>g the concepts to life with current bus<strong>in</strong>ess examples. In order to conductthe hundreds of sessions required to achieve the rollout targets, facilitatorsfrom more than a dozen firms were recruited. External facilitators tra<strong>in</strong>edtogether with the l<strong>in</strong>e managers <strong>in</strong> <strong>in</strong>-person tra<strong>in</strong>-the-tra<strong>in</strong>er sessions. Tra<strong>in</strong><strong>in</strong>gwas re<strong>in</strong>forced <strong>and</strong> ideas for cont<strong>in</strong>uous improvement shared through ongo<strong>in</strong>gvirtual (simultaneous Internet <strong>and</strong> telephone) conferences. Whenever possible,new facilitators were paired with experienced ones for their first few sessions.Outside the United States, local bil<strong>in</strong>gual facilitators were recruited <strong>and</strong> tra<strong>in</strong>edto lead the program. To ensure quality <strong>and</strong> cont<strong>in</strong>uous improvement, participantscomplete an evaluation form at the end of each session (see evaluationbelow). In 2002, more than four hundred sessions were held <strong>in</strong> more than fifty
186 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEcountries. Altogether, over 8,000 managers participated <strong>in</strong> Dynamic <strong>Leadership</strong>programs <strong>in</strong> its first full year.ON-THE-JOB SUPPORTA unique aspect of the Dynamic <strong>Leadership</strong> program was a system for manag<strong>in</strong>gthe post-course application (follow-through) period. Work by Goldsmith <strong>and</strong>others had shown a direct correlation between the degree of follow-up <strong>and</strong> the<strong>in</strong>crease <strong>in</strong> leadership effectiveness. 4 Adult learn<strong>in</strong>g studies have shownthe importance of immediate application of new skills. To ensure that Dynamic<strong>Leadership</strong> pr<strong>in</strong>ciples were put <strong>in</strong>to practice, HP implemented a rigorous postcoursemanagement system us<strong>in</strong>g a commercial, web-based follow-throughmanagement tool called Friday5s®. 5In the conclud<strong>in</strong>g session of the program, participants were asked to writeout two objectives to apply what they had learned to their jobs. These wereentered <strong>in</strong>to a group-specific Friday5s® website. The follow<strong>in</strong>g week, participantswere rem<strong>in</strong>ded of their goals by e-mail. A copy of each participant’s objectiveswas e-mailed to his or her manager to ensure that managers knew whattheir direct reports had learned <strong>and</strong> <strong>in</strong>tended to work on. Each participant’sgoals are visible to the members of his or her cohort to encourage sharedaccountability <strong>and</strong> learn<strong>in</strong>g.The follow-through process is illustrated <strong>in</strong> Exhibit 7.1. On five occasions follow<strong>in</strong>gthe course (weeks 1, 3, 5, 7, <strong>and</strong> 9), participants were sent a l<strong>in</strong>k to thegroup’s website <strong>and</strong> asked to update their progress by answer<strong>in</strong>g the follow<strong>in</strong>gquestions:• What have you done to make progress on this goal?• How much progress did you make?• What are you go<strong>in</strong>g to do next?• What has been your most important lesson learned?The purpose was to encourage participants to cont<strong>in</strong>ue to practice what theyhad learned, reflect on the experience, <strong>and</strong> cont<strong>in</strong>ue group learn<strong>in</strong>g by shar<strong>in</strong>g<strong>in</strong>sights with one another. In addition, program participants could send a l<strong>in</strong>kto their update to a manager or coach for feedback <strong>and</strong> counsel. On the lastupdate, participants were asked to describe the bus<strong>in</strong>ess impact of work<strong>in</strong>g onthe goal <strong>and</strong>, based on their two months’ experience s<strong>in</strong>ce the program, whathad proved most valuable.Program learn<strong>in</strong>g was also re<strong>in</strong>forced through an on-l<strong>in</strong>e feature calledGuideMe that provided practical suggestions for action based on coursematerials.
HEWLETT-PACKARD 187EVALUATIONThree types of evaluation were used to cont<strong>in</strong>uously improve the program, measureits impact, <strong>and</strong> calculate the return on <strong>in</strong>vestment:• Immediate post-program evaluations• Analysis of follow-through reports• Three-month post-program f<strong>in</strong>ancial impact analysisImmediate Post-Program EvaluationsAt the conclusion of each two-day program, participants were asked to completean anonymous evaluation that <strong>in</strong>cluded questions about both the content<strong>and</strong> presenters. These were forwarded to the program office, where they werereviewed by the program staff. Presenters with poor rat<strong>in</strong>gs were coached. Ifthey were unable to improve their rat<strong>in</strong>gs <strong>in</strong> subsequent programs, they werereplaced.Feedback from these evaluations was also used to improve the program materials;the tra<strong>in</strong>-the-tra<strong>in</strong>er <strong>and</strong> learn<strong>in</strong>g journal were both revised based on participants’<strong>in</strong>put. Aspects of the presentation <strong>and</strong> emphasis were modified <strong>in</strong>order to clarify areas that participants <strong>in</strong>dicated were unclear or more difficultto underst<strong>and</strong>. As a result of these cont<strong>in</strong>uous improvement efforts, the overallprogram evaluations <strong>in</strong>creased over time <strong>and</strong> now consistently exceed four ona five-po<strong>in</strong>t scale.Thematic Analysis of Follow-ThroughKirkpatrick proposed that rigorous evaluation of tra<strong>in</strong><strong>in</strong>g programs should<strong>in</strong>clude document<strong>in</strong>g behavioral change (level 3) <strong>and</strong> measur<strong>in</strong>g bus<strong>in</strong>essresults (level 4), <strong>in</strong> addition to measur<strong>in</strong>g the participant’s reaction to the programitself. 6 Dynamic <strong>Leadership</strong> <strong>in</strong>cluded both level 3 <strong>and</strong> 4 analyses.Because all of the participants’ goals were entered <strong>in</strong>to a database, it was possibleto evaluate the distribution of planned post-course objectives (Exhibit 7.2).As the program design team <strong>in</strong>tended, more than three quarters of all goalsfocused on improved alignment, more effective (authentic) conversation, <strong>and</strong>accelerated decision mak<strong>in</strong>g.The ability to efficiently review post-program goals provided assurance thatthe program was emphasiz<strong>in</strong>g the topics of greatest importance <strong>and</strong> that participantswere receiv<strong>in</strong>g the desired message. The post-program objectives illustratedthat the participants planned to apply their learn<strong>in</strong>g <strong>in</strong> ways that would havepractical benefit for HP:Obta<strong>in</strong> clear accountability for all <strong>in</strong>itiatives on cost plan; def<strong>in</strong>e roles of costteam; create process for report<strong>in</strong>g status <strong>and</strong> measur<strong>in</strong>g deviation.
188 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEReduce by 25 percent the time it takes to process a customer order.Strive to underst<strong>and</strong> the ma<strong>in</strong> purpose of all participat<strong>in</strong>g team members to f<strong>in</strong>dthe common ground upon which decisions can be rapidly made.In my next project meet<strong>in</strong>g I will make a note to ask, “Is this add<strong>in</strong>g value?”Expla<strong>in</strong> def<strong>in</strong>ition of value to team.Use conversation [meter] to draw out all the facts <strong>and</strong> senior purposes of mypeer group . . . <strong>in</strong> order to make faster-decisions measurement, reduction ofrevisits on bus<strong>in</strong>ess issues.Decrease the time of meet<strong>in</strong>gs on projects by always <strong>in</strong>volv<strong>in</strong>g the right person,with a purpose described <strong>and</strong> shared. Document a measured decrease of25 percent time spent.Use the RACI model to improve Time-to-Value for the customer regard<strong>in</strong>g ActionItems <strong>and</strong> take-always dur<strong>in</strong>g an upcom<strong>in</strong>g customer review.HP recognized that such goals are necessary but not sufficient. Level 3 analysisrequires demonstrat<strong>in</strong>g changed behavior: that learners took new, different,<strong>and</strong> better action as a result of the program. There are two clear l<strong>in</strong>es of evidencethat this was achieved <strong>in</strong> Dynamic <strong>Leadership</strong>: (1) the real-time selfreportsof the participants themselves, <strong>and</strong> (2) the <strong>in</strong>dependent observations bytheir managers <strong>and</strong> coaches. Participants’ biweekly Friday5s ® reports <strong>in</strong>dicatedthat they not only absorbed the content of the program but also translated theirlearn<strong>in</strong>g experience <strong>in</strong>to actions that benefited their teams <strong>and</strong> the company asa whole. Sample actions:Reviewed “value” concept with staff. . . . Assigned people to come to next staffwith (1) how they believe their own job adds value to the customer, (2) identifyareas to <strong>in</strong>crease percentage of value added activity.Shared the pr<strong>in</strong>ciples from the class regard<strong>in</strong>g the conversation meter, <strong>and</strong>the appropriate use of accuracy <strong>and</strong> authenticity (versus pretense<strong>and</strong> s<strong>in</strong>cerity).I <strong>in</strong>troduced the concept of “Value” versus “Waste” from the customer’s perspective<strong>and</strong> facilitated an eye-open<strong>in</strong>g bra<strong>in</strong>storm session on what customer valuemy group really provides.I <strong>in</strong>troduced the conversation meter by way of a real-time dialog example withmy team at our group meet<strong>in</strong>g. The example could not have been better toexpla<strong>in</strong> the “S<strong>in</strong>cerity” type.Used the process to map out my approach to work<strong>in</strong>g with my co-managers toagree on our comb<strong>in</strong>ed group charter.The team learned how the use of the RACI methodology led us to f<strong>in</strong>ish not onlythe process def<strong>in</strong>ition as planned but also the development of a web tool.
HEWLETT-PACKARD 189The effects of the Dynamic <strong>Leadership</strong> tra<strong>in</strong><strong>in</strong>g <strong>and</strong> the efforts made by theparticipants also were apparent to their managers <strong>and</strong> coaches, as evidenced bytheir feedback:Dear P___, First I want to thank you for <strong>in</strong>vest<strong>in</strong>g time <strong>in</strong> your cont<strong>in</strong>ueddevelopment. It is often one of those th<strong>in</strong>gs that we let fall by the wayside . . .Dear J___, Good job on streaml<strong>in</strong><strong>in</strong>g the Project Review process. Can you alsoensure that the l<strong>in</strong>kages with our review process are clearly def<strong>in</strong>ed? This willalso help to ga<strong>in</strong> alignment all around . . .Dear D___, I appreciate the facilitation of the decision process discussion. It wasamaz<strong>in</strong>g the number of subprocesses that require decisions. . . . I have a muchhigher level of confidence about our ability to get to a good decision through theuse of this model.Dear B____, I th<strong>in</strong>k you are do<strong>in</strong>g terrific work here, but don’t let it stop at this.Transformational leadership is about vision<strong>in</strong>g a compell<strong>in</strong>g future, model<strong>in</strong>gthat future, <strong>and</strong> ga<strong>in</strong><strong>in</strong>g followers.Dear G___, You made important progress <strong>in</strong> shar<strong>in</strong>g the tools with your teams<strong>and</strong> key people! I believe that after you obta<strong>in</strong> the measures you are plann<strong>in</strong>g todo, you will f<strong>in</strong>d other opportunities for reduc<strong>in</strong>g the time spent <strong>in</strong> meet<strong>in</strong>gs . . .In the tenth week follow<strong>in</strong>g the program, participants were asked what theyhad found most useful from the program. Over half of all comments mentionedthe conversations tools <strong>and</strong> the closely related concepts of shared purpose <strong>and</strong><strong>in</strong>tersections (Exhibit 7.3).Three-Month Post-Program F<strong>in</strong>ancial AnalysisAlthough the follow-through process provided ample anecdotal evidence thatthe program was hav<strong>in</strong>g a positive impact at HP, it did not provide the quantitativedata necessary to prove the return on <strong>in</strong>vestment with the rigorneeded to satisfy HP’s discern<strong>in</strong>g f<strong>in</strong>ancial managers. To quantify the impact ofthe program, HP worked with the Fort Hill Company (Wilm<strong>in</strong>gton, Delaware)to design an analysis system that could be adm<strong>in</strong>istered after each participanthad sufficient on-the-job experience with Dynamic <strong>Leadership</strong> tools to haveproduced results.Three months after attend<strong>in</strong>g the Dynamic <strong>Leadership</strong> program, participantswere asked to <strong>in</strong>dicate how frequently (if at all) they had used the Dynamic<strong>Leadership</strong> tools. They also were asked to describe, if possible, a specific example<strong>in</strong> which this created value for HP <strong>and</strong> to provide details of quantifiablebenefits, such as hours saved, new revenue generated, or costs avoided. In evaluat<strong>in</strong>gthe program’s f<strong>in</strong>ancial impact, only specific examples for which therewas good documentation <strong>and</strong> a sound basis for determ<strong>in</strong><strong>in</strong>g worth were
190 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE<strong>in</strong>cluded. No attempt was made to ascribe value to important, but difficultto-quantifybenefits such as <strong>in</strong>creased morale, better quality, or enhanced customersatisfaction. Hence, this analysis underestimates the total return from theprogram.The value generated by the program was calculated by multiply<strong>in</strong>g themedian value of reported events by the number of reported uses of programmaterial, then discount<strong>in</strong>g (75 percent) for positive report<strong>in</strong>g bias. The medianvalue of reported events (rather than the average) was used <strong>in</strong> the analysis toavoid undue <strong>in</strong>fluence of a small number of very high-value <strong>in</strong>stances. Thereturn on <strong>in</strong>vestment (ROI) was calculated by compar<strong>in</strong>g the value generatedto the full cost of deliver<strong>in</strong>g the program, <strong>in</strong>clud<strong>in</strong>g the per hour cost of theattendees’ time.The results overwhelm<strong>in</strong>gly supported the value of HP’s <strong>in</strong>vestment. Keyf<strong>in</strong>d<strong>in</strong>gs reported to the board of directors <strong>in</strong>cluded• The tra<strong>in</strong><strong>in</strong>g was practical <strong>and</strong> useful on the job. N<strong>in</strong>ety-four percent ofparticipants reported that they had used the Dynamic <strong>Leadership</strong> toolsto advantage <strong>in</strong> the first three months after tra<strong>in</strong><strong>in</strong>g. The averageparticipant used the tools 9.5 times dur<strong>in</strong>g the follow-through period.• The program produces a significant return on <strong>in</strong>vestment. The medianvalue per s<strong>in</strong>gle reported application was $3,800—50 percent more thanthe fully-loaded cost. On an annual basis, the return on <strong>in</strong>vestment is15 times cost.• Most of the immediate benefits were attributable to time saved <strong>in</strong> reach<strong>in</strong>gdecisions <strong>and</strong> ga<strong>in</strong><strong>in</strong>g alignment. Perhaps most remarkable, theseresults were achieved <strong>in</strong> the midst of the disruption of one of the largestreorganizations <strong>in</strong> corporate history: the HP-Compaq merger.HP’s executive council took the bold decision to push forward with Dynamic<strong>Leadership</strong> despite the <strong>in</strong>evitable uncerta<strong>in</strong>ty <strong>and</strong> turmoil that would accompanythe HP-Compaq merger. Their vision has been rewarded not only <strong>in</strong> f<strong>in</strong>ancialterms but also by frequent mention of many real but not readily quantifiedbenefits, <strong>in</strong>clud<strong>in</strong>g improved customer service, higher quality, <strong>and</strong> better morale.Especially reward<strong>in</strong>g are the comments shared by participants dur<strong>in</strong>g the wrapupsession. Many expressed the feel<strong>in</strong>g that this program has helped restoretheir faith <strong>in</strong> HP <strong>and</strong> their commitment to the company. One manager wrote,“It has renewed my strong <strong>in</strong>terest <strong>in</strong> team development. I have volunteered tobecome a coach <strong>and</strong> use my background <strong>in</strong> TQC <strong>and</strong> process improvementaga<strong>in</strong>.” Similar sentiments were echoed <strong>in</strong> two feedback sessions held with corel<strong>in</strong>e managers; they reported a renewed sense of optimism <strong>and</strong> commitmentamong attendees. Dynamic <strong>Leadership</strong> provided a common language thatcolleagues from both parent companies could share.
HEWLETT-PACKARD 191CONCLUSIONThe case reported here—the <strong>in</strong>troduction of Dynamic <strong>Leadership</strong> methodologyat HP—demonstrates that a well-designed <strong>and</strong> well-executed learn<strong>in</strong>g programwith strong senior leadership support can produce significant <strong>and</strong> measurableresults. The positive ROI for the Dynamic <strong>Leadership</strong> program reflects its practicalfocus, thorough plann<strong>in</strong>g, well-managed implementation, rigorous postprogramfollow-through, <strong>and</strong> ongo<strong>in</strong>g assessment. Further opportunities tocreate value <strong>in</strong>clude extend<strong>in</strong>g the program to additional managers <strong>and</strong> develop<strong>in</strong>gcomplementary programs focused on other key management skills.CourseParticipants learnnew skills <strong>and</strong>set objectives.Exhibit 7.1. The Follow-Through Process for Dynamic <strong>Leadership</strong>Coach<strong>in</strong>gBoss, peers, or<strong>in</strong>structors provide onl<strong>in</strong>eadvice/counsel.Ask for adviceCopy sent to coachor manager forfeedback.AlignmentObjectives sentto their managersfor discussion.Rem<strong>in</strong>derParticipantsrem<strong>in</strong>ded by e-mailto update progress.FollowthroughprocessLearn MoreLearn<strong>in</strong>g cont<strong>in</strong>uesby review<strong>in</strong>g others'progress.UpdateParticipants updatetheir progress <strong>in</strong>Friday5s®.DocumentresultsUser <strong>in</strong>put documentsimpact <strong>and</strong> provides datato improve next offer<strong>in</strong>g.Note: At the conclusion of the program, participants set goals to apply what they had learned. These weresent to their managers. Then on five occassions follow<strong>in</strong>g the program, participants were asked to update theirprogress, share <strong>in</strong>sights with others, <strong>and</strong> cont<strong>in</strong>ue their learn<strong>in</strong>g.
192 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 7.2. Distribution of Follow-Through Objectives <strong>in</strong> Dynamic <strong>Leadership</strong> ProgramsBetteralignment35%Authenticconversation23%Learn <strong>and</strong>adjust5%More rapiddecisions22%Other2%Issueresolution13%Note: Distribution of 13,720 DL Objectives; the distribution of goals matches the design objectives.
Exhibit 7.3. Distribution of Most Valued Aspects of Dynamic <strong>Leadership</strong> ProgramsConversationtools43%HEWLETT-PACKARD 193RACI chart29%Followthrough7%Stakeholdervalue/Map5%Sharedpurpose/Intersections16%Note: Distribution of 400 Responses to the Question: “What Have You Found Most Valuable from theDynamic <strong>Leadership</strong> Program?” (after ten weeks).ENDNOTES1. Hewlett-Packard, Inc., Dynamic <strong>Leadership</strong> Learn<strong>in</strong>g Journal, 2002.2. Hewlett-Packard, Inc., Dynamic <strong>Leadership</strong> Learn<strong>in</strong>g Journal, 2002.3. Connolly, M., <strong>and</strong> Rianoshek, R. The Communication Catalyst. Chicago, Ill.:Dearborn Trade Publish<strong>in</strong>g, 2002.4. Goldsmith, M. “Ask, Learn, Follow Up, <strong>and</strong> Grow.” In The Leader of the Future.San Francisco: Jossey-Bass, 1996, pp. 227–240.5. Friday5s®, Fort Hill Company, Montchan<strong>in</strong>, Dela. www.ifollowthrough.com6. Kirkpatrick, D. L. Evaluation of Tra<strong>in</strong><strong>in</strong>g Programs, 2nd ed. San Francisco:Berrett-Koehler, 1998.
194 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEABOUT THE CONTRIBUTORSSusan Burnett leads workforce development for Hewlett-Packard. The organization’smission is to develop the most competitive <strong>and</strong> committed workforce <strong>in</strong> theworld as determ<strong>in</strong>ed by its customers. Most recently, she served as Hewlett-Packard’s director of enterprise workforce development, the first <strong>in</strong>tegrated tra<strong>in</strong><strong>in</strong>gcapability for HP that brought together over seventy decentralized tra<strong>in</strong><strong>in</strong>g organizations<strong>in</strong> five bus<strong>in</strong>esses, seventeen product categories, four regions, <strong>and</strong> tenfunctions. Prior to this role, Susan was the director of Global Learn<strong>in</strong>g, an organizationthat developed <strong>and</strong> delivered employee, management, <strong>and</strong> executivedevelopment. Before mov<strong>in</strong>g <strong>in</strong>to her corporate roles, Susan was the manager oforganization effectiveness for the Bus<strong>in</strong>ess PC organization of HP, where she ledthe management team’s process for creat<strong>in</strong>g a new go-to-market model <strong>and</strong> organizationdesign. Susan also served as staff to the CEO <strong>and</strong> executive committee ofHP, facilitat<strong>in</strong>g the cultural, management, <strong>and</strong> leadership changes needed for HPto cont<strong>in</strong>ue value-creat<strong>in</strong>g growth. Susan’s twenty-year HP career also has<strong>in</strong>cluded seven years <strong>in</strong> l<strong>in</strong>e management positions <strong>in</strong> global market<strong>in</strong>g <strong>and</strong> salessupport. She was an elected member to the ASTD board of directors from 1997 to1999, an officer of the board from 1999 to 2000, <strong>and</strong> the chairwoman of the board<strong>in</strong> 2001. Susan has a B.A. from Simmons College <strong>and</strong> a master’s <strong>in</strong> educationtechnology from Columbia <strong>University</strong>.Calhoun Wick, founder <strong>and</strong> chairman of Fort Hill Company, has spent over twodecades study<strong>in</strong>g how managers develop <strong>and</strong> bus<strong>in</strong>esses learn new capabilities.His research led to the development of Friday5s ® , a unique web-based solutionthat helps companies motivate follow-through action from learn<strong>in</strong>g <strong>and</strong> developmentevents <strong>and</strong> measure results. Cal is a nationally recognized expert <strong>in</strong>turn<strong>in</strong>g corporate education <strong>in</strong>to improved bus<strong>in</strong>ess results <strong>and</strong> has publisheda book on the subject. Cal earned a masters of science degree as an Alfred P.Sloan Fellow at MIT’s Sloan School of Management. He graduated as a RockefellerFellow from Tr<strong>in</strong>ity College <strong>in</strong> Hartford, Connecticut.
SCHAPTER EIGHTHoneywell AerospaceSThe follow<strong>in</strong>g case study will exam<strong>in</strong>e the path of Honeywell’s successfulAerospace bus<strong>in</strong>esses <strong>in</strong> leverag<strong>in</strong>g Six Sigma as the core productivitystrategy that will fuel its aggressive growth plans. It exam<strong>in</strong>es howHoneywell has successfully evolved Six Sigma from a process improvement<strong>in</strong>itiative to a fundamental component of its leadership system. Honeywellis achiev<strong>in</strong>g this end-state with the powerful comb<strong>in</strong>ation of Six Sigma,lean, <strong>and</strong> leadership. Throughout the chapter there will be practicalpo<strong>in</strong>ts to highlight key areas <strong>and</strong> issues.OVERVIEW 196INITIATIVE DU JOUR: ANOTHER ATTEMPTAT SEATBACK MANAGEMENT 196THE JOURNEY OF CHANGE 198A New Family Member 198Br<strong>in</strong>g<strong>in</strong>g Them <strong>in</strong>to the Fold 199Another Merger Attempt: The Burn<strong>in</strong>g Platform 199The Miss<strong>in</strong>g Ingredient 200Figure 8.1: Divergent Expectations 201SIX SIGMA: AN ENCORE PERFORMANCE 202The Vision 205Figure 8.2: Bus<strong>in</strong>ess Y Model 207Figure 8.3: Project Selection Model 209Select<strong>in</strong>g Talent 209CHANGING THE DNA AT ALL LEVELS 210Exhibit 8.1: Chang<strong>in</strong>g the DNA at All Levels 211ABOUT THE CONTRIBUTORS 212195
196 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEOVERVIEWIn the aggressive world of Fortune 500 firms there are certa<strong>in</strong> associations thatare assigned to a company after a substantial period. As time passes the companyearns a reputation with their customers, <strong>in</strong>dustry peers, <strong>and</strong> Wall Street.Honeywell International, Inc. over the past decade has ga<strong>in</strong>ed a clear reputationfor hav<strong>in</strong>g a culture of execution <strong>and</strong> productivity. This legacy has thedist<strong>in</strong>ct f<strong>in</strong>gerpr<strong>in</strong>t of its former chairman <strong>and</strong> CEO, Larry Bossidy. The challengethat faces this <strong>in</strong>dustrial giant today is how to translate that productivity<strong>in</strong>to a true growth eng<strong>in</strong>e that will perpetuate Honeywell to an even greater levelof performance. This is one of the greatest challenges that faces the currentchairman <strong>and</strong> CEO, Dave Cote.Honeywell International Inc., is a diversified technology <strong>and</strong> manufactur<strong>in</strong>gcompany, serv<strong>in</strong>g customers worldwide with aerospace products <strong>and</strong> services,control technologies for build<strong>in</strong>gs, homes, <strong>and</strong> <strong>in</strong>dustry, automotive products,specialty chemicals, fibers, plastics, <strong>and</strong> electronic <strong>and</strong> advanced materials. Thiswell-known <strong>in</strong>dustrial company has a rich heritage of successful aerospace companies<strong>in</strong> its pedigree, <strong>in</strong>clud<strong>in</strong>g Sperry Flight Systems, Garrett Turb<strong>in</strong>e Eng<strong>in</strong>es,Air Research, AlliedSignal, <strong>and</strong> now Honeywell.In the mid 1990s Larry Bossidy brought a new way of th<strong>in</strong>k<strong>in</strong>g to what wasat that time AlliedSignal. Look<strong>in</strong>g back, bus<strong>in</strong>ess has never been the same forthis company s<strong>in</strong>ce Bossidy breathed life <strong>in</strong>to the Six Sigma <strong>in</strong>itiative <strong>and</strong> createda healthy passion for productivity. S<strong>in</strong>ce that time AlliedSignal <strong>and</strong> thecompanies it has acquired have cont<strong>in</strong>ued to ga<strong>in</strong> momentum at a rate muchgreater than the majority of their <strong>in</strong>dustrial peers. Today, after a successfulmerger comb<strong>in</strong>ation, Honeywell has positioned itself as one of the lead<strong>in</strong>g SixSigma companies <strong>in</strong> the marketplace. It is well positioned to take advantage ofthis discrim<strong>in</strong>at<strong>in</strong>g core competency to attract new customers <strong>and</strong> new talent<strong>and</strong> drive profitable growth.INITIATIVE DU JOUR: ANOTHER ATTEMPTAT SEATBACK MANAGEMENTWhen Larry Bossidy decided Six Sigma was go<strong>in</strong>g to be the new <strong>in</strong>itiative thatwould create unlimited opportunities for improved quality, on-time delivery,<strong>and</strong> productivity, you can only imag<strong>in</strong>e the groans from the audience: “Great,another seatback <strong>in</strong>itiative.” A seatback <strong>in</strong>itiative is what happens when theCEO reads a magaz<strong>in</strong>e from the airplane seatback <strong>in</strong> front of him on a trip<strong>and</strong> decides he wants to try a little experiment on the bus<strong>in</strong>ess when he getsback to the office. Well, it didn’t take too long for the employees to realize
HONEYWELL AEROSPACE 197this <strong>in</strong>itiative had much more stay<strong>in</strong>g power than most people would haveimag<strong>in</strong>ed.As always, launch<strong>in</strong>g a large-scale change <strong>in</strong>itiative is difficult at best, particularlyif the organization has already launched several “false starts” with asimilar look <strong>and</strong> feel. Total Quality was the rave of the 1980s, <strong>and</strong> this Six Sigmaprogram sounded curiously like a similar game with a different name. Asexpected, when Bossidy first began the implementation of Six Sigma it was drivenwith a typical Bossidy fashion <strong>and</strong> aggressive deployment. Failure was notan option <strong>and</strong> resistance futile. Bossidy’s zeal for Six Sigma was without a doubtexactly what the company needed to get this <strong>in</strong>itiative off the ground <strong>and</strong> onthe radar screen of every leader <strong>and</strong> employee.Practical Po<strong>in</strong>t One: All change encounters resistance. The more people arepushed to change, the more they will push back. People don’t m<strong>in</strong>d change asmuch as they m<strong>in</strong>d be<strong>in</strong>g changed. Zeal <strong>and</strong> a strong bus<strong>in</strong>ess case are essential<strong>in</strong>gredients for effective change. Resistance needs reason. People need to see whythe change is important for the company <strong>and</strong> themselves. Are we clear why thechange is needed? Are we communicat<strong>in</strong>g the reason <strong>in</strong> a clear, simple, <strong>and</strong> compell<strong>in</strong>gmessage <strong>and</strong> format? Do we have the commitment needed to make thechange despite the resistance? What do we need to do better?What commonly follows the rollout of <strong>in</strong>itiatives with such strong seniormanagement support is a sudden but veiled adoption of the <strong>in</strong>itiative evidencedby the <strong>in</strong>clusion of the <strong>in</strong>itiative <strong>in</strong> every leader’s annual goals <strong>and</strong>objectives. In addition, you now beg<strong>in</strong> to see the Six Sigma language appear<strong>in</strong>gthroughout presentations <strong>and</strong> reports across the bus<strong>in</strong>ess. Wonderful, youmight th<strong>in</strong>k. I have what most <strong>in</strong>itiatives would die for, senior managementsupport. What else could I possibly ask for after achiev<strong>in</strong>g this milestone? Trueacceptance would be one key component that comes to m<strong>in</strong>d! Not too manyleaders would be so bold as to st<strong>and</strong> up to the chairman <strong>and</strong> tell him or herthat they do not accept Six Sigma as a critical element to achiev<strong>in</strong>g theiraggressive bus<strong>in</strong>ess objectives. No one would make such a career-limit<strong>in</strong>gdecision—at least not openly. While many stood up <strong>and</strong> cheered for Six Sigmaon the outside, they were sitt<strong>in</strong>g down on the <strong>in</strong>side <strong>and</strong> hop<strong>in</strong>g this, too,would pass.Practical Po<strong>in</strong>t Two: Once the bus<strong>in</strong>ess case is understood <strong>and</strong> the vision is clear,the next <strong>and</strong> more difficult challenge of effective change is forg<strong>in</strong>g agreementon the new behaviors. New visions require new behaviors. In order to buildlast<strong>in</strong>g change, behaviors must change. What will we do differently to create ourvision? What is our agreement? Once behaviors are agreed upon it becomesevident who is on board <strong>and</strong> who is not. Without behavior agreements, it is easyto feign compliance.
198 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGETHE JOURNEY OF CHANGESo the change journey began. Although many leaders were less than completelyon-board with Six Sigma, vast operational improvements <strong>and</strong> excellent productivityresulted from this new methodology. Six Sigma was added to the operationalexcellence toolkit <strong>and</strong> didn’t appear to be leav<strong>in</strong>g any time soon. From1995 to 1999 AlliedSignal, Motorola, <strong>and</strong> GE became the three large <strong>in</strong>dustrialfirms to implement Six Sigma across their companies. Dur<strong>in</strong>g this time AlliedSignalbegan to create an excellent Six Sigma technical tra<strong>in</strong><strong>in</strong>g program that wassecond to none. It cont<strong>in</strong>ued to grow <strong>in</strong> its breadth <strong>and</strong> depth of Six Sigmaknowledge, experience, <strong>and</strong> personnel. Once Bossidy saw significant improvements<strong>in</strong> the manufactur<strong>in</strong>g area, he began creat<strong>in</strong>g an urgency to drive SixSigma <strong>in</strong>to all aspects of the bus<strong>in</strong>ess: “It’s time to stop pay<strong>in</strong>g lip service tomov<strong>in</strong>g Six Sigma beyond the factory floor <strong>and</strong> simply do it—the potential hereis huge.”A New Family MemberThe year 2000 would prove to be a great challenge for Honeywell Aerospace.The Aerospace bus<strong>in</strong>ess nearly doubled <strong>in</strong> size with the completion ofthe AlliedSignal-Honeywell merger. Now the Aerospace leadership team neededto br<strong>in</strong>g the former Honeywell Aerospace employees up to speed with Six Sigma<strong>and</strong> how it would be used to drive productivity <strong>and</strong> help the company realizethe merger synergies <strong>and</strong> cost sav<strong>in</strong>gs they promised to the Street. The formerHoneywell Aerospace bus<strong>in</strong>ess was not new to process improvement, it was,however, new to Six Sigma. Honeywell had used the Malcolm Baldrige modelas its framework for cont<strong>in</strong>uous improvement <strong>and</strong> for the most part had madesignificant improvements <strong>in</strong> many areas of its bus<strong>in</strong>ess. In an attempt to comb<strong>in</strong>ethe best of both worlds, a team was put together to underst<strong>and</strong> whetherthere was room for both improvement <strong>in</strong>itiatives to live under one roof. Theteam determ<strong>in</strong>ed that a marriage between Six Sigma <strong>and</strong> Baldrige was plausible.It was clear that if you properly deployed the Baldrige model as the assessmenttool to diagnose where your bus<strong>in</strong>ess needed improvement <strong>and</strong> then usedthe Six Sigma methodology to generate the process solutions, you would havea w<strong>in</strong>n<strong>in</strong>g comb<strong>in</strong>ation. As you can imag<strong>in</strong>e the personal biases <strong>and</strong> emotionalenergy around the two sides of the tug-of-war l<strong>in</strong>e were huge. This was a hillthat people were, <strong>in</strong> fact, will<strong>in</strong>g to die on. It was seen by many as dilutive tofocus on two improvement <strong>in</strong>itiatives. As often happens <strong>in</strong> large <strong>in</strong>dustrial mergers,<strong>in</strong>itiatives that are viewed as compet<strong>in</strong>g will ultimately end with someonelos<strong>in</strong>g <strong>and</strong> someone w<strong>in</strong>n<strong>in</strong>g. This was no different, once the determ<strong>in</strong>ation wasmade that Six Sigma would be the overarch<strong>in</strong>g improvement <strong>in</strong>itiative <strong>and</strong> theBaldrige model “could” be used as one of many support<strong>in</strong>g tools <strong>in</strong> the toolbox,the proverbial writ<strong>in</strong>g was on the wall. Several pilots were conducted todeterm<strong>in</strong>e the practicality of comb<strong>in</strong><strong>in</strong>g both <strong>in</strong>itiatives <strong>in</strong>to one synergistic
HONEYWELL AEROSPACE 199program. Although the two could have complemented one another <strong>and</strong> made areasonable marriage, it was seen as a distraction to most of the Six Sigma sa<strong>in</strong>ts<strong>and</strong> an uphill battle to the Baldrige believers. Six Sigma was the clear choice forthe go-forward improvement strategy.Practical Po<strong>in</strong>t Three: Usually the fight is not about the fight. Usually the fight isabout power, politics, the fear of change, or some related matter. Consequently,it is necessary to deal with emotional matters first. A series of town meet<strong>in</strong>gs toair concerns, a process of dialogues to discuss compet<strong>in</strong>g po<strong>in</strong>ts, or <strong>in</strong>formallunch gather<strong>in</strong>gs to raise questions can help sort through these issues. It is mosteffective when these sessions are led by leaders who are open to comments, canhear compet<strong>in</strong>g po<strong>in</strong>ts of views without becom<strong>in</strong>g defensive, <strong>and</strong> have thecourage to say what they know <strong>and</strong> what they don’t know. When these sessionsare facilitated <strong>in</strong> a spirit of openness <strong>and</strong> honesty, the emotional issues areallowed to dissipate. This dissipation permits the possibility of a true merger,mutual cooperation, <strong>and</strong> <strong>in</strong>tegration. It opens the way to a brighter future. Otherwise,it is more like a takeover with w<strong>in</strong>ners <strong>and</strong> losers.Br<strong>in</strong>g<strong>in</strong>g Them <strong>in</strong>to the FoldNow it was time to focus on br<strong>in</strong>g<strong>in</strong>g Six Sigma <strong>in</strong>to the former Honeywell bus<strong>in</strong>esses<strong>and</strong> maximize productivity across the comb<strong>in</strong>ed bigger <strong>and</strong> betterHoneywell Aerospace bus<strong>in</strong>ess. It was very evident with<strong>in</strong> six months of themerger comb<strong>in</strong>ation that former Honeywell <strong>and</strong> former AlliedSignal had a lotto offer <strong>in</strong> terms of their experience <strong>in</strong> deploy<strong>in</strong>g successful <strong>in</strong>itiatives. Bothcompanies understood the importance of hav<strong>in</strong>g a st<strong>and</strong>ard approach <strong>and</strong>, evenmore important, a consistent deployment of that approach. They began byensur<strong>in</strong>g that all of the new Aerospace leaders had fundamental Six Sigmatra<strong>in</strong><strong>in</strong>g. Many companies call this Champion tra<strong>in</strong><strong>in</strong>g. The objective is to teachleaders the fundamentals so they can effectively <strong>in</strong>fluence the deploymentthroughout the organization. Black Belt <strong>and</strong> Lean Expert waves were <strong>in</strong>itiated<strong>in</strong> 2000, <strong>and</strong> best practices were be<strong>in</strong>g shared across former company boundaries.Progress was beg<strong>in</strong>n<strong>in</strong>g to take place, <strong>and</strong> customers <strong>and</strong> employees couldbeg<strong>in</strong> to see the potential benefits of the newly comb<strong>in</strong>ed company.Another Merger Attempt: The Burn<strong>in</strong>g PlatformBy now, Larry Bossidy had fulfilled his obligation as chairman <strong>and</strong> CEO <strong>and</strong>h<strong>and</strong>ed the re<strong>in</strong>s over to former Honeywell CEO Michael Bonsignore.Bonsignore saw the clear benefit of the Six Sigma methodology <strong>and</strong> what itcould do for bottom-l<strong>in</strong>e performance, but before he had much opportunity tohelp or hurt the cause the newly formed bus<strong>in</strong>ess had underperformed <strong>in</strong> itsfirst several quarters. Wall Street <strong>and</strong> the Honeywell board of directors did nothave the luxury to see whether the situation would improve. After an attemptto attract United Technologies as a potential suitor to help br<strong>in</strong>g Honeywell
200 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEout of this quagmire, GE’s Jack Welch stepped <strong>in</strong> <strong>and</strong> made a last-m<strong>in</strong>ute purchaseoffer that the Honeywell board of directors could not refuse.It appeared unavoidable that another large-scale merger was on the horizonfor Honeywell, albeit this one had a bit more of the acquisition-takeover mentalitythan that of the previous Honeywell-AlliedSignal experience. One brightspot for those who lived <strong>in</strong> the world of Six Sigma <strong>and</strong> cont<strong>in</strong>uous improvementwas that GE had taken Larry Bossidy’s advice from the mid 1990s <strong>and</strong> implementedtheir own very successful Six Sigma program. What GE found whenanalyz<strong>in</strong>g Honeywell’s Six Sigma program was not quite what it had expected.It found a company with dozens of highly tra<strong>in</strong>ed Masters, hundreds of technicalBlack Belts, <strong>and</strong> thous<strong>and</strong>s of work<strong>in</strong>g-level Green Belts who were all tra<strong>in</strong>ed<strong>in</strong> the Six Sigma tools <strong>and</strong> methodologies—but someth<strong>in</strong>g was miss<strong>in</strong>g.The Miss<strong>in</strong>g IngredientIt was the leadership component. Wait a m<strong>in</strong>ute ...Ithought you said Honeywellhad the full support of senior management. It did <strong>in</strong> fact have the fullsupport of management but it did not have a leadership-driven Six Sigmamodel ensur<strong>in</strong>g that the discipl<strong>in</strong>es <strong>and</strong> behaviors of this powerful change toolpermeated the bus<strong>in</strong>ess. No one would argue that Honeywell Aerospace hada very solid Six Sigma program, but it was clear that the time was right tomove from a good program to a great program. It was time to exploit SixSigma <strong>in</strong> all areas of the bus<strong>in</strong>ess, <strong>in</strong>clud<strong>in</strong>g leadership. We needed to movethe leadership team from sitt<strong>in</strong>g <strong>in</strong> the bleachers to participat<strong>in</strong>g out on thefield. Six Sigma has never been <strong>and</strong> will never be a spectator sport. It is allabout alignment <strong>and</strong> engagement of leadership. Let’s be honest, senior managementcares primarily about three th<strong>in</strong>gs—bus<strong>in</strong>ess performance, bus<strong>in</strong>essperformance, <strong>and</strong> f<strong>in</strong>ally bus<strong>in</strong>ess performance! And that is exactly what theyshould care about. Honeywell Six Sigma champions found themselves <strong>in</strong> theall-familiar trap that often accompanies large-scale change <strong>in</strong>itiatives. Seniormanagement understood <strong>and</strong> embraced the value Six Sigma brought to thetable, <strong>and</strong> conversely the Six Sigma team saw a solid effort on the part ofmanagement to support the <strong>in</strong>itiative. Yet often the owner of the <strong>in</strong>itiative hasan unrealistic expectation of management. It is often expected that managementwill virtually ma<strong>in</strong>ta<strong>in</strong> a s<strong>in</strong>gular focus on that particular <strong>in</strong>itiative. It isa huge failure mode to expect management to be consumed with the perpetuationof the Six Sigma <strong>in</strong>itiative, or any <strong>in</strong>itiative for that matter. There is abig difference between genu<strong>in</strong>e support of Six Sigma <strong>and</strong> ask<strong>in</strong>g leadership tocreate an organization that is Six Sigma–centric. There are countless examplesof the <strong>in</strong>itiative hav<strong>in</strong>g moved from be<strong>in</strong>g an enabler to drive improved bus<strong>in</strong>essperformance to becom<strong>in</strong>g an end <strong>in</strong> itself. The Six Sigma zealots believedso strongly <strong>in</strong> Six Sigma as a measurement system, a methodology, <strong>and</strong> astrategy that they often found themselves upset at management because theywere not able to recite the Six Sigma pledge or perform the secret h<strong>and</strong>shake.
HONEYWELL AEROSPACE 201Optimal solution:Bus<strong>in</strong>ess performance is the end — Initiative is the means to the endSelf-serv<strong>in</strong>g<strong>in</strong>itiativeBus<strong>in</strong>essas usualImprovement<strong>in</strong>itiative islaunchedFigure 8.1 Divergent Expectations.Now of course you would be hard-pressed to f<strong>in</strong>d an <strong>in</strong>itiative owner to actuallyverbalize this approach as the actual strategy or goal, but the behaviorsexhibited from the <strong>in</strong>dividuals driv<strong>in</strong>g the <strong>in</strong>itiative often speak the loudest(Figure 8.1).In some <strong>in</strong>stances the exhibited behavior is ask<strong>in</strong>g that we rearrange or modifythe bus<strong>in</strong>ess model to fit with<strong>in</strong> the Six Sigma model versus the correctapproach, which is modify<strong>in</strong>g Six Sigma as appropriate to fit with<strong>in</strong> the modelof the bus<strong>in</strong>ess. At Honeywell there was evidence that some forms of this behaviorwere alive <strong>and</strong> well. For example, a Black Belt would get certified <strong>and</strong> thenget assigned the task to go out <strong>in</strong>to the organization <strong>and</strong> f<strong>in</strong>d a million dollarsworth of sav<strong>in</strong>gs. What transpired would be a very excited <strong>and</strong> well-tra<strong>in</strong>edprocess expert beg<strong>in</strong>n<strong>in</strong>g the hunt for sav<strong>in</strong>gs. Like a bloodhound <strong>in</strong> search ofits quarry, the very-well <strong>in</strong>tentioned Black Belt discovers an excessive pileof <strong>in</strong>ventory sitt<strong>in</strong>g <strong>in</strong> a particular manufactur<strong>in</strong>g cell. The Black Belt thenbeg<strong>in</strong>s to hone <strong>in</strong> <strong>and</strong> lock on this as “their” million-dollar project. The BlackBelt confronts the manufactur<strong>in</strong>g manager <strong>and</strong> <strong>in</strong>forms him or her that the<strong>in</strong>ventory <strong>in</strong> the manager’s area is targeted for removal. Subsequent to the discussion,the Black Belt beg<strong>in</strong>s expla<strong>in</strong><strong>in</strong>g the cadre of tools that would be usedto take out the <strong>in</strong>ventory enemy. Of course the manufactur<strong>in</strong>g manager resistsbe<strong>in</strong>g changed. This <strong>in</strong>itial meet<strong>in</strong>g marks the beg<strong>in</strong>n<strong>in</strong>g of the organizationalbrick wall that will be quickly built to keep out these renegade Black Belts. It isnot that the manufactur<strong>in</strong>g manager does not want to elim<strong>in</strong>ate <strong>in</strong>ventory <strong>and</strong>improve the performance of the his or her area, it is just that there is a significantdisconnect <strong>in</strong> goal alignment. This misalignment causes the key stakeholder
202 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEof the potential project to reject the potential benefits because it was perceivedas a scud missile from out of nowhere.Although this type of project misalignment was not an every day occurrence,it happened enough to create a cultural barrier at Honeywell that caused the SixSigma <strong>in</strong>itiative to plateau <strong>and</strong> <strong>in</strong> many regards even decl<strong>in</strong>e. It was perceivedby many to be a self-serv<strong>in</strong>g <strong>in</strong>itiative. One that was so focused on do<strong>in</strong>g whatwas “right” for the bus<strong>in</strong>ess that it did not consider the most important elementof a change <strong>in</strong>itiative, absolute stakeholder acceptance.Practical Po<strong>in</strong>t Four: The most critical key to any <strong>in</strong>itiative is build<strong>in</strong>g healthycoalitions. Without acceptance <strong>and</strong> coalitions there will be no successful implementation.Who are the stakeholders? Who are the people provid<strong>in</strong>g resources tothis <strong>in</strong>itiative? Who can block or veto this process? Who needs to implement it?Who will be affected? Every team needs to carefully consider the stakeholders.List the stakeholders <strong>and</strong> get to know them. It is the leader’s role to make it aseasy as possible for the stakeholders to say yes. If the leader does not respect thestakeholder’s views, why would the stakeholder consider the leader’s? First th<strong>in</strong>gsfirst. Consider the stakeholders <strong>and</strong> they are more likely to consider you. Leadwith the stakeholders’ agenda.This common approach of overzealous deployment did not keep Honeywellfrom mak<strong>in</strong>g countless improvements <strong>and</strong> generat<strong>in</strong>g very respectable productivitygoals, but Six Sigma found itself slipp<strong>in</strong>g <strong>in</strong>to the abyss of “been there,done that,” noth<strong>in</strong>g new or excit<strong>in</strong>g here.Now we had come full circle. The father of the Six Sigma <strong>in</strong>itiative at Honeywell,Larry Bossidy, was return<strong>in</strong>g to the scene. Bossidy was asked by theHoneywell board of directors to come out of retirement <strong>and</strong> help get the struggl<strong>in</strong>gcorporation back on its feet. As Larry returned to his comfortable positionof lead<strong>in</strong>g the ship, he quickly saw the companywide distraction that hadoccurred due to the GE merger attempt <strong>and</strong> the removal of CEO MichaelBosignore. Larry knew Honeywell needed an <strong>in</strong>jection of energy around thestruggl<strong>in</strong>g Six Sigma <strong>in</strong>itiative. It was obvious the merger activities had a dilutiveeffect on Six Sigma. It was time to recharge the troops.SIX SIGMA: AN ENCORE PERFORMANCENot be<strong>in</strong>g new to the Six Sigma <strong>in</strong>itiatives proved to be one of Honeywell’sgreatest strengths <strong>and</strong> one of its biggest challenges. In order for Honeywell tobe successful <strong>in</strong> its revitalization of Six Sigma, it desperately needed to leveragethe past years of technical knowledge <strong>and</strong> expertise while significantly beef<strong>in</strong>gup the leadership component of the program. How this took shape atHoneywell’s Eng<strong>in</strong>es, Systems, <strong>and</strong> Services bus<strong>in</strong>ess was with the renewed
HONEYWELL AEROSPACE 203vigor of President <strong>and</strong> CEO Steve Loranger. Loranger was conv<strong>in</strong>ced that withoutSix Sigma becom<strong>in</strong>g a game-chang<strong>in</strong>g strategy across his nearly $5 billionbus<strong>in</strong>ess, he would be unsuccessful <strong>in</strong> execut<strong>in</strong>g the aggressive strategies hehad outl<strong>in</strong>ed for the next 2–3 years. One of the def<strong>in</strong><strong>in</strong>g questions that needed tobe answered was, Is this a face-lift to Six Sigma, or is this a complete new gameplan? This was precisely the question that was asked by Jeff Osborne before heagreed to accept the challenge of lead<strong>in</strong>g the effort to revitalize Six Sigma atHoneywell’s Eng<strong>in</strong>es, Systems, <strong>and</strong> Services Aerospace bus<strong>in</strong>ess. Lorangeranswered the question with clarity <strong>and</strong> simplicity. We must take Six Sigma to agreater level of impact if we are to be successful <strong>in</strong> today’s challeng<strong>in</strong>g Aerospaceclimate. The mission was clear, change the game <strong>and</strong> take Six Sigma to a newlevel. This would not be a tweak to the current program but rather a completelydifferent approach to how it deployed, utilized, <strong>and</strong> re<strong>in</strong>forced Six Sigma. Nowthat Loranger <strong>and</strong> Osborne were aligned, how would they conv<strong>in</strong>ce over 16,000employees that this all too familiar program was really go<strong>in</strong>g to be different?As the new vice president of Six Sigma, Jeff Osborne had to quickly figure outhow to make sure the organization knew it was not bus<strong>in</strong>ess as usual for SixSigma. The good news for Osborne was that this bus<strong>in</strong>ess with<strong>in</strong> Honeywellwas relatively agile <strong>and</strong> had the ability to make change happen at an aggressivepace. In addition, the organization was well down the Six Sigma journey <strong>and</strong>had done many th<strong>in</strong>gs well <strong>in</strong> driv<strong>in</strong>g the <strong>in</strong>itiative <strong>in</strong>to the bus<strong>in</strong>ess.As with any restart or revitalization program, you have to carefully assesswhat you did well <strong>and</strong> what you need to change. You must balance the temptationto hold on to past sacred cows with throw<strong>in</strong>g out the baby with the bathwater. These are the some of the clear strengths the Eng<strong>in</strong>es, Systems, <strong>and</strong>Services bus<strong>in</strong>ess had with<strong>in</strong> its organization:Strengths• Senior executive support of Six Sigma• Excellent technical capability• Solid tra<strong>in</strong><strong>in</strong>g curriculum <strong>and</strong> learn<strong>in</strong>g program• Dozens of Master Black Belts (advanced practitioners) <strong>and</strong> Lean Masters• Hundreds of certified Black Belts <strong>and</strong> Lean Experts• Thous<strong>and</strong>s of certified Green Belts• Common Six Sigma language <strong>and</strong> term<strong>in</strong>ology across the bus<strong>in</strong>essMany companies would be envious of this star<strong>in</strong>g po<strong>in</strong>t. In fact, most companies<strong>in</strong>vest several years <strong>and</strong> millions of dollars just to arrive at this so-calledbeg<strong>in</strong>n<strong>in</strong>g. Of course the task at h<strong>and</strong> was not to <strong>in</strong>itiate a Six Sigma programbut to take the current one from good to great. Osborne made an <strong>in</strong>terest<strong>in</strong>gobservation. Most of the key <strong>in</strong>gredients for a successful Six Sigma program
204 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEwere <strong>in</strong> place. Why was it then that the recipe was not generat<strong>in</strong>g the desiredoutcome: an unquenchable drive for cont<strong>in</strong>uous improvement <strong>and</strong> a demonstratedcapability to susta<strong>in</strong> the improvement ga<strong>in</strong>s? As you probably have experienced<strong>in</strong> your own attempts at cook<strong>in</strong>g, there is typically no marg<strong>in</strong> for error.If you leave out even one key <strong>in</strong>gredient, the dish is compromised. Consequently,all <strong>in</strong>gredients are required to have a healthy <strong>and</strong> vibrant Six Sigmaprogram. Beyond simply hav<strong>in</strong>g all of the necessary components there is a bitof leadership magic required to properly br<strong>in</strong>g the components together to createa compell<strong>in</strong>g vision that will generate the desired end-state. So let’s look atwhat challenges Osborne faced as he began the journey to rebuild Six Sigmaat Eng<strong>in</strong>es, Systems, <strong>and</strong> Services.Challenges• <strong>Leadership</strong> saw Six Sigma primarily as a group of process consultants• Tra<strong>in</strong><strong>in</strong>g <strong>and</strong> certification had become a checkmark for most employees• Tools were often taken to an extreme <strong>and</strong> became more important thanthe bus<strong>in</strong>ess issue try<strong>in</strong>g to be solved• Talent level with<strong>in</strong> the Six Sigma organization had become mostlyaverage• Many certified Six Sigma Masters <strong>and</strong> Black Belts were leav<strong>in</strong>g thecompany for attractive outside offers• Projects were often self-selected by the Six Sigma resource versusbus<strong>in</strong>ess leaders• Six Sigma <strong>in</strong> many ways had become the end-state versus the meansto the endSix Sigma momentum had waned at best. Osborne realized that at Eng<strong>in</strong>es,Systems, <strong>and</strong> Services the Six Sigma <strong>in</strong>itiative had become way too focused onthe <strong>in</strong>itiative itself. Osborne’s rally cry became, “It is time to take Six Sigma frombe<strong>in</strong>g about Six Sigma activity to be<strong>in</strong>g about bus<strong>in</strong>ess performance.” No longerwould they give teams credit for simply tra<strong>in</strong><strong>in</strong>g other teams <strong>and</strong> consult<strong>in</strong>gthem on how to use the tools. Now it was time for Six Sigma to rally the Honeywellleadership team <strong>and</strong> take them to a new level of performance. If therewas one concept Osborne understood it was, <strong>Leadership</strong> rallies around bus<strong>in</strong>essperformance not <strong>in</strong>itiatives.Practical Po<strong>in</strong>t Five: The only reason for a bus<strong>in</strong>ess to exist is to provide service tocustomers <strong>and</strong> clients. It is to create value <strong>in</strong> the marketplace. As a result, theonly reason for a bus<strong>in</strong>ess to change is the customer. What does the customerneed that we are not provid<strong>in</strong>g? How does this <strong>in</strong>itiative provide more value tothe customer? How can we apply the tools of Six Sigma to improve our value <strong>in</strong>
HONEYWELL AEROSPACE 205the marketplace? This is the only legitimate start<strong>in</strong>g po<strong>in</strong>t for any <strong>in</strong>itiative.Everyone must “see” the customer.The VisionThe process to create a new <strong>and</strong> compell<strong>in</strong>g vision began by gather<strong>in</strong>g data fromsources <strong>in</strong>side <strong>and</strong> outside the Six Sigma organization. To do this the Six Sigmaleadership team utilized the Six Sigma tools <strong>and</strong> methodology to look at the failuremodes <strong>and</strong> successes of the prior Six Sigma program. Once Osborne had agood underst<strong>and</strong><strong>in</strong>g of where they were (basel<strong>in</strong>e), he created a clear <strong>and</strong> simplevision statement that described what he wanted from the Six Sigma efforts:“Six Sigma a core bus<strong>in</strong>ess value . . . the way we th<strong>in</strong>k, act, <strong>and</strong> execute.” Youmay say to yourself, OK, clear <strong>and</strong> simple but not overly unique. Many visionexercises have a propensity to end up on a plaque on the wall or a poster <strong>in</strong> abuild<strong>in</strong>g, never to be bothered with aga<strong>in</strong>—just one more th<strong>in</strong>g checked off <strong>and</strong>put on the list of completed actions. That would not be the story <strong>in</strong> this case.Far from it—this was only the beg<strong>in</strong>n<strong>in</strong>g, but a significant beg<strong>in</strong>n<strong>in</strong>g it wouldturn out to be. The Six Sigma leadership team formulated what key componentsmade up the desired end-state <strong>and</strong> what it would look like if they really gotthere. After many discussions with leaders <strong>and</strong> employees they created a cleardescription of where it was they were headed. It was now imperative that theydef<strong>in</strong>e a set of clear strategies that would take them to that end-state. Alsoneeded was a set of goals <strong>and</strong> objectives that would align with these strategies<strong>and</strong> vision. It was imperative that the overall end-game for Six Sigma was preciselythat of the Eng<strong>in</strong>es, Systems, <strong>and</strong> Services executive team. The path toget to that end-state is where Six Sigma would make all the difference.In order to get to the new end-state with momentum <strong>and</strong> speed, there wereseveral key perspectives <strong>and</strong> behaviors that would create the success criteria forthe new Six Sigma model.Success Criteria• Six Sigma is a m<strong>in</strong>dset, not a quality program• Six Sigma vision <strong>and</strong> strategies will be a subset of bus<strong>in</strong>ess vision <strong>and</strong>strategies• Six Sigma organization must align directly to bus<strong>in</strong>ess <strong>and</strong> functionalorganizations• Project selection must be top-down versus bottom-up• Focus will be on application of Six Sigma tools versus certification• Measure bus<strong>in</strong>ess results not Six Sigma activity• Six Sigma resources should be full-time <strong>and</strong> dedicated• Six Sigma resources must be bus<strong>in</strong>ess leaders not statisticians
206 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE• Never overstate Six Sigma benefits; math w<strong>in</strong>s every time• Six Sigma serves the bus<strong>in</strong>ess—the bus<strong>in</strong>ess does not serve Six SigmaIn order for Eng<strong>in</strong>es, Systems, <strong>and</strong> Services to get to a place where Six Sigmawas serv<strong>in</strong>g the bus<strong>in</strong>ess, several factors had to be considered:• Management will never buy <strong>in</strong>to a program or <strong>in</strong>itiative that is self-serv<strong>in</strong>g;make the objective clear <strong>and</strong> unquestionable.• Six Sigma is the means to the end, not the end itself; avoid focus<strong>in</strong>g onmetrics <strong>and</strong> systems that reward the “behavior of the checkmark.” Forexample, Management told me I had to take this Six Sigma tra<strong>in</strong><strong>in</strong>gclass, so I will do it, get my checkmark, <strong>and</strong> they will leave me alone.• Speak the language of the bus<strong>in</strong>ess—language should be focused on bus<strong>in</strong>essimpact, not the perpetuation of a particular tool or methodology.• Create bus<strong>in</strong>ess leaders, not Six Sigma leaders.• Bus<strong>in</strong>ess always takes the priority over the <strong>in</strong>itiative; if it is unclear toleaders <strong>and</strong> employees where the priority lies, you have already lost.• Let your results be the compell<strong>in</strong>g “why” when someone asks, Whyare we do<strong>in</strong>g this Six Sigma th<strong>in</strong>g anyway? The why is always morecompell<strong>in</strong>g than the what.And f<strong>in</strong>ally, to ensure there was full <strong>and</strong> complete leadership buy-<strong>in</strong> acrossthe board, it was essential for leadership to have the correct perception of SixSigma. It was determ<strong>in</strong>ed that there were three key perceptions that Osbornewanted the executive staff to have regard<strong>in</strong>g Six Sigma.• Six Sigma must be seen as an entrée not a side-dish. <strong>Leadership</strong> must considerSix Sigma as a primary strategy to generate <strong>and</strong> susta<strong>in</strong> bus<strong>in</strong>ess productivity,not as an afterthought. So when teams are be<strong>in</strong>g formed, products arebe<strong>in</strong>g transitioned from suppliers, <strong>and</strong> new products are be<strong>in</strong>g designed, SixSigma skills <strong>and</strong> resources need to be a core component of the team design. Theidea that there is a time <strong>and</strong> place for Six Sigma is a bad idea. This is why atHoneywell Six Sigma is not subord<strong>in</strong>ated under quality or manufactur<strong>in</strong>g. Thiswould only limit its impact to those important but by no means exclusive functionswith<strong>in</strong> the bus<strong>in</strong>ess. Six Sigma has a time <strong>and</strong> a place already; the time isnow <strong>and</strong> the place is every crack <strong>and</strong> crevice of the bus<strong>in</strong>ess.• Six Sigma must be an accelerator not an anchor. There was a common perceptionwith<strong>in</strong> many elements of the Eng<strong>in</strong>es, Systems, <strong>and</strong> Services bus<strong>in</strong>essthat if you <strong>in</strong>clude a Black Belt <strong>in</strong> the problem you are try<strong>in</strong>g to solve it willgreatly slow down the process. This perception did not evolve without reason.There were many times when the Black Belt was so adamant about us<strong>in</strong>g eachtool to the fullest degree that he or she lost sight of the need for the team to
HONEYWELL AEROSPACE 207analyze the problem quickly, make a decision, <strong>and</strong> move forward. If the tools<strong>and</strong> methodologies of Six Sigma are seen as devices to hold back, h<strong>in</strong>der, orslow down the pace at which decisions must be made, it will fail <strong>in</strong> the m<strong>in</strong>dsof bus<strong>in</strong>ess leaders.• Six Sigma maturity is a marathon not a spr<strong>in</strong>t. As with any significant culturalchange <strong>in</strong>itiative, you can’t rush the change process. You would be hardpressedto f<strong>in</strong>d any professional or consultant who would suggest systemicculture change can happen <strong>in</strong> a matter of months. S<strong>in</strong>ce you cannot change culturebut you can change behaviors, which greatly <strong>in</strong>fluence the culture, you canexpect it to take anywhere from three to seven years to have a last<strong>in</strong>g effect onyour organization. Many of us <strong>in</strong> executive leadership positions love to challenge<strong>and</strong> often short-circuit this pr<strong>in</strong>ciple. In do<strong>in</strong>g so we often pay the price<strong>and</strong> end up at best with several false starts <strong>and</strong> at worst a completely faileddeployment. Six Sigma must be seen as a journey that will transcend severalyears <strong>and</strong> often several rounds of senior leadership. We must operate with speed<strong>and</strong> agility but coupled with realistic expectations of what can be done <strong>in</strong> a yearor less.Now with this calibration, Eng<strong>in</strong>es, Systems, <strong>and</strong> Services was ready to drivethrough the rest of the rebuild<strong>in</strong>g process. The process began by gett<strong>in</strong>g theexecutive leadership to agree on what the top improvement areas were thatwe wanted Six Sigma to address. At Eng<strong>in</strong>es, Systems, <strong>and</strong> Services they calledthese the Bus<strong>in</strong>ess Ys (Figure 8.2). Where the foundational equation for SixSigma is Y f(x), expressed as y is a function of x. This means that the output(y) that you are try<strong>in</strong>g to achieve is really a function of many <strong>in</strong>puts (x).The premise here is that if you underst<strong>and</strong> the <strong>in</strong>puts <strong>and</strong> how they affect theConflict<strong>in</strong>g improvement<strong>in</strong>itiativesBus<strong>in</strong>ess Y'sAlignment of allimprovement effortsY = f(x)Y 1Y 2Y 3Y 4Y 5Figure 8.2 Bus<strong>in</strong>ess Y Model.
208 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEoutput, you can drive an improvement <strong>in</strong> the output by focus<strong>in</strong>g on the mostcritical <strong>in</strong>puts. The executive team agreed on a half dozen Bus<strong>in</strong>ess Ys thatwould be the focus for the Six Sigma organization. One of the many benefits <strong>in</strong>select<strong>in</strong>g a h<strong>and</strong>ful of focus areas such as the Bus<strong>in</strong>ess Ys is that you create anatural alignment for your improvement efforts. This approach allowedHoneywell to ensure that improvement efforts were not suboptimized by SixSigma projects be<strong>in</strong>g performed <strong>in</strong> parallel at various locations across theirglobal bus<strong>in</strong>ess. An executive owner was assigned to each of these Bus<strong>in</strong>ess Ys,as well as an accompany<strong>in</strong>g Six Sigma leader. This ensured ownership, accountability,<strong>and</strong> congruency.This approach proved very effective for Honeywell. It was able to align itslarge-scale improvement projects to these Bus<strong>in</strong>ess Ys, as well as the hundredsof Green Belt projects be<strong>in</strong>g performed at any po<strong>in</strong>t <strong>in</strong> time. The Six Sigmaleader <strong>and</strong> the associated executive champion could drive improvement priorities<strong>and</strong> synthesize the organization’s activities through this model. One of thecommon pitfalls companies run across when deploy<strong>in</strong>g a Six Sigma <strong>in</strong>itiative isonce there are a large number of Masters, Black Belts, <strong>and</strong> Green Belts acrossthe organization, project selection is driven from the bottom up. Where thisoften becomes a problem is when the Six Sigma resource is driv<strong>in</strong>g an improvementeffort that is not on the radar screen of the bus<strong>in</strong>ess leader. This is whenmisalignment results. Now that Honeywell had a Bus<strong>in</strong>ess Y model <strong>in</strong> place, itwas able to effectively ensure that all Six Sigma improvement projects werealigned to one of the Bus<strong>in</strong>ess Ys <strong>and</strong> subsequently approved by the Bus<strong>in</strong>essY champions (Figure 8.3).Helpful questions that Six Sigma leaders asked when decid<strong>in</strong>g what projectsto select were• Is the project tied directly to the objective of the bus<strong>in</strong>ess generalmanagers <strong>and</strong> functional vice presidents?• Will the customers see the benefits if we execute this project?• Does this project fit with<strong>in</strong> current bus<strong>in</strong>ess <strong>in</strong>itiatives?• What are the consequences of not do<strong>in</strong>g this project?• Assum<strong>in</strong>g the project is aligned to the critical bus<strong>in</strong>ess objectives, is thetim<strong>in</strong>g right to execute this project right now?Practical Po<strong>in</strong>t Six: The leader <strong>and</strong> executive’s job is to be effective through theefforts of others. This requires mak<strong>in</strong>g people’s strengths a priority. It dem<strong>and</strong>sa robust system that encourages <strong>and</strong> creates a discipl<strong>in</strong>e of rational action. First<strong>and</strong> foremost this means a leader’s job is to create a discipl<strong>in</strong>e of decision mak<strong>in</strong>g<strong>and</strong> alignment. All rational action starts with a sound decision. What arewe go<strong>in</strong>g to focus on? How are we go<strong>in</strong>g to measure it? What difference will thismake to the customer? How can we align our resources <strong>and</strong> energies to have the
ProjectsProjectsProjectsProjectsProjectsHONEYWELL AEROSPACE 209Company visionStrategy#1Strategy#2Strategy#3Annual performance goalsY 1 Y 2 Y 3 Y 4 Y 5Figure 8.3 Project Selection Model.greatest impact? Effective leadership beg<strong>in</strong>s with pert<strong>in</strong>ent questions that surfacerelevant data <strong>and</strong> criteria. This <strong>in</strong>formation is the path to a sound decision <strong>and</strong>rational action.Select<strong>in</strong>g TalentEven with the best vision, strategies, <strong>and</strong> aligned projects we must not forgetthe most crucial piece to the puzzle. Top talent. Honeywell knew if it was go<strong>in</strong>gto take this <strong>in</strong>itiative over the top it must recruit <strong>and</strong> develop the best talentwith<strong>in</strong> its bus<strong>in</strong>ess. <strong>Leadership</strong> creates vision <strong>and</strong> sets the strategy <strong>and</strong> direction.Six Sigma provides a tremendously powerful set of analytical tools <strong>and</strong>skills to create data-driven decisions. Top talent with<strong>in</strong> an organization createsenergy <strong>and</strong> a culture of gett<strong>in</strong>g th<strong>in</strong>gs done: execution. When all three of theseelements are comb<strong>in</strong>ed, you have an amaz<strong>in</strong>g outcome . . .<strong>Leadership</strong> Six Sigma Top Talent Power!When Eng<strong>in</strong>es, Systems, <strong>and</strong> Services began the rebuild<strong>in</strong>g process for its SixSigma organization, it went after the best of the best. It now only br<strong>in</strong>gs <strong>in</strong> itstop talent to fill Six Sigma positions. Whether it be Six Sigma leaders, Master
210 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEBlack Belts, Lean Masters, Black Belts, or Lean Experts, Honeywell makes it animperative that these <strong>in</strong>dividuals have the capability <strong>and</strong> desire to hold key leadershippositions with<strong>in</strong> the organization once their Six Sigma tour of duty iscomplete. Although many companies claim this as their mantra, Eng<strong>in</strong>es, Systems,<strong>and</strong> Services actually made this a reality. It spent 2001 <strong>and</strong> the first halfof 2002 build<strong>in</strong>g a team of talent that would meet this criteria. Six Sigma VicePresident Jeff Osborne puts it this way, “Many companies hire Black Belts<strong>and</strong> try to teach them leadership, we are hir<strong>in</strong>g leaders <strong>and</strong> teach<strong>in</strong>g them BlackBelt skills.” This subtle but dist<strong>in</strong>ct difference has made all the difference forHoneywell.Practical Po<strong>in</strong>t Seven: The most talented leaders serve with passion, commitment,<strong>and</strong> enthusiasm. They thrive on the experience of us<strong>in</strong>g their talents <strong>and</strong>abilities. They love be<strong>in</strong>g challenged. For this reason, talented people requirechalleng<strong>in</strong>g jobs. If the job does not dem<strong>and</strong> their full energy, they get bored.On the other h<strong>and</strong>, no one has the talent for all challenges. Each challenge isunique. Place talented people <strong>in</strong> the wrong job <strong>and</strong> they quickly experienceburnout <strong>and</strong> frustration. Consequently, talented people need the right challenge<strong>in</strong> the right job.CHANGING THE DNA AT ALL LEVELSAs Eng<strong>in</strong>es, Systems, <strong>and</strong> Services set out to change the basic makeup of SixSigma across its diverse global organization, it was necessary to target threeemployee groups. The masses would be tra<strong>in</strong>ed <strong>and</strong> equipped via a whole-scaleGreen Belt program that <strong>in</strong>cluded all salary-exempt employees—over 6,500 people.With<strong>in</strong> this population were nearly 3,000 eng<strong>in</strong>eers who would need a specificflavor of Green Belt tra<strong>in</strong><strong>in</strong>g called Design for Six Sigma. This step wouldensure that all eng<strong>in</strong>eers <strong>and</strong> support<strong>in</strong>g personnel <strong>in</strong>volved <strong>in</strong> the design of aproduct, process, or service would use the fundamental pr<strong>in</strong>ciples of Six Sigmafrom the genesis of all designs. To address the unique needs of the sales <strong>and</strong> market<strong>in</strong>g<strong>and</strong> customer-fac<strong>in</strong>g employees, a Green Belt program was created titledGrowth Green Belt, which focuses on how to use the Six Sigma skills to underst<strong>and</strong>customer needs <strong>and</strong> requirements. To transform primarily the middle-levelmanagement with<strong>in</strong> the bus<strong>in</strong>ess, the centralized Six Sigma organization ofnearly 200 dedicated <strong>and</strong> full-time resources would be the mechanism. As theseMasters, Black Belts, <strong>and</strong> Lean Experts fulfilled their twenty-four-month commitmentto the Six Sigma program, they would repatriate back <strong>in</strong>to other bus<strong>in</strong>essor functional roles at the middle- to upper-middle management level. F<strong>in</strong>ally,they needed to address the several hundred folks who were already <strong>in</strong> uppermanagementpositions <strong>and</strong> would never realistically take a detour <strong>in</strong> their career
HONEYWELL AEROSPACE 211to partake <strong>in</strong> one of the full-time Black Belt roles. For these <strong>in</strong>dividuals the <strong>Leadership</strong>Black Belt program was established. This <strong>in</strong>tense program consists of thevery same Black Belt <strong>and</strong> Lean tools that Honeywell’s experts learn. At the endof the four-month tra<strong>in</strong><strong>in</strong>g program <strong>and</strong> another four- to six-month project application,these executives end up with an actual Black Belt certification. This comprehensivelearn<strong>in</strong>g program ensures that all aspects of the Eng<strong>in</strong>es, Systems,<strong>and</strong> Services culture is affected with the Six Sigma methodology <strong>and</strong> analyticalskills necessary to achieve premier bus<strong>in</strong>ess results (Exhibit 8.1).The best litmus test of course is whether or not a company is able to translateall of this activity around organization alignment, culture change, leadershipdevelopment, <strong>and</strong> tra<strong>in</strong><strong>in</strong>g <strong>and</strong> mentor<strong>in</strong>g <strong>in</strong>to tangible bus<strong>in</strong>essimprovements. For Eng<strong>in</strong>es, Systems, <strong>and</strong> Services the results were unquestionablypositive. In the year 2002 it restructured its Six Sigma organization toalign directly with the bus<strong>in</strong>ess while creat<strong>in</strong>g a tremendous pull from leadershipto use <strong>and</strong> embrace Six Sigma resources <strong>and</strong> tools. In addition, Six Sigmaorganizational talent was upgraded to consist of the best <strong>and</strong> brightest Eng<strong>in</strong>es,Systems, <strong>and</strong> Services has to offer. The bus<strong>in</strong>esswide Green Belt, Growth GreenBelt, <strong>and</strong> Design for Six Sigma programs have now tra<strong>in</strong>ed nearly 6,500 employees.Over one hundred executives from the bus<strong>in</strong>ess completed the <strong>Leadership</strong>Black Belt program, <strong>and</strong> the real bus<strong>in</strong>ess benefits, <strong>in</strong>clud<strong>in</strong>g cash, operat<strong>in</strong>g<strong>in</strong>come, <strong>and</strong> sales, far exceeded management’s expectations <strong>and</strong> positioned theExhibit 8.1. Chang<strong>in</strong>g the DNA at All LevelsExecutive leadershipExecutive Black BeltProgramMiddlemanagementDedicated Six Sigma Program(Six Sigma Leaders, Masters,Black Belts, <strong>and</strong> Lean Experts)Sales <strong>and</strong>market<strong>in</strong>gGrowth Green BeltProgramEng<strong>in</strong>eer<strong>in</strong>gDesign for Six SigmaProgramAll othersalary-exemptGreen Belt Program
212 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGESix Sigma team well for the upcom<strong>in</strong>g year. All these efforts resulted <strong>in</strong> alignment,focus, <strong>and</strong> accountability that will only cont<strong>in</strong>ue to <strong>in</strong>crease as Honeywell’sEng<strong>in</strong>es, Systems, <strong>and</strong> Services cont<strong>in</strong>ues on the journey of cont<strong>in</strong>uousimprovement.ABOUT THE CONTRIBUTORSGreg Zlevor is the founder of Westwood International, a company dedicated toexecutive education, consult<strong>in</strong>g, coach<strong>in</strong>g, <strong>and</strong> cultural improvement, <strong>and</strong> thefounder of the <strong>Leadership</strong> Project at Boston College for undergraduate students.Recent clients <strong>in</strong>clude Intel, Volvo, Honeywell, Johnson & Johnson, the federalgovernment, <strong>and</strong> GE. He has published several articles <strong>and</strong> was recently published<strong>in</strong> the Change Champion’s Field Guide.Jeff Osborne has been a leader <strong>in</strong> the Honeywell Aerospace bus<strong>in</strong>ess for s<strong>in</strong>ce1988. Dur<strong>in</strong>g that time he has held leadership positions <strong>in</strong> Honeywell’s Avionics<strong>and</strong> Eng<strong>in</strong>es, Systems, <strong>and</strong> Services bus<strong>in</strong>ess. Jeff has held positions <strong>in</strong> eng<strong>in</strong>eer<strong>in</strong>g,customer <strong>and</strong> product support, operations, program management, SixSigma, <strong>and</strong> general management. Jeff is a certified Black Belt <strong>and</strong> is currentlythe vice president of Bus<strong>in</strong>ess Aviation, a $700 million jet eng<strong>in</strong>e bus<strong>in</strong>ess. Jeffholds a Bachelor of science degree <strong>in</strong> electrical eng<strong>in</strong>eer<strong>in</strong>g from Arizona State<strong>University</strong>.
SCHAPTER NINEIntelSThis case study describes the systematic approach employed by IntelCorporation’s Fab 12 Organization <strong>Development</strong> Team (ODT) to successfullylaunch an <strong>in</strong>novative, nontraditional way of develop<strong>in</strong>g leaders. 1 The ODTworks at the manufactur<strong>in</strong>g-site level (not corporate), respond<strong>in</strong>g to specificchallenges at Fab 12. Apply<strong>in</strong>g a rapid prototype design strategy, the ODT deliveredan <strong>in</strong>-depth leadership development program, the <strong>Leadership</strong> <strong>Development</strong> Forum(LDF), us<strong>in</strong>g self-reflection <strong>and</strong> Action Learn<strong>in</strong>g as its primary learn<strong>in</strong>g methods.OVERVIEW 214INTRODUCTION 215Purpose 215Objectives 216APPROACH 217PROGRAM DESCRIPTION 219PROGRAM EXAMPLE: SESSION BY SESSION 221Prep Session 221Session 1: Orientation 221Session 2: The <strong>Leadership</strong> Challenge TM 222Session 3: Challeng<strong>in</strong>g the Process 222Session 4: Build<strong>in</strong>g Trust 222Session 5: Encourag<strong>in</strong>g the Heart 223Session 6: Enabl<strong>in</strong>g Others to Act 223Session 7: The Vortex 224Session 8: Inspir<strong>in</strong>g a Shared Vision 224Plann<strong>in</strong>g for Session 9 224Session 9: Model<strong>in</strong>g the Way 225IMPACT AND RESULTS 225Overall Results 225Evaluation Results 226213
214 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGETable 9.1: Self-Assessment Results, 226by LDF Composite Evaluation ResultsWOW! Projects TM : Examples 227Personal Testimonials 228LESSONS LEARNED 229CONCLUSION 230Exhibit 9.1: Four Stages of WOW! Projects TM 231Exhibit 9.2: <strong>Leadership</strong> Action Plan 232Exhibit 9.3: <strong>Leadership</strong> Autobiography 233ENDNOTES 237ACKNOWLEDGMENTS 238ABOUT THE CONTRIBUTORS 238OVERVIEWThe <strong>Leadership</strong> <strong>Development</strong> Forum (LDF) was first delivered <strong>in</strong> 1998 <strong>and</strong>received an overwhelm<strong>in</strong>gly positive response from participants. Every LDFs<strong>in</strong>ce the pilot has generated a “wait list” of employees <strong>in</strong>terested <strong>in</strong> improv<strong>in</strong>gtheir leadership skills. Participants of the fourth LDF program made an impassionedplea to Fab 12’s senior staff request<strong>in</strong>g that the staff attend LDF <strong>and</strong>model the way for the factory. As a result, the entire twenty-two-member seniorstaff attended LDF <strong>in</strong> 2000. S<strong>in</strong>ce its <strong>in</strong>ception, eleven LDF programs have beendelivered at Fab 12 to a total of 204 middle (group leaders) <strong>and</strong> senior (departmentmanager) level factory managers.Although the first LDF was delivered to Fab 12 leaders only, subsequent programshave <strong>in</strong>cluded participants from other Intel bus<strong>in</strong>ess groups <strong>in</strong> an effort toproliferate LDF throughout the company. In 2002, LDF was first piloted outsideof Fab 12 to Intel’s Supplier Group <strong>and</strong> Corporate Quality Group. The participants’feedback about the program resulted <strong>in</strong> an exp<strong>and</strong>ed pilot to proliferateLDF on a large scale. LDF is now be<strong>in</strong>g offered to other Intel bus<strong>in</strong>ess groupsacross the United States <strong>and</strong> <strong>in</strong> Asia.In 2000, the LDF program was highlighted at the corporate Intel Manufactur<strong>in</strong>gExcellence Conference (IMEC). IMEC, an annual event attended by aworldwide audience of five hundred selected Intel employees, shares papers,presentations, <strong>and</strong> exhibits to proliferate “best known methods” across thecompany. A rigorous selection process ensues to select the exhibits <strong>and</strong> presentations(only eighty of 1,100 are selected). The focus of IMEC is primarilytechnical; however, due to LDF’s unique design <strong>and</strong> success it was selected for
INTEL 215the conference. The LDF program philosophy, key components, <strong>and</strong> results wereshared <strong>in</strong> a presentation follow<strong>in</strong>g the conference’s keynote speaker, Intel’s vicepresident of manufactur<strong>in</strong>g. IMEC established LDF as the premier leadershipdevelopment program throughout Intel.The lessons learned are important for anyone <strong>in</strong> any organization cop<strong>in</strong>g withthe daunt<strong>in</strong>g challenge of how to develop their management’s leadershipabilities.INTRODUCTIONThroughout 1997, Fab 12’s senior staff engaged <strong>in</strong> a series of work sessions <strong>and</strong>off-site meet<strong>in</strong>gs to clarify operational priorities <strong>and</strong> plan for the long-term successof the factory. With<strong>in</strong> the staff, this process became known as the Journey.As the Journey progressed, leadership emerged as a key concern. The majorityof Fab 12’s middle level managers at that time had been employed by Intel forless than three years <strong>and</strong> had very little experience lead<strong>in</strong>g people.How would Fab 12 provide the necessary leadership to meet aggressive technologyramps <strong>and</strong> high-volume manufactur<strong>in</strong>g dem<strong>and</strong>s? A corporate process todevelop Fab 12’s leadership potential did not exist. The only courses <strong>in</strong> existenceat the time were (1) a Survey of Management <strong>Practices</strong> ©, a 360 assessment customizedfor Intel by the Booth Company, 2 <strong>and</strong> (2) Intel’s corporate off-site, fortyhourmanagement tra<strong>in</strong><strong>in</strong>g program, Manag<strong>in</strong>g Through People, offered tomiddle <strong>and</strong> front l<strong>in</strong>e managers. Both of these courses focused solely on managementpractices, not leadership practices.In March 1998, Fab 12’s plant manager challenged the ODT to design <strong>and</strong>deliver a factory-specific leadership development program by Q3, 1998. Onemonth later, the ODT proposed deliver<strong>in</strong>g the <strong>Leadership</strong> <strong>Development</strong> Forumtwice a year to middle <strong>and</strong> senior level managers on a voluntary basis. LDF, afive-month program, would utilize <strong>and</strong> exp<strong>and</strong> on leadership content <strong>and</strong> activitiesexperienced <strong>in</strong> the Journey.PurposeThe overall purpose of LDF is to provide a learn<strong>in</strong>g process, not a tra<strong>in</strong><strong>in</strong>g program,whereby participants’ assumptions about leadership are challenged <strong>and</strong>their ability to affect change <strong>and</strong> meet factory performance goals is significantlyimproved.LDF focuses exclusively on leadership. It makes the dist<strong>in</strong>ction, as noted byJohn Kotter, professor of management at the Harvard Bus<strong>in</strong>ess School, that leadershipis about sett<strong>in</strong>g direction, align<strong>in</strong>g constituents, <strong>and</strong> <strong>in</strong>spir<strong>in</strong>g others versusthe fundamental management skills of plann<strong>in</strong>g, budget<strong>in</strong>g, staff<strong>in</strong>g, <strong>and</strong>problem solv<strong>in</strong>g.
216 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEAccord<strong>in</strong>g to Warren Bennis, renowned author <strong>and</strong> professor of bus<strong>in</strong>ess atthe <strong>University</strong> of Southern California, “One of the problems with st<strong>and</strong>ard leadershipcourses is that they focus exclusively on skills <strong>and</strong> produce managersrather than leaders, if they produce anyth<strong>in</strong>g at all. <strong>Leadership</strong> is the ability tomeet each situation armed not with a battery of techniques but with opennessthat permits a genu<strong>in</strong>e response.” 3LDF was formulated on the premise that leadership is just as much aboutwho we are as it is about what we do. By <strong>in</strong>corporat<strong>in</strong>g fundamental pr<strong>in</strong>ciplesof leadership experts John Kotter, Warren Bennis, Terry Pearce, BoydClarke, Ron Crossl<strong>and</strong>, Tom Peters, Ben Z<strong>and</strong>er, Joel Barker, James Kouzes, <strong>and</strong>Barry Posner <strong>in</strong>to the program’s design, LDF serves as an “<strong>in</strong>quiry” <strong>in</strong>to leadershipversus a prescription on how to lead others. The premise of LDF is thatleadership is a “generative process” best described <strong>in</strong> a Harvard Bus<strong>in</strong>essReview article by Tracy Gross:“Dur<strong>in</strong>g our thirty-five years of research <strong>and</strong> consult<strong>in</strong>gfor U.S. <strong>and</strong> multi-national corporations, we have found <strong>in</strong> senior executives,an unwill<strong>in</strong>gness to th<strong>in</strong>k rigorously about themselves or their th<strong>in</strong>k<strong>in</strong>g.It is not surpris<strong>in</strong>g that so many executives decl<strong>in</strong>e the <strong>in</strong>vitation to re<strong>in</strong>ventthemselves. There is another choice, but it requires a serious <strong>in</strong>quiry <strong>in</strong>tooneself as a leader. This is not a psychological process of fix<strong>in</strong>g someth<strong>in</strong>gthat is wrong, but an <strong>in</strong>quiry that reveals the context from which we makedecisions.” 4LDF participants focus on what they are do<strong>in</strong>g (apply<strong>in</strong>g leadership practices,lead<strong>in</strong>g breakthrough projects) <strong>and</strong> how they are be<strong>in</strong>g (shift<strong>in</strong>g paradigms,focus<strong>in</strong>g on relationships, stepp<strong>in</strong>g out of comfort zones). Participants are askedto let go of look<strong>in</strong>g good <strong>and</strong> be<strong>in</strong>g right, <strong>and</strong> <strong>in</strong>stead operate from an orientationof leaders are learners who are vulnerable <strong>and</strong> take a st<strong>and</strong> for what is possible.The ultimate purpose of LDF is for participants to improve themselves,their circumstances, <strong>and</strong> the lives of those around them.ObjectivesThe ODT established four primary program objectives <strong>and</strong> a firm set ofexpectations:1. Participants’ assumptions about leadership are challenged by def<strong>in</strong><strong>in</strong>gleadership as who you are <strong>and</strong> what you do, identify<strong>in</strong>g leaders aslearners versus someone who knows, <strong>and</strong> demonstrat<strong>in</strong>g that leadershipresults from authenticity <strong>and</strong> self-expression.2. Participants deeply reflect on <strong>and</strong> complete a one-page leadershipautobiography describ<strong>in</strong>g their purpose at work, their personal values,their vision for their organization, <strong>and</strong> the legacy they wish to leavebeh<strong>in</strong>d.
INTEL 2173. Participants develop <strong>and</strong> implement a leadership action plan, enabl<strong>in</strong>gthem to apply the five practices of Kouzes <strong>and</strong> Posner’s <strong>Leadership</strong>Model on a current breakthrough project <strong>and</strong> their day-to-day work. 54. Participants build a strong cross-functional network among themselves.Participants are held accountable to uphold the follow<strong>in</strong>g set of expectationsto ensure their total participation <strong>in</strong> LDF:• Attend 100 percent of all sessions. (Participants must attend eachsession for the entire session, <strong>and</strong> are expected to be on time at thebeg<strong>in</strong>n<strong>in</strong>g of each session <strong>and</strong> after breaks.)• Complete all homework assignments. (Read articles, watch videos,complete assignments.)• Provide specific feedback to other participants <strong>and</strong> program facilitators.• Be will<strong>in</strong>g to take risks. (Try new th<strong>in</strong>gs, don’t be afraid to make mistakes,get out of your comfort zone, challenge each other.)• Participate fully dur<strong>in</strong>g LDF sessions <strong>and</strong> one-on-one coach<strong>in</strong>g sessions.• Listen from empty. (Come with questions versus answers, let go ofshow<strong>in</strong>g other participants how effective you are <strong>and</strong> how much youknow about leadership.)• Speak up. (Many participants demonstrate weak public speak<strong>in</strong>g abilitiesor are overly soft spoken; leaders speak up <strong>and</strong> are conscious ofhow their communication affects others.)Though seem<strong>in</strong>gly trivial, much of the success of LDF can be l<strong>in</strong>ked to therigorous adherence to the program objectives <strong>and</strong> expectations. Participants whodo not comply with the expectations are asked to leave the program. When peopleare held accountable to honor their commitments, leadership shows up. Dur<strong>in</strong>gan LDF prep session, these expectations are made explicitly clear toparticipants sett<strong>in</strong>g the stage for the tenacious work of self-reflection <strong>and</strong> leadershipdevelopment.APPROACHTo develop LDF, the ODT adopted the follow<strong>in</strong>g seven design strategies.1. Anchor LDF on the pr<strong>in</strong>ciple that leadership is a self-discovery process.As the ODT conducted research on leadership, a consistent themeemerged: one is not taught leadership; leadership is learned. Accord<strong>in</strong>gto author <strong>and</strong> <strong>in</strong>ternational executive coach Kev<strong>in</strong> Cashman,
218 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE“<strong>Leadership</strong> is not someth<strong>in</strong>g people do, it comes from somewhere<strong>in</strong>side us, it is a process, an expression of who we are. It is our be<strong>in</strong>g<strong>in</strong> action.” 62. Focus on a small number of broad leadership practices versus a long listof competencies. A study of other Intel manufactur<strong>in</strong>g sites <strong>and</strong> externalprograms revealed that as many as twenty-four competencies wereidentified as key to leadership development. Which ones would Fab 12focus on? The ODT determ<strong>in</strong>ed that the five leadership practices ofKouzes <strong>and</strong> Posner, which embody effective “ways of be<strong>in</strong>g,” offered asimpler, more powerful framework for leadership than a long list ofcompetencies.3. Design or modify LDF “just-<strong>in</strong>-time” session by session. The ODT developeda shared vision that identified a high-level program schedule <strong>and</strong>key learn<strong>in</strong>g concepts. This allowed the team to let go of the need tohave the entire program designed before the first pilot session. At thecompletion of each session, feedback is reviewed <strong>and</strong> <strong>in</strong>puts are <strong>in</strong>corporated<strong>in</strong>to the design of upcom<strong>in</strong>g sessions. This just-<strong>in</strong>-timeapproach allows students to benefit from sessions that are specificallytailored to meet their needs.4. Offer LDF as a volunteer program. Each Fab 12 department is allocated“volunteer slots.” Managers are responsible for review<strong>in</strong>g the programwith their group leaders <strong>and</strong> provid<strong>in</strong>g the ODT with a list of <strong>in</strong>terestedc<strong>and</strong>idates. This process fosters real commitment; only group leaders<strong>and</strong> managers truly <strong>in</strong>terested <strong>in</strong> develop<strong>in</strong>g their leadership abilitiesparticipate <strong>in</strong> LDF.5. Apply Warren Bennis’s Innovative Learn<strong>in</strong>g Methods to the design ofLDF. 7 This method advocates that learn<strong>in</strong>g is most effective when it isactive <strong>and</strong> imag<strong>in</strong>ative. Listen<strong>in</strong>g to others <strong>and</strong> shap<strong>in</strong>g events, ratherthan be<strong>in</strong>g shaped by them, are the cornerstones of self-knowledge.Real underst<strong>and</strong><strong>in</strong>g comes from reflect<strong>in</strong>g on experience. Thisapproach was adopted as the premise for all design decisions. Eachsession was designed to allow time for dialogue <strong>and</strong> feedback <strong>in</strong>order to allow the students to learn from one another. All sessions<strong>in</strong>clude action learn<strong>in</strong>g, whereby students get to practice what theyare learn<strong>in</strong>g, <strong>and</strong> end with the shar<strong>in</strong>g of how they will apply theirnew learn<strong>in</strong>gs on the job.6. Deliver LDF on-site over an extended period. Attend<strong>in</strong>g a program onsiteis convenient, is cost effective, <strong>and</strong> builds peer relationships acrossfactory departments. N<strong>in</strong>ety percent of LDF is delivered on-site. Onetimeevents <strong>in</strong>undate participants with theory; seldom do they allowparticipants the opportunity to practice new behaviors over an
INTEL 219extended period. <strong>Leadership</strong> development has the most impact when itis embedded <strong>in</strong>to the day-to-day lives of managers. Thus, LDF is deliveredweekly over a five-month period, allow<strong>in</strong>g new leadership behaviorsto become habit <strong>and</strong> have last<strong>in</strong>g impact.7. Have ODT members serve as facilitators <strong>and</strong> coaches. As facilitators,the ODT provides a process <strong>and</strong> environment for learn<strong>in</strong>g. Ascoaches, the ODT serve as sound<strong>in</strong>g boards for participants, ratherthen act as job content experts. As coaches, the ODT’s role is tohelp participants see th<strong>in</strong>gs differently, say what they’re go<strong>in</strong>g to do,then do what they say. Coaches get participants to self-reflect<strong>and</strong> solve their own problems by ask<strong>in</strong>g questions, provid<strong>in</strong>gfeedback, <strong>and</strong> giv<strong>in</strong>g assignments that open their m<strong>in</strong>ds to newpossibilities.PROGRAM DESCRIPTIONProgram materials are updated <strong>and</strong> delivered at the start of each session. Participantsare given a b<strong>in</strong>der that provides an archival system for program materials,software, leadership articles, schedules, <strong>and</strong> evaluations. Participants are placed<strong>in</strong> cross-functional “learn<strong>in</strong>g groups.” Typically, eighteen participants are divided<strong>in</strong>to three learn<strong>in</strong>g groups (six participants per group). Participants rema<strong>in</strong> <strong>in</strong>these learn<strong>in</strong>g groups throughout the duration of the program.Each learn<strong>in</strong>g group is assigned an ODT facilitator or coach. This coach conductsfour to six meet<strong>in</strong>gs with each learn<strong>in</strong>g group participant throughout theprogram to provide coach<strong>in</strong>g, feedback, resources (that is, books, articles, <strong>and</strong>videos), encouragement, support, <strong>and</strong> advice specific to their leadership developmentneeds. In the LDF prep session, the coach<strong>in</strong>g role is expla<strong>in</strong>ed, <strong>and</strong>coaches ask the participants for their permission to “press <strong>in</strong>” <strong>and</strong> challengetheir th<strong>in</strong>k<strong>in</strong>g. Each coach<strong>in</strong>g relationship is built on mutual trust <strong>and</strong> respect<strong>and</strong> a will<strong>in</strong>gness to be vulnerable <strong>and</strong> self-expressed. Coaches offer 100 percentconfidentiality <strong>in</strong> all their <strong>in</strong>teractions with the participants. S<strong>in</strong>ce thebeg<strong>in</strong>n<strong>in</strong>g of LDF, the coach<strong>in</strong>g sessions have been described by participants asthe most valuable part of the program. Frequently, students request that thecoach<strong>in</strong>g sessions cont<strong>in</strong>ue long after the LDF program has ended.To foster accountability, LDF sessions beg<strong>in</strong> by hav<strong>in</strong>g each participant brieflyupdate their learn<strong>in</strong>g group on what they have done (the do<strong>in</strong>g of leadership)<strong>and</strong> how they have conducted themselves (the be<strong>in</strong>g of leadership) between sessions.How have they led, <strong>in</strong>fluenced, or moved their projects or teams forward?How have they shifted their th<strong>in</strong>k<strong>in</strong>g? What risks have they taken? What mistakeshave they made? What relationships have they built? What personal breakthroughshave they experienced?
220 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEBased on these discussions, participants vote (secret ballot) to identify onew<strong>in</strong>ner from their learn<strong>in</strong>g group to receive the <strong>Leadership</strong> Breakthrough Award(LBA), an eighteen-<strong>in</strong>ch trophy with pillars depict<strong>in</strong>g the five leadership practices.The learn<strong>in</strong>g group w<strong>in</strong>ners share their stories with the entire class <strong>and</strong>display the trophy on their desks until the next session, where the process isrepeated. At the conclusion of LDF, each learn<strong>in</strong>g group selects one person who,throughout the entire program, has developed the most as a leader, <strong>and</strong> thatperson is awarded the LBA permanently.Participants complete a self-assessment at the end of the program. Theassessment measures participants’ ability to apply the five leadership practicesof Kouzes <strong>and</strong> Posner <strong>in</strong> their day-to-day work. A chart is posted with a matrixlist<strong>in</strong>g the five leadership practices <strong>and</strong> a six-po<strong>in</strong>t rat<strong>in</strong>g scale (1 beg<strong>in</strong>n<strong>in</strong>g,6 mastery). Participants score themselves “publicly” aga<strong>in</strong>st the leadershippractices <strong>and</strong> then discuss the results.Participants use three key tools throughout the program.1. WOW! Projects TM 8 (Exhibit 9.1). Participants identify a specific projectthey will complete dur<strong>in</strong>g LDF that l<strong>in</strong>ks to operational goals <strong>and</strong>requires participants to lead <strong>and</strong> enroll others to take action. WOW!Projects TM need to be audacious <strong>in</strong> scope, have measurable results,have huge impact, <strong>and</strong> dem<strong>and</strong> a personal breakthrough for success.WOW! Project TM efforts are discussed regularly <strong>in</strong> class <strong>and</strong> dur<strong>in</strong>gcoach<strong>in</strong>g sessions. Participants hold each other accountable on actionswith regard to WOW! Projects TM <strong>and</strong> offer advice <strong>and</strong> support to membersof their learn<strong>in</strong>g groups.2. <strong>Leadership</strong> Action Plan (LAP) (Exhibit 9.2). The LAP is a one-pageplann<strong>in</strong>g document referred to <strong>and</strong> updated by participants throughoutLDF. As participants learn, reflect, <strong>and</strong> commit to actions or newbehaviors, the LAP acts as a track<strong>in</strong>g <strong>and</strong> accountability system. Actionplans for each leadership practice are recorded on the LAP <strong>and</strong> participantsare held accountable to complete their plans. At the beg<strong>in</strong>n<strong>in</strong>g ofeach session, participants share actions they have taken on their LAPswith their learn<strong>in</strong>g groups while obta<strong>in</strong><strong>in</strong>g feedback <strong>and</strong> encouragement.LAPs are also discussed with facilitators <strong>in</strong> coach<strong>in</strong>g sessions<strong>and</strong> are used as a coach<strong>in</strong>g tool.3. <strong>Leadership</strong> Autobiography (Exhibit 9.3). The leadership autobiographyis a one-page self-reflection tool that participants complete over theduration of LDF. Key questions prompt the participants to clarify theirvalues, what they st<strong>and</strong> for as a leader, experiences that <strong>in</strong>fluencedwho they are, the vision they have for the organization they manage,<strong>and</strong> the leadership legacy they <strong>in</strong>tend to leave beh<strong>in</strong>d.
INTEL 221The ODT delivers 80 percent of the program’s content <strong>and</strong> utilizes consultantsto deliver the rema<strong>in</strong><strong>in</strong>g 20 percent. The ODT develops strong partnershipswith consultants <strong>and</strong> contracts up front with them to ensure that materials <strong>and</strong>learn<strong>in</strong>g processes can be adapted to best fit the needs of the participants. Thisensures that external consultants will be well received by the participants, <strong>and</strong>that LDF program objectives are met.On average, a 20 percent redesign has been completed for each programoffered. To manage the redesign process <strong>in</strong> an effective manner, the ODTadopted the follow<strong>in</strong>g method. First, storyboards are used to build conceptualmaps of the overall process <strong>and</strong> content for each session. Second, a detailed sessionagenda is developed, <strong>in</strong>clud<strong>in</strong>g a materials checklist <strong>and</strong> room designs.Third, the OD team conducts a detailed “dry run” prior to each session.PROGRAM EXAMPLE: SESSION BY SESSIONPrep Session (3 Hours)The ODT <strong>and</strong> participants <strong>in</strong>troduce themselves, a video is shown highlight<strong>in</strong>gthe LDF experience, program objectives <strong>and</strong> expectations are reviewed,<strong>and</strong> an overview of LDF is presented. Participants are <strong>in</strong>formed that they willcomplete a WOW! Project TM , use action plans, write a leadership autobiography,<strong>and</strong> complete a <strong>Leadership</strong> <strong>Practices</strong> Inventory (LPI). 9 The facilitator’srole as coach is expla<strong>in</strong>ed <strong>in</strong> detail, <strong>and</strong> participants are made aware that theywill be go<strong>in</strong>g on an overnight camp<strong>in</strong>g trip where activities will be “challengeby choice.” Past graduates share the impact LDF has had on them, discusshow to get the most out of LDF, <strong>and</strong> answer participants’ questions. Participantsare encouraged to reth<strong>in</strong>k their commitment to the program, <strong>and</strong> let theODT know if they choose not to go forward so <strong>in</strong>terested c<strong>and</strong>idates on a wait<strong>in</strong>glist can attend the program <strong>in</strong> their place.Session 1: Orientation (4.5 Hours)Fab 12’s plant manager welcomes participants, <strong>and</strong> learn<strong>in</strong>g groups complete<strong>in</strong>clusion activities. A presentation is delivered mak<strong>in</strong>g the dist<strong>in</strong>ction betweenleadership versus management, emphasiz<strong>in</strong>g that LDF will focus exclusivelyon leadership. Participants share their WOW Projects TM ideas, challenge eachother aga<strong>in</strong>st the criteria, <strong>and</strong> advise each other on how to make their projectssuccessful. In learn<strong>in</strong>g groups, participants are videotaped respond<strong>in</strong>g to questionsregard<strong>in</strong>g their leadership. Without prior knowledge of the questions, participantsare asked (1) What is your vision for the organization you lead? <strong>and</strong>(2) If your title <strong>and</strong> authority were taken away, why, specifically, would anyonewant to be led by you? After videotap<strong>in</strong>g, the groups discuss the importance of
222 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEvision <strong>and</strong> their reactions to their own <strong>and</strong> other’s vision statements. Participantsare expected to view the video before the next session, us<strong>in</strong>g it as a feedbacktool.Session 2: The <strong>Leadership</strong> Challenge TM(9 Hours, Split Over 2 Half Days)A guest speaker from the Tom Peters Company 10 presents an overview of the<strong>Leadership</strong> Model of Kouzes <strong>and</strong> Posner. In learn<strong>in</strong>g groups, participants sharepersonal stories describ<strong>in</strong>g their best leadership efforts. <strong>Leadership</strong> <strong>Practices</strong>Inventory results are expla<strong>in</strong>ed <strong>and</strong> delivered (group profile <strong>and</strong> <strong>in</strong>dividualreports). One-hour modules are delivered on each leadership practice: enabl<strong>in</strong>gothers to act, challeng<strong>in</strong>g the process, <strong>in</strong>spir<strong>in</strong>g a shared vision, encourag<strong>in</strong>gthe heart, <strong>and</strong> model<strong>in</strong>g the way. These modules <strong>in</strong>clude video case studies,dynamic learn<strong>in</strong>g activities <strong>and</strong> simulations, dialogue, self-reflection, <strong>and</strong> actionplann<strong>in</strong>g. Participants review video footage taken of them present<strong>in</strong>g theirvisions <strong>in</strong> Session 1, <strong>and</strong> then provide each other feedback on the impactof their visions. Participants observe their direct reports <strong>in</strong> a focus groupdiscuss<strong>in</strong>g the type of leadership they feel is needed at Fab 12. Afterward,participants <strong>and</strong> their direct reports meet <strong>in</strong>dividually to review their <strong>in</strong>itial leadershipaction plans <strong>and</strong> get feedback.Session 3: Challeng<strong>in</strong>g the Process (8 Hours)WOW! Projects TM are <strong>in</strong>troduced as a powerful method for challeng<strong>in</strong>g theprocess. Tom Peters’ WOW! Projects TM concepts are shown via the Internet fromselected video segments from the N<strong>in</strong>th House® Network Innovation: WOW!Projects TM Course. 11 Participants transform current work <strong>in</strong>to WOW! Projects TMby apply<strong>in</strong>g four key elements: create, sell, execute, <strong>and</strong> move on. Participantscreate a “quick prototype” of their project <strong>and</strong> develop a “pitch” to enlist sponsorsupport. Participants practice “sell<strong>in</strong>g” this pitch <strong>in</strong> triads, receive feedback, <strong>and</strong><strong>in</strong>corporate the feedback <strong>in</strong>to a new “pitch.” Progress on WOW! Projects TM isdiscussed <strong>in</strong> subsequent LDF sessions <strong>and</strong> <strong>in</strong> coach<strong>in</strong>g sessions with facilitators.Session 4: Build<strong>in</strong>g Trust(1.5 Days Plus Overnight Camp<strong>in</strong>g Trip)This session is co-facilitated by the ODT <strong>and</strong> Venture Up. 12 Participants departfrom Fab 12 <strong>and</strong> caravan to a remote campsite. Learn<strong>in</strong>g groups travel together,one group per van, to foster team build<strong>in</strong>g. Upon arrival, participants are bl<strong>in</strong>dfolded<strong>and</strong> told to erect tents <strong>in</strong> an activity led by a group member who is notbl<strong>in</strong>dfolded. Participants debrief the tent activity, have d<strong>in</strong>ner, then assemble atlearn<strong>in</strong>g group campfires to discuss “what will success look like” for the follow<strong>in</strong>gday. Personal values <strong>and</strong> leadership legacies are also shared at the campfires.On day two, Venture Up conducts a “high ropes safety orientation,” <strong>and</strong>
INTEL 223participants caravan to a rock-climb<strong>in</strong>g location. In learn<strong>in</strong>g groups, participantsrappel down <strong>and</strong> climb up rock formations as team members coach <strong>and</strong> supporteach other on rope systems. Lunch is served, <strong>and</strong> participants discuss trustas a key element of leadership. A celebration is held where groups share keylearn<strong>in</strong>gs, then learn<strong>in</strong>g groups return to Fab 12.Session 5: Encourag<strong>in</strong>g the Heart (4.5 Hours)The impact of encouragement is discussed <strong>and</strong> a Fab 12 produced video isshown highlight<strong>in</strong>g the difference <strong>in</strong> perceptions that managers <strong>and</strong> subord<strong>in</strong>ateshave regard<strong>in</strong>g encouragement. Participants read excerpts from Encourag<strong>in</strong>gthe Heart, a Leader’s Guide to Reward<strong>in</strong>g <strong>and</strong> Recogniz<strong>in</strong>g Others, 13emphasiz<strong>in</strong>g that encouragement means be<strong>in</strong>g authentic, express<strong>in</strong>g our emotions,<strong>and</strong> be<strong>in</strong>g s<strong>in</strong>cere. Participants discuss what k<strong>in</strong>ds of encouragement theyhave received <strong>and</strong> the impact the encouragement has had on them. A video casestudy (Tom Melohn, North American Tool <strong>and</strong> Die) 14 is presented that identifiesseven key essentials for encourag<strong>in</strong>g the heart: set clear st<strong>and</strong>ards, expectthe best, pay attention, personalize recognition, tell the story, celebrate together,<strong>and</strong> set the example. Participants write letters of encouragement to coworkers,share them with<strong>in</strong> their learn<strong>in</strong>g groups, <strong>and</strong> are given the assignment to deliverthe letters <strong>and</strong> observe what happens as a result. In learn<strong>in</strong>g groups, participantsencourage each other <strong>and</strong> acknowledge the contributions each other has madeto the group by present<strong>in</strong>g certificates conta<strong>in</strong><strong>in</strong>g <strong>in</strong>dividual rock-climb<strong>in</strong>gphotos taken dur<strong>in</strong>g Session 4.Session 6: Enabl<strong>in</strong>g Others to Act(11.5 Hours, Split over 2 Days)Dur<strong>in</strong>g this session, participants explore ways to enable others through developmentalconversations. Career Systems International’s 15 “5 L Model of<strong>Development</strong>al Coach<strong>in</strong>g” is <strong>in</strong>troduced, <strong>in</strong>clud<strong>in</strong>g Listen (to the desires of theemployee), Level (give feedback <strong>and</strong> reflect on development needs), LookAhead (discuss how future trends affect the employee), Leverage (analyzeoptions <strong>and</strong> cont<strong>in</strong>gency plans for enrichment), <strong>and</strong> L<strong>in</strong>k (provide network<strong>in</strong>gopportunities). Participants receive tools from Career Systems International,which <strong>in</strong>clude a coach<strong>in</strong>g survey, motivational survey, <strong>in</strong>terest cards, conversationcue cards, <strong>and</strong> a network<strong>in</strong>g map. The session focuses on utiliz<strong>in</strong>g thesetools to discuss employee <strong>in</strong>terests <strong>and</strong> development. Participants use the toolsto practice hav<strong>in</strong>g developmental conversations with each other. Each participantdevelops a plan for a developmental meet<strong>in</strong>g with one of their directreports dur<strong>in</strong>g the session, as well as a plan for their own developmental conversationwith their manager. On the second day, direct reports (<strong>in</strong>vited previously)jo<strong>in</strong> the participants for a fifty-five-m<strong>in</strong>ute <strong>in</strong>dividual developmentconversation; then they participate <strong>in</strong> a debrief<strong>in</strong>g about the effectiveness of the
224 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEthose meet<strong>in</strong>gs. The session then switches from an <strong>in</strong>dividual focus to a teamfocus. The rema<strong>in</strong>der of the session is devoted to enabl<strong>in</strong>g teams. Participantsview The Unified Team 16 video <strong>and</strong> have a discussion about the concepts presented.They self-reflect about their own team’s performance <strong>and</strong>, us<strong>in</strong>g a teamsurvey, they create <strong>and</strong> share action plans to better enable their own teams.Session 7: The Vortex (8 Hours)Participants improve their ability to work effectively across <strong>in</strong>dividual, group<strong>and</strong> organizational boundaries, through a simulation experience. The ODTfacilitates the Vortex Simulation TM , 17 where participants are assigned roles <strong>in</strong>a new organization, called the Vortex. Participants are divided <strong>in</strong>to departmentsof leaders, marketers, designers, analyzers, <strong>and</strong> builders. To succeed <strong>in</strong>this new organization, participants must <strong>in</strong>teract effectively with the otherdepartments <strong>in</strong> the organization, create <strong>and</strong> share an organizational strategy,ga<strong>in</strong> an underst<strong>and</strong><strong>in</strong>g of the “big picture” environment (<strong>in</strong>stead of departmentalfocus), <strong>and</strong> create a feedback system. Throughout the simulation, morecomplexity is <strong>in</strong>troduced by giv<strong>in</strong>g selected departments new market data,changes <strong>in</strong> dem<strong>and</strong>, <strong>and</strong> changes <strong>in</strong> direction for the company. At specified<strong>in</strong>tervals, debrief<strong>in</strong>gs are held, new models for organizational effectiveness are<strong>in</strong>troduced, <strong>and</strong> participants make leadership recommendations to improvethe effectiveness of the simulated organization. Participants complete “reflectionlogs” requir<strong>in</strong>g them to be <strong>in</strong>trospective about how this experiencerelates to their work at Intel. A f<strong>in</strong>al debrief<strong>in</strong>g is held <strong>in</strong> learn<strong>in</strong>g groups todiscuss key learn<strong>in</strong>gs <strong>and</strong> develop action plans for apply<strong>in</strong>g their <strong>in</strong>sights asleaders at Fab 12.Session 8: Inspir<strong>in</strong>g a Shared Vision (6 Hours)Inspiration is discussed as a key component of an effectively communicatedvision <strong>and</strong> is generated by a leader be<strong>in</strong>g authentic <strong>in</strong> his or her communication.The ODT <strong>in</strong>troduces participants to a collection of articles <strong>and</strong> read<strong>in</strong>gsthat pose the question: How authentic are you? Participants view video clips <strong>and</strong>movie scenes to assess the impact that passion, authenticity, <strong>and</strong> vulnerabilityhave on lead<strong>in</strong>g others. Participants def<strong>in</strong>e the barriers that stop them from voic<strong>in</strong>gtheir true convictions at work <strong>and</strong> discuss ways to overcome these barriers.Participants practice communicat<strong>in</strong>g authentically, <strong>and</strong> are videotaped shar<strong>in</strong>gtheir visions with their learn<strong>in</strong>g groups. Participants model how they would<strong>in</strong>spire others around their vision <strong>and</strong> provide feedback to each other on theimpact of their message.Plann<strong>in</strong>g for Session 9 (4 Hours, 2 2-Hour Lunches)Participants meet without the ODT to plan their presentations for Session 9.
Session 9: Model<strong>in</strong>g the Way (4 Hours)Participants <strong>in</strong>vite their managers, peers, <strong>and</strong> direct reports to an open forum,where they deliver a presentation that describes their LDF journey, results theyachieved both operational <strong>and</strong> personal, <strong>and</strong> what they are committed to asleaders. A question-<strong>and</strong>-answer session between the attendees <strong>and</strong> participantsis conducted, <strong>and</strong> then participants move to a separate room for a celebration.A Ben Z<strong>and</strong>er video is shown, <strong>Leadership</strong>, an Art of Possibility, 18 emphasiz<strong>in</strong>gthat leadership is about creat<strong>in</strong>g “possibility” <strong>in</strong> others. In learn<strong>in</strong>g groups,participants share their key learn<strong>in</strong>gs <strong>and</strong> the results they have produced as aresult of LDF. One person is selected by secret ballot from each learn<strong>in</strong>g groupas the person most deserv<strong>in</strong>g of the <strong>Leadership</strong> Breakthrough Award. Learn<strong>in</strong>ggroups conduct a roundtable process whereby participants receive recognition<strong>and</strong> encouragement from each other. Participants receive a framed copy of theirleadership autobiography, a book called Flight of the Buffalo, 19 <strong>and</strong> a LDF watchwith the words <strong>in</strong>spire, challenge, model, encourage, <strong>and</strong> enable <strong>in</strong>scribed onthe watch face.INTEL 225IMPACT AND RESULTSAlthough it is always difficult to measure the results of any leadership developmentprogram, the ODT believes the follow<strong>in</strong>g measures are <strong>in</strong>dicative of theprogram’s impact both to the organization <strong>and</strong> <strong>in</strong>dividual participants. The ODTuses one of Albert E<strong>in</strong>ste<strong>in</strong>’s famous l<strong>in</strong>es as a guide to measurement: “Noteveryth<strong>in</strong>g that counts can be counted, <strong>and</strong> not everyth<strong>in</strong>g that can be countedcounts.”Overall Results• Forty-seven percent of participants who have completed LDF have newpositions of greater responsibility.• Self-assessment composite results show a 68 percent improvement <strong>in</strong>participants’ ability to apply the five leadership practices to their work.• Eighty-n<strong>in</strong>e percent of LDF participants report a stronger <strong>and</strong> exp<strong>and</strong>ednetwork of <strong>in</strong>terdepartmental peers.• One hundred percent of LDF participants report that LDF has improvedtheir ability to lead.• Benchmark: when compared to n<strong>in</strong>e member companies at the Q3, 1999SEMATECH 20 Manufactur<strong>in</strong>g Council meet<strong>in</strong>g, Fab 12’s LDF programwas recognized as the most <strong>in</strong>novative, results-oriented leadershipprogram reviewed.
226 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE• The ODT is always be<strong>in</strong>g asked how it measures the impact of LDF. It is<strong>in</strong>terest<strong>in</strong>g that when the ODT asked whether LDF should be cont<strong>in</strong>ued,100 percent of participants who completed LDF said that it shouldcont<strong>in</strong>ue <strong>in</strong> an environment of numerous operational priorities.Evaluation ResultsEach program is evaluated <strong>in</strong> three ways (see Table 9.1). First, upon the conclusionof each program, self-assessment results are calculated represent<strong>in</strong>g apercentage improvement of how effectively participants are apply<strong>in</strong>g the fiveleadership practices. Second, each LDF session (content, process, materials,facilitation) is evaluated <strong>and</strong> a composite score is calculated us<strong>in</strong>g a six-po<strong>in</strong>trat<strong>in</strong>g scale (1 low value added, 6 high value added). Third, the ODT askspeers, managers, <strong>and</strong> direct reports of LDF participants to write letters to participantsrecogniz<strong>in</strong>g changes they have witnessed <strong>in</strong> participants’ leadershipabilities. Often the ODT receives copies of these testimonials that publiclyacknowledge the positive impact participants have had as a result of their LDFexperience.Table 9.1. Self-Assessment Results, by LDF Composite Evaluation ResultsLDF Self-Assessment ResultsLDF Composite(percentage improvement <strong>in</strong> participant’s ability to apply 5 Evaluation Resultsleadership practices over a 5-month period) (out of 6.0)Q1/2 2004, Program 11 In progress In progressQ3/4 2003, Program 10 64% 5.5Q1/2 2003, Program 9 53% 5.6Q1/2 2002, Program 8 100% 5.3Q3/4 2001, Program 7 58% 5.5Q1/2 2001, Program 6 54% 5.8Q3/4 2000, Program 5 38% 4.4Q1/2 2000, Program 4 71% 5.6Q3/4 1999, Program 3 56% 5.0Q1/2 1999, Program 2 109% 4.7Q3/4 1998, Program 1 73% 4.9
INTEL 227The follow<strong>in</strong>g is a recognition letter written to a LDF participant from hismanager.Cory,I have really noticed your growth <strong>and</strong> positive change over the past couple of months.The ma<strong>in</strong> differences I have noticed are an <strong>in</strong>crease <strong>in</strong> the passion around your workas well as your will<strong>in</strong>gness to encourage the heart of those you work with. You arecont<strong>in</strong>u<strong>in</strong>g to stretch your capabilities <strong>and</strong> are now be<strong>in</strong>g viewed as an expert acrossmany factories. I really appreciate your contributions to our staff. Your leadership fromwith<strong>in</strong> cont<strong>in</strong>ues to make us a stronger team <strong>and</strong> is a great role model for your peers.<strong>Best</strong> regards, Bruce.WOW! Projects TM : ExamplesExample 1: Facilities Department Manager• WOW! Project TM Description. For the past eighteen months, Arizona FacilitiesOperations has worked to achieve three utility systems through SEMATECH’sTotal Productive Ma<strong>in</strong>tenance program. We must rapidly accelerate our paceto complete thirty utility systems with<strong>in</strong> the next three months. By channel<strong>in</strong>gsignificantly more effort <strong>in</strong>to this program we will reduce <strong>in</strong>juries, <strong>in</strong>creaseutility reliability, <strong>and</strong> decrease the time consumed <strong>in</strong> utility system ma<strong>in</strong>tenance.We will lead this implementation effort for all Corporate ServicesOrganizations.• WOW! Project TM Results. Facilities productivity doubled <strong>in</strong> three years <strong>and</strong> 2001cost reduction goals were achieved. Factory reliability has improved by allow<strong>in</strong>g86 percent fewer “impacts” to manufactur<strong>in</strong>g. As a result, Arizona Facilities Operationwon Intel’s Technology Manufactur<strong>in</strong>g 2001 Excellence Award.Example 2: F<strong>in</strong>ance Department Manager• WOW! Project TM Description. My WOW! Project TM entailed <strong>in</strong>vent<strong>in</strong>g a new wayto analyze <strong>and</strong> optimize the way we allocate manufactur<strong>in</strong>g equipment to productl<strong>in</strong>es <strong>in</strong> order to maximize Intel profitability. To help solve this problem, wecreated a f<strong>in</strong>ancial model to evaluate scenarios <strong>in</strong>volv<strong>in</strong>g complex assumptionscom<strong>in</strong>g from multiple Intel organizations.• WOW! Project TM Results. Once we had the data needed to conv<strong>in</strong>ce others that achange was required, we met with several key stakeholders <strong>in</strong> each organizationto “sell” our hypothesis <strong>and</strong> conv<strong>in</strong>ce them that a problem (<strong>and</strong> solution)existed. We then modified our model<strong>in</strong>g <strong>and</strong> approach based on feedback weheard from various perspectives (factories, market<strong>in</strong>g, <strong>and</strong> divisions). We suggestedthat we review these decisions at the product taskforce meet<strong>in</strong>g withappropriate decision-makers present all at once. As a result, we’ve proposednew alternative supply strategies that <strong>in</strong>creased Intel marg<strong>in</strong> by $59 million <strong>in</strong>Q4 2000.
228 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExample 3: Site Material Manager• WOW! Project TM Description. Reduce delivery time <strong>and</strong> associated costs formanufactur<strong>in</strong>g equipment spare parts.• WOW! Project TM Results. We attribute the success of the Integrated SparesSolutions (ISS) program to our <strong>in</strong>volvement <strong>in</strong> LDF. As a result, we now havea reduced supply cha<strong>in</strong> <strong>and</strong> have elim<strong>in</strong>ated Purchas<strong>in</strong>g, Receiv<strong>in</strong>g & Storesfrom the tactical procurement cha<strong>in</strong>. ISS <strong>in</strong>troduced an “<strong>in</strong>tegrateddistributor” to take requirements from Field Service Eng<strong>in</strong>eers <strong>and</strong> deliverparts back with<strong>in</strong> 60 m<strong>in</strong>utes versus 15 days. Contracts currently <strong>in</strong> placeproject estimated sav<strong>in</strong>gs of $20 million. LDF enabled us to challenge currentmethods, use a shared vision to ga<strong>in</strong> multiple factory acceptances, <strong>and</strong>provide leadership, which encouraged employees to overcome seem<strong>in</strong>glyimpossible obstacles.Personal TestimonialsI have really changed my daily focus. My focus is now on build<strong>in</strong>grelationships with my group versus focus<strong>in</strong>g always on deliverables. Thishas made me a more balanced leader as evidenced by improved scoreson my 360 management assessment.—SORT group leaderEfforts of the Phoenix Clean Air Initiative Team (PCAIT) which I leadresulted <strong>in</strong> the Phoenix Metropolitan Area achiev<strong>in</strong>g three consecutive yearsof zero days of unhealthy ozone read<strong>in</strong>gs. This ensures that Fab 12 is <strong>in</strong>atta<strong>in</strong>ment with the Federal Ozone 1-Hour St<strong>and</strong>ard, enabl<strong>in</strong>g the factoryto make rapid equipment <strong>and</strong> process changes without additionalregulatory restrictions. The PCAIT was my LDF project. The keyto its success was my application of the five leadership practices.—Safety managerI found the LDF program to be more powerful than my State <strong>University</strong>’s<strong>Leadership</strong> Scholarship Program. Noth<strong>in</strong>g I have ever participated <strong>in</strong> hashad the impact on me that LDF has. Its structure, content, facilitation, <strong>and</strong>pac<strong>in</strong>g all comb<strong>in</strong>e to provide a thoroughly <strong>in</strong>spir<strong>in</strong>g experience. As aresult, I have been much more effective h<strong>and</strong>l<strong>in</strong>g operational issues,<strong>and</strong> I am more aware of how I <strong>in</strong>teract with others.—Materials group leaderLDF has helped me underst<strong>and</strong> the value of <strong>in</strong>spir<strong>in</strong>g others. For too long, we’vebeen los<strong>in</strong>g sight of the human element <strong>in</strong> the factory. People have becomea consumable resource. It’s been my goal to make people feel valued bypractic<strong>in</strong>g techniques demonstrated <strong>in</strong> LDF.—Eng<strong>in</strong>eer<strong>in</strong>g group leader
INTEL 229LDF is a choice you make about how effective you want to be. I have been able toshift from an overwhelm<strong>in</strong>g goal-pressured micro-manager need<strong>in</strong>g all the detailsto a trust<strong>in</strong>g, encourag<strong>in</strong>g, <strong>and</strong> <strong>in</strong>spir<strong>in</strong>g contributor.—Manufactur<strong>in</strong>g shift managerLDF re<strong>in</strong>forced the difference between management <strong>and</strong> leadership. Participat<strong>in</strong>g<strong>in</strong> the program enabled me to see that be<strong>in</strong>g vulnerable is acceptable <strong>and</strong> thatlearn<strong>in</strong>g from my peers is <strong>in</strong>valuable.—Tra<strong>in</strong><strong>in</strong>g managerLESSONS LEARNED• Lesson #1. Don’t wait for corporate. In a large company, there are often corporate<strong>in</strong>itiatives focused on how to develop leaders. These efforts can be significant<strong>and</strong> can provide consistency while elim<strong>in</strong>at<strong>in</strong>g duplication. However,corporate programs can take a “one size fits all” approach, not tailored to meetthe needs of its customers. At the factory level, the need to develop managersis urgent. A small team of competent <strong>in</strong>dividuals who underst<strong>and</strong> their immediatecustomers’ needs can move faster than corporate efforts to creativelydesign <strong>and</strong> implement a leadership development process. Don’t wait for corporate,develop your program then share it with corporate, build it on the<strong>in</strong>side, share it with the outside. Be bold. Experts are people who startedbefore you did.• Lesson #2. Cont<strong>in</strong>uously redesign <strong>and</strong> update your program. LDF is successfulbecause the ODT cont<strong>in</strong>uously asks, How can we make it better? Howcan we enhance participants learn<strong>in</strong>g? No two LDF programs have ever beenthe same. Sessions, content, materials, <strong>and</strong> learn<strong>in</strong>g processes are constantlybe<strong>in</strong>g revised, updated, added, or deleted. If the ODT observes that participantsare disengaged or resistant, he or she modifies subsequent sessions or programsto address those issues. The mantra for success is: Design, deliver, redesign, <strong>and</strong>never stop seek<strong>in</strong>g to enrich your audience’s learn<strong>in</strong>g experience.• Lesson #3. <strong>Leadership</strong> development equals self-reflection. Is LDF about leadershipor personal development? It’s about both. Every aspect of your programneeds to be designed around managers exam<strong>in</strong><strong>in</strong>g what they are do<strong>in</strong>g <strong>and</strong> howthey are be<strong>in</strong>g as leaders. Provide a variety of ways for them to see themselves(videotap<strong>in</strong>g, assessments, focus groups, one-on-one coach<strong>in</strong>g) <strong>and</strong> experiencechallenges whereby they can apply new learn<strong>in</strong>gs. <strong>Leadership</strong> programs need toprovide numerous opportunities for authentic self-expression of vulnerabilities:that’s how participants learn, <strong>and</strong> that’s how participants grow. <strong>Development</strong> isnot about be<strong>in</strong>g comfortable. Forget competency models. You can’t put the artof leadership <strong>in</strong>to someone. True leadership comes from the <strong>in</strong>side out.
230 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE• Lesson #4. Three must haves: (1) Risk—Innovate, do what’s never beendone at your site, take a st<strong>and</strong> for implement<strong>in</strong>g a program, be relentless.(2) Support—Do whatever it takes to get key stakeholders on board (sell senior<strong>and</strong> grassroots supporters, use data to identify development needs). Don’t getlocked <strong>in</strong>to the m<strong>in</strong>dset that top management has to attend your program first—they just need to support it. Ensure key stakeholders “hear” from participantswhat value they are receiv<strong>in</strong>g. (3) Passion <strong>and</strong> knowledge—Implement<strong>in</strong>g aneffective leadership program requires dedicated, full-time resources. To succeed,these people must have knowledge of leadership theories, be <strong>in</strong>novativeprogram developers aligned with the design pr<strong>in</strong>ciples discussed <strong>in</strong> this casestudy, <strong>and</strong> most important, demonstrate a passion for build<strong>in</strong>g leaders.CONCLUSIONFab 12’s LDF Program offers an <strong>in</strong>novative, comprehensive leadership developmentprocess utiliz<strong>in</strong>g unique learn<strong>in</strong>g methods over a five-month period. Participantsembark on a journey of <strong>in</strong>tense self-reflection, action learn<strong>in</strong>g, <strong>and</strong>coach<strong>in</strong>g sessions whereby they are held accountable to apply new leadershipbehaviors on the job. Several participants report that they experience LDF as apersonal transformation.A rigorous redesign process based on participant feedback <strong>and</strong> the ODT’srelentless effort to deliver the best learn<strong>in</strong>g experience of participants’ careershas resulted <strong>in</strong> the cont<strong>in</strong>uous delivery of LDF regardless of changes <strong>in</strong> operationalpriorities, factory ramps, <strong>and</strong> <strong>in</strong>tense cost-cutt<strong>in</strong>g <strong>in</strong>itiatives. The ODT hasachieved this while honor<strong>in</strong>g the fundamental design pr<strong>in</strong>ciples <strong>and</strong> objectiveson which the program was founded. LDF has provided a leadership developmentprogram that has enabled Fab 12 to meet <strong>and</strong> exceed dem<strong>and</strong><strong>in</strong>g factoryoutput goals.
INTEL 231Exhibit 9.1. Four Stages of WOW! Projects TM1. Create F<strong>in</strong>d projects that make a difference!Reframe projects to be memorable <strong>and</strong> have impact foryour team <strong>and</strong> the organization!2. Sell Sell your vision to ga<strong>in</strong> support!Create quick prototypes, reframe your project based onyour customers’ needs. Get buy-<strong>in</strong>!3. Execute Develop <strong>and</strong> implement a plan <strong>and</strong> ensure accountability.Transform barriers <strong>in</strong>to opportunities.4. Celebrate Recognize those who contributed to the project.<strong>and</strong> move on Publish your team’s results.H<strong>and</strong> off your project to a steward who will carryit forward.Note: WOW! Projects TM is a trademark of Tom Peters Company.
Exhibit 9.2. <strong>Leadership</strong> Action PlanName:WOW Project Description:Challeng<strong>in</strong>g the Process Enabl<strong>in</strong>g Others to Act Encourag<strong>in</strong>g the Heart Inspir<strong>in</strong>g a Shared Vision Model<strong>in</strong>g the WayI will challenge the I will enable others to I will encourage others by: I will <strong>in</strong>spire <strong>and</strong> enroll I will “model” thecurrent situation (th<strong>in</strong>k accomplish great th<strong>in</strong>gs by: others by: follow<strong>in</strong>g actions/outside the box) to behaviors to ensurecreate breakthroughs by: success by:
INTEL 233Exhibit 9.3. <strong>Leadership</strong> AutobiographyNameInsert Picture HereWho I am: 8 words or less “br<strong>and</strong>”<strong>Leadership</strong> St<strong>and</strong>Th<strong>in</strong>k about your current role at work for amoment <strong>and</strong> assume you are here to makea unique contribution. What are you hereto do? What REALLY matters to you?Consider:• Why do you come to work?• What is your purpose at work?• What are you passionate about at work?• What are your convictions toward yourwork?• Why are you committed to this?Personal ValuesWhat value(s) serve as the foundationof your st<strong>and</strong>? Considerthe follow<strong>in</strong>g:• Guid<strong>in</strong>g pr<strong>in</strong>ciples that youlive by• Values you want to proliferate<strong>in</strong> the organization• Values you hold to be so fundamentalthat you would keepthem regardless of whetherthey are rewarded—theywould st<strong>and</strong> the test of time<strong>and</strong> would not changePersonal ExperienceReflect back on experiences <strong>in</strong> your life.What experiences helped shape the importanceof these values for you? What experiencescould you share that would conveyyour expertise <strong>and</strong>, at the same time,acknowledge your limitations? Consider:• Experiences that convey your“humanness”• Experiences that you use to engage,energize, teach, <strong>and</strong> lead others• A story that describes what makes youtick <strong>and</strong> how you became the personyou are(Cont<strong>in</strong>ued)
234 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 9.3. <strong>Leadership</strong> Autobiography (Cont<strong>in</strong>ued)Group/Team VisionYour vision of the future state of your group or team must give people a sense offour th<strong>in</strong>gs:• Why you feel th<strong>in</strong>gs must change (your case for change)• Where your group/team is go<strong>in</strong>g (a clear <strong>and</strong> powerful image of a future statethat is ideal, unique, <strong>and</strong> establishes a common purpose)• How you will get there (your bus<strong>in</strong>ess philosophy/strategy, your ideas to makethe group/team successful)• What it will take from followers, <strong>and</strong> what the payoff will be when you arriveYour “<strong>Leadership</strong> Legacy” is what you will leave beh<strong>in</strong>d. It is what you want tobe known <strong>and</strong> remembered for. Some personal <strong>in</strong>sights to consider:• What you want to achieve at work• Success you hope to realize<strong>Leadership</strong> Legacy• Impact you would like to have on others• The bus<strong>in</strong>ess/operational results you want to be known for
INTEL 235Exhibit 9.3. (Cont<strong>in</strong>ued)<strong>Leadership</strong> St<strong>and</strong>NameInsert Picture HereWho I am:Personal ValuesPersonal Experience(Cont<strong>in</strong>ued)
236 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 9.3. <strong>Leadership</strong> Autobiography (Cont<strong>in</strong>ued)Group/Team Vision<strong>Leadership</strong> Legacy
INTEL 237ENDNOTES1. A “fab” is a semiconductor factory. Intel uses a number to designate each fab(i.e., Fab 8, Fab 11, Fab 12). Fab 12 is located <strong>in</strong> Ch<strong>and</strong>ler, Arizona, <strong>and</strong> employs2,100 personnel.2. S<strong>in</strong>ce 1972, the Booth Company (www.720Feedback.com) has provided a fullseries of role-specific management <strong>and</strong> leadership surveys.3. Bennis, Warren. On Becom<strong>in</strong>g a Leader. (New York: Addison-Wesley), 1994, p. 73.4. Gross, Tracy, <strong>and</strong> others. “The Re<strong>in</strong>vention Roller Coaster.” Harvard Bus<strong>in</strong>essReview, November 1992.5. Kouzes, James, <strong>and</strong> Posner, Barry. The <strong>Leadership</strong> Challenge. (San Francisco:Jossey-Bass), 1995. Kouzes <strong>and</strong> Posners’ <strong>Leadership</strong> Model encompasses fivepractices: challeng<strong>in</strong>g the process, <strong>in</strong>spir<strong>in</strong>g a shared vision, enabl<strong>in</strong>g others toact, model<strong>in</strong>g the way, <strong>and</strong> encourag<strong>in</strong>g the heart.6. Cashman, Kev<strong>in</strong>. <strong>Leadership</strong> from the Inside Out. (Utah: Executive ExcellencePublish<strong>in</strong>g), 1998, p. 18.7. Bennis, Warren. On Becom<strong>in</strong>g a Leader. (New York: Addison-Wesley), 1994,pp. 76–79.8. WOW! Projects TM is a registered trademark of the Tom Peters Company; WOW!Projects Sem<strong>in</strong>ar is a copyrighted workshop (www.tompeters.com).9. LPI (<strong>Leadership</strong> <strong>Practices</strong> Inventory), a thirty-question, 360 leadership assessmentby James Kouzes <strong>and</strong> Barry Posner, assesses five leadership practices: challeng<strong>in</strong>gthe process, <strong>in</strong>spir<strong>in</strong>g a shared vision, enabl<strong>in</strong>g others to act, model<strong>in</strong>g the way,<strong>and</strong> encourag<strong>in</strong>g the heart. LPI is a product of <strong>and</strong> published by Jossey-Bass,Pfeiffer (www.pfeiffer.com).10. Tom Peters Company (www.tompeters.com) offers global consult<strong>in</strong>g services <strong>and</strong><strong>in</strong>-house tra<strong>in</strong><strong>in</strong>g.11. N<strong>in</strong>th House <strong>and</strong> Instant Advice are trademarks of N<strong>in</strong>th House, Inc. Innovation:WOW! Projects TM (<strong>and</strong> Captur<strong>in</strong>g Br<strong>and</strong> You TM are trademarks of Tom PetersCompany.12. Venture Up (www.ventureup.com) provides <strong>in</strong>teractive <strong>and</strong> outdoor adventureteam-build<strong>in</strong>g events, Phoenix, Arizona, s<strong>in</strong>ce 1983.13. Kouzes, James, <strong>and</strong> Posner, Barry. Encourag<strong>in</strong>g the Heart: A Leader’s Guide toReward<strong>in</strong>g <strong>and</strong> Recogniz<strong>in</strong>g Others. (San Francisco: Jossey-Bass), 1999.14. The “Tom Melohn Case Study” is featured on In Search of Excellence with TomPeters tra<strong>in</strong><strong>in</strong>g video (Bus<strong>in</strong>essTra<strong>in</strong><strong>in</strong>gMedia.com).15. Career Systems International (www.careersystems<strong>in</strong>tl), a Beverly Kaye company,provides career development, mentor<strong>in</strong>g, <strong>and</strong> talent retention tools <strong>and</strong> programs,Scranton, Pennsylvania.16. The Unified Team Video highlights a leader’s plan for promot<strong>in</strong>g team unity,cover<strong>in</strong>g the need to achieve, belong, <strong>and</strong> contribute (Media Partners Corporation),Seattle, Wash<strong>in</strong>gton. Founded 1993.
238 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE17. The Vortex Simulation designed <strong>and</strong> produced by 3D Learn<strong>in</strong>g, LLC(www.3Dlearn<strong>in</strong>g.com), an organizational development consult<strong>in</strong>g servicespecializ<strong>in</strong>g <strong>in</strong> simulations s<strong>in</strong>ce 1996.18. <strong>Leadership</strong>, an Art of Possibility video features Ben Z<strong>and</strong>er, conductor of theBoston Philharmonic Orchestra, who seeks to lead <strong>in</strong> order to make otherspowerful (www.provantmedia.com).19. Balasco, James, <strong>and</strong> Stayer, Ralph. Flight of the Buffalo (New York: WarnerBooks), 1993.20. SEMATECH (www.Sematch.com), located <strong>in</strong> Aust<strong>in</strong>, Texas, is the world’s premieresemiconductor research consortium, s<strong>in</strong>ce 1986. Member companies suchas Hewlett-Packard, IBM, Intel, Motorola, <strong>and</strong> Texas Instruments cooperate precompetitivelyto accelerate the development of advanced semiconductor manufactur<strong>in</strong>gtechnologies.ACKNOWLEDGMENTSWe’d like to thank the people who have cont<strong>in</strong>ued to develop the LDF programthroughout other bus<strong>in</strong>ess groups at Intel: Steve Thomas, Dorothy L<strong>in</strong>gren,Brian Schwarz, Lori Emerick, D<strong>in</strong>a Sotto, Elisa Abalajon, <strong>and</strong> Mariann Pike.They have managed to transfer the LDF program <strong>in</strong> its entirety without sacrific<strong>in</strong>gits quality or <strong>in</strong>tegrity. Other Intel employees who have facilitated the LDFProgram at Fab 12 <strong>in</strong>clude Laurel Henkel, Paul Denham, Dennis Danielson,Louise Williams, <strong>and</strong> Tom Eucker.ABOUT THE CONTRIBUTORSDale Halm, a twenty-year veteran of Intel Corporation, is currently the managerof Organizational & <strong>Leadership</strong> <strong>Development</strong> for Intel’s Fab 12 microprocessorfactory <strong>in</strong> Ch<strong>and</strong>ler, Arizona. Dale holds a M.A. <strong>and</strong> B.A. <strong>in</strong> SpeechCommunications from Northern Ill<strong>in</strong>ois <strong>University</strong>.Janelle Smith is the LDF Program manager with n<strong>in</strong>e years’ Intel experience.Prior to Intel, she was a capta<strong>in</strong> <strong>in</strong> the U.S. Air Force, with a B.S. <strong>in</strong> <strong>in</strong>dustrialeng<strong>in</strong>eer<strong>in</strong>g from the <strong>University</strong> of Arkansas.Susan Rudolph, an organizational development specialist with seven years’Intel experience, holds a B.S. <strong>in</strong> bus<strong>in</strong>ess management <strong>and</strong> psychology & socialsciences from Kansas State <strong>University</strong>.Together, Janelle, Susan, <strong>and</strong> Dale leverage their passion <strong>and</strong> commitment topersonal transformation to build the leadership capabilities of Intel’s managers.
SCHAPTER TENLockheed Mart<strong>in</strong>SBig change, fast—that was the dem<strong>and</strong> made on Lockheed Mart<strong>in</strong>’s tacticaljet bus<strong>in</strong>ess. The alternative to meet<strong>in</strong>g this change challenge was not onlyto lose the largest defense contract <strong>in</strong> history, but also to become a second-tiersubcontractor at best, or be put out of bus<strong>in</strong>ess at worst. This is the story ofhow the company met this challenge. It offers readers best practices forapproach<strong>in</strong>g “big change, fast” when the stakes are high . . . <strong>and</strong> whenthe alternative might be go<strong>in</strong>g out of bus<strong>in</strong>ess.OVERVIEW 240BACKGROUND 241A RAY OF HOPE? 242A CULTURE OF RESISTANCE 243SHAPING THE FULCRUM BY DEFINING CRITICAL BEHAVIORS 244POSITIONING THE FULCRUM BY CLARIFYING ACCOUNTABILITY 245A HOPEFUL BEGINNING 245LEVER #1: FORMAL LEADERS BECOME TEACHERS 246LEVER #2: INFORMAL LEADERS BECOME PARTNERS 247CAVEATS 249THE IMPACT? 251YOU CHANGED THE CULTURE. SO WHAT? 252SUMMARY AND BEST PRACTICES 253APPENDIX 254Everett Rogers: Lessons from Known Studies of Diffusion 254Survey Details 255EXHIBITSExhibit 10.1: Crucial Conversations <strong>in</strong> Six Sigma 256239
240 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 10.2: Potential Op<strong>in</strong>ion Leaders’ Roles <strong>in</strong> Culture Change 257Exhibit 10.3: Survey Results 258Exhibit 10.4: Significant Correlations Between Specific CriticalBehavior Items <strong>and</strong> Three Performance Metrics 259BIBLIOGRAPHY 260ABOUT THE CONTRIBUTORS 260OVERVIEWWhat’s beyond “white water?” That was the term used to characterize the competitivechallenges faced by companies a decade ago. Today, the rapids are shallower,the holes deeper, the boulders bigger, <strong>and</strong> the current faster. Not only isw<strong>in</strong>n<strong>in</strong>g <strong>in</strong> this environment harder, but los<strong>in</strong>g puts a company at greater riskof mak<strong>in</strong>g a spectacular crash. This was never more clear than <strong>in</strong> the defense<strong>in</strong>dustry, where the end of the cold war challenged defense contractors to w<strong>in</strong> <strong>in</strong>fewer contract opportunities (for fewer dollars) . . . or leave the scene. The<strong>in</strong>dustry consolidation of the 1990s made the white water froth.“W<strong>in</strong> or die”wasn’t a say<strong>in</strong>g—it was a reality.For a company like Lockheed Mart<strong>in</strong> Tactical Aircraft Systems (LMTAS), thatmeant w<strong>in</strong>n<strong>in</strong>g competitive contracts <strong>in</strong> world markets for F-16 fighter jet salesaga<strong>in</strong>st some of the best competition worldwide. As if that wasn’t enough, <strong>in</strong>1997 the defense department announced that LMTAS was one of the two f<strong>in</strong>alists<strong>in</strong> competition for what was expected to be the last manned fighter jet contractthe U.S. government would give—a $200 billion dollar contract witha thirty-year life . . . <strong>and</strong> it was go<strong>in</strong>g to be a w<strong>in</strong>ner-take-all contract. This wasthe Jo<strong>in</strong>t Strike Fighter (JSF) contract competition, <strong>and</strong> the competition was notonly w<strong>in</strong>ner-take-all, but loser-leave-the-stage. For LMTAS, los<strong>in</strong>g this contractwould put a horizon on the company’s very existence—even if it won F-16 sales<strong>in</strong> world markets, F-16 sales were not a growth bus<strong>in</strong>ess, as the JSF would eventuallybecome the product of choice on world markets.This case study reports how Da<strong>in</strong> Hancock, president of LMTAS, recognized<strong>and</strong> responded to those challenges by ga<strong>in</strong><strong>in</strong>g rapid support for change <strong>in</strong> whatfor decades had been a fiercely rigid organization. His leadership not only positionedthe company to w<strong>in</strong> worldwide F-16 sales, but more important, tow<strong>in</strong> the JSF contract—assur<strong>in</strong>g the survival <strong>and</strong> prosperity of the company long<strong>in</strong>to the twenty-first century.We’ll use the metaphor of a fulcrum <strong>and</strong> lever to describe the strategy thatHancock eventually used. His first challenge was to shape the fulcrum—to giverelevance <strong>and</strong> focus to necessary behavior change. He needed to make a clear,succ<strong>in</strong>ct, <strong>and</strong> compell<strong>in</strong>g bus<strong>in</strong>ess case for behavior change. That case needed
LOCKHEED MARTIN 241to articulate the behaviors that were critical to bus<strong>in</strong>ess survival—<strong>and</strong> it had todo so <strong>in</strong> a way that defied contradiction.As we will see, the fulcrum was not enough. Although Hancock did all theright th<strong>in</strong>gs to demonstrate the absolute relevance of behavior change, noth<strong>in</strong>ghappened. What he still lacked was a lever. The lever is what extends the <strong>in</strong>fluenceof a h<strong>and</strong>ful of senior leaders throughout to organization to <strong>in</strong>fluence dayto-daybehavior change. In the algebra of organizations, leaders represent thenumerator while all others comb<strong>in</strong>ed form the denom<strong>in</strong>ator. In this configuration,change can look like a mathematical impossibility. Discouraged leaderscan wonder what a relative few vision-bearers can do to drive change <strong>in</strong> anorganization that outnumbers them a thous<strong>and</strong> to one—or more.The senior leaders at Lockheed Mart<strong>in</strong> produced no real change until twoth<strong>in</strong>gs occurred. First, they articulated a concrete role for both formal <strong>and</strong> <strong>in</strong>formalleaders (as teachers <strong>and</strong> as partners, respectively) <strong>in</strong> <strong>in</strong>fluenc<strong>in</strong>g change.This turned out to be an important change lever. And second, they implementeda method for hold<strong>in</strong>g themselves accountable. Only when senior leaders clarifiedtheir accountability <strong>in</strong> tangible ways <strong>and</strong> grasped these two levers did theyga<strong>in</strong> traction aga<strong>in</strong>st overwhelm<strong>in</strong>g organizational <strong>in</strong>ertia <strong>and</strong> beg<strong>in</strong> to producereal change. Note that by hold<strong>in</strong>g themselves measurably accountable for results<strong>and</strong> implement<strong>in</strong>g these two change levers, they accelerated changes that oftentake the better part of a decade to occur <strong>in</strong> large companies. Evidence reported<strong>in</strong> this case shows their impact with<strong>in</strong> three years, <strong>and</strong>, what is important, thissuccess was among the factors that enabled LMTAS to w<strong>in</strong> the largest contract<strong>in</strong> their <strong>in</strong>dustry’s history—<strong>and</strong> to rema<strong>in</strong> a force <strong>in</strong> the aeronautics <strong>in</strong>dustry.BACKGROUNDWhen Da<strong>in</strong> Hancock was named company president <strong>in</strong> 1995, it appeared hewas assum<strong>in</strong>g the catbird seat. The company had a large worldwide sales backlogfor F-16s. In the previous two years, they had dramatically reduced costs atthe same time that base production was decreas<strong>in</strong>g, a first <strong>in</strong> the <strong>in</strong>dustry. Themajor customers were enthusiastic about the company’s record of qualityimprovements, <strong>and</strong>—perhaps most important—the facility had proven itself tobe a remarkable “cash cow” for Lockheed Mart<strong>in</strong>.But looks can be deceiv<strong>in</strong>g. As the former vice president of the company’slargest product l<strong>in</strong>e, Hancock was aware of a far different reality: the volum<strong>in</strong>ousbus<strong>in</strong>ess backlog was shr<strong>in</strong>k<strong>in</strong>g rapidly, with a three-year lead time fornew orders <strong>and</strong> no F-16 production scheduled on the books after 1999. Thefactory was still limp<strong>in</strong>g along with 1970s v<strong>in</strong>tage manufactur<strong>in</strong>g technology—not surpris<strong>in</strong>g, s<strong>in</strong>ce the plant had suffered from a lack of capital <strong>in</strong>vestmentfor several years. Dur<strong>in</strong>g the tenuous early 1990s <strong>in</strong> the defense <strong>in</strong>dustry, the
242 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEprevious owners’ corporate strategy had become “milk the backlog <strong>and</strong> spendas little as possible.” In addition, the workforce was ag<strong>in</strong>g, with most of theyounger eng<strong>in</strong>eers hav<strong>in</strong>g fallen victim to mass layoffs earlier <strong>in</strong> the 1990s <strong>and</strong>with no new hir<strong>in</strong>g at the facility for almost eight years. In short, the bus<strong>in</strong>esshorizon looked bleak.A RAY OF HOPE?The major product l<strong>in</strong>e for the company—the F-16 Fighter Jet—was also beg<strong>in</strong>n<strong>in</strong>gto age. Consolidation <strong>and</strong> post-Cold-War contraction of the <strong>in</strong>dustry leftlittle room for ag<strong>in</strong>g products. For this company, the message of the marketplacewas clear: w<strong>in</strong> the next major fighter program . . . or die. Shortly beforeHancock assumed the president’s office, a competition was announced for theJo<strong>in</strong>t Strike Fighter—a major program with pre-purchase commitments fromthe U.S. Air Force, Mar<strong>in</strong>es, <strong>and</strong> Navy, as well as the U.K.’s Royal Air Force <strong>and</strong>Navy. Securities analysts hailed the announcement as a harb<strong>in</strong>ger of which ofthe key companies <strong>in</strong> this <strong>in</strong>dustry would survive <strong>in</strong>to the twenty-first century.Hancock knew that if the company failed to w<strong>in</strong> this competition, all he wouldpreside over was, at best, becom<strong>in</strong>g a subcontractor to the w<strong>in</strong>n<strong>in</strong>g companyor, at worst, the organization’s demise. S<strong>in</strong>ce the contest was announced asw<strong>in</strong>ner-take-all, the latter seemed like the more likely outcome.As Hancock considered what it would take to develop a bold new productaga<strong>in</strong>st world-class competitors, he quickly concluded that the company’s12,000 employees faced another tough tradeoff: change or lose. Past m<strong>in</strong>dsetswould run up aga<strong>in</strong>st aggressive affordability goals <strong>and</strong> the necessity of creat<strong>in</strong>gthe complex product for a wide range of domestic <strong>and</strong> <strong>in</strong>ternational customersthrough long-distance partnerships with a host of other companies. Itwas clear that old ways of th<strong>in</strong>k<strong>in</strong>g <strong>and</strong> do<strong>in</strong>g bus<strong>in</strong>ess would not suffice.In the com<strong>in</strong>g months, the president <strong>and</strong> his senior staff would try to sell amessage to the workforce that chang<strong>in</strong>g the culture was a survival-level issue.In a straight-talk<strong>in</strong>g address, Hancock told the workforce, “It may not be clear tomany folks, but our company damn near died last year . . . <strong>and</strong> the primary reasonwas our culture! We have been so <strong>in</strong>wardly focused <strong>and</strong> have <strong>in</strong>hibited newideas to the po<strong>in</strong>t that we were headed down <strong>and</strong> out.”A blunt statement by Darleen Druyan, the Air Force’s acquisition chief,helped Hancock put a sharp po<strong>in</strong>t on his message. After thous<strong>and</strong>s of F-16purchases, it might have been easy for the Fort Worth crew to assume the AirForce was <strong>in</strong> their corner. Druyan made it clear that even the Air Forcewondered about whether Lockheed Mart<strong>in</strong> could compete <strong>in</strong> this new k<strong>in</strong>d ofprogram when she said, “This competition is not about an airplane. It’s abouta management team.”
LOCKHEED MARTIN 243A CULTURE OF RESISTANCEHancock knew the culture well. He had worked his way up through the ranksunder various owners of the facility. Over time he had watched as good ideas,whether <strong>in</strong>cremental or monumental, were smothered while birth<strong>in</strong>g. As president,he found his schedule filled with appo<strong>in</strong>tments with passionate agentsof change who used him as a sort of bodyguard to keep from be<strong>in</strong>g taken outby those who were threatened by their ideas.For example, Hancock <strong>in</strong>itiated a Six Sigma—or “lean manufactur<strong>in</strong>g”—effortto help drive major improvement <strong>in</strong> manufactur<strong>in</strong>g processes, which hadchanged little s<strong>in</strong>ce the mid-1970s. He also hoped to show the JSF decision makersby this effort that Lockheed Mart<strong>in</strong> could rival their competitor, Boe<strong>in</strong>g, <strong>in</strong><strong>in</strong>novative management practices that would lead to world-class quality, ontimedelivery, <strong>and</strong> low cost production. The Six Sigma effort was a critical wayof demonstrat<strong>in</strong>g that capability.And yet, a year <strong>in</strong>to the effort there was little to show beyond a few colorfuldisplays <strong>and</strong> a couple of pilot projects. Although the un<strong>in</strong>itiated wouldth<strong>in</strong>k that the president’s approval would be sufficient aid <strong>and</strong> comfort to susta<strong>in</strong>a strategically critical program like this one, the culture had perfected astrategy to deal with just such cont<strong>in</strong>gencies: slow roll<strong>in</strong>g. When authoritywas lack<strong>in</strong>g to kill someth<strong>in</strong>g outright, lower-level managers found ways todeliver death <strong>in</strong> the same way an alligator kills its prey: it embraces it—aftera fashion. In fact, it drags it under water <strong>and</strong> slowly rolls it, over <strong>and</strong> over,until it drowns. Managers at Lockheed Mart<strong>in</strong> responded to Six Sigma thesame way. They openly applauded the new ideas, dragged them back to theirdepartments, then starved them of attention, hop<strong>in</strong>g senior leaders wouldeventually lose <strong>in</strong>terest <strong>in</strong> the failed <strong>in</strong>itiative <strong>and</strong> move onto the next programdu jour.In spite of Hancock’s endorsement, little <strong>in</strong>itiative was taken to implementSix-Sigma ideas. Most managers gave only lip service to Six-Sigma goals. If theydid assign staff to special projects, it was not their best <strong>and</strong> brightest, but rathertheir “surplus.” And breakthrough recommendations aris<strong>in</strong>g from tra<strong>in</strong><strong>in</strong>g sessionsgathered dust <strong>in</strong> <strong>in</strong>-boxes while the “real work” got done.Month by month, the senior staff would write articles for the companynewsletter, speak at the beg<strong>in</strong>n<strong>in</strong>g of another tra<strong>in</strong><strong>in</strong>g session, or gather all themanagers <strong>and</strong> deliver another speech about the importance of the effort. Inshort, Hancock <strong>and</strong> his staff would f<strong>in</strong>d some way to apply brute force tobreathe a little more life <strong>in</strong>to the program.Through this <strong>and</strong> dozens of other experiences, Hancock became conv<strong>in</strong>cedthat for every <strong>in</strong>novative effort he fought to rescue, there were ahundred promis<strong>in</strong>g ideas that must be dy<strong>in</strong>g before they left the draw<strong>in</strong>gboard.
244 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGESHAPING THE FULCRUM BY DEFINING CRITICAL BEHAVIORSHancock began attack<strong>in</strong>g the problem of chang<strong>in</strong>g this culture like any goodeng<strong>in</strong>eer. He clearly def<strong>in</strong>ed the k<strong>in</strong>ds of behaviors that would cut awaythe webs of resistance that were chok<strong>in</strong>g <strong>in</strong>novation. We (the authors)were engaged by Hancock as consultants <strong>and</strong> advisors. Over a periodof months, with our help, he <strong>and</strong> his senior staff went through a process of<strong>in</strong>terview<strong>in</strong>g employees, document<strong>in</strong>g stories, <strong>and</strong> writ<strong>in</strong>g papers that helpedthem see how their culture affected their ability to meet their bus<strong>in</strong>esschallenges.Our goal was to identify critical behaviors. These, <strong>in</strong> our view, were the twoor three behaviors that would first, have an obvious positive impact on bus<strong>in</strong>essperformance; <strong>and</strong> second, produce a dom<strong>in</strong>o effect by <strong>in</strong>fluenc<strong>in</strong>g manyother behaviors to change. We reasoned that the typical approach to culturechange—long lists of abstract values or dozens of desirable behaviors—wouldlead to failure. Hancock’s objective was to pick a critical few that could clearlybe shown to drive bus<strong>in</strong>ess performance—<strong>and</strong> focus all of leadership’s energyon those. The trick was to pick the right few.After conduct<strong>in</strong>g focus group <strong>in</strong>terviews with over six hundred employees,the senior staff began to discern patterns <strong>in</strong> the success <strong>and</strong> failure stories theyheard. They began to see that a h<strong>and</strong>ful of negative behaviors were at thenexus of every pa<strong>in</strong>ful story of stifled change <strong>and</strong> choked creativity. In addition,<strong>in</strong> the areas of the company where <strong>in</strong>novation thrived, a few key behaviorswere universally present. For example, <strong>in</strong>terviews with the few Six Sigma“pockets of excellence” turned up a few behaviors that always differentiatedthese areas from the rest of the organization. Most of these behaviors werecrucial conversations that enabled Six Sigma progress when they were h<strong>and</strong>ledwell, or stalled it when they were either avoided or h<strong>and</strong>led poorly (seeExhibit 10.1).Through this study process, senior leaders came to conclude that c<strong>and</strong>id <strong>and</strong>open communication about specific high stakes subjects was a critical behavior.They concluded that if they could positively <strong>in</strong>fluence the quality of thesecrucial conversations, these conversations would have a “pull<strong>in</strong>g effect” onother, nonproductive behaviors. Thus, open communication about these crucialtopics became a major part of the fulcrum of the change effort.In addition to open communication, two other critical behaviors emerged fromthis process. The first was called personal engagement <strong>and</strong> referred to “tak<strong>in</strong>gpersonal action to unblock obstacles that prevented effective performance.” Thethird was called sense of urgency, <strong>and</strong>, as implied, was about “act<strong>in</strong>g whenthe need existed rather than ignor<strong>in</strong>g issues that needed to be addressed or escalat<strong>in</strong>gthose issues to others who would have to address them.”
POSITIONING THE FULCRUM BY CLARIFYING ACCOUNTABILITYHancock’s experience with the culture led him to conclude that if culture changewas to be taken seriously he needed a credible way of hold<strong>in</strong>g senior leadersaccountable. He was doubtful of the traditional “activity” measures associatedwith soft change efforts. For example, leaders were perfectly capable of “slowroll<strong>in</strong>g”the Six Sigma effort because they were measured only for th<strong>in</strong>gs suchas the number of people tra<strong>in</strong>ed <strong>and</strong> the number of pilot projects implemented.In this case they began with the end <strong>in</strong> m<strong>in</strong>d. S<strong>in</strong>ce what Hancock wantedwas real behavior change, he would hold senior managers accountable for that<strong>and</strong> that only. A brief survey was developed to measure the perceptions ofchange <strong>in</strong> the critical behaviors across the organization. A 10 percent goal wasset <strong>and</strong> the top two levels of leadership were given eighteen months to <strong>in</strong>fluencechange. Incentive compensation was l<strong>in</strong>ked directly to meet<strong>in</strong>g thismeasurable goal, <strong>and</strong>, not surpris<strong>in</strong>g, change was on the radar screen for seniorleaders.A HOPEFUL BEGINNINGLOCKHEED MARTIN 245We had the senior staff beg<strong>in</strong> their journey by ask<strong>in</strong>g themselves, “What drivesold behavior?” <strong>and</strong> “What will it take to foster the new behaviors?” As a result,they put <strong>in</strong> place a number of change <strong>in</strong>itiatives. These <strong>in</strong>itiatives <strong>in</strong>cludedchang<strong>in</strong>g the values embedded <strong>in</strong> the exist<strong>in</strong>g appraisal system, improv<strong>in</strong>g dysfunctionalaspects of the organization design, <strong>and</strong> exp<strong>and</strong><strong>in</strong>g the leadershipfeedback to reflect the critical behaviors.By early 1998, the senior staff had a clear <strong>and</strong> measurable goal, a sound wayof measur<strong>in</strong>g change, <strong>in</strong>centive pay tied to executive-team success, <strong>and</strong> a robustplan. After months of deliberat<strong>in</strong>g, Hancock announced the formal beg<strong>in</strong>n<strong>in</strong>gof what came to be called “Workforce Vitality.”And noth<strong>in</strong>g happened.Well, actually, teams were formed to study <strong>and</strong> make recommendations tomove these <strong>in</strong>itiatives forward, lots of meet<strong>in</strong>gs were held, presentations weremade, surveys were conducted, <strong>and</strong> easy, low-impact, employee-friendlychanges were made. But survey scores <strong>and</strong> anecdotal evidence showed thatnoth<strong>in</strong>g of substance was chang<strong>in</strong>g. That is, if one didn’t count an <strong>in</strong>crease <strong>in</strong>cynicism. Hancock began to conclude that Workforce Vitality, like other <strong>in</strong>novations,was be<strong>in</strong>g “slow-rolled.”In the beg<strong>in</strong>n<strong>in</strong>g, Hancock used the traditional top-down approach of gett<strong>in</strong>gth<strong>in</strong>gs done, <strong>and</strong> he made an enormous effort to communicate the need forchange <strong>and</strong> the change strategy to the three levels immediately below the senior
246 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEstaff <strong>in</strong> monthly “brief<strong>in</strong>gs.” He dem<strong>and</strong>ed progress reports, held reviewmeet<strong>in</strong>gs, <strong>and</strong> even promised to remove those who weren’t on board. Unfortunately,the president spent most of his time on the road <strong>in</strong> a high-level salesrole—promot<strong>in</strong>g F-16 purchases all across the globe. That left a lot of time fornoth<strong>in</strong>g to happen. As it became pa<strong>in</strong>fully clear that there was a lack of grassrootssupport for the change effort, he came to believe that irrespective of those<strong>in</strong>stitutional changes he could use brute force to implement, behavior wouldnot change without a core of support from the ranks. The prior culture wasdeeply entrenched, <strong>and</strong> the hierarchical “cascade” approach to driv<strong>in</strong>g changewas met with perfunctory compliance that whipped the masses up <strong>in</strong>to littlemore than a yawn.Noth<strong>in</strong>g happened until leaders began to look for leverage <strong>in</strong> an entirely differentway. Rather than ratchet<strong>in</strong>g up the direct efforts of senior leaders to pleadfor change from the masses—an impossible <strong>in</strong>fluence challenge given the sheernumber of people <strong>in</strong> the organization—we encouraged them to work <strong>in</strong>stead to<strong>in</strong>fluence the <strong>in</strong>fluencers. To do so, they engaged two groups with irresistibleday-to-day social <strong>in</strong>fluence throughout the organization: first, they def<strong>in</strong>ed aclear change leadership role for the formal cha<strong>in</strong> of comm<strong>and</strong>; <strong>and</strong> second, theyidentified <strong>and</strong> <strong>in</strong>volved <strong>in</strong>formal leaders—the op<strong>in</strong>ion leaders from throughoutthe organization.LEVER #1: FORMAL LEADERS BECOME TEACHERSOn our advice, Hancock <strong>and</strong> his team stopped diffus<strong>in</strong>g all of their attention onthe 12,000-person organization. Instead, they were encouraged to spend 40 percentof their Workforce Vitality attention on <strong>in</strong>fluenc<strong>in</strong>g the formal cha<strong>in</strong> ofcomm<strong>and</strong> to engage <strong>in</strong> foster<strong>in</strong>g the critical behaviors.To beg<strong>in</strong> with, senior managers ensured that their direct reports all understoodthe absolute necessity of chang<strong>in</strong>g behavior as an enabler of a JSF w<strong>in</strong>.Then they gave them a specific method for <strong>in</strong>fluenc<strong>in</strong>g behavior <strong>in</strong> their owndirect report teams. They would become teachers.Over the next few months every leader <strong>in</strong> the organization held biweeklytra<strong>in</strong><strong>in</strong>g classes with their direct reports. Dur<strong>in</strong>g these S<strong>in</strong>gle Po<strong>in</strong>t Lessons, theywould teach concepts <strong>and</strong> skills for improv<strong>in</strong>g the quality of the conversationsidentified <strong>in</strong> the Workforce Vitality critical behaviors. Every two weeks, seniormanagers would teach a new concept to their direct reports. These studentswould then become teachers. After they taught the concepts to their directreports, the cascade cont<strong>in</strong>ued until everyone <strong>in</strong> the organization was taught.The <strong>in</strong>itial response from the cha<strong>in</strong> of comm<strong>and</strong> to the idea of teach<strong>in</strong>g rangedfrom stunned silence to open revolt. Managers <strong>and</strong> supervisors were appalledthat they were be<strong>in</strong>g asked to teach. They cited two common reasons for this
LOCKHEED MARTIN 247concern. First, they thought teach<strong>in</strong>g should be the job of professionals—noteng<strong>in</strong>eers or plane-builders. Second, many asserted that people would widelydismiss the new skills as unrealistic because their teacher (that is, their boss)was a rag<strong>in</strong>g example of the opposite behavior.Time turned both of these concerns on their heads. For example, research<strong>in</strong>to areas that showed significant improvement <strong>in</strong> critical behaviors demonstratedthat there was almost no relationship between the skill of the teacher<strong>and</strong> the degree of change that resulted from the <strong>in</strong>struction. The best predictorof change was not what happened <strong>in</strong> the tra<strong>in</strong><strong>in</strong>g, but the dozens of spontaneousconversations that happened between tra<strong>in</strong><strong>in</strong>g sessions, where leadersencouraged their direct reports to use the skills they had learned earlier <strong>and</strong>where direct reports rem<strong>in</strong>ded leaders of their need to use those same skills aswell. By becom<strong>in</strong>g teachers, leaders had placed themselves <strong>in</strong> an advocacy rolefor the critical behaviors. As a result, they naturally seized opportunities tocoach people <strong>in</strong> day-to-day <strong>in</strong>teractions that they would never have recognizedhad they been relieved of this role by professional tra<strong>in</strong>ers. So while the qualityof tra<strong>in</strong><strong>in</strong>g may not have always been stellar, the quantity of change thatresulted from hav<strong>in</strong>g leaders teach was far beyond what typically occurs whenoutside professionals are responsible for <strong>in</strong>struction.The second concern—that leaders who taught one th<strong>in</strong>g but exemplifiedanother would underm<strong>in</strong>e the effort—likewise proved a false concern. In fact,the areas that experienced the greatest degree of change were those where theleaders themselves had to change the most. As leaders taught, their most attentivestudents were themselves. In the process of prepar<strong>in</strong>g to teach, manybecame more conv<strong>in</strong>ced of the relevance of the new behaviors. As they cameto believe the behaviors were important, those who were the worst offendersfound themselves <strong>in</strong> a sticky situation. They felt excruciat<strong>in</strong>g dissonance whenthey taught one th<strong>in</strong>g but modeled another. Thus, many of the “worst offenders”were the ones most likely to use the tra<strong>in</strong><strong>in</strong>g forum to acknowledge theirown mistakes. They were also some of the first to make visible attempts toimprove. And with these leaders, even small adjustments to align their words<strong>and</strong> their deeds were immediately noticeable by their direct reports. A spilloverbenefit was that employees who saw even modest changes <strong>in</strong> their boss sawthe entire culture change <strong>in</strong>itiative more favorably, thus encourag<strong>in</strong>g them tomake changes <strong>in</strong> themselves.LEVER #2: INFORMAL LEADERS BECOME PARTNERSIn addition to engag<strong>in</strong>g the management cha<strong>in</strong>, we advised senior leaders toengage <strong>in</strong>formal leaders—people whom students of change call op<strong>in</strong>ion leaders.Op<strong>in</strong>ion leaders are those whose words <strong>and</strong> actions carry great weight <strong>in</strong>
248 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEthe m<strong>in</strong>ds of their colleagues. To co<strong>in</strong> a phrase, when they speak, people listen.Hancock’s team was hopeful that this strategy would <strong>in</strong>vert the ratio that hadaugured aga<strong>in</strong>st them. Research on how change diffuses encouraged them toth<strong>in</strong>k of this subset of the population (represent<strong>in</strong>g from 5 to 10 percent) as theirprimary target for <strong>in</strong>fluence. Consultants to the company suggested that thesefive hundred or so people, if conv<strong>in</strong>ced <strong>and</strong> engaged, were the key to ga<strong>in</strong><strong>in</strong>gmore rapid support of the rema<strong>in</strong><strong>in</strong>g 11,000 employees. To the senior staff thiswas a breakthrough idea. Influenc<strong>in</strong>g five hundred people seemed a much moredoable task than over 12,000 had been. From this po<strong>in</strong>t forward, senior leaderswould spend 40 percent of their Workforce Vitality efforts with this powerfulgroup—hop<strong>in</strong>g that they would <strong>in</strong> turn br<strong>in</strong>g <strong>in</strong>fluence to bear with others (seeboxed text on Everett Rogers).We identified op<strong>in</strong>ion leaders <strong>in</strong> a rather straightforward way—by ask<strong>in</strong>gsurvey respondents to identify up to three people whose op<strong>in</strong>ions they mostrespected. A list of persons whose names were mentioned frequently was created.This proved to be an easy <strong>and</strong> reliable identification method. The nameswere given to will<strong>in</strong>g vice presidents who agreed to pilot an “op<strong>in</strong>ion leaderengagement strategy.”One such person, Bill Anderson, the successor to the president’s previous jobas vice-president of the F-16 program, was one of the first to engage op<strong>in</strong>ionleaders. S<strong>in</strong>ce the primary theme of the critical behaviors was c<strong>and</strong>id dialogueabout crucial subjects, he reasoned that engag<strong>in</strong>g regularly with this <strong>in</strong>fluentialgroup <strong>in</strong> a way that demonstrated they could dialogue about anyth<strong>in</strong>g wouldsend a powerful message to the rest of the organization. So he brought themtogether <strong>in</strong> groups of fifty to a hundred <strong>and</strong> laid his cards on the table.His first step was to help them underst<strong>and</strong> the role they already played as<strong>in</strong>formal leaders. Anderson met with the groups of op<strong>in</strong>ion leaders <strong>in</strong> two-hourorientation sessions. Dur<strong>in</strong>g these two hours Anderson worked to sell his bus<strong>in</strong>esscase for change. He helped op<strong>in</strong>ion leaders see how past behavior hadcost—<strong>and</strong> <strong>in</strong> the future could kill—the company. He told the op<strong>in</strong>ion leadershow their peers had identified them (a tremendous compliment) <strong>and</strong> describedpotential roles they could play <strong>in</strong> support<strong>in</strong>g the change. Anderson made it clearthat their <strong>in</strong>volvement was voluntary, <strong>and</strong> that op<strong>in</strong>ion leaders were not meantto become management cronies, but <strong>in</strong>dependent partners <strong>in</strong> change. Hepledged to support of their efforts <strong>and</strong> offered to be available for dialogue onany topic of importance to them. At the conclusion of each session, he askedfor <strong>in</strong>terested persons to volunteer to attend an op<strong>in</strong>ion leader summit, wherethey would work together to def<strong>in</strong>e ways to create change <strong>in</strong> the organization.The follow-up summit allowed op<strong>in</strong>ion leaders to dialogue with their seniorleader about the need for cultural change, develop skills for positively <strong>in</strong>fluenc<strong>in</strong>gothers, <strong>and</strong> identify issues that most needed to be attacked. Op<strong>in</strong>ion
LOCKHEED MARTIN 249leaders <strong>in</strong>itially served as advisors to Anderson’s senior staff <strong>in</strong> review<strong>in</strong>g culturechange strategies, <strong>and</strong> as conduits of mean<strong>in</strong>g <strong>and</strong> <strong>in</strong>tent to the rest of theorganization by help<strong>in</strong>g others underst<strong>and</strong> more than any official communicationcould ever expla<strong>in</strong> about these strategies.For example, senior leaders decided to change pay policies to reflect a marketbased,broad-b<strong>and</strong><strong>in</strong>g model. As rumors of the changes leaked out, employeereaction was quick <strong>and</strong> negative. In the midst of the reaction, Anderson beganmeet<strong>in</strong>g with groups of his op<strong>in</strong>ion leaders for extensive conversations on thesubject. In these sessions executives shared the bus<strong>in</strong>ess problems, the proposedsolutions, <strong>and</strong> the <strong>in</strong>evitable tradeoffs they faced <strong>in</strong> any solution set. These dialoguescreated change all around the table. Based on <strong>in</strong>put from op<strong>in</strong>ion leaders,executives modified plans. Op<strong>in</strong>ion leaders, by see<strong>in</strong>g the positive <strong>in</strong>tent ofleaders <strong>and</strong> appreciat<strong>in</strong>g the complexity of the issues, changed their op<strong>in</strong>ions.While the company emerged with a better plan, it also emerged with a hundredor so highly credible “<strong>in</strong>-the-trenches” leaders who helped expla<strong>in</strong> reasons <strong>and</strong>issues more deeply than the senior staff could ever hope to <strong>in</strong> an audience ofover ten thous<strong>and</strong> cynical people. The leadership lever seemed to be work<strong>in</strong>g.Although all op<strong>in</strong>ion leaders began <strong>in</strong> this advisor-conduit role, many seizedeven larger leadership opportunities. Some helped formal leaders teach dialogueskills to their peers that supported the goal of creat<strong>in</strong>g a culture based on thecritical behaviors. Others helped lead improvement efforts through Six Sigmaevents. Yet others took key roles <strong>in</strong> design<strong>in</strong>g new performance appraisal, organizationdesign, <strong>and</strong> hir<strong>in</strong>g <strong>and</strong> selection processes that would help improveWorkforce Vitality (see Exhibit 10.2 for more op<strong>in</strong>ion leader roles).This leadership strategy was prov<strong>in</strong>g so useful that Anderson began to meetmonthly with a large group of op<strong>in</strong>ion leaders. These meet<strong>in</strong>gs <strong>in</strong>cluded c<strong>and</strong>iddialogue about the state of the enterprise, progress of companywide improvementteams, <strong>and</strong> identification of barriers that needed to be addressed.CAVEATSMost <strong>in</strong>novations have a host of unexpected consequences. The company op<strong>in</strong>ionleader strategy was no exception. Once word got out that formal leaderswere engag<strong>in</strong>g a special group called Op<strong>in</strong>ion Leaders, some managersresponded with defensiveness. Early rumors pegged op<strong>in</strong>ion leaders as morepromotable; others saw a conflict between op<strong>in</strong>ion leaders’ work <strong>and</strong> themanagement cha<strong>in</strong>. Yet others saw a lack of coord<strong>in</strong>ation between op<strong>in</strong>ionleader groups. Because of a matrix-like organizational design (for example, eng<strong>in</strong>eerswere both members of the eng<strong>in</strong>eer<strong>in</strong>g core <strong>and</strong> deployed to a bus<strong>in</strong>essprogram), some op<strong>in</strong>ion leaders were on the list for multiple vice presidents <strong>and</strong>
250 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEwould be <strong>in</strong>vited to what appeared to be redundant events. Others wonderedwhether op<strong>in</strong>ion leaders were like union committeemen—people whom employeescould take their gripes to <strong>and</strong> who, <strong>in</strong> turn, would be expected to be theirvoice with management.Formal leaders dealt with <strong>in</strong>itial resistance by downplay<strong>in</strong>g the op<strong>in</strong>ion leaderlist, cit<strong>in</strong>g the fact that it was not a perfect process <strong>and</strong> that <strong>in</strong>volvement of op<strong>in</strong>ionleaders is only one way to create change. Senior managers po<strong>in</strong>ted out thathalf of the op<strong>in</strong>ion leaders were also managers. They also rem<strong>in</strong>ded themthat the list came directly from employee <strong>in</strong>put, not from them. Coord<strong>in</strong>ationconflicts were worked out by the op<strong>in</strong>ion leaders themselves; they chose theevents or issues that they felt were appropriate for them to participate <strong>in</strong>.Our <strong>in</strong>tention from the beg<strong>in</strong>n<strong>in</strong>g was to have op<strong>in</strong>ion leader <strong>in</strong>volvementslightly lag <strong>in</strong>volvement of the cha<strong>in</strong> of comm<strong>and</strong>. This is important for two reasons:first, because it is the formal leaders’ job to lead change—<strong>and</strong> engag<strong>in</strong>gop<strong>in</strong>ion leaders too soon absolves them of that responsibility. And second,because giv<strong>in</strong>g op<strong>in</strong>ion leaders advance <strong>in</strong>formation about change provokesjealousy—<strong>and</strong> therefore resistance—from members of the cha<strong>in</strong> of comm<strong>and</strong>.But good <strong>in</strong>tentions don’t always fit reality. Reality at Lockheed Mart<strong>in</strong> was thatmany of the senior leaders dragged their feet month after month <strong>in</strong> implement<strong>in</strong>gactions to <strong>in</strong>volve the cha<strong>in</strong> of comm<strong>and</strong>. So here we sat with a few will<strong>in</strong>gexecutives like Bill Andersen ready to roll with their op<strong>in</strong>ion leaders whilecha<strong>in</strong>-of-comm<strong>and</strong> strategies were caught <strong>in</strong> a traffic jam. We decided to ignoreour better judgment <strong>and</strong> get op<strong>in</strong>ion leaders mov<strong>in</strong>g. In retrospect we’re notsure what would have been best. Change got roll<strong>in</strong>g. Some formal leaders gottheir feathers ruffled. And <strong>in</strong> some ways preemptively <strong>in</strong>volv<strong>in</strong>g op<strong>in</strong>ion leadersput pressure on lagg<strong>in</strong>g executives to get the cha<strong>in</strong>-of-comm<strong>and</strong> strategiesoff dead center. Whatever we should have done—we clearly advocate that thecha<strong>in</strong> of comm<strong>and</strong> should get significant attention prior to <strong>in</strong>volv<strong>in</strong>g op<strong>in</strong>ionleaders.As we’ve worked with op<strong>in</strong>ion leaders we’ve found them to be very sensitiveto the possibility of be<strong>in</strong>g manipulated. Trust <strong>and</strong> credibility are essentialcurrency <strong>in</strong> this relationship. With these, op<strong>in</strong>ion leaders become powerful alliesthat help move the rest of the organization toward productive change. Withouttrust <strong>and</strong> credibility, we believe that any time spent with op<strong>in</strong>ion leaders justmakes them more credible opponents to change efforts. S<strong>in</strong>ce the rest of theorganization will know that formal leaders have attempted to <strong>in</strong>fluence them,their op<strong>in</strong>ions about the relevance <strong>and</strong> desirability of change will carry evenmore weight. It is important, therefore, to realize that op<strong>in</strong>ion leaders mightwalk away from an exchange more negative <strong>and</strong> cynical, <strong>and</strong>, if so, they willcarry that message to the rest of the organization.In the case of Hancock’s company, the challenge of build<strong>in</strong>g trust with op<strong>in</strong>ionleaders was particularly vex<strong>in</strong>g. What Hancock wanted to see change was
LOCKHEED MARTIN 251behavior. Op<strong>in</strong>ion leaders, <strong>in</strong> response, made it clear that unless <strong>and</strong> until theysaw that their formal leaders were will<strong>in</strong>g to change themselves, they would beless will<strong>in</strong>g to spend their credibility help<strong>in</strong>g to <strong>in</strong>fluence others. As senior leaderslearned to work with op<strong>in</strong>ion leaders, a virtuous cycle was created <strong>in</strong> whichleaders demonstrated more openness <strong>and</strong> trust while op<strong>in</strong>ion leaders practicedgreater directness <strong>and</strong> c<strong>and</strong>or.THE IMPACT?The most important impact of op<strong>in</strong>ion leaders is not <strong>in</strong> the headl<strong>in</strong>es, it’s <strong>in</strong> thecafeteria l<strong>in</strong>es. Op<strong>in</strong>ion leaders reach <strong>in</strong>to every conversation, every meet<strong>in</strong>g,<strong>and</strong> every decision made <strong>in</strong> an organization. The question is: Are they <strong>in</strong>fluenc<strong>in</strong>gthese <strong>in</strong>teractions positively or negatively? Although survey results dramaticallyimproved after the leader-as-teacher <strong>and</strong> op<strong>in</strong>ion leader engagementstook hold, we believe the best way to underst<strong>and</strong> how op<strong>in</strong>ion leaders drivechange is through specific anecdotes.A classic example of how op<strong>in</strong>ion leaders exert <strong>in</strong>fluence led to a companywideacceptance of the president’s leader-as-teacher concept. Initially, his seniorstaff was ambivalent about this approach <strong>and</strong> began to slow-roll, the idea. Manybelow them, however, were more vocal <strong>in</strong> their concern. One detractor summedup what others felt when he said: “We’re managers, not tra<strong>in</strong>ers!”While executives deliberated, the operations area moved ahead to pilot theconcept. As it turned out, the most frequently nom<strong>in</strong>ated op<strong>in</strong>ion leader<strong>in</strong> the company was <strong>in</strong> the first operations pilot. He came away conv<strong>in</strong>ced thatthe tra<strong>in</strong><strong>in</strong>g was crucial but that the leader-as-teacher concept was deeply flawed.After receiv<strong>in</strong>g the preparatory tra<strong>in</strong><strong>in</strong>g, he reluctantly began to tra<strong>in</strong> others. Ashe did, his attitude changed, as did his remarks about the leader-as-teacherapproach. In fact, he became such a vocal advocate that he even offered to substitutefor his peers when they needed coverage. While his journey from oppositionto zealot was encourag<strong>in</strong>g, what was more important was the <strong>in</strong>fluence itexerted on the dozens of others who witnessed it.Although we expected this peer effect, what surprised us was the <strong>in</strong>fluencehe wielded upward. In one session <strong>in</strong> which the senior staff deliberated, onceaga<strong>in</strong>, on whether to make a companywide commitment to leader-as-teacher,Russ Ford, the vice president of operations, described this man’s journey. At thefirst mention of his name, those who had been shuffl<strong>in</strong>g papers <strong>and</strong> hold<strong>in</strong>gside conversations stopped. Executives also respected him, <strong>and</strong> they knew hewas no pushover. As the VP told the story, previously skeptical staff membersbegan ask<strong>in</strong>g genu<strong>in</strong>e questions. At the conclusion, op<strong>in</strong>ions had changed.Although not even present dur<strong>in</strong>g the discussion, this op<strong>in</strong>ion leader hadexerted powerful <strong>in</strong>fluence.
252 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEBeyond anecdotes, it is always hard to disentangle cause-<strong>and</strong>-effect <strong>in</strong> largescaleorganizational change efforts. This case is no different. A large number ofdiscrete change <strong>in</strong>itiatives were implemented <strong>in</strong> cascad<strong>in</strong>g <strong>and</strong> overlapp<strong>in</strong>gways throughout the organization. However, it is possible to exam<strong>in</strong>e data thatspeak to all change efforts to see whether results are consistent with the tim<strong>in</strong>gof particular <strong>in</strong>terventions. In this case, the regular survey results providesome <strong>in</strong>sight <strong>in</strong>to the impact of the change effort (see Exhibit 10.3 for surveyf<strong>in</strong>d<strong>in</strong>gs). Survey results over the first year <strong>and</strong> half of the change <strong>in</strong>itiative(measured <strong>in</strong> April <strong>and</strong> September of 1998 <strong>and</strong> February <strong>and</strong> June of 1999)<strong>in</strong>dicated no mean<strong>in</strong>gful change <strong>in</strong> the critical behaviors. This changed onthe December 1999 survey, where statistically significant (p .001) <strong>and</strong>mean<strong>in</strong>gful shifts <strong>in</strong> those results were observed companywide.Although the first op<strong>in</strong>ion leader engagement began <strong>in</strong> the late spr<strong>in</strong>g of1999, it was dur<strong>in</strong>g the last six-month period that most activities <strong>in</strong>volv<strong>in</strong>g op<strong>in</strong>ionleaders <strong>and</strong> leader-teacher efforts were carried out. We believe this is morethan co<strong>in</strong>cidence.Other evidence also po<strong>in</strong>ted to change efforts hav<strong>in</strong>g their desired impact.The surveys provided employees with an opportunity to write about recentchanges they noticed at work. These comments did not show evidenceof change consistent with the Workforce Vitality <strong>in</strong>itiative until the leader-asteacher<strong>and</strong> op<strong>in</strong>ion leader efforts were under way. A shift <strong>in</strong> the tone <strong>and</strong> numberof positive-change comments started to occur on the fourth survey. Evenmore positive changes were noted on the last survey, but this time, they werespecifically attributed to the Workforce Vitality effort. Thus, the tim<strong>in</strong>g ofemployees’ reports of change matched the changes <strong>in</strong> the numerical surveyresults.YOU CHANGED THE CULTURE. SO WHAT?Although it’s always nice to succeed at what you set out to do, sometimes successisn’t worth the cost. So, the ultimate question should not be merely, Didwhat you do actually change the culture? Unless chang<strong>in</strong>g the culture also madea clear bus<strong>in</strong>ess difference, scarce resources should probably have been putelsewhere. After all, Hancock wasn’t pursu<strong>in</strong>g culture change for philosophicalor <strong>in</strong>tr<strong>in</strong>sic reasons. He was conv<strong>in</strong>ced that critical behaviors had to changefor the company to survive—to both w<strong>in</strong> the JSF contract <strong>and</strong> be able to deliveron that contract. From this perspective, the key questions are both Did thebehavior change? <strong>and</strong> Did the changed behaviors lead to improved bus<strong>in</strong>essperformance?With good eng<strong>in</strong>eer<strong>in</strong>g discipl<strong>in</strong>e, Hancock arranged from the beg<strong>in</strong>n<strong>in</strong>g forgood research to help answer these questions. The culture change survey was
LOCKHEED MARTIN 253adm<strong>in</strong>istered approximately every five months. This survey tracked changes <strong>in</strong>the critical behaviors. Movement on this metric was an <strong>in</strong>dicator that the culturehad started to shift.We were able to address the second key question by follow<strong>in</strong>g changes <strong>in</strong>performance <strong>in</strong> each of eighteen F-16 production units. In this case, we wereable to see whether improvement <strong>in</strong> these performance metrics was associatedwith greater success <strong>in</strong> hold<strong>in</strong>g the targeted crucial conversations (seeExhibit 10.4). These results <strong>in</strong>dicate that units that are seen as better able toengage <strong>in</strong> crucial conversations are more efficient <strong>and</strong> productive, <strong>and</strong> producehigher-quality work.Although statistical methods can never f<strong>in</strong>ally answer the questions aboutcausality (that is, did improved performance lead to behavior change or didbehavior change lead to improved performance?), the story here is pretty compell<strong>in</strong>g.First of all, leaders announced an <strong>in</strong>tention to <strong>in</strong>fluence specific criticalbehaviors. Second, they implemented <strong>in</strong>terventions designed to <strong>in</strong>fluencethese behaviors. Measurable behavior change followed the implementationof these <strong>in</strong>terventions. And performance improvement followed change <strong>in</strong>behavior. In fact, research with follow-up focus groups <strong>in</strong>dicated that there wereno examples of performance improvement <strong>in</strong> any unit studied where there wasnot also significant improvement <strong>in</strong> the critical behaviors.An <strong>in</strong>terest<strong>in</strong>g anecdote: as the evidence of culture change was becom<strong>in</strong>gclear, LMTAS was go<strong>in</strong>g through an assessment for the coveted Sh<strong>in</strong>go prize formanufactur<strong>in</strong>g excellence. In the end, not only did LMTAS w<strong>in</strong> that prize, but<strong>in</strong> award<strong>in</strong>g the prize, evaluators specifically applauded the breakthroughapproaches to <strong>in</strong>creas<strong>in</strong>g employee <strong>in</strong>volvement described <strong>in</strong> this chapter.Did culture change help with the JSF w<strong>in</strong>? There is no concrete way ofanswer<strong>in</strong>g that question. Did w<strong>in</strong>n<strong>in</strong>g the Sh<strong>in</strong>go Prize, Industry Week’s Plantof the Year award, <strong>and</strong> most important, demonstrat<strong>in</strong>g the ability to lead <strong>and</strong><strong>in</strong>fluence an organization toward measurably improved performance help? It’shard to th<strong>in</strong>k it didn’t.SUMMARY AND BEST PRACTICESIt is a daunt<strong>in</strong>g challenge to attempt to change widely held <strong>and</strong> deeplyentrenched patterns of behavior across a large <strong>and</strong> complex organization. Andyet there are times when it is the only path to significantly improvedperformance. New strategies or processes are worthless if poorly implemented—<strong>and</strong> behavior is the key to effective implementation. Such was the challengefac<strong>in</strong>g Lockheed Mart<strong>in</strong>.A few best practices emerge from Lockheed Mart<strong>in</strong>’s successful effort tochange its culture <strong>in</strong> its successful pursuit of the Jo<strong>in</strong>t Strike Fighter contract.
254 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEThe major lesson is that a h<strong>and</strong>ful of committed leaders can positively <strong>in</strong>fluencethous<strong>and</strong>s of others with the appropriate leverage.Da<strong>in</strong> Hancock <strong>and</strong> his staff prepared themselves for effective <strong>in</strong>fluence by1. Identify<strong>in</strong>g a few critical behaviors that were easy to tie to improvedperformance2. Sett<strong>in</strong>g a specific <strong>and</strong> measurable improvement goal3. Hold<strong>in</strong>g the top two levels of leaders accountable not for support<strong>in</strong>gculture change activities, but <strong>in</strong>stead for achiev<strong>in</strong>g measurable changes<strong>in</strong> critical behaviorsLockheed Mart<strong>in</strong> leaders ga<strong>in</strong>ed leverage for <strong>in</strong>fluenc<strong>in</strong>g 12,000 others by1. Enabl<strong>in</strong>g formal leaders to take responsibility for <strong>in</strong>fluenc<strong>in</strong>g newbehaviors by hav<strong>in</strong>g them assume the role of “teacher”2. Enlist<strong>in</strong>g <strong>in</strong>formal op<strong>in</strong>ion leaders <strong>in</strong> lead<strong>in</strong>g change by identify<strong>in</strong>gthem, listen<strong>in</strong>g to them, <strong>and</strong> <strong>in</strong>volv<strong>in</strong>g them <strong>in</strong> strategic waysAPPENDIXEVERETT ROGERSLessons from Known Studies of DiffusionEverett Rogers is well known for his systematic study of how new ideas <strong>and</strong> behaviorscatch on <strong>in</strong> large <strong>and</strong> complex populations. There is evidence of his <strong>in</strong>fluence<strong>in</strong> words he helped <strong>in</strong>troduced <strong>in</strong>to bus<strong>in</strong>ess usage such as “early adopters” <strong>and</strong>“laggards.” What is less known is that he began his academic <strong>in</strong>terest after a summerjob <strong>in</strong> which, as a county agent, he utterly failed to <strong>in</strong>duce Midwest farmers toaccept free advice on what were irrefutably better ways of farm<strong>in</strong>g. He wasstunned.Through this <strong>and</strong> similar experiences, Rogers began a systematic exploration<strong>in</strong>to what came to be known as the diffusion of <strong>in</strong>novations. He looked at everyk<strong>in</strong>d of new behavior one could try to foster. He exam<strong>in</strong>ed what encourages doctorsto beg<strong>in</strong> us<strong>in</strong>g new drugs, what <strong>in</strong>spires farmers to beg<strong>in</strong> us<strong>in</strong>g better farm<strong>in</strong>gtechniques, what motivates people to buy a VCR for the first time, how new managementtechniques are adopted, how pass<strong>in</strong>g fads become popular, <strong>and</strong> so on. Heexam<strong>in</strong>ed 3,085 behavior-change studies, <strong>and</strong> concluded that 84 percent of thepopulation is unlikely to change its behavior based solely on arguments of merit,scientific proof, great tra<strong>in</strong><strong>in</strong>g, or jazzy media campaigns. The majority of thosewho try new behaviors do so because of the <strong>in</strong>fluence of a respected peer.Rogers came to this realization <strong>in</strong> an <strong>in</strong>terest<strong>in</strong>g way. In review<strong>in</strong>g these3,000 studies, he noticed that <strong>in</strong> every one of them, change followed an S-shaped curve. Change beg<strong>in</strong>s slowly <strong>and</strong> progresses grudg<strong>in</strong>gly at first. Gradually
LOCKHEED MARTIN 255a few converts are won over. As more of the “right” converts amass, the processaccelerates. That’s where the S-curve becomes steep. Later, as most of those whoare easy to moderately difficult to engage adopt the <strong>in</strong>novation, the curve levelsback out, f<strong>in</strong>ish<strong>in</strong>g off the S. Progress past this po<strong>in</strong>t slows aga<strong>in</strong>, requir<strong>in</strong>g greateffort.Consider a common challenge, such as attempt<strong>in</strong>g to <strong>in</strong>troduce the use of qualitytools, like fishbone diagrams, process mapp<strong>in</strong>g, <strong>and</strong> Pareto analyses. Manyreports suggest that this <strong>in</strong>novation follows the S-curve precisely. Some people buy<strong>in</strong> fairly quickly, creat<strong>in</strong>g a false sense of momentum. The true picture emergeswhen the <strong>in</strong>itial euphoria wears off <strong>and</strong> leaders realize that, beh<strong>in</strong>d the few faithfulwho are giddy about these new tools, no one else is st<strong>and</strong><strong>in</strong>g <strong>in</strong> l<strong>in</strong>e. A few<strong>in</strong>fluential managers later beg<strong>in</strong> us<strong>in</strong>g the ideas <strong>in</strong> meet<strong>in</strong>gs <strong>and</strong> advocat<strong>in</strong>gprocess-mapp<strong>in</strong>g <strong>in</strong> some of their less-effective departments. These few ga<strong>in</strong> pocketsof support. The adoption curve climbs slowly for about eighteen months. Thisis the stretch of road where many leaders just quit push<strong>in</strong>g, declar<strong>in</strong>g the effort anunofficial failure.If the top leaders persist, they might enjoy the rewards of the steeper part of thecurve—that is, if those who are persuaded before the curve po<strong>in</strong>ts upward arethe right people. The people liv<strong>in</strong>g at this elbow are the key to everyone else. Atfirst Rogers <strong>and</strong> his colleagues called this group “early adopters.” After discover<strong>in</strong>gtheir relationship with everyone to their right on the curve, they began call<strong>in</strong>g them“op<strong>in</strong>ion leaders.”What these scholars found was that op<strong>in</strong>ion leaders tend to adopt new behaviorsfor reasons different from those who show up later. Op<strong>in</strong>ion leaders tend tolisten to various arguments, read objective sources, <strong>and</strong> carefully weigh options.Other characteristics of this group dist<strong>in</strong>guish them, too: they are seen by theirpeers as smarter, better connected, more widely read, <strong>and</strong> more <strong>in</strong>fluential.Whereas op<strong>in</strong>ion leaders often try new th<strong>in</strong>gs because they’ve studied it, othergroups more often adopt because op<strong>in</strong>ion leaders did.The good news <strong>in</strong> all of this is that leaders try<strong>in</strong>g to pound through the layersof clay <strong>in</strong> their organizations can accelerate their progress if they take the time toidentify <strong>and</strong> engage this smaller group of very <strong>in</strong>fluential people. Op<strong>in</strong>ion leadersare the key to accelerat<strong>in</strong>g the S-curve. If leaders miss with these people, they riskmiss<strong>in</strong>g completely.SURVEY DETAILSSurveys were adm<strong>in</strong>istered five times from April 1998 to December 1999, approximatelyfive months apart. Surveys were adm<strong>in</strong>istered electronically to all whitecollaremployees. Represented employees who did not have access to the Internettook a paper-<strong>and</strong>-pencil survey adm<strong>in</strong>istered <strong>in</strong> the company auditorium.Each survey conta<strong>in</strong>ed thirty-two items, eight of which were designed toassess the three critical behaviors. All scales were found to have acceptablereliability (Cronbach’s alpha .70, on each adm<strong>in</strong>istration). Means for eachcritical behavior, at each survey adm<strong>in</strong>istration, are depicted <strong>in</strong> Exhibit 10.3.
256 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEFor the first four surveys, r<strong>and</strong>om samples were drawn represent<strong>in</strong>g from 30 to40 percent of the workforce. Response rates ranged from 33 to 51 percent. For thef<strong>in</strong>al survey, a census was drawn. The response rate for this survey was 44 percent.All participation was voluntary <strong>and</strong> anonymous. Analyses were conductedto ensure that each survey was representative of the demographics of the company,<strong>in</strong> terms of functional area, organizational level, <strong>and</strong> union representation.These proportions were consistent across survey adm<strong>in</strong>istrations <strong>and</strong> consistentwith the proportions for these variables with<strong>in</strong> the company. F<strong>in</strong>ally, results fromrepresented <strong>and</strong> nonrepresented sectors of the workforce paralleled each other,<strong>and</strong> <strong>in</strong>dicated significant changes only on the December 1999 adm<strong>in</strong>istration ofthe survey.Exhibit 10.1. Critical Conversations <strong>in</strong> Six Sigma• People spoke up when they saw wasteful or unproductive practices.• When supervisors were slow <strong>in</strong> respond<strong>in</strong>g to employee needs, employeesspoke up <strong>in</strong> a way that got results.• When upper management needed to pay attention to problems, employees <strong>and</strong>supervisors gave c<strong>and</strong>id feedback up the cha<strong>in</strong> of comm<strong>and</strong> to the appropriateperson.
LOCKHEED MARTIN 257Exhibit 10.2. Potential Op<strong>in</strong>ion Leaders’ Roles <strong>in</strong> Culture ChangeInformation Conduit—Attend brief<strong>in</strong>gs; convey <strong>in</strong>formation to others based onyour underst<strong>and</strong><strong>in</strong>g of company efforts.Advisor—When solicited, give feedback on proposals <strong>and</strong> ideas for improv<strong>in</strong>gvitality <strong>in</strong> the organization.Model—Model the critical behaviors of open communication, personal commitment,<strong>and</strong> sense of urgency.Data Collector—Interview others, run focus groups to discover root issues, <strong>and</strong>help formal leaders improve vitality.Participant, Improvement Event—Participate <strong>in</strong> a focused improvement event,such as a Kaizen event or large-group problem-solv<strong>in</strong>g meet<strong>in</strong>g.Facilitator—Notice unproductive patterns <strong>in</strong> groups <strong>and</strong> among senior managers;c<strong>and</strong>idly share observations with others <strong>and</strong> ga<strong>in</strong> commitment for more effectivestrategies.Teacher—Facilitate s<strong>in</strong>gle-po<strong>in</strong>t lessons aimed at improv<strong>in</strong>g communication <strong>and</strong>team<strong>in</strong>g skills.Improvement Event Leader—Facilitate or lead an improvement event, such as aKaizen event or large-group problem-solv<strong>in</strong>g meet<strong>in</strong>g.Improvement Project Leader—Lead or support specific improvement projects toremove barriers to cultural vitality.Coach Formal Leaders—Give behavioral feedback to leaders from <strong>in</strong>terviews orpersonal experience to promote openness <strong>and</strong> change.
258 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 10.3. Survey Results4.54.44.34.24.143.93.83.73.63.512 3Critical behaviors: 1 = Open communication, 2 = Personal engagement, 3 = Sense of urgencyApril '98 Sept '98 Feb '99 June '99 Dec '99
Exhibit 10.4. Significant Correlations Between Specific Critical Behavior Items<strong>and</strong> Three Performance MetricsLOCKHEED MARTIN 259Efficiency* Productivity QualityPeople challenged .50 .42coworkers when theysaw wasteful or unproductivepractices.When supervisors .53 .52 .49were slow <strong>in</strong> respond<strong>in</strong>gto employee needs, employeesspoke up <strong>in</strong> a way thatgot results.When upper management .68 .43needed to pay attention toproblems, employees <strong>and</strong>supervisors gave c<strong>and</strong>id feedbackup the cha<strong>in</strong> of comm<strong>and</strong> to theappropriate person.*Efficiency is a measure of time per unit, st<strong>and</strong>ardized by size of unit. Productivity reflects the percentageof possible work actually accomplished. Quality is measured by amount of rework required,st<strong>and</strong>ardized by size of unit.Note: Only statistically significant correlations are reported.
260 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEBIBLIOGRAPHYA good source for background <strong>in</strong>formation is The Balanc<strong>in</strong>g Act: Master<strong>in</strong>g the Compet<strong>in</strong>gDem<strong>and</strong>s of <strong>Leadership</strong> by K. Patterson, J. Grenny, R. McMillan, <strong>and</strong> A.Switzler (C<strong>in</strong>c<strong>in</strong>nati, Ohio: Thompson Executive Press, 1996). This book po<strong>in</strong>ts outthat no matter how large or compell<strong>in</strong>g the vision, change leaders need to focus onspecific behaviors as targets for change. The authors develop an underst<strong>and</strong><strong>in</strong>g ofwhat supports exist<strong>in</strong>g behavior <strong>and</strong> what needs to change for new behavior toreplace it. The book <strong>in</strong>cludes a chapter on how to ga<strong>in</strong> leverage through social<strong>in</strong>fluence by work<strong>in</strong>g with op<strong>in</strong>ion leaders.Also see Crucial Conversations: Tools for Talk<strong>in</strong>g When Stakes are High (New York:McGraw-Hill, 2002) by the same authors. This book describes the pivotal role thatcerta<strong>in</strong> common but challeng<strong>in</strong>g conversations play <strong>in</strong> accelerat<strong>in</strong>g or imped<strong>in</strong>gchange—<strong>and</strong> the skills for succeed<strong>in</strong>g at them. The book outl<strong>in</strong>es the pr<strong>in</strong>ciplesreferred to <strong>in</strong> this chapter that were taught by leaders at Lockheed Mart<strong>in</strong>.Everett Rogers’ Diffusion of Innovations (New York: Free Press, 1983) is a sem<strong>in</strong>alwork on lead<strong>in</strong>g change <strong>and</strong> the foundation for the op<strong>in</strong>ion leader <strong>in</strong>terventiondescribed <strong>in</strong> this chapter. Rogers describes the challenges faced <strong>in</strong> the diffusion ofany new idea, whether a new behavior or new medic<strong>in</strong>e, <strong>and</strong> outl<strong>in</strong>es best practicesfrom ongo<strong>in</strong>g meta-research <strong>in</strong>to the hundreds of available studies of change.In The <strong>Leadership</strong> Eng<strong>in</strong>e: How W<strong>in</strong>n<strong>in</strong>g Companies Build Leaders at Every Level(New York: Harper Trade, 1997), Eli Cohen <strong>and</strong> Noel Tichy conclude that w<strong>in</strong>n<strong>in</strong>gcompanies have leaders who “nurture the development of other leaders at all levelsof the organization.” They expla<strong>in</strong> that top leaders must develop a teachable po<strong>in</strong>t ofview on bus<strong>in</strong>ess ideas <strong>and</strong> values, <strong>and</strong> they must have a personal vision that can becodified, embodied as a story, <strong>and</strong> communicated throughout the organization. Inshort, they argue that leaders are teachers, regardless of their level or role.The Tipp<strong>in</strong>g Po<strong>in</strong>t: How Little Th<strong>in</strong>gs Can Make a Big Difference (New York: LittleBrown <strong>and</strong> Company, 2000), by Malcolm Gladwell, describes various roles played by<strong>in</strong>formal <strong>in</strong>fluencers. Gladwell describes Connectors, Mavens, <strong>and</strong> Salesmen—threek<strong>in</strong>ds of <strong>in</strong>formal leaders—<strong>and</strong> their pivotal role <strong>in</strong> the rapid diffusion of new ideas.ABOUT THE CONTRIBUTORSJoseph Grenny is a found<strong>in</strong>g partner <strong>in</strong> VitalSmarts, Inc., a management consult<strong>in</strong>g<strong>and</strong> tra<strong>in</strong><strong>in</strong>g company located <strong>in</strong> Orem, Utah. Prior to start<strong>in</strong>g his owncompany, he spent six years as an executive with the Covey <strong>Leadership</strong> Center.In over fifteen years of organization development consult<strong>in</strong>g, he has workedwith senior leaders <strong>in</strong> Fortune 100 <strong>and</strong> government organizations to br<strong>in</strong>gabout clear <strong>and</strong> measurable culture change. He has authored or co-authorednumerous articles <strong>in</strong> the areas of personal <strong>and</strong> organizational effectiveness, <strong>and</strong>co-authored The Balanc<strong>in</strong>g Act: Master<strong>in</strong>g the Compet<strong>in</strong>g Dem<strong>and</strong>s of<strong>Leadership</strong> <strong>and</strong> Crucial Conversations: Tools for Talk<strong>in</strong>g When Stakes Are High.
LOCKHEED MARTIN 261The latter book is currently on the New York Times <strong>and</strong> Wall Street Journalbest-seller lists. He has designed <strong>and</strong> delivered major culture-change <strong>in</strong>itiativesfor AT&T, Coregis Insurance, IBM, the State of California, <strong>and</strong> Lockheed Mart<strong>in</strong>,among others. Contact: Joseph@VitalSmarts.com.Lawrence Peters is professor of management at the Neeley School of Bus<strong>in</strong>essat Texas Christian <strong>University</strong> <strong>and</strong> president of <strong>Leadership</strong> Solutions. He has publishedover fifty articles <strong>in</strong> lead<strong>in</strong>g journals <strong>and</strong> books, has written two casebooks,<strong>and</strong> is senior editor of the Encyclopedic Dictionary of Human ResourceManagement. He has been the recipient of college <strong>and</strong> university teach<strong>in</strong>gawards, <strong>and</strong> specializes <strong>in</strong> the area of leadership. He currently teaches leadershipcourses at the undergraduate, M.B.A., <strong>and</strong> Executive M.B.A. levels. Heconsults with private <strong>and</strong> public organizations <strong>in</strong> a variety of areas associatedwith change efforts. In the past three years, he has consulted with BellHelicopter, Chubb Insurance, Ford Motor Company, The Hartford InsuranceCompany, Lockheed Mart<strong>in</strong>, Spr<strong>in</strong>t PCS, <strong>and</strong> Verizon Communications. Contact:L.Peters@TCU.edu.M. Qu<strong>in</strong>n Price is a senior manager <strong>in</strong> the Organizational Effectiveness Groupat AT&T Wireless. His expertise <strong>in</strong>cludes lead<strong>in</strong>g cultural transformations,design<strong>in</strong>g responsive organizations, <strong>and</strong> manag<strong>in</strong>g large-scale change. Hisclients have <strong>in</strong>cluded Microsoft, Safeway, S.C. Johnson, <strong>and</strong> Lockheed Mart<strong>in</strong>,among others. His work has been featured <strong>in</strong> the International HR Journal <strong>and</strong>HR Magaz<strong>in</strong>e. Contact: qu<strong>in</strong>n.price@attws.com.Karie Willyerd is the chief talent officer for Solectron Corporation, an electronicsmanufactur<strong>in</strong>g services company. She previously worked at bothH. J. He<strong>in</strong>z <strong>and</strong> Lockheed Mart<strong>in</strong>, where she was director of People <strong>and</strong> Organization<strong>Development</strong>. Currently she is on the board of the International AthenaFoundation <strong>and</strong> is a former board member of ASTD. She holds a master’s degree<strong>in</strong> <strong>in</strong>dustrial <strong>and</strong> performance technology from Boise State <strong>University</strong> <strong>and</strong>bachelor’s degrees <strong>in</strong> English <strong>and</strong> journalism from Texas Christian <strong>University</strong>.She is a 2003 c<strong>and</strong>idate for an Executive Doctorate <strong>in</strong> Management from CaseWestern Reserve <strong>University</strong>. Contact: KarieWillyerd@ca.slr.com.Change Champions—Collectively, this group has served as <strong>in</strong>ternal <strong>and</strong> externalconsultants to a number of major corporations, government agencies, <strong>and</strong>nonprofit organizations that were attempt<strong>in</strong>g to make significant changes (see<strong>in</strong>dividual bios). These client companies have helped us better underst<strong>and</strong> thechange levers reported <strong>in</strong> this chapter—some by not embrac<strong>in</strong>g them, othersby actively do<strong>in</strong>g so. The difference was dramatic <strong>and</strong> helped shape our th<strong>in</strong>k<strong>in</strong>g.We are thankful to clients with whom we have worked <strong>and</strong> know ourunderst<strong>and</strong><strong>in</strong>g reflects what we learned together about creat<strong>in</strong>g successfultransformations.
SCHAPTER ELEVENMattelSThis case study describes Mattel’s Project Platypus—a dynamic change <strong>and</strong><strong>in</strong>novation process for br<strong>in</strong>g<strong>in</strong>g out human potential <strong>in</strong> an organizationthrough the synthesis of collaborative, action-, <strong>and</strong> results-oriented experiences,result<strong>in</strong>g <strong>in</strong> new bus<strong>in</strong>ess opportunities <strong>and</strong> high-performance products.OVERVIEW 263INTRODUCTION 263Postmodernism 264Company as Liv<strong>in</strong>g System 264Figure 11.1: Platypus 265THE INITIATIVE 265The Liv<strong>in</strong>g Stage 266The Theater 266PROJECT PLATYPUS: THE PROCESS 267Scene 1: Immersion 267Exhibit 11.1: Project Platypus: Organization of People, Ideas,<strong>and</strong> Experiences 268Exhibit 11.2: Elements of Story 269Scene 2: Expression 269Exhibit 11.3: Bonds <strong>and</strong> Membrane Form 270Figure 11.2: Person, Obstacle, Want/Need 270Scene 3: Alignment 271Figure 11.3: Bonds Strengthen 272Scene 4: Alignment 273Figure 11.4: Realignment 273Scene 5: Alignment 274Figure 11.5: Impulses <strong>and</strong> Chaos 275Scene 6: Evolution 276Figure 11.6: Impulse <strong>and</strong> Coherence 276Scene 7: Communication 278Figure 11.7: Interaction with Exterior Systems 278262
MATTEL 263RESULTS AND IMPACT 279Figure 11.8: Comments from Platypi 280ABOUT THE CONTRIBUTORS 280OVERVIEWThis case study describes the unique approach used by the Girls Division atMattel to successfully re<strong>in</strong>vent how the world’s number one toy company <strong>in</strong>novates.This is an orig<strong>in</strong>ative prototype that demonstrates how companies canleverage their human assets through new ways to collaborate.The organization <strong>in</strong>itiated a re-occurr<strong>in</strong>g product development process <strong>in</strong>volv<strong>in</strong>gemployees from all areas of the company, which is centered on the conceptof liv<strong>in</strong>g systems with<strong>in</strong> a theatrical model. It promotes collaboration, selforganization,self-generation, <strong>and</strong> self-correction. The division has established aground-break<strong>in</strong>g methodology that capitalizes on human potential, creat<strong>in</strong>g newbr<strong>and</strong> opportunities for growth.The lessons learned by Mattel, Girls Division are important for any company orcommunity seek<strong>in</strong>g new ways to ensure a healthy, susta<strong>in</strong>able, <strong>and</strong> <strong>in</strong>novativefuture.INTRODUCTIONIt’s the year 2001. Mattel, the world’s largest toy company, had survived its firstannual loss <strong>in</strong> more than a decade due to the 1999 acquisition of the Learn<strong>in</strong>gCompany. CEO Robert Eckert, formerly Kraft Foods president, had been <strong>in</strong> placefor a little over a year. Dur<strong>in</strong>g this time, the focus had been primarily on costcutt<strong>in</strong>g <strong>and</strong> supply cha<strong>in</strong> improvement. Mattel had become an efficient mach<strong>in</strong>e.It created over three thous<strong>and</strong> new toys annually between each of its threedivisions: Boys, Girls, <strong>and</strong> Fisher-Price.Ivy Ross, senior vice president of design <strong>and</strong> development for the Girls Division,had been at the company for about three <strong>and</strong> a half years. She had witnessed<strong>and</strong> participated <strong>in</strong> many reeng<strong>in</strong>eer<strong>in</strong>g processes. Mattel alreadydom<strong>in</strong>ated most of the traditional toy categories. It was clear that <strong>in</strong> order tokeep grow<strong>in</strong>g, Mattel needed to start look<strong>in</strong>g for new opportunities. This meantexplor<strong>in</strong>g emerg<strong>in</strong>g patterns <strong>in</strong> the marketplace or creat<strong>in</strong>g new ones.Based on known realities of Mattel’s processes, Ross’s <strong>in</strong>st<strong>in</strong>ct told her thata new process to <strong>in</strong>novation had to be developed. It was important that the newprocess leverage all the human assets that Mattel had. As Margaret Wheatleyputs it, “If we want to succeed with knowledge management, we must attend
264 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEto human needs <strong>and</strong> dynamics. . . . Knowledge [is not] the asset or capital. Peopleare.” The key to <strong>in</strong>novation lies <strong>in</strong> creat<strong>in</strong>g a community where everyonefeels valued, with passion <strong>and</strong> trust at it’s core. The end result must be someth<strong>in</strong>ggreater than any one person could have created by themselves. Theprocess must be as <strong>in</strong>novative as the br<strong>and</strong>s it would produce. It must mirrorsociety from both a cultural <strong>and</strong> humanistic po<strong>in</strong>t of view.What follows is a description of the research that <strong>in</strong>fluenced the approach<strong>and</strong> methodology that has become known as “Project Platypus.”PostmodernismPostmodernism is a term first used <strong>in</strong> architecture dur<strong>in</strong>g the 1960s, when architectsstarted to reject the unique architecture of modernism, express<strong>in</strong>g <strong>in</strong>steada desire for the more classical forms of the past. They began <strong>in</strong>corporat<strong>in</strong>gelements of the past forms onto modern designs. The result was somewhat ofa hybrid or collage approach that used several styles <strong>in</strong> one structure. This createda certa<strong>in</strong> playfulness of architecture, where there were no boundaries <strong>and</strong>no rules, another trait of postmodernism. Art is seen as process performance,where the artist shares identity with the audience, as opposed to art be<strong>in</strong>g made<strong>in</strong> isolation <strong>and</strong> then validated by the audience. There is a movement towardimprovisation with an emphasis on what is emergent or what is be<strong>in</strong>g created atthe moment, not what is scripted. Postmodernism calls for an end to the dom<strong>in</strong>anceof an overarch<strong>in</strong>g belief <strong>in</strong> scientific rationality, because it denies theexistence of any ultimate pr<strong>in</strong>ciple. Noth<strong>in</strong>g can expla<strong>in</strong> everyth<strong>in</strong>g for allgroups, cultures, traditions, or race. Postmodernism focuses on the relative truthfor each person. Interpretation is everyth<strong>in</strong>g; reality is merely our <strong>in</strong>terpretationof what the world means to us. There is a rejection of the autonomous <strong>in</strong>dividualwith an emphasis upon the collective unconscious experience. There is amerg<strong>in</strong>g of subject <strong>and</strong> object, self <strong>and</strong> other, <strong>and</strong> a loss of centralized control,with more politics at the local level, due to a plurality of viewpo<strong>in</strong>ts.Company as Liv<strong>in</strong>g SystemWhat is a liv<strong>in</strong>g system? It is a body that has the capacity to self-organize, selfgenerate,self-correct, <strong>and</strong> self-regulate. It cannot be controlled, only conta<strong>in</strong>edor perturbed by send<strong>in</strong>g impulses rather than <strong>in</strong>structions. A liv<strong>in</strong>g system thriveson feedback, <strong>and</strong> it is known to produce a spontaneous emergence of order atcritical po<strong>in</strong>ts of <strong>in</strong>stability. It seeks relationships <strong>and</strong> connections that lead tomore complex systems <strong>and</strong> relationships. It is alive <strong>and</strong> life enhanc<strong>in</strong>g.There is no reason that we shouldn’t th<strong>in</strong>k of a company <strong>in</strong> the same way.Most of the assets <strong>in</strong> a company are human be<strong>in</strong>gs. Unfortunately, an assemblyl<strong>in</strong>emach<strong>in</strong>e mentality has become etched <strong>in</strong>to our corporate th<strong>in</strong>k<strong>in</strong>g. Socialsusta<strong>in</strong>ability theorist Fritjof Capra notes, “See<strong>in</strong>g a company as a mach<strong>in</strong>e alsoimplies that it will eventually run down, unless it is periodically serviced <strong>and</strong>
MATTEL 265Figure 11.1 Platypus.Plat-y-pus (plat e pes) n, pl. nes. 1. A semi-aquatic, web-footed, egg-lay<strong>in</strong>g mammal with aduck’s bill. 2. An animal made up of two different species. 3. An uncommon mix. 4. A wholenew k<strong>in</strong>d of animal. 5. An accidental creature. 6. An animal that never should have existed.7. Unexpected, yet oddly underst<strong>and</strong>able.rebuilt by management. It cannot change by itself; all changes need to bedesigned by someone else.” A liv<strong>in</strong>g system, however, conta<strong>in</strong>s all the generativeattributes that a company needs to survive <strong>and</strong> flourish. Some of these attributesare the constant generation of novelty, partnership through relationship, <strong>and</strong>a strong sense of community around a common set of values. Liv<strong>in</strong>g systemscont<strong>in</strong>ually create, or re-create themselves by transform<strong>in</strong>g or replac<strong>in</strong>g theircomponents. Companies, <strong>in</strong> contrast, have a very hard time chang<strong>in</strong>g. In fact,they often have to be “reeng<strong>in</strong>eered” <strong>in</strong>stead of naturally evolv<strong>in</strong>g.Therefore, it was determ<strong>in</strong>ed that the Mattel process should embrace theknown tenants of postmodernism: ambiguity, hybridity, improvisation, performance,<strong>and</strong> fun. It should embody the attributes of a liv<strong>in</strong>g system as well:openness, regeneration, <strong>in</strong>clusiveness, chaos, <strong>and</strong> coherence.The stage was set. Ross was the playwright <strong>and</strong> she needed a director. Shehired David Kuehler to lead the project. Project Platypus was born!THE INITIATIVEProject Platypus was launched <strong>in</strong> 2001 as a way of creat<strong>in</strong>g new opportunitiesfor Mattel. The deliverables <strong>in</strong>clude a new br<strong>and</strong> that can deliver atleast $100 million <strong>in</strong> revenue by the third year <strong>in</strong> the marketplace. The f<strong>in</strong>al
266 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEpresentation <strong>in</strong>cludes tested products, packag<strong>in</strong>g, merch<strong>and</strong>is<strong>in</strong>g ideas, <strong>and</strong> afull f<strong>in</strong>ancial analysis.This was accomplished by choos<strong>in</strong>g twelve Mattel employees from differentareas of the bus<strong>in</strong>ess unit. They vacated their exist<strong>in</strong>g jobs for twelve weeks<strong>and</strong> shed their titles <strong>and</strong> their hierarchical way of work<strong>in</strong>g. They worked <strong>in</strong> theProject Platypus space as part of a liv<strong>in</strong>g system <strong>in</strong> a postmodern way. Alumniwere released back <strong>in</strong>to the system, where they utilized their newly acquiredskills to share the process with their managers <strong>and</strong> colleagues. Each sessionwould be unique. The participants <strong>and</strong> the vision, or bus<strong>in</strong>ess opportunity thatneed to be explored, would change with each session.F<strong>in</strong>ally, Ross <strong>and</strong> Kuehler needed a model to embody this k<strong>in</strong>d of th<strong>in</strong>k<strong>in</strong>g.They found it <strong>in</strong> the theater.The Liv<strong>in</strong>g StageImmerse people <strong>in</strong> universal <strong>and</strong> extreme situations which leave them onlya couple of ways out, arrange th<strong>in</strong>gs so that <strong>in</strong> choos<strong>in</strong>g the way out theychoose themselves, <strong>and</strong> you’ve won—the play is good.—Jean-Paul Sartre, Sartre on Theater 1In theater, people from a variety of discipl<strong>in</strong>es converge <strong>in</strong> one place <strong>and</strong> servea common vision, the play. It’s a process of openness, collaboration, <strong>and</strong> wholeness.The group def<strong>in</strong>es a work<strong>in</strong>g methodology that allows for personal <strong>and</strong>group expression—a liv<strong>in</strong>g system. The group’s process must embody “real life”so they can create a believable fantasy life on stage.Although plays, <strong>and</strong> the play itself, change from production to production,there is an <strong>in</strong>nate process <strong>and</strong> language that is carried <strong>in</strong>side each member of thecommunity. It allows members to align themselves to a common vision, the play,yet rema<strong>in</strong>s flexible <strong>and</strong> open enough for creativity to emerge organically.The TheaterA new process required a new theater, a place that would <strong>in</strong>spire collaboration,play, <strong>and</strong> creative th<strong>in</strong>k<strong>in</strong>g. Space was located across the park<strong>in</strong>g lot from theDesign Center. Grass-green floor<strong>in</strong>g was <strong>in</strong>stalled, <strong>and</strong> skylights were punched<strong>in</strong>to the roof, provid<strong>in</strong>g bright sunlight. “It feels like a meadow,” said one of theconstruction crew. The furniture consisted of beanbag chairs, ergonomicallydesigned office seat<strong>in</strong>g, <strong>and</strong> large rubber balls to sit <strong>and</strong> bounce on. All of thedesks were on wheels so they could be moved around to create a variety ofgroup configurations. Many of the possessions taken for granted <strong>in</strong> traditionaloffices would be shared, such as computers, telephones, <strong>and</strong> office supplies.Adjacent to the great room were two smaller rooms. The first, a library <strong>and</strong>lounge for read<strong>in</strong>g <strong>and</strong> off-l<strong>in</strong>e socializ<strong>in</strong>g, <strong>and</strong> the second, a sound room thatconta<strong>in</strong>ed a sound chair, developed by Dr. Jeff Thompson, that would encourage
MATTEL 267maximum creativity by align<strong>in</strong>g the right <strong>and</strong> left halves of the bra<strong>in</strong> by us<strong>in</strong>gmusic embedded with b<strong>in</strong>ary beats. F<strong>in</strong>ally, a twelve-by-forty-foot pushp<strong>in</strong> wallwas <strong>in</strong>stalled, as well as floor-to-ceil<strong>in</strong>g chalkboards. These would serve asliv<strong>in</strong>g journals to document the processes to come.PROJECT PLATYPUS: THE PROCESSExhibit 11.1 captures how people, ideas, <strong>and</strong> shared experiences aligned themselvesdur<strong>in</strong>g a twelve-week session. Three <strong>in</strong>dependent, yet related, variableswere charted over time: the wall (ideas conta<strong>in</strong>ed on ten- by forty-foot wall),the people (cellular alignment of liv<strong>in</strong>g systems), <strong>and</strong> the scenes (experiences<strong>and</strong> events the group shared).Scene 1: Immersion (Weeks 1 & 2)Immersion set the field for a unique culture to organically unfold. Speakers, participants,<strong>and</strong> experiences were programmed with great detail. There was nospecific formula. We set the vision <strong>and</strong> served it (see Exhibit 11.2). Not theprocess of work. The solutions evolved organically as a result of what we didto discover it.First, the leaders shared the project vision with the group to give them asense of mission. Second, they planted the seedl<strong>in</strong>gs of culture by provid<strong>in</strong>g thegroup with a collection of shared experiences that personified the core valuesof immersion: shared experience, shared knowledge, <strong>and</strong> self-discovery.The Wall. The vision was posted on the wall as a way for the group to visualize<strong>and</strong> hold the overall objective <strong>in</strong> their m<strong>in</strong>ds.The People. Speakers <strong>and</strong> outside experts were <strong>in</strong>vited <strong>in</strong> to promote the corevalues of immersion.Knowledge speakers provided the group with a 360-degree view of the vision.If you’re try<strong>in</strong>g to design a car, you don’t just look at other cars. You look forknowledge <strong>and</strong> <strong>in</strong>spiration <strong>in</strong> out-of-the-way places. We consulted with aJungian analyst, a Ph.D. <strong>in</strong> child development, <strong>and</strong> a Japanese tea master tohone the team’s observational skills. The collection of speakers provided thegroup with the <strong>in</strong>formation <strong>and</strong> context they needed to approach the project withfresh eyes.Self-discovery speakers helped each Platypus rediscover his or her dreams<strong>and</strong> <strong>in</strong>dividuality. A participant said, “This process helped me f<strong>in</strong>d a way backto myself.” Some of the speakers <strong>in</strong>cluded a practitioner <strong>in</strong> collaborative liv<strong>in</strong>gsystems <strong>and</strong> a researcher <strong>in</strong> music <strong>and</strong> bra<strong>in</strong>wave activity. Members wereencouraged to spend time <strong>in</strong> a sound chair to stimulate creativity. The
268 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 11.1. Project Platypus: Organization of People, Ideas, <strong>and</strong> ExperiencesThe WallThe journal of story <strong>and</strong> visual processesPeopleThe evolution of liv<strong>in</strong>g systemsScencesExperiences <strong>and</strong> observationsThe VisionWks. 1–2Scene 1, ImmersionKnowledgeSelf-discoveryDevelop<strong>in</strong>g a liv<strong>in</strong>g systemBra<strong>in</strong>stormResearchStoryStoryStoryResearch Br<strong>and</strong>StoryBra<strong>in</strong>stormBra<strong>in</strong>storm/IdeasSystem/ProductsResearchSystem/ProductsStory Br<strong>and</strong>Br<strong>and</strong> Story<strong>and</strong> StrategySystem <strong>and</strong>ProductsWks. 11–12 Wks. 7–10Wk. 6Wk. 5Wk. 4Wk. 3Exterior impulsesBonds <strong>and</strong>membrane formBonds strengthenRealignmentImpulses <strong>and</strong> chaosImpulses <strong>and</strong> coherenceInteraction with exterior systemsScene 2, ExpressionStoryMultiple discipl<strong>in</strong>esFace-to-faceScene 3, AlignmentImprovisation <strong>and</strong> bra<strong>in</strong>storm<strong>in</strong>gStrengthen<strong>in</strong>g bondsScene 4, AlignmentAlignment around an ideaThe <strong>in</strong>dividual <strong>and</strong> the groupResearchGiftsScene 5, AlignmentChaosTrust <strong>and</strong> respectCoherent th<strong>in</strong>k<strong>in</strong>gScene 6, EvolutionStewardsPartnersBuild<strong>in</strong>gTest<strong>in</strong>gScene 7, CommunicationPresentationBr<strong>and</strong> story <strong>and</strong> strategySystem <strong>and</strong> productsThe Wall — A 10 X 40 foot wallrepresent<strong>in</strong>g the alignment of ideas,stories, <strong>and</strong> systems.The People — Symbolsidentify<strong>in</strong>g the alignment ofpeople as a Liv<strong>in</strong>g System.Scenes — Interconnected events<strong>and</strong> experiences prompt<strong>in</strong>galignment <strong>and</strong> observation.
MATTEL 269Exhibit 11.2. Elements of StoryExterior impulsesThe VisionWks. 1–2Scene 1, ImmersionKnowledgeSelf-discoveryDevelop<strong>in</strong>g a liv<strong>in</strong>g systemSource: Exhibit created by Bill Idelson.objective was to help each participant discover a renewed sense of self <strong>and</strong>expressiveness.Creative culture speakers set the groundwork for a productive liv<strong>in</strong>g system.A cultural mythologist discussed the significance of archetypes <strong>in</strong> story <strong>and</strong> culture,<strong>and</strong> an improvisation artist led the group <strong>in</strong> a variety of theatrical gamesto teach participants the fundamentals of group storytell<strong>in</strong>g <strong>and</strong> bra<strong>in</strong>storm<strong>in</strong>g.One of the most important rules of improvisational theater is to respond to anidea by say<strong>in</strong>g, “yes, <strong>and</strong> . . .” which sets the stage for acknowledgment <strong>and</strong>acceptance of ideas.By the end of immersion, the change <strong>in</strong> many of the <strong>in</strong>dividuals was noticeable.People began to dress differently; they laughed more. Relationships wereform<strong>in</strong>g, <strong>and</strong> people were more comfortable express<strong>in</strong>g their feel<strong>in</strong>gs <strong>and</strong> ideas.This is often referred to as the “<strong>in</strong>clusion phase” of a liv<strong>in</strong>g system. The culturewas beg<strong>in</strong>n<strong>in</strong>g to emerge.Lessons Learned. Time. The group was given time to “graze,” to learn, <strong>and</strong> todevelop mean<strong>in</strong>gful relationships. Many organizations don’t allow employeesthe time they need to prepare for an <strong>in</strong>itiative. The process is often mechanical<strong>and</strong> impersonal. “Here’s the objective <strong>and</strong> the deadl<strong>in</strong>e. You, you, <strong>and</strong> you worktogether.” Imag<strong>in</strong>e the <strong>in</strong>novative ideas that are lost because people becomeslaves to a process.Scene 2: Expression (Week 3)The <strong>in</strong>tent of expression was to allow <strong>in</strong>dividuals to express their <strong>in</strong>terpretationof the vision by us<strong>in</strong>g their learn<strong>in</strong>gs from the first two weeks while cont<strong>in</strong>u<strong>in</strong>gto develop community (Exhibit 11.3).The group was made up of people from multiple discipl<strong>in</strong>es. Some expressedtheir ideas visually, others through words or technology. A common “language”was required—story. What does a person want or need? And what is keep<strong>in</strong>gthem from gett<strong>in</strong>g it? The diagram below is the foundation of all stories. Whetherit is “Little Red Rid<strong>in</strong>g Hood,” War <strong>and</strong> Peace, or a br<strong>and</strong> story, it all starts here.
270 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 11.3. Bonds <strong>and</strong> Membrane FormBonds <strong>and</strong> membrane formStoryWk. 3Scene 2, ExpressionStoryMultiple discipl<strong>in</strong>esFace-to-faceFigure 11.2 Person, Obstacle, Want/Need.Person Obstacle Want/NeedThe Wall. Subjective <strong>and</strong> objective storytell<strong>in</strong>g exercises were performed <strong>and</strong>placed on the wall.Subjective—F<strong>in</strong>d your passion <strong>in</strong> the vision. Create a story about what this<strong>in</strong>itiative means to you <strong>in</strong> a very personal way. Platypi were asked to participate<strong>in</strong> an exercise called “What If?” For example, “What if we couldcreate a br<strong>and</strong> that helped children underst<strong>and</strong> their emotions?”Objective—Tell a story based on someth<strong>in</strong>g you have observed. Platypiwere sent <strong>in</strong>to the field to perform observational research. They createdstories by watch<strong>in</strong>g children play. They identified the physical, mental, <strong>and</strong>emotional aspects of what was tak<strong>in</strong>g place.Platypi shared their stories with the rest of the group, then posted them onthe wall. They analyzed them <strong>and</strong> looked for emergent patterns. The patternsprovided the sparks of the emerg<strong>in</strong>g br<strong>and</strong> story.
MATTEL 271The People. Although people were work<strong>in</strong>g <strong>in</strong>dividually they still needed tostay connected. A check-<strong>in</strong> called “Face-to-Face” was implemented. Each morn<strong>in</strong>gthe group met <strong>in</strong> the center of the room, formed a circle of chairs, <strong>and</strong> simplyconnected with each other, as humans, before the day <strong>and</strong> the workcommenced.Face-to-Face.Any human service where the one who is served should be loved <strong>in</strong> the processrequires community, a face-to-face group<strong>in</strong>g which the liability of each for theother <strong>and</strong> all for one is unlimited, or as close to it as it is possible to get.Trust <strong>and</strong> respect are highest <strong>in</strong> this circumstance <strong>and</strong> an accepted ethicthat gives strength to all is re<strong>in</strong>forced.—Robert K. Greenleaf, Servant <strong>Leadership</strong> 2Face-to-face served three purposes. The first two are expla<strong>in</strong>ed here, <strong>and</strong> thethird will be expla<strong>in</strong>ed later. One, it provided people with a forum to connectwith each other, <strong>and</strong> to be “<strong>in</strong> relationship.” It was important for them to underst<strong>and</strong>their mutual <strong>in</strong>volvement. They discussed topics that were related to theproject, or sometimes, they talked about completely unrelated matters. The ideawas to look each other <strong>in</strong> the eye, connect, <strong>and</strong> renew their relationships on adaily basis.Two, it allowed people to name <strong>and</strong> resolve conflict. Someone once said,spouses should never go to bed angry. The team’s motto was, never go throughthe day <strong>in</strong> conflict. When people are “<strong>in</strong> relationship” conflict isn’t a bad th<strong>in</strong>g.In fact, it’s necessary for a liv<strong>in</strong>g system to survive. Face-to-face gave people theopportunity to name their differences <strong>and</strong> seek resolution with<strong>in</strong> a healthy <strong>and</strong>respectful community.At the end of the expression phase the Platypi seemed fulfilled. They createdmean<strong>in</strong>gful stories that they felt passionate about, <strong>and</strong> by committ<strong>in</strong>g theirstories to the wall they “announced themselves” to the community. In an uncomplicatedway, they were beg<strong>in</strong>n<strong>in</strong>g to build trust <strong>and</strong> respect for each other.Lessons Learned. Vulnerability creativity. The group connected on a dailybasis, which held them <strong>in</strong> relationships of trust <strong>and</strong> respect. When people arevulnerable, they are the most open—free to create. Traditionally, employees havebeen told, “leave your feel<strong>in</strong>gs at home. This is bus<strong>in</strong>ess.” When organizationsstrip humanness from the workplace they strip away human potential <strong>and</strong>creativity as well.Scene 3: Alignment (Week 4)This was the first of three scenes of alignment. It was designed to build on the storiesthat the team had created <strong>and</strong> strengthen the bonds between <strong>in</strong>dividuals (Figure11.3). A renowned product development firm <strong>and</strong> an improvisational artist
272 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEBonds strengthenBra<strong>in</strong>stormStoryBra<strong>in</strong>stormWk. 4Scene 3, AlignmentImprovisation <strong>and</strong> bra<strong>in</strong>storm<strong>in</strong>gStrengthen<strong>in</strong>g bondsFigure 11.3 Bonds Strengthen.were brought <strong>in</strong> to lead the group <strong>in</strong> Creation workshops. The comb<strong>in</strong>ation ofimprovisational theater <strong>and</strong> product development bra<strong>in</strong>storm<strong>in</strong>g techniqueshelped the group create the tools they needed to def<strong>in</strong>e their own ideation process.The Wall. There were twelve stories on the wall, which did they work on first?They voted. Each Platypi was given three Post-it notes, <strong>and</strong> they picked thestories they felt served the vision. The stories with the most votes were the onesthey bra<strong>in</strong>stormed.The wall evolved <strong>in</strong>to two sections with the orig<strong>in</strong>al twelve stories <strong>in</strong> thecenter <strong>and</strong> the more ref<strong>in</strong>ed stories to either side.The People.Group participation <strong>and</strong> agreement remove all the imposed tensions <strong>and</strong>exhaustions of the competitiveness <strong>and</strong> open the way for harmony.—Viola Spol<strong>in</strong>, Improvisation for the Theater 3Individuals gathered <strong>in</strong>to small bra<strong>in</strong>storm<strong>in</strong>g groups <strong>and</strong> aligned themselvesaround the stories they felt most passionate about. One person facilitated<strong>and</strong> acted as the scribe, while the rest of the group added ideas <strong>and</strong> built onthose of others. A playful atmosphere, mutual respect, trust, openness, <strong>and</strong>ownership took center stage. Competitiveness <strong>and</strong> egos were set aside.The group def<strong>in</strong>ed their own rules for bra<strong>in</strong>storm<strong>in</strong>g: No judgment, go forquantity of ideas, build on the ideas of others, there are no bad ideas, noedit<strong>in</strong>g, don’t th<strong>in</strong>k too much, stay connected, <strong>and</strong> pass the pen (rotate scribesdur<strong>in</strong>g the bra<strong>in</strong>storm).This scene put everyth<strong>in</strong>g the group had learned to the test. They• Applied their <strong>in</strong>dividual <strong>and</strong> collective knowledge• Saw how play could enable spontaneity• Felt what it was like to surrender their ideas to serve the story• Discovered the <strong>in</strong>telligence of twelve is far greater than the <strong>in</strong>telligenceof one
MATTEL 273Lessons Learned. The group experienced the power <strong>and</strong> fulfillment of creat<strong>in</strong>gsometh<strong>in</strong>g together through play. It strengthened the bonds between <strong>in</strong>dividuals,<strong>and</strong> competitiveness slipped away.Organizations often rely on competition to act as a catalyst for <strong>in</strong>novation.Employees are left feel<strong>in</strong>g unfulfilled, burnt out, <strong>and</strong> isolated.Imposed competition makes harmony impossible; for it destroys the basic natureof play<strong>in</strong>g by occlud<strong>in</strong>g self <strong>and</strong> by separat<strong>in</strong>g player from player.—Viola Spol<strong>in</strong>, Improvisation for the Theater 4Scene 4: Alignment (Week 5)In this scene Platypi began to express themselves through the stories they feltpassionate about, while still honor<strong>in</strong>g the vison (Figure 11.4). They alignedthemselves around narratives <strong>in</strong> groups of one or two, <strong>and</strong> they used the wallto develop their work, which created a visual representation of the process. Apractice called “Gift Giv<strong>in</strong>g” emerged.The Wall. The Platypi cont<strong>in</strong>ued to develop the stories here. Some achievedthis through research, draw<strong>in</strong>gs, or style boards <strong>and</strong> others through the writtenword or product concepts. Everyth<strong>in</strong>g hit the wall with the vision at its center.Each of these manifestations <strong>in</strong>formed each other. A liv<strong>in</strong>g, breath<strong>in</strong>g br<strong>and</strong>began to coalesce.At one of the open houses we noticed a guest walk to each corner of theroom. He would stop, look at the wall, <strong>and</strong> then move on. We asked him whathe was do<strong>in</strong>g, <strong>and</strong> he said, “I can see that wall from every corner of the room.No matter where I st<strong>and</strong>, I can see where you are <strong>in</strong> the process.”Gifts.We live <strong>in</strong> a gift-giv<strong>in</strong>g economy. Once you create a gift <strong>and</strong> give itaway you are empty, <strong>and</strong> free to create aga<strong>in</strong>.—Sam Hamill, NPR Radio <strong>in</strong>terview 5 Scene 4, AlignmentRealignmentResearchStoryBra<strong>in</strong>storm/IdeasWk. 5Alignment around an ideaThe <strong>in</strong>dividual <strong>and</strong> the groupResearchGiftsFigure 11.4 Realignment.
274 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEParticipants began to give each other “gifts.” If someone created an idea thatseemed right for another person or group, they would draw or write it <strong>and</strong> p<strong>in</strong>it next to their work on the wall. S<strong>in</strong>ce everyone felt a sense of ownership overthe process there was very little competition. Gifts were given away freely.The People. People aligned themselves around ideas they felt passionate about.We never said, “You, you, <strong>and</strong> you will work together on this.” This was theopportunity for <strong>in</strong>dividuals to express themselves. So much of their future workwould be centered on the group. This was the time for a person’s voice to comeforward. Some people chose to work together. The alliances formed organicallyaround an idea.For some, this part of the process was threaten<strong>in</strong>g. They were used to work<strong>in</strong>g<strong>in</strong> an environment where they would have a meet<strong>in</strong>g, disappear <strong>in</strong>to their cubes,<strong>and</strong> emerge only when they had a solution. “My idea is ready now!” Their processwas isolated <strong>and</strong> <strong>in</strong>visible. At first it was very difficult for some members of thegroup to commit their idea to the wall because they knew that it meant giv<strong>in</strong>g itaway. Face-to-face became very mean<strong>in</strong>gful at this stage. Members of the groupwere able to reconnect each morn<strong>in</strong>g before they began their <strong>in</strong>dividual work.At first the group didn’t want to rel<strong>in</strong>quish the comfort <strong>and</strong> security of the groupto work alone. However, they knew they were an organic whole of the liv<strong>in</strong>gsystem. They had the support <strong>and</strong> trust of the group, which allowed them to openup <strong>and</strong> create freely.Lessons Learned. A system of trust, respect, <strong>and</strong> support freed members to createideas for one another <strong>and</strong> give them away as gifts. It made sense. They wereall tell<strong>in</strong>g the same story. In some companies, the br<strong>and</strong> story is held by a chosenfew. They consider it their property. But if all employees have a stake <strong>in</strong> thestory, they will be more will<strong>in</strong>g to share ideas <strong>and</strong> promote it.Scene 5: Alignment (Week 6)The f<strong>in</strong>al scene of alignment was meant to br<strong>in</strong>g the br<strong>and</strong> story <strong>in</strong>to view. Thestories, research, <strong>and</strong> product concepts were orbit<strong>in</strong>g on the wall. The groupsearched for patterns <strong>and</strong> tried to br<strong>in</strong>g coherence to the story. The wall <strong>and</strong>liv<strong>in</strong>g system had entered a new, yet necessary, phase of development—chaos(see Figure 11.5).Chaos theory proposes that when repetitive dynamics beg<strong>in</strong> to <strong>in</strong>teract withthemselves they become so complex that they defy def<strong>in</strong>ition. Yet fromthese “complex dynamics” there eventually emerge new patterns thatare based loosely on the old. In other words, while chaotic systemsbreak down order, they also reconstitute it <strong>in</strong> new forms.—John R. Van Eenwyk, Archetypes <strong>and</strong> Strange Attractors 6
MATTEL 275Impulses <strong>and</strong> chaosResearch Br<strong>and</strong>StorySystem/ProductsWk. 6Scene 5, AlignmentChaosTrust <strong>and</strong> respectCoherent th<strong>in</strong>k<strong>in</strong>gFigure 11.5 Impulses <strong>and</strong> Chaos.The Wall. Like “strange attractors” the research, br<strong>and</strong>, story, <strong>and</strong> product wereorbit<strong>in</strong>g on the wall. The group looked back upon their experience <strong>and</strong> comparedthe patterns of knowledge they acquired earlier to the learn<strong>in</strong>gs <strong>and</strong>macro-patterns on the wall. They were close, but they couldn’t make sense ofit. Two days later, a Platypus “gifted” the wall with the skeleton of a unique system.Then someone else added an idea, then another. Then without warn<strong>in</strong>g,order emerged.The People. This was a difficult time for the group. They rema<strong>in</strong>ed connected;however, their frustration with themselves <strong>and</strong> each other was obvious. Theymoved from <strong>in</strong>clusion to conflict to coherence <strong>and</strong> back aga<strong>in</strong>. They were look<strong>in</strong>gfor mean<strong>in</strong>g, <strong>and</strong> they couldn’t f<strong>in</strong>d it.In the theater, every production reaches a po<strong>in</strong>t when the performers becomestagnant <strong>and</strong> frustrated. Actors are unable to move to the next level of performance.The director sends them impulses, hop<strong>in</strong>g that if they spark one actorthe others will respond <strong>and</strong> rise to the occasion. Unfortunately, this happens <strong>in</strong>its own time. The group f<strong>in</strong>ds its own syncopation. Inevitably, an <strong>in</strong>dividual willraise his or her game <strong>and</strong>, like magic, the rest of the group will synchronize.This transformation often happens <strong>in</strong> the bl<strong>in</strong>k of an eye. When you look back<strong>and</strong> try to identify that lim<strong>in</strong>al moment, you can’t remember when <strong>and</strong> how ithappened. It just did. A similar experience happened at Platypus. One day theywere <strong>in</strong> a state of chaos, where it seemed noth<strong>in</strong>g made sense, <strong>and</strong> a couple ofdays later—coherence. The new br<strong>and</strong> unfolded before their eyes.At this pivotal scene <strong>in</strong> the process the group experienced frustration <strong>and</strong> disorder;they were try<strong>in</strong>g to make sense of their efforts. They could see the light atthe end of the tunnel, but they couldn’t get there. The leaders rema<strong>in</strong>ed supportive,trust<strong>in</strong>g the people <strong>and</strong> the work. They, too, had to surrender to thechaos; it was necessary <strong>and</strong> essential to the process.Lessons Learned. Organizations often experience chaotic moments on the pathto <strong>in</strong>novation. Rather than support the emergence, they become nervous. They
276 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEswitch to Plan B, the “tried <strong>and</strong> true” process. Who knows what could haveemerged if they had only rema<strong>in</strong>ed supportive <strong>and</strong> committed to the process.The experience of the critical <strong>in</strong>stability that precedes the emergence of noveltymay <strong>in</strong>volve uncerta<strong>in</strong>ty, fear, confusion, or self-doubt. Experienced leadersrecognize these emotions as <strong>in</strong>tegral parts of the whole dynamic <strong>and</strong>create a climate of trust <strong>and</strong> mutual support.—Fritjof Capra, The Hidden Connections 7Scene 6: Evolution (Weeks 7–10)The br<strong>and</strong> story <strong>and</strong> system were coherent (Figure 11.6). The group needed toaccess its relevance to the consumer. This was structured <strong>in</strong> three phases: partner<strong>in</strong>g,build<strong>in</strong>g, <strong>and</strong> test<strong>in</strong>g. The face-to-face meet<strong>in</strong>gs became an essential partof their project plann<strong>in</strong>g, <strong>and</strong> the concept of “steward<strong>in</strong>g” was implemented.The Wall. The wall was segmented <strong>in</strong>to three sections: research, story <strong>and</strong>br<strong>and</strong>, <strong>and</strong> system <strong>and</strong> products.The People. The group realigned themselves <strong>in</strong>to small teams around the segmentedwall. Individuals volunteered to act as the po<strong>in</strong>t person between thegroup <strong>and</strong> their partners.• Stewards. A steward was someone who guided the development of a specificproduct, process, or system of th<strong>in</strong>k<strong>in</strong>g. This person may have been butwas not necessarily the <strong>in</strong>dividual who came up with the idea. Once aga<strong>in</strong>, peoplealigned themselves around ideas they felt passionate about. Someone mayhave conceived the orig<strong>in</strong>al idea, gifted it, <strong>and</strong> then moved on. The stewarddidn’t own the idea, the group did. The steward guided the idea to its nextevolution.• Partners. Partnership development was two-fold. First, as part of the biggermission of Platypus, it was important to <strong>in</strong>clude people from other areas ofImpulses <strong>and</strong> coherenceResearchSystem/ProductsStory Br<strong>and</strong>Wks. 7–10Scene 6, EvolutionStewardsPartnersBuild<strong>in</strong>gTest<strong>in</strong>gFigure 11.6 Impulse <strong>and</strong> Coherence.
MATTEL 277the company <strong>in</strong> the process. Second, the team couldn’t do it alone. To br<strong>in</strong>g thebr<strong>and</strong> to life, it was essential for them to f<strong>in</strong>d <strong>and</strong> work with partners that heldthe expertise they needed.Each person that walked through the doors of Platypus was considered apartner <strong>in</strong> the process—from Bob Eckert, the CEO, to the service man whochanged the toner <strong>in</strong> the pr<strong>in</strong>ter. The Platypus room was a field of creativity.Everyone who entered was part of the field. Each guest was asked to leave agift on the wall before they departed, such as an <strong>in</strong>spirational say<strong>in</strong>g or draw<strong>in</strong>gto record their participation <strong>in</strong> the larger story.• Build<strong>in</strong>g. The team partnered with eng<strong>in</strong>eers to help them cost products <strong>and</strong>build prototypes. In the spirit of Platypus they sat down with each partner<strong>and</strong> communicated the story. It was important for them to underst<strong>and</strong> that their<strong>in</strong>put was essential to the evolution of the product. They were not there just tocost the product <strong>and</strong> tell the team whether it could work or not. They were thereto serve the vision <strong>and</strong> tell the story <strong>and</strong> to make each product better from thespark of the idea to the delivery to the consumer.• Test<strong>in</strong>g. As part of the overarch<strong>in</strong>g mission of Platypus, products from eachnew br<strong>and</strong> went through two rounds of focus test<strong>in</strong>g with consumers. Each testwas a milestone for the project; it permitted the team to check <strong>in</strong> <strong>and</strong> seewhether their ideas were resonat<strong>in</strong>g with the consumer.Focus Test 1: Test<strong>in</strong>g of the br<strong>and</strong> th<strong>in</strong>k<strong>in</strong>gFocus Test 2: Br<strong>and</strong> system, fourteen product concepts <strong>in</strong> 2-DFocus Test 3: Br<strong>and</strong> system, six product models, 3-D.• Face-to-face. As mentioned earlier, the third component of face-to-facewas plann<strong>in</strong>g. It allowed the Platypi to def<strong>in</strong>e the process as they went.There was an overall project schedule, but the schedule <strong>and</strong> plann<strong>in</strong>g foreach day happened <strong>in</strong> face-to-face. Every day was valuable. If a focus testdidn’t go well the night before, they had to reth<strong>in</strong>k the product the nextmorn<strong>in</strong>g—they couldn’t wait a day or two. The group had to th<strong>in</strong>k, plan, <strong>and</strong>reach consensus quickly. When twelve people are connected <strong>and</strong> “their po<strong>in</strong>tof concentration” is on the same th<strong>in</strong>g, the comb<strong>in</strong>ed <strong>in</strong>telligence <strong>and</strong> abilityto solve complex problems is remarkable. The fluidity of the face-to-faceallowed them to realign the process <strong>and</strong> create customized solutions to suitthe need.The group had to look both <strong>in</strong>ward <strong>and</strong> outward to further the developmentof the project. Communication was an essential component this phase. Thesmall groups, the larger body, <strong>and</strong> their partners needed to stay <strong>in</strong> relationshipto ensure success.Communication, trust, <strong>and</strong> relationships were crucial at this phase. Multipleprocesses were happen<strong>in</strong>g concurrently. Stewards had the trust <strong>and</strong> support of
278 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEthe rest of the group to guide the micro-processes. They relied on face-to-faceto br<strong>in</strong>g the larger group up to speed <strong>and</strong> to• Adjust daily plann<strong>in</strong>g if necessary• Ensure that all of the processes were “on br<strong>and</strong>”• Use the group <strong>in</strong>telligence to help overcome obstacles <strong>and</strong> reach solutionsLessons Learned. It wasn’t necessary for one or two people to carry the weightof the project on their shoulders. The responsibilities spread out naturally.Stewards had the trust <strong>and</strong> support of the larger body, <strong>and</strong> most important,every Platypus “owned” the story. They didn’t have to constantly check-<strong>in</strong> tomake sure they were mak<strong>in</strong>g the right decisions. How often do corporate managersfeel like they have to micro-manage a process? If employees feel likethey’re part of the big picture, <strong>and</strong> feel trusted, they are much more likely toown their processes as well.Scene 7: Communication (Weeks 11–12)The team’s f<strong>in</strong>d<strong>in</strong>gs were presented <strong>in</strong> the f<strong>in</strong>al week to senior management toatta<strong>in</strong> buy-<strong>in</strong> (Figure 11.7). Shortly thereafter, the strategy for the next phase ofdesign development was <strong>in</strong>itiated. The presentation consisted of the process,research, br<strong>and</strong> strategy, products, <strong>and</strong> recommendations for a three-yearbus<strong>in</strong>ess plan.The Wall. The wall became more ref<strong>in</strong>ed. It evolved <strong>in</strong>to a communication tool,a journal of twelve bra<strong>in</strong>s. As the team’s underst<strong>and</strong><strong>in</strong>g of the <strong>in</strong>itiative becamemore coherent, so did the wall. Anyone could “walk the wall” <strong>and</strong> underst<strong>and</strong>the entire development process from start to f<strong>in</strong>ish.The People. The team had reached an elevated level of <strong>in</strong>terconnectedness.They were all striv<strong>in</strong>g for the same goal. They were work<strong>in</strong>g <strong>in</strong>dividually or <strong>in</strong>small groups, yet they were able to shift their th<strong>in</strong>k<strong>in</strong>g <strong>and</strong> task<strong>in</strong>g swiftly ifInteraction with exterior systemsBr<strong>and</strong> Story<strong>and</strong> StrategySystem <strong>and</strong>ProductsWks. 11–12Scene 7, CommunicationPresentationBr<strong>and</strong> story <strong>and</strong> strategySystem <strong>and</strong> productsFigure 11.7 Interaction with Exterior Systems.
MATTEL 279necessary. They operated <strong>in</strong>side <strong>and</strong> outside of the liv<strong>in</strong>g system with relativeease.In a group, when members reach a certa<strong>in</strong> level of high <strong>in</strong>terconnection, they forma similar web or matrix. The resources, talents <strong>and</strong> expertise of each memberbecome available to the whole group. Inclusion, then, allows the group to shiftfrom work<strong>in</strong>g as parts of a system to work<strong>in</strong>g as a whole system.—Mukara Meredith, MatrixWorks Inc. 8The f<strong>in</strong>al presentation was a performance. It was a chronology of the process,content, <strong>and</strong> methodology. In some <strong>in</strong>stances the members gave testimonials oftheir personal <strong>and</strong> work-related transformations. They felt it was vital for theaudience to underst<strong>and</strong> the complex journey that the <strong>in</strong>dividual, the group, <strong>and</strong>their ideas had taken.RESULTS AND IMPACTThe results of Project Platypus have gone beyond our expectations. The firstgroup produced a hybrid build<strong>in</strong>g-toy br<strong>and</strong> for girls called “Ello,” which went<strong>in</strong>to full distribution <strong>in</strong> Spr<strong>in</strong>g 2003. Accord<strong>in</strong>g to Mattel first quarter f<strong>in</strong>ancialreports, “Ello TM br<strong>and</strong>s were up 7 percent for the quarter.” The Akron BeaconJournal reported on Thursday, October 16 that, “Strong sales of Flavas, PollyPocket, <strong>and</strong> Ello toys led a 15 percent <strong>in</strong>crease <strong>in</strong> sales for other girls br<strong>and</strong>s.”“It blew me away,” said Chris Blyme, a long-time <strong>in</strong>dustry analyst <strong>and</strong> a contribut<strong>in</strong>geditor at Toy Report <strong>and</strong> Toy Wishes. “You rarely see someth<strong>in</strong>g orig<strong>in</strong>alany more <strong>in</strong> this <strong>in</strong>dustry. Usually, everybody copies everybody else’s ideas.”The next two br<strong>and</strong>s (currently <strong>in</strong> development) are equally orig<strong>in</strong>al. Besidesprovid<strong>in</strong>g Mattel with growth opportunities, Project Platypus will <strong>in</strong>fluence theculture of the company more <strong>and</strong> more as each group of employees is releasedback <strong>in</strong>to the system. They become creative catalysts, br<strong>in</strong>g<strong>in</strong>g new ways ofbe<strong>in</strong>g, do<strong>in</strong>g, <strong>and</strong> creat<strong>in</strong>g back to their previous jobs. There have been sight<strong>in</strong>gsof cubicle walls be<strong>in</strong>g taken down, dialogues replac<strong>in</strong>g meet<strong>in</strong>gs, storiesbe<strong>in</strong>g told, <strong>and</strong> gifts be<strong>in</strong>g given every day. The appreciation of <strong>in</strong>tuition <strong>and</strong>the ability to read patterns <strong>in</strong> the field suggest “future possibilities” <strong>and</strong> “imag<strong>in</strong>ation”as qualities of observation. Designers <strong>and</strong> marketers are collaborat<strong>in</strong>g<strong>in</strong> a different way. There is a level of <strong>in</strong>timacy <strong>and</strong> freedom of expression amongthose who have participated <strong>in</strong> the Platypus experience.Most important, there are a grow<strong>in</strong>g number of people <strong>in</strong> the divisionwho have experienced the magic that can transpire when they come to workas who they really are, give all they can give, have fun, <strong>and</strong> be <strong>in</strong>spired at thesame time. As one Platypus said, “All our truth is welcome here.”When asked what makes Platypus unique, the team responded with thecomments <strong>in</strong> Figure 11.8.
280 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEFigure 11.8 Comments from Platypi.ENDNOTES1. Sartre, John Paul. Sartre on Theater. New York: Pantheon Books, 1976.2. Greenleaf, Robert K. Servant <strong>Leadership</strong>: A Journey <strong>in</strong>to the Nature of LegitimatePower <strong>and</strong> Greatness. New York: Paulist Press, 1977, p. 38.3. Spol<strong>in</strong>, Viola. Improvisation for the Theater. Evanston, Ill.: Northwestern <strong>University</strong>Press, 1963, p. 10.4. Spol<strong>in</strong>, Viola. Improvisation for the Theater. Evanston, Ill.: Northwestern <strong>University</strong>Press, 1963, p. 10.5. Sam Hamill, editor of Copper Mounta<strong>in</strong> Press. (Radio <strong>in</strong>terview). NPR/KCRW,Los Angeles, Calif.6. Van Eenwyk, John R. Archetypes <strong>and</strong> Strange Attractors. Toronto: Inner CityBooks, 1997. p. 43.7. Capra, Fritjof. The Hidden Connections. New York: Doubleday, 2002, p. 123.8. Meredith, Mukara. (Interview). MatrixWorks Inc., November 22, 2002.ABOUT THE CONTRIBUTORSIvy Ross is currently the senior vice president of design <strong>and</strong> development <strong>in</strong> theGirls Division of Mattel, Inc. She oversees the design <strong>and</strong> development of allproducts <strong>and</strong> packag<strong>in</strong>g for girls, <strong>in</strong>clud<strong>in</strong>g Barbie dolls, accessories, Diva Stars,
MATTEL 281What’s Her Face, Ello, Polly Pocket <strong>and</strong> six other unique br<strong>and</strong>s, with total salesof approximately $2 billion. In addition, Ross is <strong>in</strong> charge of the model shop,sound lab, chemistry lab, <strong>and</strong> sculpt<strong>in</strong>g functions for all Mattel products. Ross’seducation was <strong>in</strong> design <strong>and</strong> psychology <strong>and</strong> <strong>in</strong>cluded time at the Harvard Bus<strong>in</strong>essSchool. Her high-level background <strong>in</strong> fashion <strong>and</strong> design spans more thantwo decades. She came to Mattel from Calv<strong>in</strong> Kle<strong>in</strong>, where she led a turnaround<strong>in</strong> men’s accessories. Prior to Calv<strong>in</strong> Kle<strong>in</strong>, Ross served as vice president ofproduct design <strong>and</strong> development for Coach, the maker of high-end leathergoods <strong>and</strong> accessories. She also held positions at Liz Claiborne, Bausch & Lomb,<strong>and</strong> Swatch Watch. In addition, Ross was a found<strong>in</strong>g partner of two <strong>in</strong>dependentdesign firms <strong>and</strong> a retail store. She has a proven ability as a design leader<strong>and</strong> also possesses a strong sense of bus<strong>in</strong>ess management. A world-renownedartist, Ross’s <strong>in</strong>novative metal work <strong>in</strong> jewelry is <strong>in</strong> the permanent collection oftwelve <strong>in</strong>ternational museums, <strong>in</strong>clud<strong>in</strong>g the Smithsonian <strong>in</strong> Wash<strong>in</strong>gton D.C.,the Victoria <strong>and</strong> Albert Museum <strong>in</strong> London, <strong>and</strong> the Cooper Hewitt Museum <strong>in</strong>New York City, among others. A w<strong>in</strong>ner of the prestigious National Endowmentfor the Arts grant, Ross has also received the Women <strong>in</strong> Design Award <strong>and</strong>Diamond International award for her creative designs. She has served as a juror,teacher, <strong>and</strong> critic <strong>in</strong> a wide range of product categories.David Kuehler is the director of Project Platypus, an <strong>in</strong>novative product development<strong>in</strong>itiative with<strong>in</strong> the Girls Division of Mattel, Inc. Kuehler’s backgroundencompasses over fifteen years <strong>in</strong> the design <strong>and</strong> enterta<strong>in</strong>ment fields. His educationis <strong>in</strong> design, eng<strong>in</strong>eer<strong>in</strong>g, <strong>and</strong> theater. Before jo<strong>in</strong><strong>in</strong>g Mattel, Kuehler wasdirector, creative development <strong>and</strong> programm<strong>in</strong>g for Robert Redford’s SundanceFilm Centers. At the Walt Disney Company, Kuehler was <strong>in</strong>strumental <strong>in</strong> thedesign development <strong>and</strong> rollout of Club Disney, a location-based enterta<strong>in</strong>mentconcept. He produced <strong>in</strong>itiatives for Walt Disney Imag<strong>in</strong>eer<strong>in</strong>g, R&D, DisneyOnl<strong>in</strong>e, <strong>and</strong> ESPN Zone. As an <strong>in</strong>structor <strong>and</strong> speaker at Art Center College ofDesign, he taught spatial graphics <strong>and</strong> successfully led students <strong>in</strong> a projectsponsored by Intel Corporation, creat<strong>in</strong>g user <strong>in</strong>terfaces <strong>and</strong> products for thenext generation of wireless, personal computers. A versatile th<strong>in</strong>ker with aunique ability to both conceive <strong>and</strong> implement <strong>in</strong>novative ideas, Kuehlercofounded an enterta<strong>in</strong>ment design <strong>and</strong> production company. He has developedshows for Nelvana Communications <strong>and</strong> the Sundance Channel. He is currentlycocreat<strong>in</strong>g children’s programm<strong>in</strong>g with Britt Allcroft, best known for herpopular Thomas the Tank Eng<strong>in</strong>e series.
SCHAPTER TWELVEMcDonald’s CorporationSA leadership development program designed specifically to help participantsprepare for success <strong>in</strong> meet<strong>in</strong>g the <strong>in</strong>creased challenges <strong>and</strong> dem<strong>and</strong>s of oneof the roles most critical to success of the bus<strong>in</strong>ess.OVERVIEW 283Bus<strong>in</strong>ess Context <strong>and</strong> Need for the <strong>Leadership</strong> Program 283Objectives of the <strong>Leadership</strong> <strong>Development</strong> Experience 285ASSESSMENT OF PARTICIPANTS 285The Role of Assessment 285Process <strong>and</strong> Approach 286Insights Emerg<strong>in</strong>g from the Assessment Results 287Initial Feedback <strong>and</strong> Coach<strong>in</strong>g 287THE PROGRAM 288Design<strong>in</strong>g the <strong>Leadership</strong> <strong>Development</strong> Experience 288Content of the Program 289Tools, Instruments, <strong>and</strong> Tra<strong>in</strong><strong>in</strong>g Materials 290Re<strong>in</strong>forc<strong>in</strong>g <strong>and</strong> Build<strong>in</strong>g on Learn<strong>in</strong>g 291EVALUATION 291Methods <strong>and</strong> Measure 291Program Outcomes 292Critical Success Factors 293Lessons Learned <strong>and</strong> Opportunities for Improvement 293Additional Benefits <strong>and</strong> Impacts Realized After InitialProgram Completion 294ENHANCED PROGRAM LAUNCH 295SUMMARY 296EXHIBITSExhibit 12.1: Regional Manager Success Profile 297Exhibit 12.2: Team Charter—Sample Format 298282
MCDONALD’S CORPORATION 283Exhibit 12.3: Team Metrics 299Exhibit 12.4: Team Process Check 300Exhibit 12.5: Pros <strong>and</strong> Cons of Data Collection Methods 301Exhibit 12.6: Force-Field Analysis 303Exhibit 12.7: Project Review Checklist 304Exhibit 12.8: Bus<strong>in</strong>ess Improvement Recommendation Process 306ABOUT THE CONTRIBUTORS 308OVERVIEWBus<strong>in</strong>ess Context <strong>and</strong> Need for the <strong>Leadership</strong> ProgramIn early 2001, the HR Design Center for McDonald’s Corporation <strong>in</strong>itiated thedevelopment of a special leadership development program for a select numberof high-potential managers identified as c<strong>and</strong>idates for possible promotion <strong>in</strong>toa key role <strong>in</strong> its system, that of regional manager (RM). The program developedwas entitled the McDonald’s <strong>Leadership</strong> <strong>Development</strong> Experience. Thischapter will describe what differentiated this program from other leadershipdevelopment activities that had previously been offered with<strong>in</strong> the company,what program elements worked particularly well (<strong>and</strong> which didn’t), <strong>and</strong> howthis program has helped <strong>in</strong>fluence both the tra<strong>in</strong><strong>in</strong>g methodology <strong>and</strong> substantivecontent of current <strong>and</strong> future planned leadership tra<strong>in</strong><strong>in</strong>g <strong>in</strong>itiatives atMcDonald’s.There were a number of factors that led the company to support this <strong>in</strong>itiative.First, the regional manager role was a very significant one with<strong>in</strong> the overalloperations structure of the bus<strong>in</strong>ess. At the time of this <strong>in</strong>itiative, <strong>in</strong>dividuals<strong>in</strong> the regional manager positions were responsible for manag<strong>in</strong>g regions thatcomprised 300 to 400 stores that generated $480—$640 million <strong>in</strong> revenue. Theregional manager position was not only considered a significant bus<strong>in</strong>ess responsibilitybut also a key stepp<strong>in</strong>g stone for many <strong>in</strong>dividuals who were thought tobe capable of advanc<strong>in</strong>g to the senior executive level of the company. Anotherfactor that helped create a felt need for develop<strong>in</strong>g a special leadership developmentprogram focus<strong>in</strong>g on future c<strong>and</strong>idates for the regional manager rolewas the fact that the expectations <strong>and</strong> challenges for this position had shiftedsignificantly over the previous five to ten years as a result of both changes <strong>in</strong> themarketplace <strong>and</strong> with<strong>in</strong> McDonald’s. These changes <strong>in</strong>cluded heightened competition,the <strong>in</strong>creased challenge of grow<strong>in</strong>g market share, RMs be<strong>in</strong>g given moreautonomy as the organization became more decentralized <strong>and</strong> moved decisionmak<strong>in</strong>g closer to the market <strong>and</strong> customer, <strong>and</strong> the grow<strong>in</strong>g expectation for RMsto act strategically as well as tactically. Given this evolution <strong>in</strong> the role, it wasdecided to develop an accelerated leadership development experience that could
284 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEassist potential future RMs to be better prepared to meet these new expectations<strong>and</strong> challenges.A f<strong>in</strong>al factor that helped lead to <strong>and</strong> <strong>in</strong>fluence the development of this programwas a study that had been conducted dur<strong>in</strong>g the year 2000 that wasdesigned to develop a Regional Manager Success Profile. The <strong>in</strong>tent <strong>in</strong> develop<strong>in</strong>gthis profile was to provide a sharp picture of what superior performance<strong>in</strong> the regional manager role looked like <strong>in</strong> order to guide both the future selectionof <strong>in</strong>dividuals for <strong>and</strong> the development of <strong>in</strong>dividuals already <strong>in</strong> thisposition. The development of this profile <strong>in</strong>volved <strong>in</strong>terviews with the presidentof the North American bus<strong>in</strong>ess, all five division presidents report<strong>in</strong>g tohim, key senior human resource executives, selected others who had a clearperspective on the role <strong>and</strong> dem<strong>and</strong>s of the RM position, <strong>and</strong> selected “star”performers <strong>in</strong> the RM position. The content of the <strong>in</strong>terviews focused onidentify<strong>in</strong>g1. How the bus<strong>in</strong>ess had changed <strong>in</strong> the past five to ten years2. How these changes had affected “the recipe for success” <strong>in</strong> the RM role3. The critical results <strong>and</strong> competencies that differentiated the “star” performersfrom the average ones4. What experiences were felt to be key to the preparation of someone tostep successfully <strong>in</strong>to the role <strong>and</strong> the k<strong>in</strong>ds of problems that hadderailed some <strong>in</strong>dividuals who had been put <strong>in</strong>to the positionThe Regional Manager Success Profile that emerged from this work (<strong>and</strong> wasf<strong>in</strong>alized <strong>in</strong> early 2001) identified both the key results that the top RMs neededto produce <strong>and</strong> the critical competencies that they needed to be able to demonstrate<strong>in</strong> order to excel <strong>in</strong> the position (see Exhibit 12.1). The availability of thissuccess profile made the design of a customized leadership experience for develop<strong>in</strong>gfuture RMs easier <strong>and</strong> more effective.In addition to the success profile that emerged from this process, a variety ofother useful <strong>in</strong>formation was gathered <strong>in</strong> the course of this prelim<strong>in</strong>ary workthat has proved valuable <strong>in</strong> guid<strong>in</strong>g the ongo<strong>in</strong>g efforts to design tra<strong>in</strong><strong>in</strong>g <strong>and</strong>development <strong>in</strong>itiatives for regional manager leadership. Key elements of thisadditional <strong>in</strong>formation <strong>in</strong>clude• Specific examples of ten critical but common practical leadership challengesthat <strong>in</strong>dividuals stepp<strong>in</strong>g <strong>in</strong>to the RM role might expect to face<strong>and</strong> that they must be prepared to h<strong>and</strong>le if they are to be effective (forexample, <strong>in</strong>herit<strong>in</strong>g a region that has been steadily los<strong>in</strong>g market share,need<strong>in</strong>g to significantly upgrade the talent or morale level of theregional staff team, need<strong>in</strong>g to strengthen or rebuild trust <strong>and</strong> credibilitywith the owner-operators)
MCDONALD’S CORPORATION 285• Identification of the k<strong>in</strong>ds of jobs or experiences that an <strong>in</strong>dividualmight have prior to becom<strong>in</strong>g an RM that would help better prepare himor her for tak<strong>in</strong>g on the roleAlthough some elements of this additional <strong>in</strong>formation were <strong>in</strong>corporated<strong>in</strong>to the leadership development experience that is the primary focus of thischapter, other aspects are just beg<strong>in</strong>n<strong>in</strong>g to be used to help shape a broader <strong>and</strong>more complete set of development programs <strong>and</strong> experiences that are be<strong>in</strong>gdesigned to better prepare future leaders for success at the regional leadershiplevel throughout McDonald’s.Objectives of the <strong>Leadership</strong> <strong>Development</strong> ExperienceThe design of the leadership development program for high-potential RM c<strong>and</strong>idateshad a number of key objectives. These <strong>in</strong>cluded• Help participants take a critical look at themselves <strong>and</strong> their currentmanagement capabilities <strong>and</strong> develop an <strong>in</strong>dividualized personal learn<strong>in</strong>gplan that could help them <strong>in</strong>crease their likelihood of future successas RMs• Provide participants with an action learn<strong>in</strong>g assignment that would helpthem grow <strong>in</strong> their underst<strong>and</strong><strong>in</strong>g of the bus<strong>in</strong>ess while contribut<strong>in</strong>g tothe development of practical ideas to address the significant bus<strong>in</strong>essissues they worked on• Provide participants with an opportunity to build relationships withkey peers from across the organization with whom they could partner aspart of their ongo<strong>in</strong>g development• Provide significant exposure of the c<strong>and</strong>idates to senior executives <strong>in</strong> theorganization <strong>and</strong> vice versa• Demonstrate the potential value <strong>and</strong> power of action learn<strong>in</strong>g as a newmodel for accelerat<strong>in</strong>g the development of leaders <strong>and</strong> as a way to complementthe more classroom-based approaches that were already <strong>in</strong> useASSESSMENT OF PARTICIPANTSThe Role of AssessmentIt was decided that the Regional Manager Success Profile would be used not onlyto shape the design of the overall program but also as part of the process of assess<strong>in</strong>gthe strengths <strong>and</strong> development needs of <strong>in</strong>dividuals who were participat<strong>in</strong>g<strong>in</strong> the program. Although a number of the <strong>in</strong>dividual c<strong>and</strong>idates selected for thisprogram had been through various management assessment experiences at
286 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEdifferent po<strong>in</strong>ts <strong>in</strong> their careers, none of these assessments had been tailored toevaluate the <strong>in</strong>dividuals aga<strong>in</strong>st the more specific dem<strong>and</strong>s <strong>and</strong> requirements associatedwith success <strong>in</strong> the RM role. Thus, the RM Success Profile provided a toolthat was uniquely tailored to help the <strong>in</strong>dividuals better underst<strong>and</strong> their read<strong>in</strong>essto step <strong>in</strong>to the role <strong>and</strong> to identify the k<strong>in</strong>ds of development needs theymight need to address to enhance their likelihood of effectiveness. As will becomeapparent later <strong>in</strong> this chapter, the opportunity to get feedback about one’s read<strong>in</strong>essfor promotion <strong>in</strong>to a specific role (rather than just feedback about genericmanagement skills) turned out to be one of the more compell<strong>in</strong>g aspects of thisleadership development experience for the participants.It should be made clear that all fourteen participants who had been identifiedas high-potential c<strong>and</strong>idates for future advancement to the RM role wereassessed after they were selected by their division presidents for <strong>in</strong>clusion <strong>in</strong> theprogram. In other words, at this stage, the assessments of <strong>in</strong>dividuals aga<strong>in</strong>stthe RM Success Profile were not used as the basis for selection <strong>in</strong>to the highpotentialgroup <strong>and</strong> this leadership program.The specific objectives of the assessment of <strong>in</strong>dividual participants were to• Provide <strong>in</strong>dividuals with an evaluation of themselves aga<strong>in</strong>st the RMSuccess Profile so that they could identify key strengths to build on <strong>and</strong>key development areas to work on <strong>in</strong> order to enhance their potentialeffectiveness <strong>in</strong> the RM role• Provide the organization with data on development areas the groupmight benefit most from hav<strong>in</strong>g targeted <strong>in</strong> this <strong>and</strong> other future leadershipdevelopment programsProcess <strong>and</strong> ApproachThe assessment process was conducted by a team of external consultants (Ph.D.psychologists) <strong>and</strong> took place between the times that participants were told theyhad been selected for the program <strong>and</strong> that the program was launched.The assessment process itself <strong>in</strong>cluded1. Hav<strong>in</strong>g participants complete prework <strong>in</strong>clud<strong>in</strong>g• A self-assessment aga<strong>in</strong>st the fourteen competencies that comprisedthe RM Success Profile• A brief survey regard<strong>in</strong>g the extent to which they had had the opportunityto already be exposed to, manage, <strong>and</strong> learn from a set of sixlearn<strong>in</strong>g challenges that were similar to practical on-the-job leadershipchallenges typically faced by RMs• A brief synopsis of their career histories highlight<strong>in</strong>g key jobs <strong>and</strong>learn<strong>in</strong>g experiences on the path toward the RM role
MCDONALD’S CORPORATION 2872. Adm<strong>in</strong>ister<strong>in</strong>g an <strong>in</strong>-depth (three- to four-hour) behavioral-eventfocused <strong>in</strong>terview designed to evaluate the <strong>in</strong>dividuals’ career accomplishments<strong>and</strong> experience aga<strong>in</strong>st the key elements <strong>in</strong> the RM SuccessProfile (for example, results “track-record” as well as competenciesdemonstrated)Insights Emerg<strong>in</strong>g from the Assessment ResultsAlthough there was considerable variability across the <strong>in</strong>dividuals assessed,it was apparent that as a group the participants would benefit most from aprogram target<strong>in</strong>g development <strong>in</strong> the competency areas of• Strategic perspective• Maximiz<strong>in</strong>g bus<strong>in</strong>ess performance• Insightful listen<strong>in</strong>g• Problem solv<strong>in</strong>g <strong>and</strong> <strong>in</strong>novation• Mental agilityFurther, when the participants were evaluated <strong>in</strong> terms of the extent of theirprior learn<strong>in</strong>g as a result of opportunities to deal with the various types of keyleadership challenges they would likely face as RMs, it was clear that a numberof them had a somewhat limited view of how to lead the bus<strong>in</strong>ess due to• Hav<strong>in</strong>g “grown up” primarily <strong>in</strong> a s<strong>in</strong>gle region <strong>and</strong> thus hav<strong>in</strong>g seen afairly limited set of bus<strong>in</strong>ess conditions <strong>and</strong> challenges• Work<strong>in</strong>g for relatively few regional managers, thus limit<strong>in</strong>g the model<strong>in</strong>gof varied leadership styles <strong>and</strong> approaches <strong>in</strong> operat<strong>in</strong>g as an RM• Be<strong>in</strong>g accustomed to focus<strong>in</strong>g primarily on execut<strong>in</strong>g the plans <strong>and</strong> tacticsdeveloped for them at more senior management levels (rather thanhav<strong>in</strong>g personal responsibility for formulat<strong>in</strong>g strategy <strong>and</strong> vision)These <strong>in</strong>sights regard<strong>in</strong>g the needs <strong>and</strong> read<strong>in</strong>ess of <strong>in</strong>dividuals targeted fordevelopment for the regional manager role were used to shape the leadershipprogram described here <strong>and</strong> are currently be<strong>in</strong>g leveraged to shape tra<strong>in</strong><strong>in</strong>g<strong>in</strong>itiatives for the future.Initial Feedback <strong>and</strong> Coach<strong>in</strong>gPrior to the start of the leadership program, the <strong>in</strong>dividual consultants who hadconducted the assessments met with each <strong>in</strong>dividual participant <strong>in</strong> a one-on-onesession to discuss his or her results. The <strong>in</strong>tent of this meet<strong>in</strong>g was to helpparticipants identify areas of personal learn<strong>in</strong>g needed prior to the start of theprogram so that they might be able to beg<strong>in</strong> to take advantage of opportunities
288 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEto learn or practice new behaviors <strong>in</strong> the course of the program itself. This feedbacksession also set the stage for subsequent work on the development ofpersonal development action plans for each participant that was to take placedur<strong>in</strong>g <strong>and</strong> after the action learn<strong>in</strong>g program itself.THE PROGRAMDesign<strong>in</strong>g the <strong>Leadership</strong> <strong>Development</strong> ExperienceA number of factors <strong>and</strong> <strong>in</strong>fluences were used to help shape the design decisionsfor the leadership program. Among these were the results of the <strong>in</strong>itialwork done to create the RM Success Profile, the results of the <strong>in</strong>itial assessmentof the skill <strong>and</strong> development levels of participants aga<strong>in</strong>st elements ofthe success profile, <strong>and</strong> an underst<strong>and</strong><strong>in</strong>g of the k<strong>in</strong>ds of leadership developmentexperiences that these participants had already been part of <strong>in</strong> the past.These considerations helped identify some specific needs <strong>and</strong> opportunities<strong>and</strong> led to the design of a leadership development program <strong>in</strong>tended specificallyto• Provide participants with the opportunity to learn, practice, <strong>and</strong> demonstratekey competencies identified as <strong>in</strong> need of development, <strong>in</strong>clud<strong>in</strong>gA broad, strategic conception of the bus<strong>in</strong>essMental agility <strong>and</strong> creativity <strong>in</strong> problem solv<strong>in</strong>gListen<strong>in</strong>g <strong>and</strong> collaboration skills• Expose participants to selected regional manager role models who canexp<strong>and</strong> their perspective about the RM role by shar<strong>in</strong>g some of their keyexperiences <strong>and</strong> learn<strong>in</strong>gs <strong>in</strong> the position• Provide participants with the opportunity to work closely with seniorlevel executives from whom they could learn (about leadership <strong>and</strong>about the bus<strong>in</strong>ess)• Give participants an action learn<strong>in</strong>g assignment that addressed realissues fac<strong>in</strong>g the bus<strong>in</strong>ess overall (<strong>and</strong> that would complement typicalclassroom-based tra<strong>in</strong><strong>in</strong>g offered)• Provide participants with an experience that was both organizationallyrelevant (tied to achiev<strong>in</strong>g McDonald’s growth objectives) <strong>and</strong> personallyrelevant (tied to develop<strong>in</strong>g specific competencies needed forsuccess <strong>in</strong> the RM position to which they aspired)• Take place <strong>in</strong> a concentrated period—n<strong>in</strong>ety days with a def<strong>in</strong>itecommitment to present results to the president of the bus<strong>in</strong>ess <strong>and</strong>his team
Content of the ProgramMCDONALD’S CORPORATION 289The program consisted of four phases over a period of six to twelve months.Phase One. In Phase One, the participants met <strong>in</strong>itially for three <strong>and</strong> a halfdays. Content <strong>in</strong> this phase <strong>in</strong>cluded• Strategic bus<strong>in</strong>ess context for the program <strong>and</strong> for their development asa group• Introduction of personal learn<strong>in</strong>g journals to be used throughout• Explanation of the basis for the RM Success Profile <strong>and</strong> a presentation ofthe aggregate profile results for the entire group• Initial <strong>in</strong>dividual development plann<strong>in</strong>g• The use of learn<strong>in</strong>g partners• Presentations on the bus<strong>in</strong>ess from “star” RM performers• Introduction of the group to the two action learn<strong>in</strong>g assignments• Introduction of division president champions who would assist eachlearn<strong>in</strong>g group through the process• <strong>Development</strong> of team charters for tackl<strong>in</strong>g their action learn<strong>in</strong>gassignments• Presentation of their <strong>in</strong>itial work on their issue to senior management• Record<strong>in</strong>g of personal learn<strong>in</strong>gs from the <strong>in</strong>itial meet<strong>in</strong>gAction Learn<strong>in</strong>g Assignments. The action learn<strong>in</strong>g assignments were tied tospecific bus<strong>in</strong>ess issues or questions that had been identified as high-priorityby the senior leadership of the company. The actual bus<strong>in</strong>ess issues or questionsselected were, <strong>in</strong> fact, drawn from a list of key <strong>in</strong>itiatives identified as partof a “Bluepr<strong>in</strong>t Plan” developed at the corporate level to drive <strong>and</strong> support doubl<strong>in</strong>gthe size of the bus<strong>in</strong>ess <strong>in</strong> ten years. It was believed that ty<strong>in</strong>g the programcontent to the bus<strong>in</strong>ess strategy <strong>in</strong> this way would make the learn<strong>in</strong>gexperience more real <strong>and</strong> compell<strong>in</strong>g for the participants <strong>and</strong> the output morevaluable to the bus<strong>in</strong>ess.Phase Two. Phase Two consisted of the next n<strong>in</strong>ety days over which the twoaction learn<strong>in</strong>g teams tackled their respective assignments:Group One. Identify opportunities <strong>and</strong> make recommendations to simplifymarket<strong>in</strong>g <strong>and</strong> operations with<strong>in</strong> all the regionsGroup Two. Make recommendations for how to transform the critical roleof bus<strong>in</strong>ess consultant <strong>in</strong> the regions <strong>in</strong> order to support the company’sgrowth objectives
290 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEDur<strong>in</strong>g this phase, the groups met on several occasions to bra<strong>in</strong>storm <strong>and</strong>ref<strong>in</strong>e ideas, members carried out <strong>in</strong>dividual assignments (gather<strong>in</strong>g data,access<strong>in</strong>g experts throughout the system for <strong>in</strong>terviews), <strong>and</strong> learn<strong>in</strong>g partnersconnected with each other to stay on track with their <strong>in</strong>dividual learn<strong>in</strong>gobjectives.Phase Three. Phase three <strong>in</strong>volved the entire group of participants reassembl<strong>in</strong>gat corporate <strong>in</strong> n<strong>in</strong>ety days to present their results <strong>and</strong> recommendationsto senior management.Phase Four. Phase Four <strong>in</strong>volved senior management actually implement<strong>in</strong>gmany of the ideas developed by the learn<strong>in</strong>g groups, as well as ongo<strong>in</strong>g followup<strong>and</strong> coach<strong>in</strong>g of <strong>in</strong>dividual participants.Tools, Instruments, <strong>and</strong> Tra<strong>in</strong><strong>in</strong>g MaterialsThere were a number of support tools, <strong>in</strong>struments, <strong>and</strong> tra<strong>in</strong><strong>in</strong>g materials thatwere developed <strong>and</strong> used throughout the program. Among these were• RM Success Profile. This profile was developed as a “bluepr<strong>in</strong>t forsuccess” for <strong>in</strong>dividuals <strong>in</strong> the RM role. It <strong>in</strong>cludes a picture of boththe competencies <strong>and</strong> the results that must be demonstrated <strong>and</strong>produced by RMs <strong>in</strong> order to excel <strong>in</strong> the role. It is provided asExhibit 12.1.• Individual participant assessment <strong>and</strong> development reports developedby the external assessors with <strong>and</strong> for the <strong>in</strong>dividual participants. Thesereports identified <strong>in</strong>dividual strengths <strong>and</strong> weaknesses relative to thesuccess profile.• Personal learn<strong>in</strong>g journals for each participant that focused on identify<strong>in</strong>ghis or her learn<strong>in</strong>g needs <strong>and</strong> objectives, significant learn<strong>in</strong>g events<strong>and</strong> <strong>in</strong>sights, <strong>and</strong> ongo<strong>in</strong>g progress.• Action-learn<strong>in</strong>g tools, <strong>in</strong>clud<strong>in</strong>gTeam tools; for example, Project Map, Team Charter (see Exhibit 12.2),Roles <strong>and</strong> Responsibilities Chart, Team Metrics (Exhibit 12.3), TeamCommunications Model, Team Process Check (Exhibit 12.4)Project tools; for example, Stakeholders Commitment Chart, DataCollection Methods: Pros <strong>and</strong> Cons (Exhibit 12.5), Aff<strong>in</strong>ity Diagram,Force-Field Analysis (Exhibit 12.6), Flowchart Process Measures, Cause<strong>and</strong> Effect Diagram, Project Review Checklist (Exhibit 12.7)Presentation tools; for example, def<strong>in</strong><strong>in</strong>g your audience’s needs,choreograph<strong>in</strong>g the presentation, organiz<strong>in</strong>g the presentation content,us<strong>in</strong>g visuals effectively.
Re<strong>in</strong>forc<strong>in</strong>g <strong>and</strong> Build<strong>in</strong>g on Learn<strong>in</strong>gMCDONALD’S CORPORATION 291Although the program was well received by participants, it was felt importantto take some specific steps to re<strong>in</strong>force the learn<strong>in</strong>gs ga<strong>in</strong>ed. Examples of someof these steps <strong>in</strong>cluded• Follow-up memos to the group regard<strong>in</strong>g program outcomes• Progress reports on the specific participant recommendations that hadbeen implemented• Feedback provided to the managers of the participants so that theycould re<strong>in</strong>force ongo<strong>in</strong>g learn<strong>in</strong>g• Follow-up progress checks with <strong>in</strong>dividual participants by executivecoaches on implementation of development plan ideasIn order to re<strong>in</strong>force the participants’ learn<strong>in</strong>g from the program experiencesteps were taken to help participants be able to connect their program-specific<strong>in</strong>sights <strong>and</strong> learn<strong>in</strong>g plans with the overall organization’s ongo<strong>in</strong>g personaldevelopment system <strong>and</strong> processes:Integration with the HR Systems <strong>in</strong> the Organization• Show<strong>in</strong>g participants how the unique job-specific competencies developedas part of the success profile for the RM position l<strong>in</strong>ked to theorganization’s more generic core <strong>and</strong> leadership competencies that serveas a key component with<strong>in</strong> the overall performance development system• Encourag<strong>in</strong>g participants to take their specific learn<strong>in</strong>g <strong>and</strong> developmentgoals <strong>and</strong> plans emerg<strong>in</strong>g from this program <strong>and</strong> “add them to” thedevelopment plans that they had put together with their managersearlier <strong>in</strong> the year• Provid<strong>in</strong>g participants with <strong>in</strong>formation on how to use the <strong>in</strong>-houseresources for competency development <strong>and</strong> l<strong>in</strong>k it to the k<strong>in</strong>ds ofpersonal development needs identified <strong>in</strong> this program• Offer<strong>in</strong>g additional external resources for personal development (forexample, coach<strong>in</strong>g) where required for specific development needsEVALUATIONMethods <strong>and</strong> MeasuresEfforts were made to identify <strong>and</strong> gather both process- <strong>and</strong> outcome-orientedmeasure of the program’s effectiveness. Examples of the evaluation datacollected <strong>in</strong>cluded• Questionnaires of participants at the end of each of the four phases ofthe program
292 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE• Invitation of comments <strong>and</strong> suggestions from all of the senior executives<strong>in</strong>volved with the program or participants• Data on completion <strong>and</strong> implementation of <strong>in</strong>dividual action plans• Track<strong>in</strong>g of participants’ promotions <strong>and</strong> job success• Follow-up phone calls <strong>and</strong> surveys to program participants one yearafter program completionProgram OutcomesThe evaluation data gathered to date <strong>in</strong>clude <strong>in</strong>formation on objective outcomesthat have occurred with participants, as well as their subjective assessment ofprogram impacts.Objective Data on Program Impact. The recommendations presented by twoteams were both adopted <strong>and</strong> <strong>in</strong>tegrated <strong>in</strong>to the Strategic Agenda for the U.S.bus<strong>in</strong>ess <strong>in</strong> 2002. One focused on simplification at the restaurant level, <strong>and</strong> theother focused on the redef<strong>in</strong>ition of the bus<strong>in</strong>ess consultant’s role.Ten of fourteen participants have been successfully promoted <strong>in</strong>to keyregional leadership positions. Thirty percent of those promoted <strong>in</strong>to thesekey leadership positions were rated at the top of the performance rat<strong>in</strong>g scaleafter only six months <strong>in</strong> position <strong>in</strong> their new jobs. The rema<strong>in</strong><strong>in</strong>g 70 percentwere perform<strong>in</strong>g at a strong level.Subjective Assessment of Program Impact. Results of the one-year follow-upsurvey with program participants <strong>in</strong>dicated that they felt the action-learn<strong>in</strong>gexperience <strong>and</strong> the feedback <strong>and</strong> <strong>in</strong>sights on their own <strong>in</strong>dividual effectiveness<strong>and</strong> development needs have helped them be much more effective <strong>in</strong> theircurrent roles as a result of their• Hav<strong>in</strong>g learned the importance of <strong>and</strong> practic<strong>in</strong>g better listen<strong>in</strong>g skills,particularly when work<strong>in</strong>g <strong>in</strong> groups (for example, allow<strong>in</strong>g others toexpress their op<strong>in</strong>ions, underst<strong>and</strong><strong>in</strong>g before react<strong>in</strong>g)• Recogniz<strong>in</strong>g the value of teams <strong>and</strong> diversity of thought (for example,one general manager (GM) provided the example of how the learn<strong>in</strong>gsfrom the program helped him assemble his team dur<strong>in</strong>g the restructure,pick<strong>in</strong>g talented <strong>in</strong>dividuals to maximize the strengths of his team)• Look<strong>in</strong>g at the bus<strong>in</strong>ess differently today (for example, with a morestrategic perspective, “big picture th<strong>in</strong>k<strong>in</strong>g,” focused on build<strong>in</strong>g a foundationfor the future versus just short-term results) as a result of theprogram’s re<strong>in</strong>forc<strong>in</strong>g their underst<strong>and</strong><strong>in</strong>g of the notion of l<strong>in</strong>kage <strong>and</strong>how the many different aspects of the bus<strong>in</strong>ess need to be consideredwhen mak<strong>in</strong>g changes
MCDONALD’S CORPORATION 293• Enhanced communication with <strong>and</strong> leverag<strong>in</strong>g of people <strong>and</strong> idearesources with<strong>in</strong> the broader McDonald’s system• Putt<strong>in</strong>g <strong>in</strong>creased emphasis on their efforts to coach <strong>and</strong> develop others• Be<strong>in</strong>g exposed to different management styles that allowed them torealize the strengths of different approaches• Becom<strong>in</strong>g more self-aware <strong>and</strong> beg<strong>in</strong>n<strong>in</strong>g to put more emphasis on theirown personal development by work<strong>in</strong>g on the specific issues <strong>and</strong>opportunities that were targeted <strong>in</strong> the feedback from their personalassessmentsCritical Success FactorsFeedback from participants <strong>in</strong>dicated that there were a number of key featuresof the program <strong>and</strong> its design that helped make it successful. The participantsespecially appreciated• Hav<strong>in</strong>g the ability to make a significant contribution to the bus<strong>in</strong>essthrough work<strong>in</strong>g on real bus<strong>in</strong>ess problems <strong>and</strong> see<strong>in</strong>g their recommendationsimplemented by senior management• Hav<strong>in</strong>g their own personal success requirements articulated <strong>in</strong> the contextof a leadership model tailored to the RM position to which theyaspired (as opposed to a more generic model of leadership effectiveness)• Gett<strong>in</strong>g personal feedback <strong>and</strong> coach<strong>in</strong>g based on the assessment oftheir competencies <strong>and</strong> “read<strong>in</strong>ess” for advancement• Hav<strong>in</strong>g the opportunity to network with highly talented peers as well as“content experts” <strong>in</strong> other areas of the bus<strong>in</strong>ess <strong>and</strong> build relationshipswith them• Hav<strong>in</strong>g senior managers be available, <strong>in</strong>volved, <strong>and</strong> engaged <strong>in</strong> theaction learn<strong>in</strong>g program• Hav<strong>in</strong>g the opportunity to be part of a diverse learn<strong>in</strong>g group (for example,different th<strong>in</strong>k<strong>in</strong>g styles, work approaches, ethnicities)• Hav<strong>in</strong>g the opportunity to significantly broaden their underst<strong>and</strong><strong>in</strong>g ofthe organization <strong>and</strong> view of the bus<strong>in</strong>essLessons Learned <strong>and</strong> Opportunities for ImprovementAlthough the feedback from <strong>and</strong> about the program was generally quite positivethere were also some specific opportunities for improvement identified.These <strong>in</strong>cluded• Use of learn<strong>in</strong>g partners. Participants <strong>in</strong>dicated that they did not haveenough time to <strong>in</strong>teract closely with their learn<strong>in</strong>g partner dur<strong>in</strong>g the course of
294 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEthe program. Although they liked the concept, there just wasn’t enough time toreally get to know <strong>and</strong> bond with partners dur<strong>in</strong>g the program.• Assessment results l<strong>in</strong>kage to program. Although the <strong>in</strong>dividualized feedbackthat participants received relative to the RM Success Profile prior to theprogram was felt to be very helpful, participants <strong>in</strong>dicated that it could havebeen better l<strong>in</strong>ked to the specific development activities conta<strong>in</strong>ed <strong>in</strong> the actionlearn<strong>in</strong>g program three-day kick-off <strong>and</strong> follow-up sessions.• Assessment results l<strong>in</strong>kage to IDPs. All of the participants expressed thatthe <strong>in</strong>dividual assessment component of the program had <strong>in</strong>creased their selfawarenessof strengths <strong>and</strong> development needs <strong>and</strong> had worked to make positivebehavioral changes, but none of the participants had <strong>in</strong>corporated theassessment results <strong>in</strong>to their formal <strong>in</strong>dividual development plans (which hadbeen put together earlier <strong>in</strong> the year prior to the program). Part of this was simplydue to a lack of time, but more could have been done to facilitate this l<strong>in</strong>kagebetween program <strong>in</strong>formation <strong>and</strong> the ongo<strong>in</strong>g performance developmentprocess with<strong>in</strong> the company.• Improv<strong>in</strong>g the assessment process. Although a number of the participantsfound the personal assessment process to be quite valuable, many felt that itsvalue or impact could have been heightened by gather<strong>in</strong>g <strong>and</strong> <strong>in</strong>clud<strong>in</strong>g 360-degree feedback to supplement the data gathered <strong>in</strong> the <strong>in</strong>terview conducted by<strong>in</strong>dividual assessors (this suggestion has s<strong>in</strong>ce been implemented). In addition,participants felt that there should have been greater clarity from the very startwith regard to who <strong>in</strong> the organization would have access to the results of theirassessment data (that is, some understood that their data would be shared withtheir managers <strong>and</strong> others understood that it was confidential—for them only).Additional Benefits <strong>and</strong> Impacts Realized AfterInitial Program CompletionIn addition to the successful achievement of the ma<strong>in</strong> objectives of the programdescribed above, a number of additional impacts of the program have also beenrealized with<strong>in</strong> the organization:• The success of the program set the stage for the establishment of asenior level position devoted specifically to executive development.• The positive response to the success profile developed specificallyfor the RM position <strong>and</strong> used to shape this program set the stage for<strong>in</strong>creased use of a leadership competency model with<strong>in</strong> the organization<strong>and</strong> for a commitment to develop additional job-specific success profilesto differentiate the effectiveness <strong>and</strong> potential of <strong>in</strong>dividual managers <strong>in</strong>key roles.• This program demonstrated the viability <strong>and</strong> value of the action learn<strong>in</strong>gapproach to leadership development with<strong>in</strong> McDonald’s. As a result,
MCDONALD’S CORPORATION 295action learn<strong>in</strong>g has now become the preferred methodology for develop<strong>in</strong>gleaders <strong>in</strong> the organization <strong>and</strong> will be used <strong>in</strong> future developmentprograms for high-potential c<strong>and</strong>idates.ENHANCED PROGRAM LAUNCHIn June of 2003, an enhanced leadership development program was launched.The <strong>Leadership</strong> at McDonald’s Program (LAMP) was designed to br<strong>in</strong>gtogether a global pool of twenty-two high-potential directors viewed as hav<strong>in</strong>gpotential to move <strong>in</strong>to officer level positions for a n<strong>in</strong>e-month long <strong>in</strong>tensiveleadership development experience. Key learn<strong>in</strong>gs from the McDonald’s <strong>Leadership</strong><strong>Development</strong> Experience launched <strong>in</strong> 2001 (<strong>and</strong> described above) contributedsignificantly to the design of this new accelerated developmentprogram for McDonald’s.The <strong>Leadership</strong> at McDonald’s Program (LAMP) is an <strong>in</strong>tegrated approach todevelop<strong>in</strong>g high-potential talent. Although it clearly focuses on accelerat<strong>in</strong>g thedevelopment of <strong>in</strong>dividual participants, the program process is also designed tomore broadly benefit the organization by driv<strong>in</strong>g real bus<strong>in</strong>ess results, shap<strong>in</strong>gculture, <strong>and</strong> build<strong>in</strong>g leadership depth. To achieve these goals the programfocuses on• Increas<strong>in</strong>g the ability of participants to improve bus<strong>in</strong>ess results <strong>in</strong> their currentroles as well as prepare them for achiev<strong>in</strong>g success at the next level. Similarto the action learn<strong>in</strong>g component of the <strong>Leadership</strong> <strong>Development</strong> Experience(LDE) that was so well received, LAMP gives participants the opportunity towork <strong>in</strong> small groups to identify significant bus<strong>in</strong>ess improvement opportunities<strong>and</strong> develop specific actionable recommendations to be presented to executivemanagement. In LAMP, participants are also expected to develop theirimprovement recommendations by scann<strong>in</strong>g the external environment <strong>and</strong>us<strong>in</strong>g ideas from sources outside of McDonald’s to encourage <strong>in</strong>novation.• Leverag<strong>in</strong>g participants’ on-the-job accountabilities as opportunities to learn<strong>and</strong> develop. Feedback from the LDE program <strong>in</strong>dicated a need to more closelytie participants’ identified development needs to concrete actions <strong>in</strong>cluded theircurrent Individual <strong>Development</strong> Plans. LAMP focuses on strengthen<strong>in</strong>g the connectionbetween the development needs identified <strong>in</strong> <strong>in</strong>dividual program participants’assessments <strong>and</strong> readily available opportunities <strong>in</strong> their current rolesto build relevant skills. It also <strong>in</strong>corporates the direct <strong>in</strong>volvement of participants’bosses <strong>in</strong>to the development plann<strong>in</strong>g process dur<strong>in</strong>g the program.• Help<strong>in</strong>g participants ga<strong>in</strong> the <strong>in</strong>sight needed to further develop <strong>in</strong>dividualleadership capabilities. Tak<strong>in</strong>g <strong>in</strong>to account the very positive feedback from LDEprogram participants on the value of be<strong>in</strong>g assessed aga<strong>in</strong>st a specific leadership
296 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEmodel tied to success <strong>in</strong> the role(s) they were aspir<strong>in</strong>g to, the LAMP programprovided participants with a look at how they matched up aga<strong>in</strong>st theLAMP leadership framework designed for officer-level positions. In addition,the <strong>in</strong>sights ga<strong>in</strong>ed from the assessment process for LAMP were strengthenedwith the added use of 360-degree feedback <strong>and</strong> realistic work <strong>and</strong> bus<strong>in</strong>esssimulations.• Broaden<strong>in</strong>g participants’ focus <strong>and</strong> exp<strong>and</strong><strong>in</strong>g their m<strong>in</strong>dset from regionalto global. A clear need identified for most participants <strong>in</strong> the <strong>in</strong>itial LDE programwas to broaden their strategic perspective of the bus<strong>in</strong>ess that was generally limitedby the narrow scope of their localized experience. The LAMP programplaced strong emphasis on help<strong>in</strong>g participants develop a more global perspectivethrough the use of a two-week executive education program provided bythe Thunderbird International Consortia.• Provid<strong>in</strong>g opportunities to build strong peer networks—externally as wellas <strong>in</strong>ternally. The opportunity to build strong peer networks as a result of programparticipation was recognized as a key benefit of the <strong>in</strong>itial LDE program.The LAMP program not only facilitated the build<strong>in</strong>g of stronger <strong>in</strong>ternal peernetworks for participants but added the opportunity for participants to extendthis network build<strong>in</strong>g to external peers (from noncompet<strong>in</strong>g global companies)with whom they worked <strong>in</strong> the Thunderbird executive education program.As of this writ<strong>in</strong>g, the participants are approximately three weeks away from theend of the 2003 program. The program will conclude with the subteams present<strong>in</strong>gtheir bus<strong>in</strong>ess improvement recommendations (see summary of the bus<strong>in</strong>essimprovement recommendation process <strong>in</strong> Exhibit 12.8), a debrief<strong>in</strong>g of thepresentation “experience” as well as overall learn<strong>in</strong>gs from all aspects of the program,<strong>and</strong> a team celebration. Program follow-up will <strong>in</strong>clude the establishmentof key mentor<strong>in</strong>g relationships, sponsorship of the 2004 program participants,<strong>and</strong> a “reconnect<strong>in</strong>g” experience six months after conclusion of the program.SUMMARYThis chapter described the development <strong>and</strong> implementation of a leadershipdevelopment program targeted to help prepare selected c<strong>and</strong>idates for advancement<strong>in</strong>to a key leadership position for the McDonald’s bus<strong>in</strong>ess (that is, regionalmanager). The comb<strong>in</strong>ation of do<strong>in</strong>g prelim<strong>in</strong>ary work to identify the specificrequirements for success of leaders <strong>in</strong> this role (versus tak<strong>in</strong>g a “generic” approachto leadership) <strong>and</strong> the use of a more practical <strong>and</strong> engag<strong>in</strong>g tra<strong>in</strong><strong>in</strong>g method(action learn<strong>in</strong>g) resulted not only <strong>in</strong> produc<strong>in</strong>g significant benefits for the <strong>in</strong>itialprogram participants but also <strong>in</strong> help<strong>in</strong>g to set the stage for <strong>in</strong>fluenc<strong>in</strong>g the designof current <strong>and</strong> future leadership <strong>in</strong>itiatives with<strong>in</strong> the company.
MCDONALD’S CORPORATION 297Exhibit 12.1. Regional Manager Success ProfileResultsTypesEmployeeCustomerOwner-operatorStructure <strong>and</strong> processF<strong>in</strong>ancialMetrics• Staff <strong>and</strong> commitment survey results• Underst<strong>and</strong><strong>in</strong>g of company strategy <strong>and</strong> futurevision• Solid staff expertise• Performance st<strong>and</strong>ards <strong>and</strong> accountabilityfor results• <strong>Development</strong> of leadership talent for the system• Customer-count targets• Quality, service, cleanl<strong>in</strong>ess, <strong>and</strong> value st<strong>and</strong>ardsscores• Customer experience feedback• Owner-operator (O/O) feedback/confidence• Results-focused O/O teams• Engagement of O/Os with the strategic platform• Operator cash flow targets• Performance on corporate <strong>in</strong>itiatives• Infrastructure <strong>and</strong> process improvements• Operat<strong>in</strong>g <strong>in</strong>come targets• Positive economic profit (EP) contribution• Net new unit plan targetsCompetenciesTh<strong>in</strong>k<strong>in</strong>g skillsPeople skillsBus<strong>in</strong>essunderst<strong>and</strong><strong>in</strong>g• Mental agility• Focus <strong>and</strong> balance• Strategic perspective• Problem solv<strong>in</strong>g <strong>and</strong> <strong>in</strong>novation• Self-management• Insightful listen<strong>in</strong>g• Impact <strong>and</strong> <strong>in</strong>fluence• Mature assertiveness• Teamwork <strong>and</strong> collaboration• Communicates effectively• Peer leadership• Marketplace perspective• Maximizes bus<strong>in</strong>ess performance• F<strong>in</strong>ancial acumen• Bus<strong>in</strong>ess judgment
298 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 12.2. Team Charter—Sample FormatTeam Leader, Members, <strong>and</strong> Sponsor (if appropriate)Team PurposesTask purposeInterpersonal purposeProcess to Be Used(For example, specific problemsolv<strong>in</strong>gmethodologies, <strong>in</strong>formationtechnologies,conflict-resolution techniques)Boundaries of the Team’s Work(For example, issues outside ofteam’s scope, beg<strong>in</strong>n<strong>in</strong>g <strong>and</strong>end po<strong>in</strong>ts of a process to beimproved, decision-mak<strong>in</strong>gauthority)Key MilestonesL<strong>in</strong>ks to Organization’s Context(How the purpose contributes to specificplans <strong>and</strong> objectives, addresses gaps <strong>in</strong> theorganization’s performance, or addressesspecific customer needs)Success Measures <strong>and</strong> Progress Measures(For example, cycle time, error rates, or coststo be reduced; productivity to be <strong>in</strong>creased;customer satisfaction to be improved; gapsto be closed)Resource Availability <strong>and</strong> Constra<strong>in</strong>ts(For example, budget, equipment, tra<strong>in</strong><strong>in</strong>g)Team Member Time Commitments(For example, formal reviews,deliverable dates, f<strong>in</strong>al deadl<strong>in</strong>e)Team Operat<strong>in</strong>g Pr<strong>in</strong>ciples
MCDONALD’S CORPORATION 299Exhibit 12.3. Team MetricsSubjective MeasuresObjective MeasuresTeam MetricDescriptionResponsibilityHow MeasuredVarianceKick-offFrequencyStatusIssues
300 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 12.4. Team Process CheckMeet<strong>in</strong>g Goals/Focus0 1 2 3 4 5 6 7 8 9 10Confused, diverse, conflict<strong>in</strong>g, unrealistic,misaligned, un<strong>in</strong>terest<strong>in</strong>g to membersClear <strong>and</strong> shared by all, important to all,well aligned, engag<strong>in</strong>g to allPlann<strong>in</strong>g/Track<strong>in</strong>g0 1 2 3 4 5 6 7 8 9 10No agenda or did not follow agenda,poorly plannedAgreed upon agenda, followed <strong>in</strong> sequence,no wasteful digressionsMeet<strong>in</strong>g participation/Involvement0 1 2 3 4 5 6 7 8 9 10A few key members dom<strong>in</strong>at<strong>in</strong>g <strong>and</strong> somemembers not participat<strong>in</strong>gEveryone contribut<strong>in</strong>g <strong>and</strong> <strong>in</strong>volved <strong>in</strong>discussion <strong>and</strong> team processListen<strong>in</strong>g/Communicat<strong>in</strong>g0 1 2 3 4 5 6 7 8 9 10More than one person talks at a time; repetitions,<strong>in</strong>terruptions, <strong>and</strong> side conversations; little <strong>in</strong>quiry<strong>and</strong> advocacyOne person talks at a time, others clarify <strong>and</strong>build on ideas; good balance of advocacy<strong>and</strong> <strong>in</strong>quiryMember trust/Openness0 1 2 3 4 5 6 7 8 9 10Members distrust each other, keep their thoughtsto themselves, <strong>and</strong> don't explore others' data/positionsMutual trust <strong>and</strong> open exploration ofothers' data/positionsProductivity/Driv<strong>in</strong>g results0 1 2 3 4 5 6 7 8 9 10Team decision-mak<strong>in</strong>g process breaks down;unable to reach decisions, resolve conflicts,or focus on resultsParticipate <strong>in</strong> process to reach consensusdecisions; able to surface <strong>and</strong> resolve issuesto reach results
MCDONALD’S CORPORATION 301Exhibit 12.5. Pros <strong>and</strong> Cons of Data Collection MethodsOne-on-one<strong>in</strong>terviewsFocus groupsSurveysPros• Opportunity to buildrelationships with those<strong>in</strong>terviewed.• Direct/<strong>in</strong>direct nonverbalcommunication willallow you to pick upadditional <strong>in</strong>formation.• Details can be clarifiedwhen necessary.• You can get a lot of data<strong>in</strong> a short time.• Group synergy can leadto deeper <strong>in</strong>quiry.• Allows you to obta<strong>in</strong>several po<strong>in</strong>ts of view.• You can get a lot of data,<strong>in</strong>expensively, frommany people.• You can get <strong>in</strong>formationfrom people who mayotherwise be<strong>in</strong>accessible.• Anonymous answerspromote greateropenness.• Can be used to alert theorganization as part ofan <strong>in</strong>tervention.Cons• Gett<strong>in</strong>g access to the peopleyou need to <strong>in</strong>terview maynot be easy.• Telephone <strong>in</strong>terviews sometimescatch people off guard<strong>and</strong> keep them fromcommunicat<strong>in</strong>g.• Those not <strong>in</strong>terviewed mayfeel “discrim<strong>in</strong>ated aga<strong>in</strong>st.”• Schedul<strong>in</strong>g may be difficult.• There is a risk of “groupth<strong>in</strong>k” or self-censor<strong>in</strong>g <strong>in</strong>front of group.• Process may becomedom<strong>in</strong>ated by strong orvocal leader.• Questions cannot beclarified.• You can’t identify the exactsources of the responses, sothey may be difficult to<strong>in</strong>terpret.• You may not receive open<strong>and</strong> honest answers to allquestions.• Require attention to design<strong>and</strong> implementation.(Cont<strong>in</strong>ued)
302 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 12.5. Pros <strong>and</strong> Cons of Data Collection Methods (Cont<strong>in</strong>ued)DirectobservationAnalysis ofexist<strong>in</strong>g dataPros• You get first-h<strong>and</strong> <strong>in</strong>formationfrom what youpersonally observe.• There is less chance ofmisunderst<strong>and</strong><strong>in</strong>g fromsomeone else’sobservation.• You can redirect yourfocus as situationchanges.• Saves time, money, <strong>and</strong>resources.• Data may be morerespected from primaryresearcher.• You may get <strong>in</strong>formationthat you would nototherwise have access to.• What others don’t see asrelevant may be vitallyimportant.Cons• You may not have access tothe situations that need tobe observed.• Direct observation mayalter the situation be<strong>in</strong>gobserved.• It may difficult to observeenough situations to be ableto make generalizations.• The data may be <strong>in</strong>complete,unreliable, or outof date.• The data may be difficult<strong>and</strong> or time consum<strong>in</strong>g toobta<strong>in</strong> or underst<strong>and</strong>.• Data obta<strong>in</strong>ed may beirrelevant to your research.
MCDONALD’S CORPORATION 303Exhibit 12.6. Force-Field AnalysisDriv<strong>in</strong>g or Support<strong>in</strong>gForces <strong>and</strong> TrendsOppos<strong>in</strong>g or Restra<strong>in</strong><strong>in</strong>gForces <strong>and</strong> Trends(Describe forces or trend above arrow)(Draw length of arrow to <strong>in</strong>dicate relative impact)Neutral impact(Add as many arrows as necessary)Notes on us<strong>in</strong>g worksheetIdentify the force or trend whether it is a positive or negative impact on the project.Label the force or trend on the appropriate side of the central (neutral impact) axis.Immediately under the label, draw an arrow whose length reflects the team's perception of the relativeamount of impact that force or trend is likely to exert on the project's success—short arrows <strong>in</strong>dicate m<strong>in</strong>orimpact; longer arrows <strong>in</strong>dicate major impact.
304 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 12.7. Project Review ChecklistTime DateTask Applicable Needed Needed DoneWhat plann<strong>in</strong>g needed forthe execution of the project:• Set project reviewdates at the startof the project.• Ask project team membersto keep the dates sacrosancton their personal calendars.• Create a template so thateach member can reportprogress on his or her part ofthe project <strong>in</strong> a st<strong>and</strong>ardizedway.• Ensure the project sponsor isaware of the dates.Before the review:• Identify all participants; sendannouncements.• Specify the goal of the review.• Develop an agenda with times forspecific areas if the review isgo<strong>in</strong>g to last longer than threehours• Prepare pert<strong>in</strong>ent materials <strong>and</strong>distribute them well <strong>in</strong> advance• If needed, arrange for logisticssupport (room, coffee, food,audio-visual support, etc.).Dur<strong>in</strong>g the review:• Welcome participants <strong>and</strong>make any <strong>in</strong>troductions.
MCDONALD’S CORPORATION 305Exhibit 12.7. (Cont<strong>in</strong>ued)Time DateTask Applicable Needed Needed Done• Ask for someone to act asa recorder <strong>and</strong> take notesunless there is a formal secretary.• Set goals for the review.• Review agenda; modifyas needed.• Announce decision-mak<strong>in</strong>gmodel.• Describe relevant rules <strong>and</strong>processes.• Monitor group processes.• Stay focused on the task.• Sum up at the end of discussions.• Ensure the recorder has capturedany decisions before mov<strong>in</strong>g on.• Watch the logistics <strong>and</strong> timekeep<strong>in</strong>g.If people have effectivelyf<strong>in</strong>ished their contribution, offerto excuse them if they wish.• Before the end, review decisionsreached.• Develop any action plans needed.• Ask participants to evaluate theeffectiveness of the review.• Thank participants.• After the review:• Follow up with m<strong>in</strong>utes as soonas possible. On a fast-mov<strong>in</strong>gproject they should be issued thesame day.• Implement action plan.
306 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 12.8. Bus<strong>in</strong>ess Improvement Recommendation ProcessBackgroundAchiev<strong>in</strong>g McDonald’s bus<strong>in</strong>ess strategies <strong>and</strong> goals will require that McDonald’sleaders do th<strong>in</strong>gs differently. Although it is important that our leaders are confident<strong>in</strong> the company <strong>and</strong> their own ability, that confidence cannot result <strong>in</strong> the perceptionthat others can’t <strong>and</strong> aren’t do<strong>in</strong>g th<strong>in</strong>gs better than we are. In fact, <strong>in</strong> healthycompanies, <strong>in</strong>novation occurs when every leader has a m<strong>in</strong>dset of cont<strong>in</strong>uousimprovement <strong>and</strong> is constantly scann<strong>in</strong>g the external environment for better waysof do<strong>in</strong>g bus<strong>in</strong>ess.Therefore, we are us<strong>in</strong>g the <strong>Leadership</strong> at McDonald’s Program (LAMP) as avehicle to support <strong>and</strong> re<strong>in</strong>force a culture of cont<strong>in</strong>uous improvement <strong>and</strong> <strong>in</strong>novationwith<strong>in</strong> McDonald’s. Each LAMP subteam is charged with leverag<strong>in</strong>g their comb<strong>in</strong>edLAMP experiences, especially their experience at Thunderbird <strong>University</strong>, toscan for potential ideas from external sources that, if adopted or adapted appropriately,have the potential to have a significant impact on McDonald’s performance.Team DeliverableFour subteams are to search <strong>and</strong> discover, from any sources external to McDonald’s,one significant “bus<strong>in</strong>ess improvement opportunity” that they recommend be seriouslyconsidered by the executive councils for possible adoption with<strong>in</strong> McDonald’s.The opportunity should be one that supports or accelerates the achievement of ourkey bus<strong>in</strong>ess strategies.Each team is to do enough research on their recommendation to be able to presenta bus<strong>in</strong>ess case to the chairman’s <strong>and</strong> president’s councils <strong>and</strong> have their proposedaction plan for tak<strong>in</strong>g the recommendation to the next step of feasibility beadopted <strong>and</strong> funded, should fund<strong>in</strong>g be required.Purpose of the Bus<strong>in</strong>ess Improvement Recommendation• Organizational leadership. Re<strong>in</strong>force a cont<strong>in</strong>uous improvement <strong>and</strong> <strong>in</strong>novationm<strong>in</strong>dset <strong>and</strong> culture with<strong>in</strong> McDonald’s. Put a strong focus on the importanceof leaders to be constantly seek<strong>in</strong>g to “scan <strong>and</strong> m<strong>in</strong>e” the external environmentfor ideas that, if adopted with<strong>in</strong> McDonald’s, could have the potentialof positively <strong>and</strong> significantly affect<strong>in</strong>g bus<strong>in</strong>ess results.• Team leadership. Provide each of the four teams a real versus role-play opportunityto learn more about how to be a part of <strong>and</strong> lead a high-perform<strong>in</strong>g teamresponsible for deliver<strong>in</strong>g an important bus<strong>in</strong>ess recommendation to a highprofileaudience of senior leaders of the bus<strong>in</strong>ess.
MCDONALD’S CORPORATION 307Exhibit 12.8. (Cont<strong>in</strong>ued)• Personal leadership. Provide every LAMP participant the opportunity forpersonal development around <strong>in</strong>novation, idea development <strong>and</strong> adaptation,manag<strong>in</strong>g change, stakeholder analysis, <strong>and</strong> executive presentation <strong>and</strong><strong>in</strong>fluence.Ground Rules1. The core idea must come from somewhere outside of McDonald’s.2. There must be evidence to confirm that the recommendation has workedsuccessfully <strong>in</strong> another organization(s).3. There is no need to get approval from a person or any organization <strong>in</strong>sideMcDonald’s before present<strong>in</strong>g recommendation.4. Each team presentation can go no longer than thirty m<strong>in</strong>utes, leav<strong>in</strong>g fifteenm<strong>in</strong>utes for discussion with the council members.5. Teams have complete freedom with<strong>in</strong> this framework.Evaluation of Recommendation by Council Members• Assess the quality of the thought process <strong>and</strong> logic that went <strong>in</strong>to therecommendation.• Evaluate the presentation approach, style, <strong>and</strong> form <strong>in</strong> terms of its impact onpersuad<strong>in</strong>g you toward approv<strong>in</strong>g the recommendation.• Rate the degree to which the team effectively h<strong>and</strong>les questions, challenges,<strong>and</strong> concerns dur<strong>in</strong>g the discussion.• Assess the feasibility of successfully implement<strong>in</strong>g this recommendation <strong>and</strong>ga<strong>in</strong><strong>in</strong>g the benefits for the bus<strong>in</strong>ess.Executive council members will also provide each team with specific, writtenfeedback on what they liked most about the team’s recommendation <strong>and</strong> oneor two suggestions they have for how the team could have improved theirpresentation.
308 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEABOUT THE CONTRIBUTORSJames Intagliata is president <strong>and</strong> founder of the NorthStar Group, a managementconsult<strong>in</strong>g firm that specializes <strong>in</strong> senior-level executive assessment, <strong>in</strong>dividualleadership coach<strong>in</strong>g, <strong>and</strong> competency model<strong>in</strong>g. Over the past twentyyears he has consulted to a diverse group of clients <strong>and</strong> senior executives <strong>in</strong>bus<strong>in</strong>esses rang<strong>in</strong>g <strong>in</strong> size <strong>and</strong> maturity from venture capital–backed start-ups toFortune 100 companies deal<strong>in</strong>g with dramatic new challenges <strong>in</strong> their bus<strong>in</strong>ess<strong>and</strong> marketplace. In addition to his consult<strong>in</strong>g work, he has held faculty positionsat the State <strong>University</strong> of New York at Buffalo <strong>and</strong> the <strong>University</strong> ofMissouri at Kansas City <strong>and</strong> taught organizational theory <strong>and</strong> management atthe graduate level. He received his Ph.D. <strong>in</strong> cl<strong>in</strong>ical psychology <strong>in</strong> 1976 from theState <strong>University</strong> of New York at Buffalo. His recently published articles <strong>in</strong>clude“Leverag<strong>in</strong>g <strong>Leadership</strong> Competencies to Produce <strong>Leadership</strong> Br<strong>and</strong>: Creat<strong>in</strong>gDist<strong>in</strong>ctiveness by Focus<strong>in</strong>g on Strategy <strong>and</strong> Results” (with co-authors DaveUlrich <strong>and</strong> Norm Smallwood) <strong>in</strong> Human Resources Plann<strong>in</strong>g, W<strong>in</strong>ter, 2000.David Small is currently senior director, U.S. leadership development <strong>and</strong> successionplann<strong>in</strong>g for McDonald’s Corporation <strong>in</strong> Oak Brook, Ill<strong>in</strong>ois. In this rolehe is responsible for talent management <strong>and</strong> leadership development forMcDonald’s U.S. bus<strong>in</strong>ess. David has a master’s degree <strong>in</strong> <strong>in</strong>dustrial <strong>and</strong> organizationalpsychology from the <strong>University</strong> of Colorado, <strong>and</strong> has worked <strong>in</strong> thefield of employee selection <strong>and</strong> assessment systems, performance development,succession plann<strong>in</strong>g, <strong>and</strong> leadership development for over fifteen years. David’sprofessional career <strong>in</strong>cludes work<strong>in</strong>g for U.S. West <strong>and</strong> Ameritech/SBC prior tojo<strong>in</strong><strong>in</strong>g McDonald’s Corporation <strong>in</strong> 1995.
SCHAPTER THIRTEENMITSDevelop<strong>in</strong>g the higher-level skills to create <strong>and</strong> susta<strong>in</strong> a self-perpetuat<strong>in</strong>glearn<strong>in</strong>g organization through mental models, systems th<strong>in</strong>k<strong>in</strong>g, personal<strong>and</strong> organizational vision<strong>in</strong>g, <strong>and</strong> several other best practice organizationallearn<strong>in</strong>g exercises <strong>and</strong> tools that achieved significant results.OVERVIEW 310DIAGNOSIS AND ASSESSMENT OF NEEDS 310MAINTAINING THE SPIRIT AND SETTING THE TONE 312INTERVENTION 313Program Design Stage 314Overall Competency Models 315Program Implementation 315The Journey Cont<strong>in</strong>ues 316Tra<strong>in</strong><strong>in</strong>g Methodologies <strong>and</strong> Tools 316Lead<strong>in</strong>g Indicators of Performance 317Behavioral <strong>and</strong> Attitud<strong>in</strong>al Changes 318Significant Shifts <strong>in</strong> Organizational <strong>Practices</strong> 318INSIGHTS AND REFLECTIONS 319REFERENCES 320EXHIBITSExhibit 13.1: Status of Strategic Plan Action Items,1999 <strong>and</strong> 2002 322Exhibit 13.2: Systems Diagram 324Exhibit 13.3: Model I: Organizational Learn<strong>in</strong>gCapabilities 325Exhibit 13.4: Model II: Competency ModelOperationaliz<strong>in</strong>g Organizational Learn<strong>in</strong>g 326Exhibit 13.5: Agenda for Session I 327Exhibit 13.6: Agenda for Session II 327309
310 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 13.7: Session Follow-up Questionnaire 328Exhibit 13.8: Tra<strong>in</strong><strong>in</strong>g Content: Exercises Used<strong>in</strong> Organizational Learn<strong>in</strong>g Sessions 329ABOUT THE CONTRIBUTORS 333OVERVIEWThis case study describes the steps that the Massachusetts Institute of Technology’sDepartment of Facilities is undertak<strong>in</strong>g to transform <strong>in</strong>to a self-perpetuat<strong>in</strong>g learn<strong>in</strong>gorganization. The overarch<strong>in</strong>g goal is to create an organization that constructs,operates, serves, <strong>and</strong> ma<strong>in</strong>ta<strong>in</strong>s physical space <strong>in</strong> ways that enhance MIT’s missionto advance knowledge <strong>and</strong> educate students <strong>in</strong> science, technology, <strong>and</strong> otherareas of scholarship. Also it is a story about a leader’s vision <strong>and</strong> courage to builda leader-full organization <strong>and</strong> br<strong>in</strong>g together customers <strong>and</strong> representatives fromevery corner <strong>and</strong> level of the department to set its strategic direction.DIAGNOSIS AND ASSESSMENT OF NEEDSMost journeys beg<strong>in</strong> with a s<strong>in</strong>gle step; however, this journey began with twoquestions: Where’s the plan, <strong>and</strong> what are people talk<strong>in</strong>g about? In July 1993,Victoria Sirianni became head of MIT’s Department of Facilities. Her first act ofofficial bus<strong>in</strong>ess was to review the department’s strategic plan; however, therewasn’t one. Also, dur<strong>in</strong>g her visits from functional unit to functional unit shelearned that there were some very unhappy people; more unhappy people thanshe expected. Prior to accept<strong>in</strong>g the position of chief facilities officer, Vicky,as she prefers to be called, had been employed by the Department of Facilitiesfor twenty years <strong>and</strong> worked <strong>in</strong> several capacities with<strong>in</strong> the discipl<strong>in</strong>e of spaceplann<strong>in</strong>g. Nevertheless, her f<strong>in</strong>d<strong>in</strong>g surprised her. Her new goal was to f<strong>in</strong>d theanswers to these two questions <strong>and</strong> do someth<strong>in</strong>g about them. Thus beganthe transformation of MIT’s s<strong>in</strong>gle largest adm<strong>in</strong>istrative department.Soon after Vicky accepted her new position, but unknown to her at the time,the Institute was beg<strong>in</strong>n<strong>in</strong>g to launch bus<strong>in</strong>ess process reeng<strong>in</strong>eer<strong>in</strong>g efforts <strong>in</strong>several ma<strong>in</strong> operational areas as a means to simplify convoluted workprocesses <strong>and</strong> save money. Facilities was selected to be one of the target areas,so to prepare, Vicky encouraged members of the department to learn as muchas they could about reeng<strong>in</strong>eer<strong>in</strong>g.Although sidetracked by the rumors of impend<strong>in</strong>g reeng<strong>in</strong>eer<strong>in</strong>g for a fewmonths, Vicky asked Laura Lucas, now learn<strong>in</strong>g <strong>and</strong> performance coord<strong>in</strong>ator,to survey everyone with<strong>in</strong> the department <strong>and</strong> determ<strong>in</strong>e the basis for the
unhapp<strong>in</strong>ess. The questions were direct: How are we communicat<strong>in</strong>g <strong>in</strong>ternally,do you feel that your ideas <strong>and</strong> suggestions are valued, <strong>and</strong> do you believe thatyou <strong>and</strong> your coworkers perform to the highest st<strong>and</strong>ard of excellence? Theanswers were just as direct: Our biggest problem presently is that [namedeleted]’s autocratic style has led to a breakdown of communications <strong>and</strong> mistrustbetween workers <strong>and</strong> l<strong>in</strong>e supervisors, there is noth<strong>in</strong>g that could be saidto change this so it won’t matter, <strong>and</strong> everyone should do their fair share of thework. Whether these responses were from people lash<strong>in</strong>g out at their supervisors<strong>and</strong> workmates or those react<strong>in</strong>g to the uncerta<strong>in</strong>ty of reeng<strong>in</strong>eer<strong>in</strong>g, it waseasy to conclude that someth<strong>in</strong>g was wrong. Fortunately, there were many positivecomments. For example: I’m proud to support a f<strong>in</strong>e <strong>in</strong>stitution such as MIT,I’m proud that it’s <strong>in</strong> the midst of real change <strong>and</strong> that we may be able to makethis a high-quality energized environment, <strong>and</strong> Facilities is a friendly place towork.Whether the problems were real or perceived they had to be addressed. Tothis end, Vicky, Laura, <strong>and</strong> Joe Gifun, currently assistant director of Facilitiesfor <strong>in</strong>frastructure renewal <strong>and</strong> special projects, imag<strong>in</strong>ed that Facilities employeescould take control of the future. Therefore, they pulled together a large numberof people represent<strong>in</strong>g every aspect of the department, took the <strong>in</strong>formationcollected by the survey, comb<strong>in</strong>ed it with <strong>in</strong>formation from other <strong>in</strong>itiativesalready under way, <strong>and</strong> used it to write the department’s first strategic plan.The word was sent out ask<strong>in</strong>g for people to come forward to participate<strong>in</strong> writ<strong>in</strong>g the plan. Fifty volunteers were distributed <strong>in</strong>to one of four focusgroups: communications; empowerment <strong>and</strong> accountability; leadership, management,<strong>and</strong> fairness; <strong>and</strong> recognition. Each team <strong>in</strong>cluded a mix of unionizedservice staff, adm<strong>in</strong>istrators, architects, eng<strong>in</strong>eers, computer experts, adm<strong>in</strong>istrativeassistants, <strong>and</strong> ma<strong>in</strong>tenance, grounds, <strong>and</strong> custodial service supervisors.The goal was to make each focus group as cross-functional as possible. Eachgroup was charged with analyz<strong>in</strong>g the survey responses <strong>and</strong> determ<strong>in</strong><strong>in</strong>g thestrengths, weaknesses, opportunities, <strong>and</strong> challenges for the particular focusarea <strong>and</strong> to recommend concrete action items. All of the work was compiled<strong>in</strong>to one document <strong>and</strong> the strategic plan was published <strong>and</strong> distributed to allmembers of the department <strong>in</strong> December 1994.As one of the outcomes of the strategic plan was the desire <strong>and</strong> necessity formore tra<strong>in</strong><strong>in</strong>g, Facilities launched three departmentwide tra<strong>in</strong><strong>in</strong>g efforts: communications,teamwork, <strong>and</strong> diversity. Also, Facilities built a mechanism toensure l<strong>in</strong>kage between learn<strong>in</strong>g <strong>and</strong> performance <strong>and</strong> worked with humanresources to determ<strong>in</strong>e competencies for each job classification. It was at thisstage that Laura restructured Facilities’ tra<strong>in</strong><strong>in</strong>g department to focus on learn<strong>in</strong>g<strong>and</strong> performance.The Strategic <strong>Leadership</strong> Team (SLT) was formed soon after the creation ofthe strategic plan <strong>and</strong> was a collective of several formal leaders but mostlyMIT 311
312 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE<strong>in</strong>formal leaders. The SLT comprised a diverse group of people from all walksof department life <strong>and</strong> several customers who came together to express theirfrustrations <strong>and</strong> ideas about current practices <strong>and</strong> the future of the Departmentof Facilities. The SLT also acted as an advisor to Vicky <strong>and</strong> her directors <strong>and</strong> asa sound<strong>in</strong>g board for new ideas. Members of the SLT operated under two rules:keep a departmentwide strategic focus <strong>and</strong> ma<strong>in</strong>ta<strong>in</strong> the spirit of the orig<strong>in</strong>alstrategic plan <strong>and</strong> its amendments.There were fifty-six action items listed <strong>in</strong> the strategic plan, <strong>and</strong> muchprogress has been made. Exhibit 13.1 shows the status of the fifty-six actionitems <strong>in</strong> 1999 <strong>and</strong> aga<strong>in</strong> <strong>in</strong> 2002. Of particular <strong>in</strong>terest is the action item that islabeled “<strong>in</strong> progress”; it calls for the implementation of an external <strong>and</strong> <strong>in</strong>ternalcommunications program. S<strong>in</strong>ce 1994 several communications programs<strong>and</strong> processes have been put <strong>in</strong>to place. Although some have had a moderatelevel of success, complete success has been elusive. Facilities has yet to determ<strong>in</strong>ethe balance po<strong>in</strong>t between level of service (the <strong>in</strong>formation the <strong>in</strong>ternal<strong>and</strong> external customer needs <strong>and</strong> the form <strong>in</strong> which it is delivered orpresented) <strong>and</strong> cost. Facilities def<strong>in</strong>es the <strong>in</strong>ternal customer as the Facilitiesemployee who functions as a customer when request<strong>in</strong>g services from anotherteam or functional unit, such as technical assistance on a project, tra<strong>in</strong><strong>in</strong>g, <strong>and</strong>build<strong>in</strong>g-system repairs. The external customer is any member of the MITcommunity who is not a Facilities employee.MAINTAINING THE SPIRIT AND SETTING THE TONEPeople say that there needs to be full support “at the top” for successful growth<strong>and</strong> change <strong>in</strong> any organization. MIT’s Department of Facilities was very luckyto have a leader who was committed to mak<strong>in</strong>g a difference with<strong>in</strong> the department<strong>and</strong> had the vision to put the appropriate pieces together to make thathappen. The department is a team-centered environment where people canexpress ideas <strong>and</strong> work together at resolv<strong>in</strong>g issues, formulat<strong>in</strong>g policy, <strong>and</strong>,yes, develop<strong>in</strong>g a strategic vision for the department. The department respects<strong>in</strong>dependent th<strong>in</strong>k<strong>in</strong>g <strong>and</strong> believes <strong>in</strong> the reeng<strong>in</strong>eer<strong>in</strong>g concept of empower<strong>in</strong>gpeople to get the job done <strong>and</strong> done well. To do so, one needs to have theappropriate tools, resources, <strong>and</strong> the ability to learn from mistakes.Under Vicky’s leadership, the department began to use teamwork as a meansto discuss alternatives, make decisions, <strong>and</strong> resolve issues as they came up.These teams worked both with<strong>in</strong> <strong>and</strong> across established service areas—operations, utilities, design <strong>and</strong> construction, capital projects, f<strong>in</strong>ance <strong>and</strong>account<strong>in</strong>g, adm<strong>in</strong>istration, systems eng<strong>in</strong>eer<strong>in</strong>g, <strong>and</strong> <strong>in</strong>frastructure—whereeach service area is led by a director. From 1998 to summer 2002, three st<strong>and</strong><strong>in</strong>gteams supported Vicky, the directors, the operational leadership team, <strong>and</strong> the
MIT 313strategic leadership team. The operational leadership team has transformed overtime <strong>and</strong> consists now of functional unit managers; it provides a forum for themanagers to discuss operational issues that have an impact on all units <strong>and</strong> toupdate each other on current <strong>and</strong> upcom<strong>in</strong>g activities. The strategic leadershipteam has transformed as well, <strong>and</strong> Vicky <strong>and</strong> the directors have adopted itsformat, <strong>in</strong>vestigatory function, <strong>and</strong> team-based leadership model.Over the course of time, Facilities employees experienced the value of teamsfirst-h<strong>and</strong>; therefore, <strong>in</strong>dividual teams would be formed for specific purposes<strong>and</strong> <strong>in</strong> many cases without formal permission. These ad hoc teams, whetherofficial or unofficial, became a breed<strong>in</strong>g ground for <strong>in</strong>formal leaders <strong>and</strong> a toolused by <strong>in</strong>formal leaders to advance an idea. Informal leaders came from all paycategories. They were supervisors, managers, unionized service staff, adm<strong>in</strong>istrativeassistants, support staff, <strong>and</strong> even directors. In many cases, teams havemade departmental decisions <strong>and</strong> developed <strong>and</strong> implemented major processes.This practice created an environment of openness <strong>and</strong> enabled cross-functionaldiscussions to help <strong>in</strong>dividuals underst<strong>and</strong> that most issues were important toall, not just to an <strong>in</strong>dividual’s service area.The Facilities division ma<strong>in</strong>ta<strong>in</strong>s an open environment that can constantlyrefresh itself. Facilities employees underst<strong>and</strong> change <strong>and</strong> the need to developa culture that reflects upon itself <strong>and</strong> cont<strong>in</strong>ues to enhance the lives of its teams,leaders, <strong>and</strong> <strong>in</strong>dividuals. Formal <strong>and</strong> <strong>in</strong>formal teams exhibit much pride, engagetheir members, <strong>and</strong> produce high-quality work. Teams are the place whereFacilities looks for emerg<strong>in</strong>g leaders.INTERVENTIONAlthough some previous <strong>in</strong>itiatives had failed <strong>and</strong> others lived out their usefullives satisfy<strong>in</strong>g their <strong>in</strong>tended purposes, one can readily observe that Facilities isa very different organization now. Nevertheless, Facilities, like any organizationthat desires to thrive <strong>in</strong> the marketplace, must provide its customers with highervalue than their competitors, <strong>in</strong> this case facility management <strong>and</strong> ma<strong>in</strong>tenancefirms. Facilities, like its competitors, must at the very least keep pace with thechang<strong>in</strong>g technology <strong>in</strong> build<strong>in</strong>g systems, such as those that monitor <strong>and</strong> controlthe <strong>in</strong>terior climate of build<strong>in</strong>gs <strong>and</strong> fulfill, at least m<strong>in</strong>imally, the expectationof the MIT community to provide more service <strong>and</strong> deliver it much faster thanit has ever been. So the need for learn<strong>in</strong>g cont<strong>in</strong>ues but at a much higher developmentallevel. The current goal is to help Facilities employees become betterth<strong>in</strong>kers so that they will have the skills to create <strong>and</strong> susta<strong>in</strong> a self-perpetuat<strong>in</strong>glearn<strong>in</strong>g organization. To achieve this goal, Facilities sought the help <strong>and</strong> experienceof Dr. Carol Zulauf, a professor of organizational learn<strong>in</strong>g at Suffolk <strong>University</strong>.Dr. Zulauf, consult<strong>in</strong>g partner, Pat Kennedy Graham, director ofadm<strong>in</strong>istration, <strong>and</strong> Joe Gifun <strong>in</strong>vested much time <strong>in</strong> frankly discuss<strong>in</strong>g all that
314 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEhas happened, good <strong>and</strong> bad, with<strong>in</strong> the Department of Facilities over prioryears to ascerta<strong>in</strong> its current strengths <strong>and</strong> weaknesses <strong>and</strong> recommend a courseof action to Vicky. The primary methodology used dur<strong>in</strong>g the plann<strong>in</strong>g discussionswas guided bra<strong>in</strong>storm<strong>in</strong>g. Once ideas were recorded, they were clarifiedif necessary <strong>and</strong> challenged. The result was to develop a series of learn<strong>in</strong>g modules<strong>in</strong>troduc<strong>in</strong>g Peter Senge’s five discipl<strong>in</strong>es. The first module was <strong>in</strong>troducedto the assistant directors <strong>and</strong> members of the operational leadership <strong>and</strong> strategicleadership teams <strong>and</strong> focused on systems th<strong>in</strong>k<strong>in</strong>g. The second module, personalmastery, was offered to <strong>in</strong>formal leaders, whether or not they weremembers of a current team, <strong>and</strong> others who had shown the <strong>in</strong>itiative to lead.Highlights of these programs are presented as follows.Program Design StageThe strategic goals <strong>and</strong> priorities that were developed <strong>and</strong> <strong>in</strong>troduced by theoperational leadership team encompassed the follow<strong>in</strong>g:• Improve customer service• Enhance <strong>and</strong> protect MIT’s assets• Design, build, <strong>and</strong> deliver on the capital projects• Cont<strong>in</strong>uous improvement <strong>in</strong> core processes• Meet MIT’s commitment to the environment• Develop <strong>in</strong>dividual <strong>and</strong> organizational capabilitiesDr. Zulauf, work<strong>in</strong>g very closely with two of the key people from the Departmentof Facilities, focused on two subsets with<strong>in</strong> the “develop <strong>in</strong>dividual <strong>and</strong>organizational capabilities” strategic goal: (1) develop, adopt, <strong>and</strong> implementnew HR practices <strong>and</strong> (2) renew learn<strong>in</strong>g <strong>and</strong> performance effort.When the consult<strong>in</strong>g partner first started to envision the <strong>in</strong>terventions forthis project, us<strong>in</strong>g these strategic goals <strong>and</strong> priorities as her driv<strong>in</strong>g force, shehad as her overall framework the organizational <strong>and</strong> <strong>in</strong>dividual capabilities asdef<strong>in</strong>ed by the Balanced Scorecard, developed by Dave Ulrich <strong>and</strong> others <strong>in</strong>Results-Based <strong>Leadership</strong>. This framework <strong>in</strong>cluded, from the organizational perspective,consider<strong>in</strong>g the capabilities for learn<strong>in</strong>g <strong>and</strong> <strong>in</strong>novation, work<strong>in</strong>gtoward “boundary-less-ness,” or <strong>in</strong> the language of the Department of Facilities,work<strong>in</strong>g cross-functionally, <strong>and</strong> build<strong>in</strong>g <strong>in</strong> accountability. The employeeperspective encompasses <strong>in</strong>creas<strong>in</strong>g performance by develop<strong>in</strong>g <strong>and</strong> leverag<strong>in</strong>gemployee capabilities <strong>and</strong> <strong>in</strong>tellectual capital. The results, over time, would<strong>in</strong>clude new best practices with<strong>in</strong> Facilities <strong>and</strong> a positive impact on Facilities’<strong>in</strong>ternal <strong>and</strong> external customer base.With the focus on develop<strong>in</strong>g organizational <strong>and</strong> employee capabilities asthe overall framework for design<strong>in</strong>g the <strong>in</strong>itial learn<strong>in</strong>g <strong>and</strong> performance<strong>in</strong>itiative, the consult<strong>in</strong>g partner then took this overall framework to the level
MIT 315of us<strong>in</strong>g organizational learn<strong>in</strong>g capabilities to develop a culture of learn<strong>in</strong>g forleaders with<strong>in</strong> the Department of Facilities. The design of this leadershipdevelopment system was l<strong>in</strong>ked directly to the strategic goals <strong>and</strong> priorities<strong>in</strong>itially promulgated by Facilities.The critical success factors encompassed two guid<strong>in</strong>g pr<strong>in</strong>ciples:• That the capacity to grow <strong>and</strong> learn will transform our systems• That learn<strong>in</strong>g is fundamental to leadershipThe consult<strong>in</strong>g partner believes <strong>in</strong> underst<strong>and</strong><strong>in</strong>g a system before implement<strong>in</strong>gan <strong>in</strong>tervention or envision<strong>in</strong>g the dynamics of that system. Exhibit 13.2illustrates those key dynamics.Hav<strong>in</strong>g a systems perspective <strong>in</strong>creases the ability to view how an <strong>in</strong>terventionor change will affect the system <strong>and</strong> what the outcomes <strong>and</strong> consequencesmay be. Develop<strong>in</strong>g the systems perspective was the cornerstone of the programdesign <strong>and</strong> implementation.Overall Competency ModelsTwo significant models have been used to guide the development of the sessionsat MIT. One is from Peter Senge, which shows the organizational learn<strong>in</strong>gcapabilities as the overarch<strong>in</strong>g discipl<strong>in</strong>es; the other competency model,developed by Warner Burke, highlights the specific competencies that this consult<strong>in</strong>gpartner has directly l<strong>in</strong>ked to the discipl<strong>in</strong>es of organizational learn<strong>in</strong>g.Model 1 <strong>and</strong> Model 2 are displayed as Exhibit 13.3 <strong>and</strong> Exhibit 13.4,respectively.Program ImplementationThe specific content of this program focused on develop<strong>in</strong>g leaders to envisionchange with<strong>in</strong> Facilities <strong>and</strong> to embrace the systems perspective <strong>in</strong> order to havethe participants start to see how they are part of the whole system. To quoteKathleen Dannemiller, organizational change expert, “If you see yourself as partof the system, you are on the path to mak<strong>in</strong>g real change” (L<strong>in</strong>kage ODSummit, October 2001). The agendas for the first two tra<strong>in</strong><strong>in</strong>g sessions areshown as Exhibits 13.5 <strong>and</strong> 13.6, with the actual tra<strong>in</strong><strong>in</strong>g content shown asExhibit 13.8.The critical elements of this implementation h<strong>in</strong>ged on the purposeful l<strong>in</strong>kageto the strategic mission of the department through an exercise <strong>in</strong> which participantsstarted by envision<strong>in</strong>g their department <strong>in</strong> five years time, envision<strong>in</strong>g<strong>in</strong> detail how it operates <strong>in</strong> a healthy, productive, susta<strong>in</strong>able way. A key questionfor this exercise was: What was it you <strong>and</strong> others did back <strong>in</strong> 2001 toachieve this remarkable transformation? The participants became engaged <strong>and</strong>energized as they started to design their future direction. From there, we focused
316 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEon the <strong>in</strong>fluence of systems <strong>and</strong> systemic change, which got the participants<strong>in</strong>volved <strong>in</strong> a new way of th<strong>in</strong>k<strong>in</strong>g about their organization <strong>and</strong> the impact theirdecisions have on each other.The Journey Cont<strong>in</strong>uesThis first session set the stage for cont<strong>in</strong>ued work <strong>in</strong> build<strong>in</strong>g a learn<strong>in</strong>g organization<strong>and</strong> develop<strong>in</strong>g the future leaders with<strong>in</strong> Facilities. Our second sessionfocused on develop<strong>in</strong>g personal mastery with its foundational premise based onthis thought:The miss<strong>in</strong>g l<strong>in</strong>k <strong>in</strong> leadership development is grow<strong>in</strong>g theperson to grow the leader.—Kev<strong>in</strong> Cashman (1998, p. 18)Other key thoughts:• We tend to view leadership as an external event. We see it as someth<strong>in</strong>gpeople do, <strong>in</strong>stead of an expression of who we are.• It is our be<strong>in</strong>g <strong>in</strong> action.• Our be<strong>in</strong>g says as much about us as a leader as the act of lead<strong>in</strong>g itself.• As we grow, so shall we lead.The different sections <strong>in</strong> this personal mastery session concentrated on theparticipants identify<strong>in</strong>g the creative tension with<strong>in</strong> themselves <strong>and</strong> theirorganizations.Tra<strong>in</strong><strong>in</strong>g Methodologies <strong>and</strong> ToolsIn both sessions, different methodologies <strong>and</strong> tra<strong>in</strong><strong>in</strong>g tools were employed tostimulate maximum participant engagement <strong>and</strong> learn<strong>in</strong>g: causal loop diagramm<strong>in</strong>gfor the systems th<strong>in</strong>k<strong>in</strong>g session, h<strong>and</strong>s-on exercises, small-groupwork, video clips, dialogue sessions, guided presentations, <strong>and</strong> exercises tocont<strong>in</strong>ue after the formal <strong>in</strong>-class work.Session 2 also set the stage for cont<strong>in</strong>ued development <strong>and</strong> follow-up byimplement<strong>in</strong>g two specific steps to re<strong>in</strong>force learn<strong>in</strong>g after the program. One<strong>in</strong>corporated the practice of keep<strong>in</strong>g a journal <strong>in</strong> the spirit of encourag<strong>in</strong>g theparticipants to beg<strong>in</strong> the process of record<strong>in</strong>g any key learn<strong>in</strong>gs, <strong>in</strong>sights, lessonslearned, <strong>and</strong> “do differentlies” that they have experienced (for def<strong>in</strong>ition of“do differently,” please see Exhibit 13.8). In addition to writ<strong>in</strong>g aboutthese experiences, participants were also encouraged to write about how these<strong>in</strong>sights, lessons learned, <strong>and</strong> so forth affected or changed their work practicesor <strong>in</strong>teractions. A follow-up was undertaken with each participant six to eightweeks after the session to f<strong>in</strong>d out how the session <strong>in</strong>fluenced participants’<strong>in</strong>teractions <strong>and</strong> reflections as leaders.
Lead<strong>in</strong>g Indicators of PerformanceThe performance measurement focuses on the lead<strong>in</strong>g <strong>in</strong>dicators of performance.For example, lead<strong>in</strong>g <strong>in</strong>dicators of develop<strong>in</strong>g leadership <strong>and</strong> organizationallearn<strong>in</strong>g capabilities are build<strong>in</strong>g new relationships cross-functionally; enhanc<strong>in</strong>gcustomer <strong>in</strong>teractions, both <strong>in</strong>ternally <strong>and</strong> externally to Facilities; <strong>in</strong>creas<strong>in</strong>gthe communication flow with<strong>in</strong> the department; <strong>and</strong> l<strong>in</strong>k<strong>in</strong>g our progress <strong>and</strong>results back to the strategic goals already del<strong>in</strong>eated by MIT’s Department ofFacilities.Feedback <strong>and</strong> Follow-up from Our Participants. One participant from the firstsession on develop<strong>in</strong>g leadership capabilities gave feedback stat<strong>in</strong>g that, “Youdid a great job <strong>in</strong>tegrat<strong>in</strong>g examples from the morn<strong>in</strong>g session [which was ondel<strong>in</strong>eat<strong>in</strong>g strategic goals] <strong>in</strong>to your presentation.”Another participant from the first session said, “The content is very useful asit causes one to be <strong>in</strong>tentional.” How the consult<strong>in</strong>g partner is <strong>in</strong>terpret<strong>in</strong>g thatcomment is that once someth<strong>in</strong>g becomes part of our conscious thought process,or <strong>in</strong>tentional, then one is on their way to mak<strong>in</strong>g (behavioral) changes.For Session 2, we implemented two measures: a written evaluation right afterthe session <strong>and</strong> a follow-up questionnaire six to eight weeks later. At the conclusionof the session, participants were asked, on a scale of 1 to 5, with 5 be<strong>in</strong>gexcellent, please rate the follow<strong>in</strong>g:1. Sem<strong>in</strong>ar content—relevance, timel<strong>in</strong>ess2. Facilitator—knowledge of subject, enthusiasm, teach<strong>in</strong>g style,preparation3. Sem<strong>in</strong>ar materials—clarity, appropriateness4. Sem<strong>in</strong>ar exercises—variety, l<strong>in</strong>k to subject area5. Additional comments, thoughts, <strong>and</strong> ahasFeedback <strong>in</strong>cluded such comments as• Worth a follow-up• Exercises were excellent• Keep the momentum go<strong>in</strong>g by hold<strong>in</strong>g more sessions• This session will help me plan my future• This session made me th<strong>in</strong>k about th<strong>in</strong>gs I hadn’t thought about before• I th<strong>in</strong>k this is a great class for everyone to go to, also may open a lotof eyes• Well thought out exercise on how to look deeply at ourselves, goals,visions, <strong>and</strong> limitationsMIT 317
318 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEThe questionnaire, shown as Exhibit 13.7, was sent to the participants six toeight weeks after the session.Behavioral <strong>and</strong> Attitud<strong>in</strong>al ChangesSome very powerful shifts have occurred <strong>in</strong> how people view <strong>and</strong> <strong>in</strong>teract withothers. Some examples are shared below:I do f<strong>in</strong>d myself try<strong>in</strong>g to be more authentic <strong>in</strong> my <strong>in</strong>teractions with others. Thequestion <strong>in</strong> my m<strong>in</strong>d, Why should I care? was transformed to Why do I care? Asa result, I’ve been able to give feedback to people who don’t directly report tome because I care enough to take the risk.The video [on Personal Mastery that was shown <strong>in</strong> Session 2] touched me at thecore. It shook me to ask, What is my signature?It also must be underscored that real change comes about <strong>in</strong> seem<strong>in</strong>gly subtleways, yet has a powerful impact on a relationship or how people <strong>in</strong>teractwith each other. The follow<strong>in</strong>g example is another peek <strong>in</strong>to how a shiftoccurred between two coworkers as a result of the exercise <strong>in</strong> Session 2 to identifyour conscious <strong>and</strong> shadow beliefs.In the breakout session, a coworker <strong>and</strong> I found some commonality <strong>in</strong> “try<strong>in</strong>g tobe perfect” [which they identified as a shadow for themselves] <strong>and</strong> not accomplish<strong>in</strong>gmore because the product we work on isn’t quite as good as it could be.S<strong>in</strong>ce the sem<strong>in</strong>ar, we’ve been able to exchange some “not-so-perfect” reportsbut good enough to suit the needs. When the coworker asked me for the reports,he said, “It doesn’t have to be perfect . . .” I knew what he meant.Also, regard<strong>in</strong>g the Personal Mastery exercise that asked participants to identifytheir “Word-<strong>in</strong>-a-Box,” one participant said,S<strong>in</strong>ce the class, I have become m<strong>in</strong>dful of my “word <strong>in</strong> the box” as well as theth<strong>in</strong>gs that I need to change <strong>in</strong> order to <strong>in</strong>corporate “my word” <strong>in</strong>to a variety ofenvironments.One last, yet aga<strong>in</strong> very powerful comment from one of the participantswho wants to create a culture of learn<strong>in</strong>g, creativity, <strong>and</strong> growth with<strong>in</strong> thisorganization:I want to create an organization that anticipates learn<strong>in</strong>g opportunities <strong>and</strong>constantly asks the questions, Why <strong>and</strong> why not?Significant Shifts <strong>in</strong> Organizational <strong>Practices</strong>The Department of Facilities does not have the mechanisms <strong>in</strong> place at thistime to quantitatively determ<strong>in</strong>e the return on <strong>in</strong>vestment on learn<strong>in</strong>g <strong>and</strong>organizational change efforts. Nevertheless, the follow<strong>in</strong>g comparisons may
MIT 319help the reader underst<strong>and</strong> the magnitude of the change that has occurredfollow<strong>in</strong>g the implementation of the strategic plan (see Exhibit 13.1 for thestrategic plan).INSIGHTS AND REFLECTIONSFacilities has taken many steps along the road to becom<strong>in</strong>g a learn<strong>in</strong>g organization;however, what needs to be done to make certa<strong>in</strong> that the journey results<strong>in</strong> success? Employ Senge’s discipl<strong>in</strong>e of personal mastery, specifically creativetension, <strong>and</strong> focus on the gap between current reality <strong>and</strong> vision. With<strong>in</strong> thisgap are the th<strong>in</strong>gs that need to be implemented, the issues that need to beresolved, <strong>and</strong> the questions that need to be answered. For example:• How does Facilities build an organization that learns from its experiences<strong>and</strong> records these experiences <strong>in</strong> a way that is accessible to all employees? Somefunctional units have adopted the practice of conduct<strong>in</strong>g after-action reviewsfollow<strong>in</strong>g select events, such as annual commencement exercises or difficultprojects. Participants f<strong>in</strong>d the after-action review process beneficial, so a goal isto teach more people to perform them. The Department of Facilities ma<strong>in</strong>ta<strong>in</strong>s acentral archive of all construction documents; however, it needs to f<strong>in</strong>d themeans to capture learn<strong>in</strong>gs <strong>and</strong> <strong>in</strong>formation about nonconstruction-relatedstudies, projects, <strong>and</strong> events. At this time, these records are kept by <strong>in</strong>dividuals<strong>and</strong> are not readily accessible to others unless the <strong>in</strong>quirer knows or learns thata specific <strong>in</strong>dividual has the <strong>in</strong>formation.• Employees need to have the means <strong>and</strong> tra<strong>in</strong><strong>in</strong>g to communicate effectivelybetween all levels of the organization. Facilities employees have access to manycommunications <strong>and</strong> customer service courses whether they are conducted by theFacilities Learn<strong>in</strong>g <strong>and</strong> Performance Center or HR’s Organizational <strong>and</strong> Employee<strong>Development</strong> <strong>in</strong>structors; however, higher levels of <strong>in</strong>terpersonal <strong>and</strong> presentationskills are necessary for the future. Therefore, more tra<strong>in</strong><strong>in</strong>g is necessary.• Capitalize on the power of cross-functional teams. Although Facilities hasexperienced great success with cross-functional teams, more people need tolearn the skills required to be good team members.• L<strong>in</strong>k learn<strong>in</strong>g to performance at all levels. The discussion of learn<strong>in</strong>g goals<strong>and</strong> achievements is encouraged <strong>in</strong> annual performance appraisal meet<strong>in</strong>gs;however, the practice needs to be more widespread. Implement the steps necessaryto help employees become stewards of a $3 billion physical asset. To helpeveryone make decisions that enhance the learn<strong>in</strong>g, research, <strong>and</strong> bus<strong>in</strong>essaspects of the Institute <strong>and</strong> seek out <strong>and</strong> rectify problems before they are ableto adversely affect MIT’s build<strong>in</strong>g systems <strong>and</strong> mission. Facilities employeesmust possess the skills to work more effectively <strong>and</strong> efficiently with complex
320 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEprocesses, dem<strong>and</strong><strong>in</strong>g clients, rapidly <strong>in</strong>creas<strong>in</strong>g technologically sophisticatedsystems, <strong>and</strong> <strong>in</strong>creas<strong>in</strong>gly str<strong>in</strong>gent regulations. Members of the MIT community<strong>and</strong> MIT’s physical assets, its build<strong>in</strong>gs <strong>and</strong> grounds, benefit from highlyskilled facilities personnel. The Learn<strong>in</strong>g <strong>and</strong> Performance Center is implement<strong>in</strong>gmore technical skills tra<strong>in</strong><strong>in</strong>g along with many courses <strong>in</strong> diversity,management, computers, leadership, <strong>and</strong> safety.• How does Facilities measure the value of its service <strong>in</strong> terms of the <strong>in</strong>ternal<strong>and</strong> external customer? At the completion of every service request byRepair <strong>and</strong> Ma<strong>in</strong>tenance, the functional unit responsible for all of the repairsto exist<strong>in</strong>g build<strong>in</strong>g structures <strong>and</strong> systems, <strong>and</strong> Design <strong>and</strong> Construction Services,the functional unit responsible for all renovations, the <strong>in</strong>ternal or externalcustomer is asked to provide feedback on the quality of the service.Returned evaluations are reviewed <strong>and</strong> changes implemented if necessary.Learn<strong>in</strong>g <strong>and</strong> Performance measures the value of its tra<strong>in</strong><strong>in</strong>g <strong>in</strong> the workplacewith an evaluation form that is distributed at the conclusion of every course<strong>and</strong> by way of dialogue sessions one to two months follow<strong>in</strong>g the conclusionof select courses. The form asks questions about the specific course <strong>and</strong> forsuggestions regard<strong>in</strong>g new courses, <strong>and</strong> the dialogue focuses on the applicationof new skills <strong>and</strong> knowledge. Very few historical statistical data are available;therefore, longitud<strong>in</strong>al studies are not possible at this time. Facilities isbeg<strong>in</strong>n<strong>in</strong>g to collect data <strong>and</strong> exp<strong>and</strong> measurement capabilities to other functionalunits.At this early stage of its development, Facilities’ learn<strong>in</strong>g organization effortis fragile <strong>and</strong> requires unflagg<strong>in</strong>g vigilance, much ma<strong>in</strong>tenance, <strong>and</strong> cont<strong>in</strong>uous,consistent, <strong>and</strong> strong leadership. The primary elements for growth arealready <strong>in</strong> place: the realization by many employees that to be successful <strong>in</strong> thelong-term, Facilities must become a learn<strong>in</strong>g organization; a visionary chief facilitiesofficer; a few enlightened leaders; <strong>and</strong> a cadre of <strong>in</strong>formal leaders to susta<strong>in</strong>this growth <strong>and</strong> lead, <strong>in</strong>fluence, <strong>and</strong> motivate the rest of the organizationthroughout the many changes <strong>and</strong> transformations that will be occurr<strong>in</strong>g.Facilities’ journey is clearly under way.The journey of a thous<strong>and</strong> miles starts from beneath your feet.—Lao Tzu, Tao Te Ch<strong>in</strong>g, Book Two, Chapter 64REFERENCESBurke, W. W. (2001). Competency Model. OD Practitioner, 33(3), 15.Cashman, K. (1998). <strong>Leadership</strong> from the Inside Out. Provo, Utah: ExecutiveExcellence Publish<strong>in</strong>g.
MIT 321Dannemiller, K. (Oct. 2001). “Whole Scale Change.” Paper presented at L<strong>in</strong>kageOrganization <strong>Development</strong> Summit, Chicago, Ill.Lao Tzu (4th century B.C./1963). Tao Te Ch<strong>in</strong>g, D. C. Lau (trans.). Baltimore, Md.:Pengu<strong>in</strong>.Senge, P. (1990). The Fifth Discipl<strong>in</strong>e: The Art <strong>and</strong> Practice of the Learn<strong>in</strong>g Organization.New York: Doubleday.Ulrich, D., Zenger, J., <strong>and</strong> Smallwood, N. (1999). Results-Based <strong>Leadership</strong>. Boston,Mass.: Harvard Bus<strong>in</strong>ess School Press.
322 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 13.1. Status of Strategic Plan Action Items, 1999 <strong>and</strong> 2002Number of Action Items1999 2002Complete 29 45Partially complete 16 10In progress 5 1No action 6 0Note: “Partially complete” refers to an action item with several deliverables where at least one butnot all of the deliverables are complete; whereas, “<strong>in</strong> progress” refers to an action item withseveral deliverables where none are complete.Prior to Strategic PlanTra<strong>in</strong><strong>in</strong>g centrally documented for27 percent of employeesFourteen courses were offeredannually to unionized service staffThirty computers plus thirtyterm<strong>in</strong>als were <strong>in</strong> useOnly select <strong>in</strong>dividuals receivedcomputer tra<strong>in</strong><strong>in</strong>gTra<strong>in</strong><strong>in</strong>g was generally focused ontechnical issuesAnnual performance reviews foradm<strong>in</strong>istrative staff were conducted<strong>in</strong>formally <strong>and</strong> <strong>in</strong>consistentlyAdm<strong>in</strong>istrative assistants did notreceive annual performance reviewsFollow<strong>in</strong>g Strategic PlanTra<strong>in</strong><strong>in</strong>g documented for all employeesForty-five <strong>in</strong>dividual courses were offeredto all employees <strong>in</strong> 1998, one year follow<strong>in</strong>gthe formation of the Learn<strong>in</strong>g <strong>and</strong>Performance Team. Currently Learn<strong>in</strong>g<strong>and</strong> Performance offers a similar numberof courses; however, many of the orig<strong>in</strong>alcourses have been updated or replacedwith those address<strong>in</strong>g current needs.Four hundred computers are <strong>in</strong> useAll employees receive tra<strong>in</strong><strong>in</strong>g <strong>in</strong> electronicmail <strong>and</strong> web fundamentalsLearn<strong>in</strong>g is aligned to strategic goalsThe annual performance review processfor adm<strong>in</strong>istrative staff is formal <strong>and</strong>consistently appliedAdm<strong>in</strong>istrative assistants receive annualperformance evaluations
MIT 323Exhibit 13.1. (Cont<strong>in</strong>ued)Unionized service staff did notreceive annual performance reviewsRecognition for good work wasdependent upon a customer send<strong>in</strong>gpraise to the employee by the wayof a letter. The letter would beplaced <strong>in</strong> the employee’s fileNo customer <strong>in</strong>volvement <strong>in</strong>strategic decisionsThe receipt of a repair request is notacknowledgedSelect employees communicate withcustomersUnionized service staff participate <strong>in</strong> anannual performance feedback session withtheir coachEmployees recognize each other for do<strong>in</strong>ggood work. All cash rewards are tied tostrategic goals. Praise from customers iswelcome, but most recognition orig<strong>in</strong>atesfrom with<strong>in</strong> Facilities.Customers participate <strong>in</strong> the decisions thatcould affect the strategic direction ofFacilitiesAn acknowledgment for the receipt <strong>and</strong>completion of each repair request is sentto the customer automaticallyAll employees communicate withcustomers
324 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 13.2. Systems DiagramsInformal leaderswill<strong>in</strong>g to takenew <strong>in</strong>itiativesStart hereStrong, respectedleadership(from director)sRsOrganizationallearn<strong>in</strong>g discipl<strong>in</strong>esl<strong>in</strong>ked directly tostrategic goalsInterventionOver timeNext level ofgrowth <strong>and</strong>developmentsChanges <strong>in</strong>culturesOver timeTo read the systems diagram:The strong, respected leadership consistently demonstrated by the chief facilitiesofficer, Vicky Sirianni, has <strong>in</strong>fluenced <strong>in</strong>formal leaders to take the <strong>in</strong>itiative toimplement new processes <strong>and</strong> practices, which then leads up to the <strong>in</strong>tervention:hav<strong>in</strong>g the organizational learn<strong>in</strong>g discipl<strong>in</strong>es directly l<strong>in</strong>ked to the strategic goalsof the department. This is not a one-time <strong>in</strong>tervention. On-go<strong>in</strong>g <strong>in</strong>itiativeshave been <strong>and</strong> currently are be<strong>in</strong>g developed. Over time, the objectives of these<strong>in</strong>itiatives are to lead to (a) changes <strong>in</strong> culture by hav<strong>in</strong>g new practices <strong>and</strong> waysof <strong>in</strong>teract<strong>in</strong>g <strong>and</strong> (b) employees cont<strong>in</strong>ually learn<strong>in</strong>g <strong>and</strong> striv<strong>in</strong>g for the nextlevels of growth.Note: The “s” <strong>in</strong>dicates <strong>in</strong>creases <strong>in</strong> growth or the direction of <strong>in</strong>fluence <strong>in</strong> a positive direction.
MIT 325Exhibit 13.3. Model I: Organizational Learn<strong>in</strong>g CapabilitiesOrganizational learn<strong>in</strong>gcapabilitiesAspiration• Personal Mastery• Shared VisionUnderst<strong>and</strong><strong>in</strong>gComplexity• Systems Th<strong>in</strong>k<strong>in</strong>gGenerativeConversation• Mental Models• Team Learn<strong>in</strong>gPersonal Mastery is the discipl<strong>in</strong>e of personal growth <strong>and</strong> learn<strong>in</strong>g. It is theability to create the results <strong>in</strong> your life that you truly seek.Shared Vision b<strong>in</strong>ds people together by their common aspirations. Shared visionis vital for the learn<strong>in</strong>g organization because it provides the focus <strong>and</strong> energy forlearn<strong>in</strong>g (Senge, 1990, p. 206).Systems Th<strong>in</strong>k<strong>in</strong>g allows us to see the <strong>in</strong>terconnectedness <strong>and</strong> <strong>in</strong>terdependencies<strong>in</strong> any given situation. It is a holistic way of th<strong>in</strong>k<strong>in</strong>g <strong>and</strong> look<strong>in</strong>g at the world.Mental Models are the pictures we have <strong>in</strong> our m<strong>in</strong>ds of how the worldworks. They are our assumptions <strong>and</strong> belief systems.Team Learn<strong>in</strong>g is about alignment of goals, roles, learn<strong>in</strong>g together for thegreater good. It is a collective discipl<strong>in</strong>e.Source: P. Senge (1990). Repr<strong>in</strong>ted with permission.
326 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 13.4. Model II: Competency Model Operationaliz<strong>in</strong>g Organizational Learn<strong>in</strong>gKey CompetenciesDevelops the Ability to:Tolerate ambiguityInfluenceConfront difficult issues (through<strong>in</strong>quiry)*Support <strong>and</strong> nurture othersListen well <strong>and</strong> empathizeRecognize one’s own feel<strong>in</strong>gs,<strong>in</strong>tuitions quicklyConceptualizeDiscover <strong>and</strong> mobilize humanenergyCreate learn<strong>in</strong>g opportunitiesSense of mission (<strong>and</strong> vision)*Ma<strong>in</strong>ta<strong>in</strong> sense of humorL<strong>in</strong>k to Organizational Learn<strong>in</strong>gCapabilities:Systems th<strong>in</strong>k<strong>in</strong>gTeam learn<strong>in</strong>gTeam learn<strong>in</strong>gTeam learn<strong>in</strong>gTeam learn<strong>in</strong>g, mental modelsPersonal mastery, team learn<strong>in</strong>gSystems th<strong>in</strong>k<strong>in</strong>gTeam learn<strong>in</strong>g, personal masteryEntirety of organizational learn<strong>in</strong>gPersonal mastery, shared visionResult of environment that honors <strong>and</strong>supports fun <strong>and</strong> learn<strong>in</strong>g together*Model adapted by Consult<strong>in</strong>g Partner, 2001–2002.Source: Copyright © 1982 W. Burke. Repr<strong>in</strong>ted with permission.
MIT 327Exhibit 13.5. Agenda for Session IThe <strong>Development</strong> of <strong>Leadership</strong> Capabilities: Its L<strong>in</strong>k to Individual <strong>and</strong>Organizational CapabilitiesI. Successful Change Exercise• Two Purposes:1. L<strong>in</strong>k this morn<strong>in</strong>g’s session on strategic goals to <strong>in</strong>dividual <strong>and</strong>organizational growth2. Provide a basis for our focus on organizational learn<strong>in</strong>g <strong>and</strong>effectivenessII. Discussion: <strong>Leadership</strong>, Learn<strong>in</strong>g, Performance• Capacity to Grow → Learn → Transform Our Systems• Organizational Learn<strong>in</strong>g Capabilities• Learn<strong>in</strong>g <strong>and</strong> PerformanceIII. The Influence of Systems <strong>and</strong> Systemic Change• Four Response Modes• Identify<strong>in</strong>g the Interconnect<strong>in</strong>g Influences—Discussion <strong>and</strong> Small-GroupApplicationIV. <strong>Leadership</strong> Dialogue: Key Learn<strong>in</strong>gs <strong>and</strong> <strong>Leadership</strong> StoryDevelop<strong>in</strong>g Personal Mastery <strong>and</strong> VisionExhibit 13.6. Agenda for Session III. The Foundational Premises for This SessionII.III.IV.Persona <strong>and</strong> Character Models of Personal <strong>and</strong> <strong>Leadership</strong> <strong>Development</strong>Qualities Guid<strong>in</strong>g Character <strong>and</strong> PersonaPersonal MasteryV. The Inner Journey ItselfA. Conscious BeliefsB. Shadow BeliefsVI.VII.VIII.IX.Two Forces of Personal MasteryThe L<strong>in</strong>kage of Personal Mastery to the Other Discipl<strong>in</strong>esDevelop<strong>in</strong>g Personal VisionPersonal Mastery ExerciseX. Your Organizational VisionXI.Ongo<strong>in</strong>g Personal Mastery Exercise: Do Differently
328 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 13.7. Session Follow-up QuestionnaireDevelop<strong>in</strong>g Personal Mastery <strong>and</strong> Vision: Follow-up questions from our sessionon July 11, 2002We wanted to check <strong>in</strong> to see how our session has had an <strong>in</strong>fluence on your<strong>in</strong>teractions <strong>and</strong> reflections as a leader. Thank you for tak<strong>in</strong>g the time to th<strong>in</strong>kabout these questions.1. How have you seen your view of leadership change s<strong>in</strong>ce our session? Haveyou had any shifts <strong>in</strong> thought, action, or how you perceive th<strong>in</strong>gs? (Forexample, th<strong>in</strong>k of persona-character, conscious-shadow beliefs that we talkedabout.)2. Have you started to th<strong>in</strong>k about develop<strong>in</strong>g a personal or organizationalvision? Please elaborate . . .3. What did you learn <strong>in</strong> our session that you would be able (or have alreadybeen able) to use?4. Was there an “aha” for you? If so, what was it?5. Have you been able to do a “Do Differently?” What changes did you or othersexperience as a result of the “Do Differently?”6. What would you like to see as the focus for any subsequent sessions?
MIT 329Session IExhibit 13.8. Tra<strong>in</strong><strong>in</strong>g Content: Exercises Used <strong>in</strong> Organizational Learn<strong>in</strong>g SessionsThe <strong>Development</strong> of <strong>Leadership</strong> Capabilities:Its L<strong>in</strong>k to Individual <strong>and</strong> Organizational CapabilitiesExercise I—Successful Change ExerciseUnderst<strong>and</strong><strong>in</strong>g <strong>and</strong> Manag<strong>in</strong>g Change1. We have all experienced a successful change, whether with an organization, acommunity, a church, or even <strong>in</strong> our family. Describe an experience you’vebeen a part of that achieved a powerful change <strong>in</strong> a productive way. Whathappened? What made it successful?2. Take yourself forward <strong>in</strong> time. It is 2005 <strong>and</strong> your organization/department isoperat<strong>in</strong>g <strong>in</strong> a healthy, productive, <strong>and</strong> susta<strong>in</strong>able way. What is go<strong>in</strong>g on?How is it different? What was it you <strong>and</strong> others did back <strong>in</strong> 2001 to achievethis remarkable transformation?Exercise II—Application Exercise: Your Own Specific ExampleIn teams, choose an example from your own environment that you’d like to diagramus<strong>in</strong>g the systems th<strong>in</strong>k<strong>in</strong>g tools. With your team members, have one personbe the owner of the problem. The other team members will act as facilitators <strong>and</strong>consultants <strong>in</strong> help<strong>in</strong>g the “client” diagram the problem. Use the follow<strong>in</strong>g steps<strong>and</strong> diagrams as tools to guide you.Systems Th<strong>in</strong>k<strong>in</strong>g TemplateCompletedStep 1: Stat<strong>in</strong>g the Problem Yes NoStep 2: Tell<strong>in</strong>g the Story Yes NoStep 3: Identify<strong>in</strong>g the Key Variables Yes NoStep 4: Visualiz<strong>in</strong>g the Problem Yes NoStep 5: Creat<strong>in</strong>g the Loops Yes NoStep 6: Evaluat<strong>in</strong>g the Whole Process Yes NoStep 1: State the problem.Step 2: Tell it as a story.Step 3: Identify the key variables.Step 4: Visualize the problem us<strong>in</strong>g a behavior over time (BOT) graph.Step 5: Create the loop.Step 6: Evaluate the whole process, key <strong>in</strong>sights.(Cont<strong>in</strong>ued)
330 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 13.8. Tra<strong>in</strong><strong>in</strong>g Content: Exercises Used <strong>in</strong> Organizational Learn<strong>in</strong>g Sessions (Cont<strong>in</strong>ued)Session IIDevelop<strong>in</strong>g Personal Mastery <strong>and</strong> VisionExercise I—Personal Mastery ExerciseThis exercise will help you def<strong>in</strong>e your personal vision: what you want to createfor yourself <strong>and</strong> the world around you. This is one positive way to channel thestress <strong>in</strong> your life to more reward<strong>in</strong>g <strong>and</strong> fulfill<strong>in</strong>g endeavors.Your Own Personal Vision: Steps <strong>in</strong> the ProcessStep 1: Know<strong>in</strong>g what you want your life to beCreate your life plan first by know<strong>in</strong>g why you are here, often called your mission.Summarize your mission with us<strong>in</strong>g one word—your word-<strong>in</strong>-the-box. Inother words, what “one word” guides you . . . that you want to strive for.Your word-<strong>in</strong>-the-box could be service, excellence, teamwork, peace, happ<strong>in</strong>ess,or anyth<strong>in</strong>g else . . .Here’s your very own place for your word-<strong>in</strong>-the-box:Step 2: Go<strong>in</strong>g deeper with our word-<strong>in</strong>-the boxTh<strong>in</strong>k about your word-<strong>in</strong>-the box <strong>and</strong> what that word means to you <strong>and</strong> yourlife’s mission or purpose. Picture that word <strong>in</strong> three different environments:• At Home/Your Social Life• At Work• With<strong>in</strong> YourselfWhat would you need to change <strong>in</strong> order to br<strong>in</strong>g forth/<strong>in</strong>corporate your wordeven more <strong>in</strong> each of these three environments?____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
MIT 331Exhibit 13.8. (Cont<strong>in</strong>ued)Step 3: Creat<strong>in</strong>g a Result (Beg<strong>in</strong> with the end <strong>in</strong> m<strong>in</strong>d)Imag<strong>in</strong>e achiev<strong>in</strong>g a result <strong>in</strong> your life that you deeply desire. Beg<strong>in</strong> with thequestion, “What do I really want?” Describe the experience you have imag<strong>in</strong>edby ask<strong>in</strong>g these questions: What does it look like? How does it make me feel?(proud, significant, successful, other feel<strong>in</strong>gs . . .)____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Step 4: Describ<strong>in</strong>g Your Personal VisionYou will now want to focus on <strong>and</strong> get clear about the results you want to see <strong>in</strong>your life. Here are some questions to help you <strong>in</strong> this area:• What do you want to be do<strong>in</strong>g <strong>in</strong> three years time that you are not do<strong>in</strong>g today?____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________• What critical skills or “learn<strong>in</strong>gs” will you have developed <strong>in</strong> that time?____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________• What do you want to contribute (or leave beh<strong>in</strong>d) as your legacy?____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________• What are some concrete, practical steps that you can take to cont<strong>in</strong>ue todevelop your personal vision?____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________(Cont<strong>in</strong>ued)
332 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 13.8. Tra<strong>in</strong><strong>in</strong>g Content: Exercises Used <strong>in</strong> Organizational Learn<strong>in</strong>g Sessions (Cont<strong>in</strong>ued)Exercise II—<strong>Development</strong> of an Organizational VisionTake yourself forward <strong>in</strong> time. It is 2005 <strong>and</strong> your organization/department isoperat<strong>in</strong>g <strong>in</strong> a healthy, productive, <strong>and</strong> susta<strong>in</strong>able way.–What is go<strong>in</strong>g on?–How is it different?–Why are we go<strong>in</strong>g there?–How are we go<strong>in</strong>g to get there?–What was it you <strong>and</strong> others did back <strong>in</strong> 2002 to achieve this remarkabletransformation?–What creative tensions need to be resolved <strong>in</strong> order for this change to happen?Note: This exercise was exp<strong>and</strong>ed upon from Session I <strong>and</strong> highlighted aga<strong>in</strong> <strong>in</strong> Session II toreflect changes <strong>in</strong> th<strong>in</strong>k<strong>in</strong>g <strong>and</strong> to capture new participants.Exercise III—Ongo<strong>in</strong>g Personal Mastery Exercise: Do DifferentlyIn order to start to <strong>in</strong>itiate any k<strong>in</strong>d of change, it is necessary to first identifysometh<strong>in</strong>g that you want to change or do differently <strong>in</strong> your life. You can startwith a goal that you’ve been want<strong>in</strong>g to <strong>in</strong>itiate, work on some “irritation” orchallenge that you’ve been experienc<strong>in</strong>g, or just do someth<strong>in</strong>g <strong>in</strong> a different wayto stretch your creativity.This exercise <strong>in</strong>volves three steps.Step 1: Make some change ...dosometh<strong>in</strong>g differently . . . start on some goal.Describe that experience:____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Step 2: Describe any <strong>in</strong>sights you had from your “do differently.”____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Step 3: Can you now transfer those <strong>in</strong>sights to a susta<strong>in</strong>ed, on-go<strong>in</strong>g practice?____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________Source: Copyright © Zulauf & Associates, 2001–2002. Repr<strong>in</strong>ted with permission.References: The Journal of Personal <strong>and</strong> Professional Success, Vol. 2, Issue 4, <strong>and</strong> The Fifth Discipl<strong>in</strong>eFieldbook.
MIT 333ABOUT THE CONTRIBUTORSJoseph Gifun, PE, is assistant director of facilities for <strong>in</strong>frastructure <strong>and</strong> specialprojects <strong>in</strong> the Massachusetts Institute of Technology’s Department of Facilities,where he has worked <strong>in</strong> various capacities over the past eighteen years. Dur<strong>in</strong>gthe past n<strong>in</strong>e years, Joe’s focus has shifted from eng<strong>in</strong>eer<strong>in</strong>g to bus<strong>in</strong>ess processdesign <strong>and</strong> organizational learn<strong>in</strong>g. He participated <strong>in</strong> the creation of the Departmentof Facilities’ strategic plan <strong>and</strong> led the design <strong>and</strong> implementation of thedepartment’s repair <strong>and</strong> ma<strong>in</strong>tenance reeng<strong>in</strong>eer<strong>in</strong>g effort <strong>and</strong> co-managedthe resultant process. He developed <strong>and</strong> implemented MIT’s <strong>in</strong>frastructurerenewal program <strong>and</strong> led it from its <strong>in</strong>ception. Joe is a registered professionaleng<strong>in</strong>eer <strong>in</strong> the Commonwealth of Massachusetts <strong>and</strong> he holds a Bachelor ofScience degree <strong>in</strong> civil eng<strong>in</strong>eer<strong>in</strong>g from Lowell Technological Institute <strong>and</strong> aMaster’s degree <strong>in</strong> adult <strong>and</strong> organizational learn<strong>in</strong>g from Suffolk <strong>University</strong>.Patricia Kennedy Graham is director of adm<strong>in</strong>istration for the MassachusettsInstitute of Technology’s Department of Facilities. In that capacity, Pat has responsibilityfor the human resource, learn<strong>in</strong>g <strong>and</strong> performance, <strong>and</strong> IT teams thatsupport the entire department. Additionally, she participates as a member of theoperational leadership team, the strategic leadership team, <strong>and</strong> the director’steam for the department. Pat worked at MIT’s L<strong>in</strong>coln Laboratory, a federallyfunded research <strong>and</strong> development center, as associate group leader. Pat leftL<strong>in</strong>coln Laboratory to be the director of adm<strong>in</strong>istration for the Boston office ofDeloitte & Touche. Prior to return<strong>in</strong>g to MIT to work <strong>in</strong> the Department of Facilities,she was manag<strong>in</strong>g director at Surgency, Inc., a management consult<strong>in</strong>g firmspecializ<strong>in</strong>g <strong>in</strong> best bus<strong>in</strong>ess practices <strong>and</strong> e-bus<strong>in</strong>ess transformation consult<strong>in</strong>g.Pat received her Bachelor of Arts degree from Boston College <strong>and</strong> Master’s degree<strong>in</strong> adm<strong>in</strong>istration from Boston <strong>University</strong>.Dr. Carol Ann Zulauf is associate professor of adult <strong>and</strong> organizational learn<strong>in</strong>gat Suffolk <strong>University</strong> <strong>in</strong> Boston. She also has her own consult<strong>in</strong>g practice,specializ<strong>in</strong>g <strong>in</strong> leadership, team development, <strong>and</strong> systems th<strong>in</strong>k<strong>in</strong>g. Her clientsspan high-tech, federal <strong>and</strong> state government, health care, education, <strong>and</strong>consumer product organizations. Her prior work experience <strong>in</strong>cludes be<strong>in</strong>g asenior tra<strong>in</strong><strong>in</strong>g <strong>in</strong>structor for Motorola, Inc. Dr. Zulauf has many publicationsto her credit, <strong>in</strong>clud<strong>in</strong>g her newly published book, The Big Picture: A SystemsTh<strong>in</strong>k<strong>in</strong>g Story for Managers (L<strong>in</strong>kage Press, 2001). She is also a frequentpresenter at regional, national, <strong>and</strong> <strong>in</strong>ternational conferences.
SCHAPTER FOURTEENMotorolaSThis case study describes Motorola’s success <strong>in</strong> quickly acquir<strong>in</strong>g, develop<strong>in</strong>g,<strong>and</strong> leverag<strong>in</strong>g the world-class leadership talent it needed to turn around thecompany’s performance <strong>and</strong> accelerate its return to prom<strong>in</strong>ence <strong>in</strong> the worldmarket through talent management, recruitment <strong>and</strong> selection procedures,career plann<strong>in</strong>g <strong>and</strong> development, l<strong>in</strong>kage of performance to rewards,assistance <strong>in</strong> transition, <strong>and</strong> clear st<strong>and</strong>ards for leadership.OVERVIEW 335THE DEMAND SIDE 335THE SUPPLY SIDE 336LEADERSHIP SUPPLY IS A CORE BUSINESS PRINCIPLE 337THE NEW MOTOROLA LEADERSHIP SUPPLY PROCESS 337Recruit <strong>and</strong> Select 337Performance Management 338TALENT MANAGEMENT 338Career Plann<strong>in</strong>g <strong>and</strong> <strong>Development</strong> 338Rewards 338TRANSITION ASSISTANCE 338PERFORMANCE MANAGEMENT IS KEY 339<strong>Leadership</strong> St<strong>and</strong>ards 339Motorola’s Performance Management Process 340L<strong>in</strong>k to Rewards 341SO WHAT? 342LESSONS LEARNED AND “DO DIFFERENTLIES” 342REFERENCES 344ABOUT THE CONTRIBUTORS 344334
MOTOROLA 335OVERVIEWWhy would the CEO of a Fortune 50 company with more than 100,000 employeesworldwide dedicate one-third of his time to the creation <strong>and</strong> implementation of aleadership development system? Because companies with the best leaders w<strong>in</strong>.Beg<strong>in</strong>n<strong>in</strong>g <strong>in</strong> 2000, Motorola undertook significant restructur<strong>in</strong>g of its bus<strong>in</strong>esses<strong>in</strong> response to f<strong>in</strong>ancial downturn brought about by (among other th<strong>in</strong>gs)the dot-com crash <strong>and</strong> the concurrent telecom <strong>in</strong>dustry meltdown. As leadershipteams were redistributed across new organization structures, it became<strong>in</strong>creas<strong>in</strong>gly clear to decision makers that the <strong>in</strong>ternal cadre of leadership talentwas not sufficient to meet the challenges fac<strong>in</strong>g the new organization.In essence, the leadership situation fac<strong>in</strong>g Motorola was an economic one—aquestion of supply <strong>and</strong> dem<strong>and</strong>. The new organization structure created dem<strong>and</strong>not only for more leaders, but also for a different k<strong>in</strong>d of leader who could transformthe company <strong>and</strong> sharpen Motorola’s competitive edge. But the <strong>in</strong>ternalleadership supply cha<strong>in</strong> was not produc<strong>in</strong>g sufficient talent to meet this newdem<strong>and</strong>; to compound matters, a war for talent had erupted <strong>in</strong> the externalmarket, further reduc<strong>in</strong>g supply.THE DEMAND SIDEDem<strong>and</strong> for more leaders. As part of the restructur<strong>in</strong>g, Motorola undertook anexercise to estimate the number of additional general managers <strong>and</strong> functionalvice presidents that would be needed to achieve the company’s five-year growthtargets. The gap between the number of leaders needed over five years <strong>and</strong> thenumber of leaders available was substantial. The situation looked even worseonce anticipated retirements, open positions, <strong>and</strong> underperformers were taken<strong>in</strong>to account. The message was clear: the company needed more leaders to growbut simply did not have enough “ready now” leaders <strong>in</strong> the pipel<strong>in</strong>e to do so.Dem<strong>and</strong> for a different k<strong>in</strong>d of leader. Historically, Motorola’s strategy wasto <strong>in</strong>vent excit<strong>in</strong>g new technologies <strong>and</strong> then create new markets around them.The company prospered as it executed this strategy <strong>in</strong> an era of economicgrowth with virtually no competitive threat <strong>in</strong> its pr<strong>in</strong>cipal markets. The late1990s, however, <strong>in</strong>troduced a new reality when competitors began to br<strong>in</strong>g newproducts <strong>and</strong> technologies to market more quickly than Motorola, <strong>and</strong> subsequentlywon market share <strong>in</strong> spaces Motorola once owned almost exclusively.It was apparent that Motorola’s traditional style of leadership was not up to thejob of transform<strong>in</strong>g the company to take on the competition by becom<strong>in</strong>g morecustomer-focused, solutions-oriented, quick to adapt to changes <strong>in</strong> markets <strong>and</strong>technologies, <strong>and</strong> collaborative across bus<strong>in</strong>ess units. So beyond hav<strong>in</strong>g too few
336 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEleaders, Motorola also was short of leaders experienced <strong>in</strong> driv<strong>in</strong>g change <strong>and</strong>rebuild<strong>in</strong>g the bus<strong>in</strong>ess.The war for talent. In McK<strong>in</strong>sey & Company’s 1998 l<strong>and</strong>mark study, The Warfor Talent, Ed Michaels concluded that go<strong>in</strong>g forward, companies’ competitiveedge would lie almost exclusively <strong>in</strong> the quality of its leadership: “Capital isaccessible for good ideas <strong>and</strong> good projects. Strategies are transparent; even ifyou’ve got a smart strategy, others simply copy it. And the half-life of technologyis grow<strong>in</strong>g shorter all the time. . . . In that k<strong>in</strong>d of environment, all that matters istalent.” In a few short words, the McK<strong>in</strong>sey study summed up the environment<strong>in</strong> which Motorola found itself <strong>and</strong> underscored the importance of dramaticallytransform<strong>in</strong>g the leadership supply cha<strong>in</strong> to produce the k<strong>in</strong>d of leaders requiredto sharpen the company’s competitive edge.THE SUPPLY SIDEInternal talent supply. Dur<strong>in</strong>g the period of tremendous growth Motorola experienced<strong>in</strong> the early- to mid-1990s, scant attention was given to develop<strong>in</strong>g thenext generation of leaders. More press<strong>in</strong>g was manufactur<strong>in</strong>g <strong>and</strong> shipp<strong>in</strong>gproduct to meet seem<strong>in</strong>gly <strong>in</strong>satiable customer dem<strong>and</strong>. As a result, a largecont<strong>in</strong>gent of next-generation leadership talent never fully developed fundamentalmanagement <strong>and</strong> leadership skills. Later, as Motorola restructured <strong>in</strong>response to the market downturn, reduction of the workforce by nearly onethirdfurther limited the size of the <strong>in</strong>ternal leadership pipel<strong>in</strong>e <strong>and</strong> the availablemix of leadership skills.External talent supply. At the same time Motorola was experienc<strong>in</strong>g a dramatic<strong>in</strong>crease <strong>in</strong> leadership dem<strong>and</strong>, so was the rest of the world. The dot-comcraze <strong>and</strong> concurrent rapid expansion of the global economy enticed numbersof bus<strong>in</strong>ess school graduates <strong>and</strong> experienced leaders alike away from traditionalcorporate roles to Internet start-up companies, thus reduc<strong>in</strong>g the external supplyof available talent. With leadership dem<strong>and</strong> outstripp<strong>in</strong>g supply, a fluid, freeagent market emerged of technical, professional, <strong>and</strong> management talent whosold their services to the highest bidder <strong>and</strong> were quick to move on when abetter deal was offered elsewhere. Even as the world economy slowed, the freeagent market persisted, possibly because employees feel less loyal to theiremployers, who through downsiz<strong>in</strong>g, cost cutt<strong>in</strong>g, <strong>and</strong> “do<strong>in</strong>g more with less”have demonstrated less loyalty to employees. So even though more talent maybe available dur<strong>in</strong>g economic slowdown, competition for quality leadershiptalent rema<strong>in</strong>s <strong>in</strong>tense.Chang<strong>in</strong>g demographics. From a purely statistical st<strong>and</strong>po<strong>in</strong>t, the demographicshift <strong>in</strong> the U.S. population from the Baby Boom generation, the oldestof whom are rapidly approach<strong>in</strong>g retirement, to the Baby Bust generation
MOTOROLA 337portends an even smaller pool of leadership talent <strong>in</strong> the com<strong>in</strong>g years. TheMcK<strong>in</strong>sey study stated it quite succ<strong>in</strong>ctly: “In 15 years, there will be 15 percentfewer Americans <strong>in</strong> the thirty-five- to forty-five-year-old range than there arenow. At the same time the U.S. economy is likely to grow at 3–4 percent peryear. . . . That sets the stage for a talent war.”LEADERSHIP SUPPLY IS A CORE BUSINESS PRINCIPLEFram<strong>in</strong>g the leadership issue as a matter of <strong>in</strong>sufficient supply for projecteddem<strong>and</strong> was key to creat<strong>in</strong>g awareness that attract<strong>in</strong>g, develop<strong>in</strong>g, <strong>and</strong> reta<strong>in</strong><strong>in</strong>gleadership talent is an essential core bus<strong>in</strong>ess process. To underst<strong>and</strong> why thesupply side of the equation was not function<strong>in</strong>g effectively, Motorola benchmarkedbest practices <strong>in</strong> f<strong>in</strong>ancially successful companies. When a compositemap of best practice leadership supply processes was overlaid on a map ofMotorola’s “as-is” leadership supply practices, gaps <strong>and</strong> weaknesses requir<strong>in</strong>gattention were clearly illum<strong>in</strong>ated. As a result, the CEO called for a new leadershipsupply process to be created <strong>and</strong> implemented quickly, as the marketwould not wait for the company to catch up.From the outset, it was determ<strong>in</strong>ed that the new leadership supply processwould be designed “for leaders by leaders.” Active <strong>in</strong>volvement of the company’sleaders created buy-<strong>in</strong> for the organizational <strong>and</strong> cultural change thatnaturally would accompany this significant shift away from traditional practices.It also <strong>in</strong>creased the likelihood that the deliverables of the redesign effort wouldwork <strong>and</strong> would pass the “user acceptance” test.THE NEW MOTOROLA LEADERSHIP SUPPLY PROCESSThe new Motorola leadership supply process comprises six major components:recruit <strong>and</strong> select, talent management, career plann<strong>in</strong>g <strong>and</strong> development,transition assistance, performance management, <strong>and</strong> rewards. The componentswere designed to work <strong>in</strong>terdependently to produce the quantity <strong>and</strong> qualityof leadership talent required to w<strong>in</strong>. All are founded on Motorola’s st<strong>and</strong>ards ofleadership behavior, <strong>and</strong> the entire process is supported by an <strong>in</strong>tegrated,web-based <strong>in</strong>formation system referred to as Talent Web.Recruit <strong>and</strong> SelectThe recruit <strong>and</strong> select process is a proactive approach to manag<strong>in</strong>g leadershipsupply relative to dem<strong>and</strong>. Bus<strong>in</strong>ess strategy is translated <strong>in</strong>to leadership needs,which are compared to the make-up of the available <strong>in</strong>ternal supply <strong>and</strong> actionstaken to close any gaps through accelerated development of <strong>in</strong>ternal talent oracquisition of talent from the external market.
338 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEPerformance ManagementThe performance management process aligns employees’ performance expectations,results, behaviors, <strong>and</strong> career plans with the organization’s bus<strong>in</strong>essgoals. It consists of quarterly dialogues that help employees maximize theircontributions to the bus<strong>in</strong>ess <strong>and</strong> atta<strong>in</strong> job satisfaction, beg<strong>in</strong>n<strong>in</strong>g with goalsett<strong>in</strong>g at the start of the year, performance monitor<strong>in</strong>g throughout the year, <strong>and</strong>then performance evaluation at the end of the year. As will be discussed later<strong>in</strong> this chapter, performance management is the central component of theleadership supply process.TALENT MANAGEMENTGreat companies manage their talent as aggressively as they do their P&Ls. AtMotorola, talent management is an ongo<strong>in</strong>g process of mov<strong>in</strong>g, develop<strong>in</strong>g, <strong>and</strong>reward<strong>in</strong>g top talent <strong>and</strong> reassign<strong>in</strong>g or transition<strong>in</strong>g out of the company underperform<strong>in</strong>gtalent. The highlight of the process is a series of semi-annual, formalmeet<strong>in</strong>gs with the chief executive officer to discuss how talent is be<strong>in</strong>g leveraged<strong>in</strong> the organization. Action plans are agreed upon, <strong>and</strong> progress to planreviewed <strong>in</strong> the next set of meet<strong>in</strong>gs.Career Plann<strong>in</strong>g <strong>and</strong> <strong>Development</strong>Career plann<strong>in</strong>g <strong>and</strong> development focuses both on performance development forthe current role <strong>and</strong> career development for future roles. The <strong>in</strong>tent is to create anenvironment <strong>in</strong> which developmental activity is perceived as a good th<strong>in</strong>g—avisible <strong>in</strong>vestment <strong>in</strong> talent <strong>and</strong> the future of the organization. <strong>Development</strong>options are several, <strong>in</strong>clud<strong>in</strong>g, for example, mentor<strong>in</strong>g, executive coach<strong>in</strong>g, expansionof job scope, transfer to a new job offer<strong>in</strong>g specific development opportunities,special projects, <strong>in</strong>-class or Internet-based coursework, lateral job rotations,assignment <strong>in</strong> an “office of” or “assistant” role, <strong>and</strong> <strong>in</strong>ternational assignments.RewardsExecutive rewards play a key role <strong>in</strong> driv<strong>in</strong>g Motorola’s change to a performancebasedculture. Differential <strong>in</strong>vestment—reward<strong>in</strong>g executives commensurate withtheir overall contribution to the success of the company—sends a clear messageto employees that results <strong>and</strong> leadership behavior are what count.TRANSITION ASSISTANCEThe transition assistance process was created to provide a formalized, systematicway to either re-deploy or remove from the leadership pipel<strong>in</strong>e <strong>in</strong>dividualswho are not progress<strong>in</strong>g satisfactorily. Such a mechanism is necessary to ensure
MOTOROLA 339that sufficient resources are available to acquire, develop, motivate, <strong>and</strong> ma<strong>in</strong>ta<strong>in</strong>a steady flow of top talent <strong>in</strong>to leadership roles.PERFORMANCE MANAGEMENT IS KEYEconomic success is closely tied to a strong performance ethic <strong>in</strong> an organization.This was a conclusion drawn <strong>in</strong> a 2001 McK<strong>in</strong>sey & Company (McK<strong>in</strong>sey,2001) survey of senior executives <strong>in</strong> high-perform<strong>in</strong>g companies. High-perform<strong>in</strong>gcompanies align operations <strong>and</strong> practices to an attractive end state <strong>and</strong> set aggressive,well-understood goals for achiev<strong>in</strong>g it. Organization members feel a senseof ownership for achiev<strong>in</strong>g the end state, are given frequent <strong>and</strong> accurate performancefeedback, <strong>and</strong> experience rewards <strong>and</strong> consequences commensuratewith performance.The McK<strong>in</strong>sey results re<strong>in</strong>forced the f<strong>in</strong>d<strong>in</strong>gs of Motorola’s benchmark<strong>in</strong>gstudy that an objective performance management process, based on specificleadership <strong>and</strong> performance criteria, was key to creat<strong>in</strong>g the performance-basedculture required to reshape the company’s future.<strong>Leadership</strong> St<strong>and</strong>ardsEarly on, Motorola recognized that change would only beg<strong>in</strong> when the company’sleadership was clear on what they were to do <strong>and</strong> how. Consequently, anew set of leadership st<strong>and</strong>ards was articulated to def<strong>in</strong>e the k<strong>in</strong>d of leaderneeded to achieve the organizational <strong>and</strong> cultural change critical to turn<strong>in</strong>garound Motorola’s bus<strong>in</strong>ess performance.In-depth <strong>in</strong>terviews were conducted with Motorola executives <strong>and</strong> thoroughreviews of the academic <strong>and</strong> popular literatures were compiled to develop a frameworkof the leadership competencies <strong>and</strong> behaviors required to transformMotorola to a customer-focused <strong>and</strong> performance-based corporation. The outcomeof this work was Motorola’s “4e’s Always 1” leadership st<strong>and</strong>ards:• Envision. Identifies mean<strong>in</strong>gful <strong>and</strong> <strong>in</strong>novative change that producesprofitable growth. Comes up with the vision, strategies, <strong>and</strong> viable planthat achieve it.• Energize. Excites employees, customer, <strong>and</strong> partners around w<strong>in</strong>n<strong>in</strong>gideas. Br<strong>in</strong>gs extraord<strong>in</strong>arily high personal energy to everyth<strong>in</strong>g. Createsan environment where everyone has a passion to excel <strong>and</strong> an opportunityto contribute.• Edge. Cuts to the essence of what is important. Makes bold, timelydecisions. Insists that the organization outperform expectations. Br<strong>in</strong>gsa healthy dissatisfaction with the way th<strong>in</strong>gs are. Makes tough callswhen the bus<strong>in</strong>ess or <strong>in</strong>dividuals are not perform<strong>in</strong>g.
340 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE• Execute. Achieve results significantly better <strong>and</strong> faster than our competitorsby employ<strong>in</strong>g <strong>in</strong>novative, proven, <strong>and</strong> rigorous management practices.Personally meets commitments <strong>and</strong> keeps promises.• And always, Ethics <strong>and</strong> character. Conducts bus<strong>in</strong>ess ethically always<strong>and</strong> everywhere. Treats all people <strong>and</strong> all cultures with respect <strong>and</strong>dignity. Keeps one’s personal ambitions <strong>and</strong> emotional reactions from<strong>in</strong>terfer<strong>in</strong>g.Motorola’s CEO also articulated a five-po<strong>in</strong>t plan for achiev<strong>in</strong>g bus<strong>in</strong>essresults <strong>in</strong> which improved leadership effectiveness topped the list.Motorola’s Performance Management ProcessMotorola’s performance management process is an ongo<strong>in</strong>g cycle of sett<strong>in</strong>g personalgoals that align with the bus<strong>in</strong>ess’s scorecard objectives, then observ<strong>in</strong>g<strong>and</strong> discuss<strong>in</strong>g performance issues, development plans, job match, <strong>and</strong> careerplans throughout the year. The process culm<strong>in</strong>ates with year-end assessment ofleadership behavior <strong>and</strong> bus<strong>in</strong>ess results, calibrated across leadership ranks,which <strong>in</strong> turn <strong>in</strong>forms differential <strong>in</strong>vestment decisions (for example, <strong>in</strong>centiveplan payout, executive education opportunities, assignment to special CEOproject teams) based on relative contribution to the company’s performance.Outcomes of assessment <strong>and</strong> calibration of relative performance feed <strong>in</strong>to goalsett<strong>in</strong>g for the next year, <strong>and</strong> the cycle repeats.Plann<strong>in</strong>g Dialogue. The plann<strong>in</strong>g dialogue occurs at the start of the year, <strong>and</strong>its purpose is to create mutual underst<strong>and</strong><strong>in</strong>g of performance expectationsbetween employees <strong>and</strong> their managers. The discussion focuses on def<strong>in</strong><strong>in</strong>gresults goals aligned with the bus<strong>in</strong>ess or function scorecard, <strong>and</strong> leadershipgoals focused on behavior most critical for atta<strong>in</strong><strong>in</strong>g expected results. Once goalsare def<strong>in</strong>ed, the discussion turns to establish<strong>in</strong>g professional development <strong>and</strong>career plans that will enable employees to achieve their immediate performance<strong>and</strong> future career goals.Checkpo<strong>in</strong>t Dialogues. The purpose of checkpo<strong>in</strong>t dialogues held <strong>in</strong> the second<strong>and</strong> third quarters is to review progress to goals. Key to these discussionsis performance feedback from key work partners <strong>and</strong> matrix managers. Checkpo<strong>in</strong>tdialogues provide the opportunity for employees <strong>and</strong> their managers toassess progress to goals <strong>and</strong> development plans, discuss goal modificationsto support chang<strong>in</strong>g circumstances, create action plans to address barriers tosuccess, <strong>and</strong> check for underst<strong>and</strong><strong>in</strong>g <strong>and</strong> agreement.Assessment of Results <strong>and</strong> Behaviors. At year-end, two performance assessmentsare made. First, leadership effectiveness is evaluated via a web-based
MOTOROLA 341multirater assessment based on the “4e’s Always 1” leadership st<strong>and</strong>ards <strong>and</strong>adm<strong>in</strong>istered to executives, their managers, <strong>and</strong> their subord<strong>in</strong>ates. Rater <strong>in</strong>putis comb<strong>in</strong>ed statistically to produce an overall leadership behavior score. Second,performance to results goals is evaluated <strong>and</strong> jo<strong>in</strong>tly agreed upon by the employee<strong>and</strong> manager, us<strong>in</strong>g metrics established dur<strong>in</strong>g the plann<strong>in</strong>g dialogue.Calibration. Follow<strong>in</strong>g year-end performance assessment, managers participate<strong>in</strong> a calibration process—supported by the web-based <strong>in</strong>formation system—toshare rationale for performance evaluations <strong>and</strong> come to agreement on therelative performance of the employees report<strong>in</strong>g to them.Managers view their direct reports’ results <strong>and</strong> leadership behavior scoresplotted graphically (with results plotted on the horizontal axis <strong>and</strong> behaviorsplotted on the vertical axis). Discussion follows of each person’s <strong>in</strong>dividual<strong>and</strong> relative contribution based on results, leadership behaviors, <strong>and</strong> other legitimatebus<strong>in</strong>ess factors (such as job complexity, stretch <strong>in</strong> goals, technical skills,special expertise, breadth of experience). The end result is a collectively determ<strong>in</strong>edrelative rank<strong>in</strong>g of employees <strong>in</strong>to most effective, solidly effective, <strong>and</strong>least effective group<strong>in</strong>gs.Summary Dialogue. Follow<strong>in</strong>g calibration, managers <strong>and</strong> employees completethe summary dialogue to review <strong>in</strong>dividual performance through year-end, discusscalibration outcomes, ref<strong>in</strong>e development plans, <strong>and</strong> beg<strong>in</strong> plann<strong>in</strong>g for thecom<strong>in</strong>g year. Aid<strong>in</strong>g the discussion is a comprehensive feedback report derivedfrom the multirater assessment that not only displays rat<strong>in</strong>gs <strong>and</strong> comments butalso suggests development actions from For Your Improvement (Lombardo &Eich<strong>in</strong>ger, 2000) for areas requir<strong>in</strong>g improvement. These suggestions are veryuseful <strong>in</strong> guid<strong>in</strong>g development of performance goals, creat<strong>in</strong>g developmentplans, <strong>and</strong> discuss<strong>in</strong>g career plans.L<strong>in</strong>k to RewardsExecutive rewards play a key role <strong>in</strong> driv<strong>in</strong>g Motorola’s change to a performancebasedculture. Differential <strong>in</strong>vestment—reward<strong>in</strong>g executives commensurate withtheir overall contribution to the success of the company as determ<strong>in</strong>ed dur<strong>in</strong>gcalibration—sends a clear message to employees that results <strong>and</strong> leadershipbehavior are what count. Leaders considered most effective have produced breakawayresults <strong>and</strong> have demonstrated exemplary leadership behavior. They arerewarded with challeng<strong>in</strong>g job assignments, promotional <strong>and</strong> developmentalopportunities, <strong>and</strong> significant monetary awards. Somewhat less, yet still considerable,<strong>in</strong>vestment is made <strong>in</strong> solidly effective leaders—those who “deliver thegoods” consistently <strong>and</strong> demonstrate leadership behavior. They are compensatedcompetitively <strong>and</strong> provided opportunities for cont<strong>in</strong>ued learn<strong>in</strong>g <strong>and</strong> development.Modest <strong>in</strong>vestment is made <strong>in</strong> least effective talent to f<strong>in</strong>d a way to
342 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEimprove performance through job reassignment, performance improvementplans, referral to the company’s employee assistance program, or as a last resort,separation with dignity.SO WHAT?By the end of its third full year of implementation, the leadership supplyprocess was produc<strong>in</strong>g observable change. In those years, new leadership talentswere placed <strong>in</strong> all but three of the roles report<strong>in</strong>g to the CEO; one-third ofthe new senior staff had been brought <strong>in</strong> from outside the company; <strong>and</strong> abalance of technical <strong>and</strong> general management skills among the staff had beenachieved. By year-end 2003, Motorola had placed over seventy new leaders <strong>in</strong>its top one hundred jobs, <strong>in</strong>clud<strong>in</strong>g a new CEO, COO, CFO, CTO, <strong>and</strong> six sectorpresidents.Probably the most tell<strong>in</strong>g story, however, is Motorola’s improved bus<strong>in</strong>essperformance <strong>in</strong> a very tough economic environment. Based on the company’sfourth quarter, 2003 f<strong>in</strong>ancial report:• Earn<strong>in</strong>gs per share were $0.38 (exclud<strong>in</strong>g special charges), up from$1.78 at year-end 2001• The company had reported profitability for seven consecutive quarters• Operat<strong>in</strong>g marg<strong>in</strong> was 4.3 percent, up from 6.0 percent for 2001• The company had reported twelve consecutive quarters of positivecash flow• Net debt was $100 million, down from $7 billion <strong>in</strong> 2000• Net debt to net debt equity ratio was 0.3 percent, the lowest <strong>in</strong>twenty yearsLESSONS LEARNED AND “DO DIFFERENTLIES”Reflection over the past three years of development <strong>and</strong> implementation yields<strong>in</strong>sights <strong>in</strong>to what worked well, <strong>and</strong> what didn’t work so well. Both provideperspective for others contemplat<strong>in</strong>g the leadership supply issue.What Worked Well?• Strong sponsorship by a key executive dur<strong>in</strong>g the redesign phase led toCEO ownership of the process.• Bus<strong>in</strong>ess leaders were actively <strong>in</strong>volved <strong>in</strong> the redesign process. Humanresources did not own the redesign, but <strong>in</strong>stead worked with <strong>and</strong>through bus<strong>in</strong>ess leaders who led the redesign teams.
MOTOROLA 343• Hir<strong>in</strong>g an outside consultant to complete the benchmark<strong>in</strong>g study gaveMotorola access to <strong>in</strong>formation about leadership programs <strong>in</strong> othercompanies without expend<strong>in</strong>g scarce <strong>in</strong>ternal resources to collect <strong>and</strong>consolidate this <strong>in</strong>formation.• Web-enabl<strong>in</strong>g the process was key to achiev<strong>in</strong>g consistency of applicationthroughout the company. It also m<strong>in</strong>imized ongo<strong>in</strong>g adm<strong>in</strong>istrationbecause the web-based tools compile <strong>and</strong> report without the need forhuman <strong>in</strong>tervention.• The Office of <strong>Leadership</strong>, the new central organization created tomanage the leadership supply process, was purposefully kept verysmall. With web-based tools <strong>and</strong> implementation carried out byresources with<strong>in</strong> the <strong>in</strong>dividual bus<strong>in</strong>ess units, the Office of <strong>Leadership</strong>was staffed by fewer than ten people, m<strong>in</strong>imiz<strong>in</strong>g cost to the organization<strong>and</strong> avoid<strong>in</strong>g the trap of creat<strong>in</strong>g a centralized bureaucracy.• The CEO m<strong>and</strong>ated that executives comply with the new leadershipsupply process, particularly with respect to assign<strong>in</strong>g rewards commensuratewith personal <strong>and</strong> organizational performance. Although unpopular,the m<strong>and</strong>ate served to jump-start the process, short-circuit resistanceto change, <strong>and</strong> quickly ga<strong>in</strong> acceptance as the value of the processbecame evident.• Establish<strong>in</strong>g semi-annual talent management reviews between sectorpresident <strong>and</strong> CEO created a rhythmic cadence to the process, re<strong>in</strong>forcedthe expectation that development <strong>and</strong> deployment of leadership talentwas to be managed as aggressively as P&Ls, <strong>and</strong> ensured cont<strong>in</strong>uedownership of executive leadership talent <strong>and</strong> the leadership supplyprocess by the CEO.“Do Differentlies”• The broader human resources organization was not kept up-to-datedur<strong>in</strong>g the redesign phase. As a consequence, implementation washampered by the need to assuage feel<strong>in</strong>gs of ill will from hav<strong>in</strong>gbeen excluded from “the action,” conv<strong>in</strong>ce HR associates of the needfor change, <strong>and</strong> enlist them as change agents as the process wasrolled out.• An external management consult<strong>in</strong>g firm was brought <strong>in</strong> to build, <strong>in</strong>tegrate,<strong>and</strong> pilot HR processes, tools, <strong>and</strong> procedures. Given the successachieved through partnership with an external consultant <strong>in</strong> theredesign phase, this approach seemed reasonable. Unfortunately, theconsult<strong>in</strong>g team was not up to the challenge <strong>and</strong> the project lostmomentum until an <strong>in</strong>ternal team was assembled to take over <strong>and</strong> completeit. In retrospect, the build <strong>and</strong> implementation phases should have
344 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEbeen led by an <strong>in</strong>ternal team from the outset, with consultants brought<strong>in</strong> as needed to work on discrete, specific components requir<strong>in</strong>g expertisenot available with<strong>in</strong> Motorola.• The web-based <strong>in</strong>frastructure support<strong>in</strong>g the process was developed<strong>in</strong>ternally, saddl<strong>in</strong>g Motorola with the cost of ongo<strong>in</strong>g ma<strong>in</strong>tenance <strong>and</strong>system improvements. Had the sophisticated HR systems that existtoday been available then, the better option would have been tocustomize commercially available software to meet Motorola’s specificneeds.REFERENCESLombardo, M. M., & Eich<strong>in</strong>ger, R. W. (Eds.). (2000). For your improvement (3rd ed.).M<strong>in</strong>neapolis, M<strong>in</strong>nesota: Lom<strong>in</strong>ger Limited, Inc.McK<strong>in</strong>sey & Company. (1998). “The war for talent.” The McK<strong>in</strong>sey Quarterly, No. 3.McK<strong>in</strong>sey & Company. (September 2001). “Performance ethic: out-execut<strong>in</strong>g thecompetition.” Organization <strong>and</strong> <strong>Leadership</strong> Practice. Charlotte, South Carol<strong>in</strong>a:McK<strong>in</strong>sey & Company.ABOUT THE CONTRIBUTORSKelly Brookhouse, <strong>in</strong> her role as director, leadership, learn<strong>in</strong>g, <strong>and</strong> performanceat Motorola from 1999 to 2003, played a central role <strong>in</strong> conceptualiz<strong>in</strong>g <strong>and</strong>direct<strong>in</strong>g Motorola’s leadership supply core process redesign effort, <strong>in</strong>clud<strong>in</strong>gdesign <strong>and</strong> development of the procedures, tools, support materials, <strong>and</strong> <strong>in</strong>tegrated<strong>in</strong>formation systems required to translate the leadership supply processfrom vision to reality. Prior to jo<strong>in</strong><strong>in</strong>g Motorola <strong>in</strong> 1997, Kelly was senior vicepresident of Aon Consult<strong>in</strong>g’s start-up preemployment test<strong>in</strong>g outsourc<strong>in</strong>g groupestablished <strong>in</strong> 1994. Her career began as a human resource consultant withHRStrategies, dur<strong>in</strong>g which time she designed, validated, <strong>and</strong> implemented preemploymenttest<strong>in</strong>g, developmental assessment, <strong>and</strong> performance managementprograms for numerous Fortune 100 companies, <strong>in</strong>clud<strong>in</strong>g Motorola. Kellyobta<strong>in</strong>ed her doctorate <strong>in</strong> <strong>in</strong>dustrial <strong>and</strong> organizational psychology <strong>in</strong> 1987 <strong>and</strong>is a member of the American Psychological Society <strong>and</strong> the Society for Industrial<strong>and</strong> Organizational Psychology. Kelly currently is director, leadership developmentat Capital One F<strong>in</strong>ancial Services, Inc.Jamie M. Lane, vice president, leadership, learn<strong>in</strong>g, <strong>and</strong> performance, Motorola,Inc., has been with Motorola s<strong>in</strong>ce 1998 <strong>and</strong> was actively <strong>in</strong>volved <strong>in</strong> the leadershipsupply core process redesign efforts. Jamie’s current role is vice president
MOTOROLA 345of leadership, learn<strong>in</strong>g, <strong>and</strong> performance for one of Motorola’s bus<strong>in</strong>ess units.Dur<strong>in</strong>g 2001 <strong>and</strong> 2002, Jamie was responsible for performance management, theTalentWeb, the leadership st<strong>and</strong>ards, <strong>and</strong> organization effectiveness forMotorola. Prior to that role, Jamie was responsible for tra<strong>in</strong><strong>in</strong>g <strong>and</strong> developmentfor Motorola employees, where she led a team of over 300 professionals throughn<strong>in</strong>e bus<strong>in</strong>ess-focused learn<strong>in</strong>g teams <strong>and</strong> four global regions. Prior to jo<strong>in</strong><strong>in</strong>gMotorola, Jamie spent two years as a director <strong>in</strong> organization development <strong>and</strong>tra<strong>in</strong><strong>in</strong>g at McDonald’s Corporation. Prior to jo<strong>in</strong><strong>in</strong>g McDonald’s <strong>in</strong> 1996, Jamiespent eighteen years with a major professional services <strong>and</strong> consult<strong>in</strong>g organization.Jamie has an M.S. from Benedict<strong>in</strong>e <strong>University</strong> <strong>in</strong> organization behaviorwith an emphasis <strong>in</strong> organization development <strong>and</strong> <strong>in</strong>ternational management.She has a bachelor’s degree <strong>in</strong> account<strong>in</strong>g <strong>and</strong> is a Certified Public Accountant.Jamie is a member of the <strong>Development</strong>, Education <strong>and</strong> Tra<strong>in</strong><strong>in</strong>g Council ofthe Conference Board, the Executive <strong>Development</strong> Network, ASTD, <strong>and</strong> theAmerican Society of Certified Public Accountants (AICPA). She was on the boardof trustees for National Technological <strong>University</strong>.
SCHAPTER FIFTEENPraxairSAn organizational change model for align<strong>in</strong>g leadership strategy withbus<strong>in</strong>ess strategy <strong>in</strong> order to drive marketplace differentiation with a heavyemphasis on assessment tools such as customer focus conferences,management practices such as employee surveys, customer scorecards,performance management processes, a series of conferences <strong>and</strong> follow-uppractices, <strong>and</strong> a commitment to evaluation.OVERVIEW 347THE OLD GAME IN THE PACKAGED GAS MARKET 347THE NEW RULES 348DIAGNOSIS: DELIVERING ON THE PROMISE 349Early Problems 349TWO TYPES OF DESIRED OUTCOMES 350ASSESSMENT: HIGH INVOLVEMENT BUILDS HIGH COMMITMENT 350Assessment Tools 351Assessment Steps 351Assessment F<strong>in</strong>d<strong>in</strong>gs 352Exhibit 15.1: Assessment Steps 353DESIGN: AN ITERATIVE PROCESS 354Management <strong>Practices</strong> Are Central to the Change<strong>in</strong> <strong>Leadership</strong> Culture 354Visible Senior Management Support 355Critical Success Factors <strong>in</strong> the Design of PDI’s New<strong>Leadership</strong> Strategy 356IMPLEMENTATION: ALIGNING LEADERSHIP STRATEGYWITH BUSINESS STRATEGY 357ONGOING SUPPORT AND DEVELOPMENT: A SYSTEMS APPROACH 358EVALUATION: ARE WE ON THE RIGHT PATH? 359346
PRAXAIR 347LESSONS RELEARNED 360NOTES 361Exhibit 15.2: PDI’s <strong>Leadership</strong> Philosophy Map 362ABOUT THE CONTRIBUTORS 364OVERVIEWIs it really possible to be an A company <strong>in</strong> a C <strong>in</strong>dustry, especially when start<strong>in</strong>gas a C player? In the late 1980s <strong>and</strong> early 1990s Praxair’s then parent companydecided to exit the low-marg<strong>in</strong>, high-cost packaged gases (cyl<strong>in</strong>der)segment of the <strong>in</strong>dustrial gas <strong>in</strong>dustry. But <strong>in</strong> 1994 different market conditions,<strong>and</strong> a stronger balance sheet, follow<strong>in</strong>g Praxair’s sp<strong>in</strong>-off as an <strong>in</strong>dependentcompany warranted reenter<strong>in</strong>g this $8 billion market, where sales ofpackaged gases <strong>and</strong> consumable hardgoods, primarily to the metal fabrication<strong>in</strong>dustry, constitute 70 percent of the total revenue. Despite its long associationwith the <strong>in</strong>dustry, Praxair reentered the market as a C player,aggressively acquir<strong>in</strong>g over one hundred small, regional distributors <strong>in</strong> theUnited States <strong>and</strong> Canada to ga<strong>in</strong> market share, as well as to secure a position<strong>in</strong> a bus<strong>in</strong>ess with good fundamentals. In the early stages of this acquisitionperiod it was unclear what the end-game strategy would actually be.After several years acquisitions were suspended <strong>in</strong> early 1998 until the longertermstrategic <strong>in</strong>tent could be decided <strong>and</strong> the acquired companies made moreprofitable.In time the managers of Praxair Distribution Inc., (PDI) the division responsiblefor Praxair’s packaged gas bus<strong>in</strong>ess <strong>in</strong> the United States <strong>and</strong> Canada, cameto realize that a fresh approach to this traditional, low-tech <strong>in</strong>dustry wasrequired if bus<strong>in</strong>ess results were to be improved. The goal was noth<strong>in</strong>g less thanemerg<strong>in</strong>g as the clear <strong>in</strong>dustry leader, with 6–8 percent sales growth <strong>and</strong> 15 percentnet <strong>in</strong>come growth annually, <strong>and</strong> sequentially improv<strong>in</strong>g ROC to abovere<strong>in</strong>vestment levels. These aggressive goals could not be realized without apply<strong>in</strong>gnew rules to an old game.THE OLD GAME IN THE PACKAGED GAS MARKETTraditionally, regional packaged gas distributors bought their gases (oxygen,nitrogen, argon, acetylene, helium, carbon dioxide, <strong>and</strong> various specialty gases)<strong>in</strong> bulk from major gas manufacturers, repackaged them <strong>in</strong>to high-pressurecyl<strong>in</strong>ders, <strong>and</strong> distributed them to weld<strong>in</strong>g shops, <strong>in</strong>dustrial sites, hospitals, <strong>and</strong>manufactur<strong>in</strong>g centers. Hardgoods, <strong>in</strong> the form of weld<strong>in</strong>g rods <strong>and</strong> wire, cutt<strong>in</strong>g
348 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEtips, helmets, gloves, <strong>and</strong> weld<strong>in</strong>g mach<strong>in</strong>es, typically made up 40 percent ofthe revenue to these same end-use customers.A traditional regional distributor employed eighty to 120 people <strong>in</strong> functionssuch as sales, cyl<strong>in</strong>der fill<strong>in</strong>g <strong>and</strong> h<strong>and</strong>l<strong>in</strong>g, route delivery, retail store sales,warehous<strong>in</strong>g, <strong>and</strong> adm<strong>in</strong>istrative support. Annual sales for these regional companiesranged from $2 million to $25 million, but the average was $8 to 10 million.Pay scales, benefits packages, <strong>and</strong> employee tra<strong>in</strong><strong>in</strong>g were often less thancompetitive, result<strong>in</strong>g <strong>in</strong> turnover exceed<strong>in</strong>g 30 percent a year. Managementpractices were typical of those found <strong>in</strong> entrepreneurial, family-owned <strong>and</strong>operated bus<strong>in</strong>esses. Although much larger, PDI was managed <strong>in</strong> much thesame way.THE NEW RULESPDI’s sales <strong>in</strong> 1992 totaled $250 million but by 1998 were over $900 million,reflect<strong>in</strong>g an aggressive acquisition strategy. Return on capital, however, hadfallen from 9.1 to 6.5 percent by 1998, when acquisitions were stopped. PDI’sleaders realized that a fresh approach to the traditional, low-tech <strong>in</strong>dustry wasrequired if bus<strong>in</strong>ess results were to be any different.In effect, PDI embarked on a well-known bus<strong>in</strong>ess model, but one fraughtwith difficulties. Known as a “strategic rollup,” PDI’s bus<strong>in</strong>ess model could besummarized as• Take a highly fragmented <strong>in</strong>dustry• Buy up hundreds of owner-operated bus<strong>in</strong>esses• Create a bus<strong>in</strong>ess that can reap economies of scale• Build national br<strong>and</strong>s• Leverage best practices across all aspects of market<strong>in</strong>g <strong>and</strong> operations• Hire better talent than small bus<strong>in</strong>esses could previously afford 1In a few words, the new bus<strong>in</strong>ess model was to “be big <strong>and</strong> act small.” Thechallenge would be to ma<strong>in</strong>ta<strong>in</strong> the nimbleness of a small bus<strong>in</strong>ess while leverag<strong>in</strong>gthe economies of scale <strong>and</strong> market clout of a large enterprise.If the 1995–1998 period was the acquisition phase, 1999–2000 was the fix-itphase. Dur<strong>in</strong>g this period the emphasis was on creat<strong>in</strong>g a clear, consistent vision<strong>and</strong> strategy, replac<strong>in</strong>g nearly 65 percent of the senior management staff wholacked the skills or the desire to execute the new strategy, <strong>and</strong> implement<strong>in</strong>gdiscipl<strong>in</strong>ed processes <strong>in</strong> sales, operations, <strong>and</strong> distribution across all fifteenCanadian <strong>and</strong> U.S. divisions. Integration <strong>and</strong> alignment was the focus of theturnaround efforts dur<strong>in</strong>g this time period.
PRAXAIR 349Beg<strong>in</strong>n<strong>in</strong>g <strong>in</strong> 2001, the focus shifted to realiz<strong>in</strong>g the potential of the new bus<strong>in</strong>essmodel by launch<strong>in</strong>g a bus<strong>in</strong>ess strategy grounded on differentiation. Newnational product <strong>and</strong> service offer<strong>in</strong>gs were <strong>in</strong>troduced dur<strong>in</strong>g this period basedon exclusive distribution rights <strong>and</strong> private label hardgoods. Growth of thebus<strong>in</strong>ess <strong>and</strong> eventual leadership of the <strong>in</strong>dustry depended on successfulimplementation of these new rules.One other rule needed to be broken—the traditional management practicesthat had been st<strong>and</strong>ard <strong>in</strong>dustry orthodoxy for more than fifty years. The f<strong>in</strong>alchallenge was to determ<strong>in</strong>e whether a new leadership strategy could contributeto the overall success of the bus<strong>in</strong>ess strategy. Could the way people aremanaged contribute to marketplace leadership?DIAGNOSIS: DELIVERING ON THE PROMISEThe problem with a rollup bus<strong>in</strong>ess model is that it is especially difficult to execute.The promise of market leadership is hard to deliver. In general, rollupstrategies most often get stuck at the second stage of creat<strong>in</strong>g an <strong>in</strong>stitution thatcan truly deliver value beyond that achievable by small, regional bus<strong>in</strong>esses. Inthe mid-1990s, PDI found itself fac<strong>in</strong>g a number of the problems typical ofstrategic rollups.Early ProblemsProblems encountered early on <strong>in</strong>cluded• A loss of marketshare; new customer ga<strong>in</strong>s were more than offset bycustomer losses• Decl<strong>in</strong><strong>in</strong>g ROC as synergies proved more elusive than orig<strong>in</strong>ally expected• Diverse cultures with<strong>in</strong> acquired companies resisted changes <strong>in</strong>operat<strong>in</strong>g procedures <strong>and</strong> new management practices• Employee surveys for two years <strong>in</strong> a row <strong>in</strong>dicated that PDI was lesscustomer-focused than <strong>in</strong>tended <strong>and</strong> difficult to do bus<strong>in</strong>ess with, ow<strong>in</strong>g<strong>in</strong> part to a variety of <strong>in</strong>compatible <strong>in</strong>formation technology systems• Management skills of many frontl<strong>in</strong>e managers were not sufficient toachieve differentiation through new customer contact behaviors• Frontl<strong>in</strong>e supervisors did not underst<strong>and</strong> their role <strong>in</strong> bus<strong>in</strong>essimprovement<strong>in</strong>itiatives• Substantially different bus<strong>in</strong>ess <strong>and</strong> market conditions existed <strong>in</strong> theUnited States <strong>and</strong> Canada, compound<strong>in</strong>g efforts to capture synergies• Acquisitions had been made <strong>in</strong> low-growth, rust-belt manufactur<strong>in</strong>gregions <strong>in</strong> the United States
350 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGETo address these problems, Praxair appo<strong>in</strong>ted a new management team <strong>in</strong> 2000headed by Wayne Yakich, previously PDI’s VP of sales <strong>and</strong> operations, <strong>and</strong> charteredhis new team with deliver<strong>in</strong>g on the promise of the new bus<strong>in</strong>ess model.TWO TYPES OF DESIRED OUTCOMESThe Yakich team communicated a clear vision, expla<strong>in</strong>ed the strategy required toexecute the bus<strong>in</strong>ess model, <strong>and</strong> set forth a new set of core values. Among theemphases of the new values was a realization that “this is a people bus<strong>in</strong>ess.”Previously, this concept had been given lip service, but was not taken seriously.It became the cornerstone for an entirely new leadership strategy, one thatwould enable employees to become part of the differentiation equation <strong>in</strong> themarketplace. Now the leadership strategy would be as widely implemented asthe bus<strong>in</strong>ess strategy <strong>and</strong> enable nearly 3,000 customer contact employees totruly differentiate themselves from those of all competitors.Therefore senior managers championed the work to develop a new leadershipstrategy just as seriously as they drove the bus<strong>in</strong>ess strategy. In both casesdifferentiation was the goal. The new management team had to transform aloose confederation of bus<strong>in</strong>esses with different cultures, different operat<strong>in</strong>gprocedures, different values, <strong>and</strong> different ways of manag<strong>in</strong>g employees <strong>in</strong>to amarket leader that comb<strong>in</strong>es the speed advantages of be<strong>in</strong>g small with the scaleadvantages of be<strong>in</strong>g large.In order to execute both the bus<strong>in</strong>ess strategy <strong>and</strong> the leadership strategy,two skill sets were required. The first consists of traditional bus<strong>in</strong>ess skills—determ<strong>in</strong><strong>in</strong>g what the marketplace wants <strong>and</strong> how to deliver it. The second consistsof leadership skills used to mobilize people so that they have anunderst<strong>and</strong><strong>in</strong>g of the requirements for market success <strong>and</strong> how to deliver onthem. 2 Although the ultimate bus<strong>in</strong>ess goal for PDI’s new senior managementteam was successful implementation of the bus<strong>in</strong>ess strategy, their ultimateleadership goal was a new leadership culture, generally understood as the sumof the habits of leaders. In other words, leaders must beg<strong>in</strong> treat<strong>in</strong>g employeesdifferently if employees were to treat customers differently.ASSESSMENT: HIGH INVOLVEMENT BUILDS HIGH COMMITMENTGenerally speak<strong>in</strong>g, employees don’t support solutions when they don’t underst<strong>and</strong>the orig<strong>in</strong>al problem <strong>and</strong> when they aren’t <strong>in</strong>volved <strong>in</strong> both the assessment<strong>and</strong> the design of a bus<strong>in</strong>ess improvement <strong>in</strong>tervention. This maxim oforganizational change is frequently overlooked. Assessment should not be done<strong>in</strong> the dark. If the assessment activities engage the group targeted for change,resistance is reduced <strong>and</strong> support for the change is much greater.
PRAXAIR 351A second maxim of organizational change is that the assessment <strong>and</strong> designphases should model the new values that underlie the change <strong>in</strong>itiative—<strong>in</strong> thiscase, a valu<strong>in</strong>g of the contribution people can make to bottom-l<strong>in</strong>e bus<strong>in</strong>ess success.With these pr<strong>in</strong>ciples <strong>in</strong> m<strong>in</strong>d, Yakich chartered a three-person change teamto develop assessment tools for use with PDI’s top 175 managers, <strong>in</strong>clud<strong>in</strong>g allsenior managers, fifteen division general managers (DGMs) <strong>and</strong> all of theirdirect reports. The change team, compris<strong>in</strong>g the director of HR, the manager oftra<strong>in</strong><strong>in</strong>g <strong>and</strong> development, <strong>and</strong> an external consultant, recommended a fourstepleadership strategy design process 3 to engage these 175 managers <strong>in</strong> assess<strong>in</strong>gthe current state of the leadership practices <strong>and</strong> the changes required if PDIemployees were to become a susta<strong>in</strong>able source of competitive advantage.Listed below are the assessment tools, the steps followed <strong>in</strong> the assessmentprocess, <strong>and</strong> the assessment f<strong>in</strong>d<strong>in</strong>gs. The assessment process was deliberatelyconducted to prepare the organization for future changes by engag<strong>in</strong>g more thanfive hundred employees—175 leaders <strong>in</strong> the top three levels of management <strong>and</strong>over 325 employees—across all fifteen regional bus<strong>in</strong>esses.Assessment ToolsThe assessment tools were the follow<strong>in</strong>g:• An employee survey solicited feedback on the extent to which the bus<strong>in</strong>essstrategy <strong>and</strong> leadership strategies were effective.• A tool was used for compar<strong>in</strong>g the current leadership strategy with theone required to differentiate employees <strong>in</strong> the marketplace.• An assessment tool called a <strong>Leadership</strong> Philosophy Map 4 was used todef<strong>in</strong>e the core assumptions beh<strong>in</strong>d the portrait of a new manager.• A leadership cultural assessment tool for use with senior managers <strong>and</strong>division general managers (DGMs) clarified the change <strong>in</strong> leadershipculture required to support the newly emerg<strong>in</strong>g leadership strategy. 5• Customer focus conferences 6 conducted <strong>in</strong> each of the fifteen divisionsbrought representative customers together with customer contactemployees. The purpose of these conferences was to clarify the customercontact behaviors, <strong>in</strong> terms of both attitudes <strong>and</strong> actions, thatwould differentiate PDI employees from all other competitors.Assessment StepsThe assessment was conducted <strong>in</strong> the follow<strong>in</strong>g four steps:1. All senior managers participated <strong>in</strong> a six-hour session to apply theleadership strategy design tool to crystallize their own th<strong>in</strong>k<strong>in</strong>g aboutneeded changes.
352 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE2. Division general managers conducted four-hour sessions with twelveto fifteen managers from the next level of field managers, dur<strong>in</strong>g whichthe leadership strategy design tool identified gaps <strong>in</strong> the current <strong>and</strong>desired leadership behaviors. This step also resulted <strong>in</strong> one <strong>Leadership</strong>Philosophy Map from each session.3. The 15 DGMs <strong>and</strong> senior PDI leaders then analyzed the <strong>in</strong>put fromall the sessions to determ<strong>in</strong>e common themes <strong>and</strong> assess the gapbetween the current leadership strategy <strong>and</strong> the one required to differentiateemployees. At this time, the group realized that they did not reallyhave a clear picture of the customer contact behaviors required to makePDI employees dist<strong>in</strong>ctive. Rather than settl<strong>in</strong>g for a best guess, theyauthorized a series of one-day, voluntary customer focus conferences sothat exemplary employees <strong>and</strong> customers, work<strong>in</strong>g together, coulddevelop the attitudes <strong>and</strong> actions that would set PDI apart from all othersuppliers. All fifteen divisions opted for the customer focus conferenceswhen they realized how energiz<strong>in</strong>g they were for employees <strong>and</strong> howwell received they were by participat<strong>in</strong>g customers.4. Fifteen customer focus conferences were held, each engag<strong>in</strong>g twenty totwenty-five employees <strong>and</strong> two to three customer representatives whoshared their views on what customer contact behaviors would set PDIemployees apart from those of other suppliers. The output from theseconferences was a set of differentiat<strong>in</strong>g attitudes <strong>and</strong> actions identifiedfor each of the different customer contact groups (sales, drivers, <strong>in</strong>sidesales, counter sales, technicians, <strong>and</strong> so forth). These attitudes <strong>and</strong>actions were consolidated <strong>in</strong>to a master set for use companywide witheach group of customer contact employees. 7Assessment F<strong>in</strong>d<strong>in</strong>gsThe assessment phase lasted over fifteen months. But by the time it was completed,there was widespread agreement on the shortcom<strong>in</strong>gs of the currentleadership strategy <strong>and</strong> how to improve it. Resistance dur<strong>in</strong>g the implementationphase was virtually nonexistent. Nearly every leader <strong>in</strong> the top three levelsof management understood why his or her current ways of manag<strong>in</strong>gemployees was deficient. And they all were will<strong>in</strong>g to implement the actionplans that they themselves adopted, <strong>in</strong>clud<strong>in</strong>g prioritized management tra<strong>in</strong><strong>in</strong>g,revised performance review procedures, <strong>and</strong> new performance-based compensationschemes—all changes not normally supported by l<strong>in</strong>e managers.Below is a summary of the major f<strong>in</strong>d<strong>in</strong>gs of the assessment phase.The assessment phase was far more than a few surveys or focus groups. Itwas an <strong>in</strong>tensive set of actions, engag<strong>in</strong>g more than five hundred employees<strong>and</strong> simultaneously lay<strong>in</strong>g the foundation for implementation actions endorsedby those whose behaviors were expected to change.
PRAXAIR 353Exhibit 15.1. Assessment StepsAssessment Step1. Senior managementleadership strategy designsession2. DGMs conducted fourhourleadership strategydesign sessions3. DGMs <strong>and</strong> senior teamconsolidate <strong>in</strong>put from allleadership strategy designsessions4. Customer focus conferencesto determ<strong>in</strong>e differentiat<strong>in</strong>gcustomer contactbehaviorsAssessment F<strong>in</strong>d<strong>in</strong>gs• The leadership culture is <strong>in</strong> drastic need of change.DGMs <strong>and</strong> their direct reports must be engaged <strong>in</strong>a process to determ<strong>in</strong>e the current leadershipstrategy <strong>and</strong> how better to manage employees• 175 managers are <strong>in</strong> surpris<strong>in</strong>g agreement thatthe leadership strategy will not lead to differentiat<strong>in</strong>gcustomer contact behaviors• The <strong>in</strong>dustry orthodoxies on the management ofpeople were alive <strong>and</strong> well <strong>in</strong> PDI• The new portrait of a successful PDI managermust conta<strong>in</strong> a different people-managementcomponent• The leadership values must be changed <strong>and</strong><strong>in</strong>corporated <strong>in</strong>to key management practices• Field managers were skeptical of senior managers’commitment to stay the course on the newleadership strategy• The new leadership philosophy map summarizesthe required portrait of all managers <strong>in</strong> PDI• The new portrait makes it clear that currentsupervisors have not been tra<strong>in</strong>ed <strong>in</strong> requisitemanagement skills• Nearly all of the 175 managers have a strongdesire to improve their managerial skills• The differentiat<strong>in</strong>g attitudes <strong>and</strong> actions are toogeneral at this stage to be useful. Therefore,employees <strong>and</strong> customers must be engaged toadd greater specificity• Customers confirm the critical role of customercontact employees <strong>in</strong> differentiat<strong>in</strong>g PDI fromother suppliers• Employees are surprised that their op<strong>in</strong>ions count<strong>and</strong> are be<strong>in</strong>g taken seriously• Employees leave feel<strong>in</strong>g highly engaged <strong>and</strong> will<strong>in</strong>gto change their own behaviors. The messagethat employee op<strong>in</strong>ion matters ripples throughoutthe company• Employees feel frustrated that some managers tolerateweak to mediocre customer contact behaviors• Specific attitudes <strong>and</strong> actions are developed forthe different groups of employees who contactcustomers• Barriers to improved customer focus are identified<strong>and</strong> local action plans adopted
354 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEDESIGN: AN ITERATIVE PROCESSOrganizational change of the magnitude undertaken by PDI is often likened tochang<strong>in</strong>g the tires on a car that is travel<strong>in</strong>g at 70 miles per hour. The metaphoris quite apt. No change plan, no matter how well designed, can possibly anticipateall the bumps <strong>and</strong> curves <strong>in</strong> the road. Consequently, PDI followed an iterativedesign process. Each step of the change was designed, implemented, <strong>and</strong>then evaluated. The next step was designed based on the outcomes of the previousone. Along the way, bus<strong>in</strong>ess performance, budget constrictions, <strong>and</strong> marketdynamics, to name just a few of the “bumps” <strong>in</strong> the road, had to beconsidered <strong>in</strong> design<strong>in</strong>g the next steps. For <strong>in</strong>stance, no one anticipated need<strong>in</strong>gcustomer focus conferences to help clarify customer contact behaviors. Theywere designed as a result of an unforeseen outcome from the previous step—that l<strong>in</strong>e managers did not know how employees could dist<strong>in</strong>guish themselves<strong>in</strong> the eyes of customers. That be<strong>in</strong>g said, the PDI change team followed twofundamental pr<strong>in</strong>ciples, a focus on new or revised management practices <strong>and</strong>visible senior management support.Management <strong>Practices</strong> Are Central to the Change<strong>in</strong> <strong>Leadership</strong> CultureThe first three steps of PDI’s leadership strategy design process were actuallyassessment steps. The true design work took place when the management practiceswere aligned with the new leadership values. Values mean noth<strong>in</strong>g if theyaren’t reflected <strong>in</strong> how managers actually behave. Therefore, the PDI change teamasked senior managers <strong>and</strong> field managers to prioritize the management practicesto be changed first. The <strong>in</strong>tent was to identify the management practices thatwould have the most impact early <strong>in</strong> the change process. The priority managementpractices were (1) skills tra<strong>in</strong><strong>in</strong>g for managers <strong>and</strong> (2) realignment of theprofit-shar<strong>in</strong>g plan to <strong>in</strong>corporate division performance as part of the formula.Other management practices to be redesigned <strong>in</strong>cluded:• Employee survey—to <strong>in</strong>clude questions about the new leadership strategy<strong>and</strong> the consistent practice of the new customer contact behaviors.• Customer scorecards—to provide feedback from customers on the attitudes<strong>and</strong> actions for each group of employees who rout<strong>in</strong>ely talk tocustomers. The feedback is managed by employee groups who takeownership for the results <strong>and</strong> formulate ways to improve their own customercontact behaviors. Managers are consulted when policy questionsare <strong>in</strong>volved or when actions may have an impact on other functionalareas.• PDI playbook—a desktop reference guide for all employees conta<strong>in</strong><strong>in</strong>gpert<strong>in</strong>ent company <strong>in</strong>formation, <strong>in</strong>clud<strong>in</strong>g PDI’s vision, values, goals,
PRAXAIR 355bus<strong>in</strong>ess strategies, <strong>and</strong> department-specific guidel<strong>in</strong>es for what to do<strong>and</strong> what not to do to help PDI reach its performance goals.• Praxair performance management process—the annual performancereview process, <strong>in</strong>clud<strong>in</strong>g tra<strong>in</strong><strong>in</strong>g <strong>and</strong> development actions, for exempt<strong>and</strong> nonexempt employees.• <strong>Leadership</strong> commitment day—a designated day to re<strong>in</strong>force throughoutall management ranks the importance of implement<strong>in</strong>g the PDI leadershipstrategy <strong>and</strong> of liv<strong>in</strong>g the leadership values.• DGM of the future assessment—an assessment process for DGMs to use<strong>in</strong> th<strong>in</strong>k<strong>in</strong>g about their own development needs as well as subord<strong>in</strong>ateswith the potential to become DGMs. Self-assessments are discussed withPDI senior managers, result<strong>in</strong>g <strong>in</strong> future development objectives.Visible Senior Management SupportThe critical role of senior managers <strong>in</strong> the success of a change process has longbeen acknowledged. Senior management support is absolutely essential to mak<strong>in</strong>gchanges <strong>in</strong> leadership culture. The commitment of Yakich <strong>and</strong> the entiresenior team proved pivotal <strong>in</strong> the early days of the design <strong>and</strong> implementation.The PDI change team took advantage of all bus<strong>in</strong>ess meet<strong>in</strong>gs, company publications,conferences, <strong>and</strong> teleconferences to communicate the message thatchange <strong>in</strong> PDI’s leadership culture was a vital l<strong>in</strong>k to success <strong>in</strong> the marketplace.Listed below are just a few of the communication opportunities designed <strong>in</strong>tothe change <strong>in</strong>itiatives.• DGM meet<strong>in</strong>gs. Held twice a year, the meet<strong>in</strong>gs provided an update onthe leadership strategy work <strong>and</strong> laid out plans for next steps of theimplementation process.• Annual bus<strong>in</strong>ess conferences. The annual meet<strong>in</strong>gs of sales managers,operations managers, <strong>and</strong> functional staff groups provided a forum tocommunicate expectations for chang<strong>in</strong>g how employees are managed <strong>in</strong>order to support new employee behaviors with customers.• Monthly growth commitment teleconferences. Teleconferences provideddirect contact between sales reps <strong>and</strong> senior managers on the status ofmarket<strong>in</strong>g <strong>and</strong> sales plan implementation. They also afforded opportunitiesfor Yakich <strong>and</strong> his senior team to model new leadership values.• Quarterly town meet<strong>in</strong>g teleconferences. Senior managers spoke directlywith employees about bus<strong>in</strong>ess results <strong>and</strong> progress <strong>in</strong> the implementationof the leadership strategy.• Division leadership conferences. Senior managers <strong>and</strong> the humanresource change team conducted leadership conferences <strong>in</strong> each of the
356 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEfifteen divisions, <strong>and</strong> <strong>in</strong> the functional staff groups, to underscore thel<strong>in</strong>kage between the bus<strong>in</strong>ess <strong>and</strong> leadership strategies <strong>and</strong> the role ofeach manager <strong>in</strong> their implementation.• In-house publications. The quarterly newspaper, TOPICS, provided anexcellent opportunity to highlight success stories, expectations for managers,<strong>and</strong> the critical l<strong>in</strong>k between the bus<strong>in</strong>ess strategy <strong>and</strong> the leadershipstrategy.Critical Success Factors <strong>in</strong> the Design of PDI’sNew <strong>Leadership</strong> StrategyThe follow<strong>in</strong>g factors proved to be critical <strong>in</strong> the successful implementation ofPDI’s new leadership strategy. Some critical success factors are structural, somerelational, <strong>and</strong> some are procedural.• Broad <strong>in</strong>volvement <strong>in</strong> the assessment phase. Engag<strong>in</strong>g the group targetedfor change <strong>in</strong> the assessment <strong>and</strong> design phases enabled the <strong>in</strong>corporationof their th<strong>in</strong>k<strong>in</strong>g <strong>in</strong> the design but also began build<strong>in</strong>g a read<strong>in</strong>essfor change.• DGM participation. Ask<strong>in</strong>g DGMs to conduct four-hour leadership strategydesign sessions proved critically important <strong>in</strong> help<strong>in</strong>g these managersunderst<strong>and</strong> the new leadership strategy while advocat<strong>in</strong>g itsimportance.• Customer focus conferences. Perhaps the design element with the mostimpact, the customer focus conferences engaged customers <strong>and</strong> employees<strong>in</strong> a dialogue that echoed throughout the company.• Senior management support. In meet<strong>in</strong>gs, publications, teleconferences<strong>and</strong> one-on-one discussions, senior management conveyed that the newleadership strategy was for real.• Local champions. Customer focus champions were designated <strong>in</strong> eachdivision to assist <strong>in</strong> the implementation of customer focus conferences.This local resource was an <strong>in</strong>valuable design element to the overall successof the new leadership strategy, because the champions providedfeedback <strong>and</strong> support for local implementation. They served as anextension of the change team, as did field human resource managers,who fulfilled a critical role <strong>in</strong> the tra<strong>in</strong><strong>in</strong>g <strong>and</strong> implementation phase.• The change team make-up. The change team comprised the HR director,the manager of tra<strong>in</strong><strong>in</strong>g, <strong>and</strong> an external consultant, <strong>and</strong> possessed acomplementary mix of expertise, experience, <strong>and</strong> knowledge of the organization’speople.• L<strong>in</strong>k to the bus<strong>in</strong>ess strategy. At all times the work on the leadershipstrategy was l<strong>in</strong>ked back to the bus<strong>in</strong>ess strategy. This provided a
PRAXAIR 357constant reality check for the change team <strong>and</strong> those <strong>in</strong>volved <strong>in</strong>implementation.• Momentum. The change team quickly realized that an essentialelement <strong>in</strong> all design <strong>and</strong> implementation components is momentum.If it is lost, managers beg<strong>in</strong> to th<strong>in</strong>k that the change agenda no longermatters. Ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g momentum is especially critical <strong>in</strong> the earlystages.IMPLEMENTATION: ALIGNING LEADERSHIP STRATEGYWITH BUSINESS STRATEGYIn PDI’s effort to transform its leadership strategy, the implementation phasewas quite straightforward. By the time the implementation phase was reached,there was enthusiastic support for the pend<strong>in</strong>g changes. Most of the changeswere <strong>in</strong> the form of new management practices, as mentioned earlier. Anothercore implementation activity was the tra<strong>in</strong><strong>in</strong>g of nearly five hundred frontl<strong>in</strong>emanagers <strong>and</strong> supervisors. They had not been exposed to either the bus<strong>in</strong>essstrategy or the leadership strategy dur<strong>in</strong>g the assessment <strong>and</strong> design phases.As the focus of implementation shifted to these frontl<strong>in</strong>e managers, the DGMsonce aga<strong>in</strong> played a critical role. Us<strong>in</strong>g presentation materials developed by thechange team, the DGMs <strong>and</strong> their local human resource managers presented anoverview of the bus<strong>in</strong>ess strategy <strong>and</strong> a more extensive explanation of the leadershipstrategy. Frontl<strong>in</strong>e managers were also <strong>in</strong>troduced to the new attitudes<strong>and</strong> actions for their customer contact employees. The focus of these sessionswas the critical role frontl<strong>in</strong>e managers play <strong>in</strong> achiev<strong>in</strong>g marketplace success.Another feature of the implementation phase was the launch<strong>in</strong>g of a sixmodulesupervisory skill-tra<strong>in</strong><strong>in</strong>g program. Performance coach<strong>in</strong>g, conflict management,<strong>and</strong> communications modules were scheduled for all PDI fieldmanagers over a period of fifteen to eighteen months. This was the first tra<strong>in</strong><strong>in</strong>gof its k<strong>in</strong>d offered to many of these managers. Taught by human resourcemanagers, this tra<strong>in</strong><strong>in</strong>g re<strong>in</strong>forced the message that PDI was serious about<strong>in</strong>stitut<strong>in</strong>g a new leadership strategy.A third element of implementation was the gather<strong>in</strong>g of basel<strong>in</strong>e data on theextent to which PDI managers were currently follow<strong>in</strong>g the new leadership philosophy<strong>and</strong> values embedded <strong>in</strong> the leadership strategy. These data were collectedat national conferences of sales <strong>and</strong> operations managers <strong>and</strong> dur<strong>in</strong>g thefifteen division leadership conferences. The data serve as a means of track<strong>in</strong>gthe progress <strong>in</strong> implement<strong>in</strong>g the new leadership strategy.One unexpected event dur<strong>in</strong>g a DGM meet<strong>in</strong>g proved quite beneficial <strong>in</strong> thelong run despite be<strong>in</strong>g disconcert<strong>in</strong>g at the time. The DGMs voiced c<strong>and</strong>id
358 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEconcerns about how well the senior team actually followed the new leadershipphilosophy <strong>and</strong> values. Their feedback essentially expressed frustration that the“walk” of senior managers didn’t match their “talk.” This discussion served tore<strong>in</strong>force the importance of the leadership strategy <strong>and</strong> to heighten the awarenessamong senior managers that they, too, must change. In addition to agreementsreached dur<strong>in</strong>g this meet<strong>in</strong>g, subsequent sessions among senior managersled to additional changes <strong>in</strong> their own actions. What could have been a crisispo<strong>in</strong>t for the implementation of PDI’s new leadership strategy turned out to bea recommitment to its strategic importance.ONGOING SUPPORT AND DEVELOPMENT:A SYSTEMS APPROACHPDI realized that behavior change could best be promoted through a systemsapproach. Without such an approach the new behaviors were not likely tobecome part of the new leadership culture. The revisions to the many managementpractices discussed earlier constituted much of the systems work. As thesenew ways of manag<strong>in</strong>g people were implemented, managers realized that PDIwas serious about lead<strong>in</strong>g differently.For <strong>in</strong>stance, the revised performance management system will eventuallyresult <strong>in</strong> all PDI managers receiv<strong>in</strong>g feedback on the extent to which they aredriv<strong>in</strong>g the new leadership strategy <strong>in</strong> their work groups. And their performancerat<strong>in</strong>gs will be l<strong>in</strong>ked to their compensation. Likewise, the revised employee surveywill provide managers with feedback on how thoroughly their division hasembraced the new leadership strategy. <strong>Leadership</strong> Commitment Day, a newmanagement practice, will further demonstrate that PDI expects managers tolead <strong>in</strong> such a way that PDI employees dist<strong>in</strong>guish themselves from those ofcompetitors.New management practices will cont<strong>in</strong>uously be <strong>in</strong>troduced to re<strong>in</strong>force thenew behaviors <strong>and</strong> values <strong>in</strong>herent <strong>in</strong> PDI’s leadership strategy. A PerspectivesConference is be<strong>in</strong>g launched, for example, for new college hires to help themunderst<strong>and</strong> PDI’s leadership strategy <strong>and</strong> its l<strong>in</strong>k to w<strong>in</strong>n<strong>in</strong>g <strong>in</strong> the marketplace.But <strong>in</strong> addition to new <strong>and</strong> revised management practices, PDI managers arebe<strong>in</strong>g provided <strong>in</strong>dividual coach<strong>in</strong>g, skills tra<strong>in</strong><strong>in</strong>g, <strong>and</strong> periodic feedbackon their progress. PDI employees will receive feedback from customers via thecustomer scorecards. Ongo<strong>in</strong>g skills tra<strong>in</strong><strong>in</strong>g, coach<strong>in</strong>g from their managers, <strong>and</strong>the annual performance discussions are other sources of support.In summary, a systems approach not only means that current managementpractices are l<strong>in</strong>ked to the bus<strong>in</strong>ess <strong>and</strong> leadership strategies, but also that allnew <strong>in</strong>itiatives are likewise l<strong>in</strong>ked. PDI found that establish<strong>in</strong>g this l<strong>in</strong>kage is
PRAXAIR 359the best means of rem<strong>in</strong>d<strong>in</strong>g managers <strong>and</strong> employees that expectations forchanged behaviors are real, <strong>and</strong> that failure to change has consequences.EVALUATION: ARE WE ON THE RIGHT PATH?In the early stages of a change process it is difficult to determ<strong>in</strong>e whether yourefforts are produc<strong>in</strong>g the desired results. Unfortunately, concrete evidence tendsto come <strong>in</strong> the form of lagg<strong>in</strong>g <strong>in</strong>dicators. At this early stage, the positive impacton bus<strong>in</strong>ess performance has at least covered project costs. In the early go<strong>in</strong>g,the best that one can hope for is that lead<strong>in</strong>g <strong>in</strong>dicators signal promis<strong>in</strong>g results.The lead<strong>in</strong>g <strong>in</strong>dicators to which PDI looked were key stakeholders.More than thirty-five customers, for <strong>in</strong>stance, said dur<strong>in</strong>g the customer focusconferences that if PDI employees were to implement the differentiat<strong>in</strong>g customercontact behaviors, they would consider PDI to be true bus<strong>in</strong>ess partners,someth<strong>in</strong>g they want but rarely see among suppliers. The customer scorecardswill soon be yield<strong>in</strong>g data from customers as part of the lead<strong>in</strong>g <strong>in</strong>dicators ofsuccess. An early <strong>in</strong>dicator of bus<strong>in</strong>ess impact is reflected <strong>in</strong> the follow<strong>in</strong>gcomment from a customer:Good Morn<strong>in</strong>g, I have received several comments regard<strong>in</strong>g your drivers. Theyare helpful, professional, courteous, neat, <strong>and</strong> respectful of our staff. This is arefresh<strong>in</strong>g change from the service we have been receiv<strong>in</strong>g from our other twosuppliers. This also extends to the employees I have talked to on the telephoneat your service depots. It is nice to hear “How can we help you” rather than awhole explanation of how cyl<strong>in</strong>ders <strong>and</strong> tanks are filled <strong>and</strong> why we can’t do it.A job well done. This type of service <strong>and</strong> professionalism will ensure a cont<strong>in</strong>uedrelationship with [our company] <strong>and</strong> Praxair.Approximately seven hundred managers <strong>and</strong> more than two thous<strong>and</strong>employees have been exposed to either the new leadership strategy or theresults of the customer focus conferences or both. The early <strong>in</strong>dicators <strong>in</strong>the form of anecdotal evidence tell PDI that it is on the right path. Stories aresurfac<strong>in</strong>g throughout the United States <strong>and</strong> Canada of employees follow<strong>in</strong>g thenew attitudes <strong>and</strong> actions to the delight of customers. Managers are report<strong>in</strong>gdelight at see<strong>in</strong>g their employees take <strong>in</strong>itiative to address long-st<strong>and</strong><strong>in</strong>goperations issues.PDI suppliers have provided another early <strong>in</strong>dication that PDI is on the rightpath. A major hardgoods supplier to the <strong>in</strong>dustrial gas <strong>in</strong>dustry has seen theimpact of PDI’s new bus<strong>in</strong>ess strategy <strong>in</strong> the marketplace <strong>and</strong> realizes thatthe leadership strategy has played a part. Inquiries are beg<strong>in</strong>n<strong>in</strong>g to come <strong>in</strong>about how the leadership strategy was developed <strong>and</strong> whether it could beadapted for use <strong>in</strong> the supplier’s own bus<strong>in</strong>ess. In a similar ve<strong>in</strong> more than one
360 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEcustomer who participated <strong>in</strong> the customer focus conferences has <strong>in</strong>quired howthey might run a conference for their own customers. And the PDI distributornetwork has expressed similar <strong>in</strong>terest.Although it is difficult to quantify the impact, improv<strong>in</strong>g bus<strong>in</strong>ess resultsare clearly related to employee <strong>and</strong> managerial actions. Sales are runn<strong>in</strong>gbelow planned growth, due to the recession <strong>in</strong> the North American manufactur<strong>in</strong>geconomy. But operat<strong>in</strong>g profit is on or close to plan. Employees are show<strong>in</strong>gevidence of underst<strong>and</strong><strong>in</strong>g the bus<strong>in</strong>ess realities <strong>and</strong> are committed to do<strong>in</strong>gtheir part to control costs, reduce customer turnover, <strong>and</strong> w<strong>in</strong> new bus<strong>in</strong>ess.Go<strong>in</strong>g forward, PDI will monitor progress through a variety of measures:Future Measures for Monitor<strong>in</strong>g Success• Track<strong>in</strong>g progress aga<strong>in</strong>st the basel<strong>in</strong>e data gathered at the beg<strong>in</strong>n<strong>in</strong>g ofimplementation• Monitor<strong>in</strong>g employee survey results• Track<strong>in</strong>g the adoption of new customer contact behaviors via customerscorecards• Follow<strong>in</strong>g the turnover rate among employees, which is expected todrop as a result of changed management practices• Monitor<strong>in</strong>g the rate of customer churn, which is expected to slow asnew customer contact behaviors build stronger ties to customers• Measur<strong>in</strong>g the new customer w<strong>in</strong> rate, also expected to improve as newproduct <strong>and</strong> service offer<strong>in</strong>gs, coupled with differentiat<strong>in</strong>g actions <strong>and</strong>attitudes, create a more compell<strong>in</strong>g offer<strong>in</strong>gLESSONS RELEARNEDSomeone once observed that “experience is recogniz<strong>in</strong>g the same mistake whenyou make it aga<strong>in</strong>.” PDI’s experience with large-scale change has proven aga<strong>in</strong>some familiar truths for manag<strong>in</strong>g change. What is noteworthy about PDI’s change<strong>in</strong>itiative is how it is engag<strong>in</strong>g its people as a source of susta<strong>in</strong>able competitiveadvantage. Market advantage ga<strong>in</strong>ed through technology, product functionality,geographic presence, or f<strong>in</strong>ancial position<strong>in</strong>g is easily matched by competitors <strong>in</strong>ever-decreas<strong>in</strong>g cycle times. The one competitive advantage that is difficult toduplicate is that ga<strong>in</strong>ed through people. Wayne Yakich <strong>and</strong> his team of senior managersrealized that the packaged gas bus<strong>in</strong>ess is a people bus<strong>in</strong>ess. In order to turnaround a stalled strategic rollup plan, he needed the commitment of all 750 managers<strong>and</strong> 3500+ employees at 435 locations. Rather than mak<strong>in</strong>g the same mistakeas his predecessors, Yakich opted for a different approach. He knew that abus<strong>in</strong>ess strategy based on different products <strong>and</strong> services, while desirable, could
PRAXAIR 361eventually be duplicated, but that a leadership strategy that differentiated employeescould complement the bus<strong>in</strong>ess strategy <strong>and</strong> quite possibly add a susta<strong>in</strong>ableadvantage that would translate <strong>in</strong>to market leadership.NOTES1. Kocourek, Paul F., Chung, Steven Y., <strong>and</strong> McKenna, Matthew G. Strategic Rollups:Overhaul<strong>in</strong>g the Multi-Merger Mach<strong>in</strong>e (Strategy Publication Issue 19). New York:Booz Allen Hamilton. Available at http://www.strategy-bus<strong>in</strong>ess.com/export/export.php?article_id=168582. See “Executive vs. Leaders: Is There a Difference,” Rich Rard<strong>in</strong>, ManchesterReview, Spr<strong>in</strong>g/Summer, 1999.3. Four-step leadership strategy design tool. Step 1: Identify those customer contactbehaviors that would truly differentiate PDI employees from all others suppliers.Step 2: Identify current <strong>and</strong> desired leadership philosophy with<strong>in</strong> PDI us<strong>in</strong>g theleadership philosophy map. Step 3: Make explicit the new leadership values thatare implicit <strong>in</strong> the desired leadership philosophy. Step 4: Redesign current managementpractices to reflect the new leadership values. These management practices,when implemented, will give substance to the new values, which <strong>in</strong> turnwill reflect the new leadership philosophy, which when followed will re<strong>in</strong>force thenew customer contact behaviors.4. PDI’s leadership philosophy map reflects the current leadership philosophy amongmanagers as well as their desired one (see Exhibit 15.2). The def<strong>in</strong>itions to eachof the four parts follow:Mental Model—the culturally accepted underst<strong>and</strong><strong>in</strong>g of the leader’s roleMotive—the driv<strong>in</strong>g force beh<strong>in</strong>d the leader’s actionsManner—the way <strong>in</strong> which employees are treatedMethods—the overall characterization of the processes or procedures leaders use5. <strong>Leadership</strong> culture assessment model <strong>and</strong> tool adapted from Roger Harrison <strong>and</strong>Herb Stokes, Diagnos<strong>in</strong>g Organizational Culture (San Francisco: Jossey-Bass, 1992).6. Process steps for conduct<strong>in</strong>g customer focus conferences:Preconference• Launch employee participant nom<strong>in</strong>ation process: three to four people fromeach of four to five customer contact groups• Invite local customers to participate• Prepare local meet<strong>in</strong>g space <strong>and</strong> related logisticsConference Design• Welcome, <strong>in</strong>troductions, <strong>and</strong> ground rules• Customer presentations
362 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 15.2. PDI’s <strong>Leadership</strong> Philosophy MapMentalmodelMotivePast: Get results,no excusesDesired: Get resultsthrough motivatedpeople<strong>Leadership</strong>Past: Self-preservationDesired: Help otherssucceedMannerMethodsPast: Expendable assetsDesired: Trusted partnersPast: Controll<strong>in</strong>g <strong>and</strong><strong>in</strong>consistentDesired: Consistent <strong>and</strong>growth-oriented• Employee small groups to review their own customer contact behaviors; preparepresentation to customers• Dialogue between customers <strong>and</strong> employees; employees revisit attitudes <strong>and</strong>actions <strong>and</strong> recommend five each• Lunch• Employee small groups discuss <strong>and</strong> report barriers to be<strong>in</strong>g more customerfocused• Employees report actions needed from managers to enhance customer focus• Employees report on ways to tra<strong>in</strong> colleagues <strong>in</strong> new attitudes <strong>and</strong> actions <strong>and</strong>on how to monitor successful implementationPostconference• Expla<strong>in</strong> conference outcomes to all employees• Design tra<strong>in</strong><strong>in</strong>g on new customer contact behaviors• Budget <strong>and</strong> conduct tra<strong>in</strong><strong>in</strong>g• Create <strong>and</strong> beg<strong>in</strong> us<strong>in</strong>g customer scorecards for feedback on effectiveness
PRAXAIR 3637. Here’s a sample of attitudes <strong>and</strong> actions for one role group, counter sales:Counter Sales: Attitudes <strong>and</strong> Actions• Attitude: safety firstDemonstrates a safety-first attitudeAdvises customers on safe h<strong>and</strong>l<strong>in</strong>g of productsHelps load product safely <strong>in</strong>to customer’s vehicleThe store is free from tripp<strong>in</strong>g <strong>and</strong> other safety hazards• Attitude: “can-do” problem solverDisplays <strong>and</strong> uses flyers, Solution Guides, <strong>and</strong> other resourcesProbes, listens, underst<strong>and</strong>s customer needs, <strong>and</strong> offers best solutionDemonstrates knowledge of our products <strong>and</strong> bus<strong>in</strong>essAnswers questions <strong>and</strong> expla<strong>in</strong>s related products <strong>and</strong> servicesSomeone from Praxair has called to see whether all is well after I have made asignificant purchase (for example, a weld<strong>in</strong>g mach<strong>in</strong>e)• Attitude: responsive <strong>and</strong> reliableProvides accurate <strong>and</strong> reliable <strong>in</strong>formationFills orders quickly <strong>and</strong> accuratelyReturns phone calls promptlyFollows up on ordersStocks items I frequently use• Attitude: honestyTells the truth, does not hide mistakesF<strong>in</strong>ds out correct answers when not sureKeeps commitments to get back to customers• Attitude: professional <strong>and</strong> positiveAcknowledges customer even when tied up with someone elseGreets customer by name, smiles, makes eye contactComes out from beh<strong>in</strong>d the counter, shakes h<strong>and</strong>s, <strong>and</strong> gives nameTreats all customers as though it was their first visitKeeps store clean <strong>and</strong> appeal<strong>in</strong>gHelps customers take product to vehicleTakes pride <strong>in</strong> personal appearance• Attitude: team playerI get high-quality service at all Praxair storesOffers to share technical expertiseDraws on other Praxair resources to solve my problem
364 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEABOUT THE CONTRIBUTORSJohn Graboski is director, human resources, at Praxair Distribution, Inc. He hasworked <strong>in</strong> the corporate world for twenty-five years, <strong>in</strong> market<strong>in</strong>g <strong>and</strong> sales, aswell as HR, <strong>in</strong> three very different <strong>in</strong>dustries (telecommunications, health care<strong>in</strong>surance, <strong>and</strong> <strong>in</strong>dustrial gases). Still a market<strong>in</strong>g guy at heart, he looks at hisrole as one of help<strong>in</strong>g employees sell not only the company’s products but alsothemselves successfully to customers. He lives with his wife, G<strong>in</strong>ny, <strong>and</strong> twoteenage daughters, Caitl<strong>in</strong> <strong>and</strong> Lexi, <strong>in</strong> Cheshire, Connecticut.Ruth Neil is manager, tra<strong>in</strong><strong>in</strong>g <strong>and</strong> development, at Praxair Distribution, Inc.She has a thirty-four-year track record <strong>in</strong> organizational change <strong>in</strong>itiatives, especiallythrough tra<strong>in</strong><strong>in</strong>g <strong>and</strong> development, employee relations, <strong>and</strong> employeecommunications <strong>in</strong>terventions. Her focus has been on grassroots implementationof strategic change lead<strong>in</strong>g to service excellence <strong>in</strong> organizations <strong>and</strong> to<strong>in</strong>creased employee competence <strong>and</strong> commitment.Rich Rard<strong>in</strong> is president of BenchStrength <strong>Development</strong>, LLC. He helps organizationsdevelop leadership strategies that align with <strong>and</strong> drive their bus<strong>in</strong>essstrategies <strong>in</strong> order to achieve marketplace objectives. A skilled facilitator, Richempowers teams, as well as <strong>in</strong>dividual executive leaders, to overcome barriersto organizational change objectives while liv<strong>in</strong>g out their core values. He hasworked <strong>in</strong> leadership <strong>and</strong> organization development with a variety of Fortune500 <strong>and</strong> nonprofit companies for over twenty-five years. He has presented hisproprietary executive coach<strong>in</strong>g model at human resource conferences worldwide.Rich <strong>and</strong> his family reside <strong>in</strong> Newtown, Connecticut.
SCHAPTER SIXTEENSt. Luke’s Hospital <strong>and</strong> Health NetworkSThis case study describes how this hospital <strong>and</strong> health network implementeda leadership development program that achieved breakthrough results <strong>in</strong>patient satisfaction, improved quality of care, overall service, efficiency,<strong>and</strong> top status <strong>in</strong> the <strong>in</strong>dustry through a series of quality improvement<strong>in</strong>itiatives, behavioral change programs, <strong>and</strong> an emphasison a five-po<strong>in</strong>t leadership model that is focused on results.OVERVIEW 366HISTORY 366INTRODUCTION 367DIAGNOSIS 368DESIGN 369DEVELOPMENT 369IMPLEMENTATION 372KEY TO (CONTINUED) SUCCESS 375FORUM EVALUATION 375ORGANIZATIONAL RESULTS 376LEADERSHIP COMMITTEE OUTCOMES 382ENDNOTES 383Exhibit 16.1: Strategic Plan Goals <strong>and</strong> Objectives 384Exhibit 16.2: Management Philosophy, Vision for PatientSatisfaction, PCRAFT Core Values, Service ExcellenceSt<strong>and</strong>ards of Performance, <strong>and</strong> Performance Improvement Plan 386Exhibit 16.3: <strong>Leadership</strong> Steer<strong>in</strong>g Committee Mission, Vision,Goals, <strong>and</strong> Member Roles 388Exhibit 16.4: The Five Po<strong>in</strong>ts of the Star Model 389Exhibit 16.5: Sample Forum Evaluation 390365
366 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 16.6: 2000–January 2004: St. Luke’s Hospital <strong>and</strong>Health Network Major Accomplishments by Five Po<strong>in</strong>tsof the Star Model 391Exhibit 16.7: Press Ganey Report 392Exhibit 16.8: Accountability Grid for <strong>Best</strong> “People Po<strong>in</strong>tof the Star,” Fall 2003: L<strong>in</strong>k<strong>in</strong>g Education to Chang<strong>in</strong>g Behavior 393Exhibit 16.9: Management Performance Evaluation 394ABOUT THE CONTRIBUTORS 400OVERVIEWThis case study illustrates the unique methodology taken by St. Luke’s Hospital<strong>and</strong> Health Network <strong>in</strong> assist<strong>in</strong>g its managers become stronger leaders. Ledby the leadership steer<strong>in</strong>g committee, a deliberate approach with a creativedelivery strategy has been used for nearly three years <strong>in</strong> efforts to cont<strong>in</strong>uouslydevelop the leadership skills <strong>and</strong> abilities of the over 260 managers <strong>in</strong> the healthnetwork.The strategy stems from a five-po<strong>in</strong>t model that embodies the foundationpr<strong>in</strong>ciples that are required for managers <strong>and</strong> leaders to realize the St. Luke’smission <strong>and</strong> vision. The implementation of these pr<strong>in</strong>ciples is primarily realizedthrough the delivery of regular leadership forums. This casual learn<strong>in</strong>g environmentis where managers can frequently <strong>in</strong>teract, ask questions, <strong>and</strong> challengethemselves by learn<strong>in</strong>g from other colleagues <strong>in</strong> different cl<strong>in</strong>ical, fiscal,<strong>and</strong> operational environments. These forums, <strong>and</strong> subsequent associated events,provides additional outlets where managers can use new methodologies <strong>and</strong>ideas to better maximize their resources <strong>in</strong> accordance with the Five Po<strong>in</strong>ts ofthe Star model.While this program is <strong>in</strong> its <strong>in</strong>fancy, St. Luke’s has already realized the benefits<strong>in</strong> areas of fiscal, cl<strong>in</strong>ical, operational, managerial, <strong>and</strong> human resourceperformance.HISTORYSt. Luke’s Hospital <strong>and</strong> Health Network has a rich history of provid<strong>in</strong>g qualityhealth care to generations of families. S<strong>in</strong>ce it was chartered <strong>in</strong> 1872, St. Luke’shas grown from a community hospital to the region’s most nationally honored<strong>in</strong>tegrated health care network; it comprises tertiary, nonprofit hospitals, morethan 1,400 physicians, <strong>and</strong> numerous other related health organizations. The
ST. LUKE’S HOSPITAL AND HEALTH NETWORK 367network provides direct services to people <strong>in</strong> the Lehigh Valley, surround<strong>in</strong>gcounties, <strong>and</strong>, <strong>in</strong> some cases, neighbor<strong>in</strong>g states. The network <strong>in</strong>cludes morethan 800 licensed beds, 72 medical specialties, more than 5,500 employees, <strong>and</strong>40,000 annual patient admissions <strong>and</strong> is the second largest employer <strong>in</strong> LehighCounty. As it has evolved, St. Luke’s has always stayed at the forefront of medicaltechnology. Today St. Luke’s is known for its nationally recognized heart <strong>and</strong>ICU care, its preem<strong>in</strong>ence as a teach<strong>in</strong>g <strong>in</strong>stitution, the excellence of its physician,nurs<strong>in</strong>g, <strong>and</strong> other cl<strong>in</strong>ical staff, <strong>and</strong> its superior customer service. In its130 years, St. Luke’s has stayed true to its mission to provide excellent care.INTRODUCTIONAt St. Luke’s, the board of trustees provides the stimulus, vision, <strong>and</strong> resourcesto develop <strong>and</strong> successfully implement an effective strategic plan. The plan providesan overall foundation with<strong>in</strong> which the network <strong>and</strong> its entities operate<strong>and</strong> form their own strategic plans. The goals <strong>and</strong> objectives of the plan alsoalign targets <strong>and</strong> <strong>in</strong>terests of the network’s constituents, whose success is <strong>in</strong>terdependent(see Exhibit 16.1).As noted <strong>in</strong> the excerpts from the strategic plan, St. Luke’s has a strong foundation<strong>and</strong> a clear commitment to its people as evident <strong>in</strong> its mission, vision,<strong>and</strong> guid<strong>in</strong>g pr<strong>in</strong>ciples. In addition, St. Luke’s builds upon that foundationthrough the management philosophy, vision for patient satisfaction, PCRAFT(pride, car<strong>in</strong>g, respect, accountability, flexibility, teamwork) core values, serviceexcellence st<strong>and</strong>ards of performance, <strong>and</strong> performance improvement plan(see Exhibit 16.2 for all elements listed above).St. Luke’s mission, vision, <strong>and</strong> guid<strong>in</strong>g pr<strong>in</strong>ciples are communicated throughoutthe network <strong>in</strong> varied written <strong>and</strong> verbal ways—such as framed, hang<strong>in</strong>gcopies of the mission, vision, values, <strong>and</strong> management philosophy; themnemonic PCRAFT visually presented <strong>in</strong> creative ways; the Wall of Fame;the employee h<strong>and</strong>book; the st<strong>and</strong>ards of performance booklet; customer service<strong>and</strong> management tips; Essentials (the annual m<strong>and</strong>atory education newsletter);the network web site (www.slhhn.org)—stated as part of new employeeorientation, <strong>and</strong> re<strong>in</strong>forced <strong>in</strong> educational programs <strong>and</strong> at employee meet<strong>in</strong>gs.Richard A. Anderson, president <strong>and</strong> CEO of St. Luke’s Hospital <strong>and</strong> HealthNetwork, is often heard to say, “St. Luke’s is more than bricks <strong>and</strong> mortar . . .it is people.” Through its people, the network is steadfast <strong>in</strong> its commitment toa mission of heal<strong>in</strong>g, realized through a susta<strong>in</strong>ed effort to create a last<strong>in</strong>gculture of service excellence. The adm<strong>in</strong>istration throughout the network, ledby Mr. Anderson, embraces some basic concepts that foster a culture of serviceexcellence. Those concepts <strong>in</strong>clude
368 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE1. Employee satisfaction yields patient satisfaction yields a successfulbus<strong>in</strong>ess (Build your people . . . they build your bus<strong>in</strong>ess)2. Employee satisfaction beg<strong>in</strong>s <strong>and</strong> ends with effective leaders whoprovide• Vision• Clear expectations regard<strong>in</strong>g care <strong>and</strong> service• <strong>Development</strong> <strong>and</strong> education• Effective communication• Role model<strong>in</strong>g• Constructive feedback• Recognition3. Effective leaders can <strong>and</strong> need to be developed4. <strong>Leadership</strong> development <strong>and</strong> education is based on educat<strong>in</strong>g tochange behaviorEvidence of this is reflected <strong>in</strong> the <strong>in</strong>terview<strong>in</strong>g (<strong>and</strong> hir<strong>in</strong>g) practices, jobdescriptions, performance evaluations, <strong>and</strong> ongo<strong>in</strong>g assessment of competence.Employee <strong>in</strong>volvement is actively <strong>and</strong> perpetually encouraged at St. Luke’s.Many workplace processes <strong>and</strong> systems exist to re<strong>in</strong>force that <strong>in</strong>volvement.DIAGNOSIS<strong>Leadership</strong> “owns” the responsibility to create, support, <strong>and</strong> susta<strong>in</strong> anenvironment that values St. Luke’s employees, physicians, <strong>and</strong> volunteers.—Richard Anderson, president & CEO, St. Luke’s Hospital <strong>and</strong> Health NetworkIn late 2000, senior adm<strong>in</strong>istration began to realize that the health care environmentwas becom<strong>in</strong>g <strong>in</strong>creas<strong>in</strong>gly challeng<strong>in</strong>g to all hospitals <strong>in</strong> the UnitedStates. From reimbursement to privacy, a wide array of large issues consistentlypresented itself to the senior adm<strong>in</strong>istrators across the health care l<strong>and</strong>scape.Be<strong>in</strong>g cognizant of these early challenges, St. Luke’s was assertive <strong>in</strong> alreadyimplement<strong>in</strong>g plans to h<strong>and</strong>le the operational, cl<strong>in</strong>ical, <strong>and</strong> fiscal challenges ofits immediate environment. However, management uncovered that although ithad action plans to take on all challenges <strong>in</strong> these three areas, it was not tak<strong>in</strong>gthe same assertive approach to meet<strong>in</strong>g the needs of its managers. St. Luke’swas not fully provid<strong>in</strong>g its own team with the ability to grow <strong>and</strong> exp<strong>and</strong> theirmanagement <strong>and</strong> leadership skills <strong>in</strong> parallel with the environmental challengesthat surrounded them.In embrac<strong>in</strong>g the concepts noted above, the St. Luke’s Hospital <strong>and</strong> HealthNetwork Adm<strong>in</strong>istration recognized the need to provide consistent, effective
ST. LUKE’S HOSPITAL AND HEALTH NETWORK 369leadership development across the network. In order to accomplish that end,a leadership steer<strong>in</strong>g committee, chaired by Robert P. Zimmel, senior vicepresident of human resources for the network, was formed <strong>in</strong> June 2001. Theleadership steer<strong>in</strong>g committee <strong>in</strong>cludes representation from the differentnetwork entities <strong>and</strong>, by design, teams people with varied backgrounds,communication styles, <strong>and</strong> skill sets. The mission, vision, goals, <strong>and</strong> memberroles of the committee were <strong>in</strong>itially established <strong>and</strong> rema<strong>in</strong> as guides to all thatis planned <strong>and</strong> implemented by the committee (see Exhibit 16.3). Completionof the <strong>in</strong>itial foundation work allowed the leadership steer<strong>in</strong>g committee tomove <strong>in</strong>to the process of design.DESIGNThe beg<strong>in</strong>n<strong>in</strong>g steps to this change effort began by look<strong>in</strong>g around, gett<strong>in</strong>g “outof our woods,” if you will, <strong>and</strong> seek<strong>in</strong>g out other models of leadership <strong>in</strong> healthcare. The leadership steer<strong>in</strong>g committee performed the obvious literature search;however, not many substantial <strong>and</strong> successful models were found.Follow<strong>in</strong>g the research assessment, members of the leadership steer<strong>in</strong>g committeevisited several sites that were considered qualitative performance <strong>in</strong>dicators.The target group was specific hospitals highly ranked <strong>in</strong> numerouscategories of the Press Ganey survey. While the visits were helpful <strong>and</strong> someknowledge was ga<strong>in</strong>ed, committee members also left these sites with a strongbelief that St. Luke’s was on the right track with many of its exist<strong>in</strong>g practices.A key learn<strong>in</strong>g for this leadership group was the recognition that these organizationswere <strong>in</strong>tentional <strong>in</strong> their leadership development. They designed settimes throughout the year when they brought leaders together to educate. Theseset times seemed to serve as the “milestone” days when growth opportunitieswould be deployed to employees.DEVELOPMENTPrior to form<strong>in</strong>g the committee that currently exists, a few chart<strong>in</strong>g members ofthe leadership steer<strong>in</strong>g committee traveled to St. Charles, Ill<strong>in</strong>ois to attend asem<strong>in</strong>ar hosted by Delnor Hospital. It was there that the leadership steer<strong>in</strong>gcommittee was <strong>in</strong>troduced to philosophies <strong>and</strong> methodologies of Qu<strong>in</strong>t Studer.From Qu<strong>in</strong>t Studer <strong>and</strong> other <strong>in</strong>dustry leaders, the mantra, “As you grow yourleaders, you grow your organization” was <strong>in</strong>troduced to the St. Luke’s team. Inaddition to Studer’s <strong>in</strong>fluential philosophies, the St. Luke’s team was <strong>in</strong>troducedto Studer’s “Five Pillars of Success.” From these pillars, the leadership steer<strong>in</strong>gcommittee designed the Five Po<strong>in</strong>ts of the Star model. (A star has significant
370 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEmean<strong>in</strong>g to the organization, as an eight-po<strong>in</strong>t star is <strong>in</strong>cluded <strong>in</strong> the St. Luke’slogo.) The Five Po<strong>in</strong>ts of the Star were identified as people, quality, service, cost,<strong>and</strong> growth (see Exhibit 16.4). Each po<strong>in</strong>t also has <strong>in</strong>dicators that are used toensure that the vision of each po<strong>in</strong>t is be<strong>in</strong>g achieved.The vision of the people po<strong>in</strong>t was def<strong>in</strong>ed as hav<strong>in</strong>g all leaders, staff <strong>and</strong>volunteers <strong>in</strong> St. Luke’s Hospital <strong>and</strong> Health Network feel valued <strong>and</strong> recognizedfrom all levels with<strong>in</strong> the Network. The <strong>in</strong>dicators for this po<strong>in</strong>t are• Hav<strong>in</strong>g a strong customer service orientation throughout the system• Implement<strong>in</strong>g a process for professional development• Reta<strong>in</strong><strong>in</strong>g quality staff• Acknowledg<strong>in</strong>g staff longevity <strong>and</strong> dedication• Recogniz<strong>in</strong>g our volunteers• Reduc<strong>in</strong>g employee turnover• Lett<strong>in</strong>g employees know that they are the advocates for the success ofthe entire network <strong>and</strong> that their contribution, regardless of the departmentor function, is valuable <strong>and</strong> critical to the success of the <strong>in</strong>stitutionThe quality po<strong>in</strong>t was designed to gauge the qualitative successes of the organizationaga<strong>in</strong>st benchmark data gathered for hospitals of similar size. St. Luke’scont<strong>in</strong>uously strives to reduce turnaround times, improve environmental quality,decrease length of stays, become the employer of choice <strong>in</strong> the local area,be nationally recognized for cl<strong>in</strong>ical outcomes, <strong>and</strong> ultimately become the organizationof choice. F<strong>in</strong>ally, <strong>in</strong> addition to the aspirations of the leadership steer<strong>in</strong>gcommittee, the hospital itself wanted to be ranked as a top hospital by<strong>in</strong>dustry experts for provid<strong>in</strong>g quality care <strong>and</strong> services.The service po<strong>in</strong>t sets clear guidel<strong>in</strong>es of what is expected of each employee<strong>and</strong> volunteer. The network has partnered with Press Ganey to gauge patient satisfaction.St. Luke’s works to wow the patient community with friendl<strong>in</strong>ess. The<strong>in</strong>stitution recognizes its accomplishments <strong>and</strong> takes accountability for any shortcom<strong>in</strong>gs.Every quarter managers are expected to evaluate their scores <strong>and</strong> determ<strong>in</strong>ewhether <strong>and</strong> where improvement is needed. Departments excell<strong>in</strong>g aga<strong>in</strong>sttheir national peers are celebrated at each monthly management meet<strong>in</strong>g.The cost po<strong>in</strong>t is by far the most difficult po<strong>in</strong>t St. Luke’s has had to communicateover the past years. Although ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g a positive bottom l<strong>in</strong>e is clearlythe vision, the greater challenge is leverag<strong>in</strong>g employee resources appropriatelyto maximize efficiency. The adm<strong>in</strong>istrative leadership monitors the managementby establish<strong>in</strong>g competitive employee wages, negotiat<strong>in</strong>g with vendors, tak<strong>in</strong>gsteps to decrease operat<strong>in</strong>g costs, <strong>and</strong> ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g adequate staff<strong>in</strong>g levels.F<strong>in</strong>ally, the growth po<strong>in</strong>t was designed with the vision to thrust St. Luke’s <strong>in</strong>the marketplace as the largest health network <strong>in</strong> Pennsylvania. This wouldbecome evident by the total number of patients, visits, <strong>and</strong> admissions.
ST. LUKE’S HOSPITAL AND HEALTH NETWORK 371St. Luke’s would <strong>in</strong>crease revenue, volume, <strong>and</strong> market share across all entitiesof the network. Look<strong>in</strong>g <strong>in</strong>to the future, St. Luke’s Hospital <strong>and</strong> Health Networkwishes to serve the needs of other patients <strong>in</strong> both new communities <strong>and</strong>border<strong>in</strong>g states.As a mechanism to illustrate the importance of the Five Po<strong>in</strong>ts of the Starmodel while cont<strong>in</strong>u<strong>in</strong>g to develop network leaders, a series of forums was conducted.The forums were designed to educate <strong>and</strong> stimulate learn<strong>in</strong>g with adesired outcome of chang<strong>in</strong>g behaviors. Forums were presented on a regularbasis, with each session primarily focus<strong>in</strong>g on one po<strong>in</strong>t of the star model. Orig<strong>in</strong>ally,the <strong>in</strong>tent was to have quarterly forums, but after consider<strong>in</strong>g thedem<strong>and</strong>s placed on the steer<strong>in</strong>g committee to produce the forums <strong>and</strong> the timeconstra<strong>in</strong>ts on the leaders to attend the sessions, the number of forums wasreduced to three per year. Each forum was based on the idea of <strong>in</strong>corporat<strong>in</strong>goutside lecturers <strong>and</strong> presenters, coupled by <strong>in</strong>ternal adm<strong>in</strong>istrators or leaderswho could implement the concepts presented by the guests while relat<strong>in</strong>g themto St. Luke’s Hospital <strong>and</strong> Health Network. The net result of each forum wasthat managers became knowledgeable not just of present practice but also ofother highly regarded practices away from the network. Managers had theopportunity to evaluate <strong>and</strong>, if applicable, implement new ideas <strong>in</strong>to everydaypractice.The implementation of these regular forums constituted another change tothe St. Luke’s culture. No longer could policies <strong>and</strong> procedures alone direct thenetwork’s leaders. Rather, the leaders had to th<strong>in</strong>k, plan, <strong>and</strong> respond differentlyto a dynamically chang<strong>in</strong>g health care environment while work<strong>in</strong>g <strong>in</strong>successfully grow<strong>in</strong>g organization.The forums always focused on the Five Po<strong>in</strong>ts of the Star model <strong>and</strong> providededucational <strong>and</strong> <strong>in</strong>formational content to help develop the skills of the networkleadership. The manner <strong>in</strong> which the forums were conducted fostered a casualatmosphere that was enterta<strong>in</strong><strong>in</strong>g yet <strong>in</strong>formative. Presenters at these sessionswere coached to enterta<strong>in</strong> <strong>and</strong> <strong>in</strong>teract <strong>and</strong> avoid a lecture-type format. Attend<strong>in</strong>gleaders were encouraged to socialize <strong>and</strong> network with their colleagues. Theleaders often stepped out of their more conservative roles <strong>and</strong> participated <strong>in</strong>learn<strong>in</strong>g exercises or even presented <strong>in</strong> a humorous fashion. This quicklyrevealed the diverse talent that made up the leadership team <strong>and</strong> made for amore enjoyable time. All of the forums were held away from the workplace toprovide a brief separation from the job <strong>and</strong> focus the attention on the learn<strong>in</strong>g.Another key element to the success of the leadership forums was <strong>and</strong> rema<strong>in</strong>sthe consistent <strong>in</strong>terjections of fun. Although fun <strong>in</strong> the workplace may not bevaluable to other corporate cultures, St. Luke’s Hospital <strong>and</strong> Health Network considersthis value vital to its culture. Dur<strong>in</strong>g forum plann<strong>in</strong>g, all members bra<strong>in</strong>stormmethods of deliver<strong>in</strong>g valuable learn<strong>in</strong>g <strong>in</strong> an environment that is bothcomfortable <strong>and</strong> enjoyable to guests. This attitude stems from the senior adm<strong>in</strong>istrationthat exercises this methodology on an everyday basis. Management
372 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEmeet<strong>in</strong>gs commonly have a comfortable tone. In addition, St. Luke’s providesvarious programs dur<strong>in</strong>g the year to appreciate the efforts <strong>and</strong> time of its entirestaff. As important, St. Luke’s is committed to celebrat<strong>in</strong>g success <strong>and</strong>recogniz<strong>in</strong>g its staff throughout the year. Although there are various events, thegreatest of them all is the St. Luke’s Hospital <strong>and</strong> Health Network Annual Picnic.This day-long festival is an event that attracts over three thous<strong>and</strong> attendees. Italso <strong>in</strong>cludes organized team competitions for employees <strong>and</strong> their families.Produc<strong>in</strong>g three quality forums a year for 260 managers has been a majorundertak<strong>in</strong>g. Fortunately, the leadership steer<strong>in</strong>g committee was experienced atproject work <strong>and</strong> implement<strong>in</strong>g major changes. The steer<strong>in</strong>g committee decidedto split the responsibilities up <strong>in</strong>to six subgroups, thus mak<strong>in</strong>g the process ofproduc<strong>in</strong>g a forum more manageable. The steer<strong>in</strong>g committee members selecteda subgroup <strong>in</strong> which to participate <strong>and</strong> became responsible for coord<strong>in</strong>at<strong>in</strong>g thatpart of the forum. The committee exp<strong>and</strong>ed some of the subgroup work by <strong>in</strong>vit<strong>in</strong>gother managers to assist with the tasks. The subgroups would report backto the steer<strong>in</strong>g committee for updates, feedback, <strong>and</strong>, at times, constructivecriticism.The leadership steer<strong>in</strong>g committee would decide on which po<strong>in</strong>t of the starto focus <strong>and</strong> provide a general framework for the forum, along with one or twokeynote speakers. A subgroup then worked on the content of the forum by select<strong>in</strong>gspecific topics for the presenters <strong>and</strong> prepp<strong>in</strong>g them on the desired direction<strong>and</strong> style. Another subgroup provided the decorations to support the theme <strong>and</strong>created the ambiance of the forum. A third subgroup provided the logisticalneeds <strong>and</strong> coord<strong>in</strong>ated the location, the audio-visual equipment, <strong>and</strong> the foodmenu. A fourth subgroup communicated weeks <strong>in</strong> advance to <strong>in</strong>vite leaders toattend, provid<strong>in</strong>g periodic rem<strong>in</strong>ders that were cleverly done <strong>and</strong> effective <strong>in</strong>reach<strong>in</strong>g everyone. Two other subgroups were formed to provide an evaluationprocess <strong>and</strong> the ability to l<strong>in</strong>k previous, present, <strong>and</strong> future forums. The evaluationtool was important not only to hear feedback but also to assess the effectivenessof the leadership steer<strong>in</strong>g committee’s <strong>in</strong>tent to educate, <strong>in</strong>form, <strong>and</strong>change behaviors. The l<strong>in</strong>kage component was critical to cont<strong>in</strong>ually tie theforums all back together as a process <strong>and</strong> not allow each forum to be an <strong>in</strong>dependentevent that was forgotten at the end of the day.IMPLEMENTATIONThe actual presentation of the leadership forums has been specifically designedto embody the goals of the organization as a whole through the Five Po<strong>in</strong>ts of theStar model. In specific reference to employee satisfaction, the leadership forumwas dedicated to provid<strong>in</strong>g multiple programs per year that both educate <strong>and</strong>challenge the over 260 St. Luke’s managers. Although each forum has a different
ST. LUKE’S HOSPITAL AND HEALTH NETWORK 373focus, the structure is relatively the same. The morn<strong>in</strong>g portion is dedicated tothe guest lecturer (or presenter), who provides a presentation based on his or herexperiences away from St. Luke’s that have parallel values <strong>and</strong> applicability.Many of the speakers share commonalities <strong>in</strong> personality <strong>and</strong> approach <strong>in</strong> thatthey provide valuable learn<strong>in</strong>g while be<strong>in</strong>g charismatic, energized, <strong>and</strong> audiencegrabb<strong>in</strong>g<strong>in</strong> delivery. The afternoon session <strong>in</strong>volves the presentation of networkadm<strong>in</strong>istrators <strong>and</strong> staff, who take some of the concepts presented by the guest,<strong>and</strong> relate them to everyday challenges <strong>and</strong> opportunities with<strong>in</strong> the network.The leadership steer<strong>in</strong>g committee ma<strong>in</strong>ta<strong>in</strong>s the same delivery st<strong>and</strong>ards for itsown staff as it does for featured guests. It regularly works with <strong>and</strong> even reviewsthe presentations to ensure that the audience will both learn <strong>and</strong> enjoyfrom them. The successful outcome is seen <strong>in</strong> qualitative feedback received fromSt. Luke’s staff <strong>in</strong>dicat<strong>in</strong>g that these forums have made a difference <strong>in</strong> the waythey operate both as <strong>in</strong>dividual managers <strong>and</strong> as members of teams orcommittees.As the leadership forums approach their third full year of implementation, itis valuable to trace back to their orig<strong>in</strong>al development. The journey, as wellas the theme of stars for our leadership events, began on September 18, 2001,with the “Journey to the Stars,” a kick-off event for the management team.The scene was <strong>in</strong>tentionally dramatic, with star-glittered sunglasses for all managers,Star-Trek theme music, a star-studded glow<strong>in</strong>g ceil<strong>in</strong>g, <strong>and</strong> an agendaemphasiz<strong>in</strong>g personal growth <strong>and</strong> development. The journey was “dest<strong>in</strong>ed” totransform managers to leaders.The follow<strong>in</strong>g three forums primarily focused on people, <strong>in</strong>clud<strong>in</strong>g the <strong>in</strong>troduction(<strong>and</strong> underst<strong>and</strong><strong>in</strong>g) of the Myers Briggs Type Inventory (MBTI) <strong>and</strong>campus-specific (hospital) satisfaction survey results (Press Ganey). <strong>Leadership</strong>core competencies, developed <strong>in</strong> a group management approach, were <strong>in</strong>troducedto managers <strong>in</strong> a forum focused on the people po<strong>in</strong>t of the star. Additionaltopics that were part of that forum <strong>in</strong>cluded us<strong>in</strong>g the MBTI to assist <strong>in</strong> bothstaff communications <strong>and</strong> conflict resolution. This forum illustrated to staff thatMBTI could be used to facilitate more effective conversations with variouspersonalities.Subsequent leadership forums focused on three other po<strong>in</strong>ts of the star:service, quality, <strong>and</strong> growth. Service featured two highly successful localcompany leaders who shared their bluepr<strong>in</strong>ts for service. Dr. James Bagian, ofthe Department of Veteran Affairs, presented quality <strong>in</strong> health care throughexamples from his experiences as both a NASA astronaut <strong>and</strong> <strong>in</strong> implement<strong>in</strong>gprocess improvements of the Veterans Adm<strong>in</strong>istration. Dr. Bagian re<strong>in</strong>forced pr<strong>in</strong>ciples<strong>and</strong> topics that were essential for atta<strong>in</strong><strong>in</strong>g positive outcomes fromqualitative excellence. In particular, he highlighted• Health care is of the tra<strong>in</strong>-<strong>and</strong>-blame mentality; elim<strong>in</strong>ate the “Who is atfault?” questions as an <strong>in</strong>itial response.
374 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE• When assess<strong>in</strong>g your quality program, your start<strong>in</strong>g po<strong>in</strong>t is your safetyprogram. Reason: safety systems keep you focused on the people, theproduct be<strong>in</strong>g manufactured, <strong>and</strong> the system through which the serviceor product is delivered. Keep<strong>in</strong>g this focus ultimately determ<strong>in</strong>es thequality outcome.• Do a very good needs analysis <strong>in</strong> the beg<strong>in</strong>n<strong>in</strong>g. Work on the areas thatneed improvement, don’t just gather statistics around th<strong>in</strong>gs go<strong>in</strong>gwrong. This is a problem-solv<strong>in</strong>g, proactive approach.• Clearly def<strong>in</strong>e the th<strong>in</strong>gs you want to measure, how you will measurethem (what tools you will use), <strong>and</strong> what you will do with the data tohelp improve the system.• Don’t po<strong>in</strong>t the f<strong>in</strong>ger of blame if someth<strong>in</strong>g fails. Treat failure as ateachable moment, use the opportunity to learn from it <strong>and</strong> <strong>in</strong>structthose <strong>in</strong>volved <strong>in</strong> the problem. Create an environment of learn<strong>in</strong>g whenmistakes happen.• Create quality review teams that are made up of people from differentdiscipl<strong>in</strong>es.St. Luke’s senior vice president of f<strong>in</strong>ance discussed the growth po<strong>in</strong>t of thestar. F<strong>in</strong>ancial growth at all campuses <strong>and</strong> as a network was highlighted.The senior vice president of network development cleverly presented St. Luke’snetwork strategic plan. Based on the game show Jeopardy, the senior vice presidentof network development <strong>and</strong> colleagues reenacted the game <strong>in</strong> a humorousfashion. While educat<strong>in</strong>g the network of particular growth facts <strong>and</strong>strategies, mock answers were also given as a means to joke about fictionalideas <strong>and</strong> take the occasional sarcastic “jab” at present senior adm<strong>in</strong>istrationacross the network. This format was well received regard<strong>in</strong>g the quantitativefeedback <strong>and</strong> general comments received on postforum surveys. The thirdspeaker of the growth forum, the CEO from St. Luke’s Quakertown, made ahumorous but educational presentation called “Build<strong>in</strong>g a Great Place to Work.”While highlight<strong>in</strong>g programs that did work, through multiple slides <strong>and</strong> pictureshe mocked programs that were not as successful.Although leadership forums were gr<strong>and</strong> stage events, they were only heldthree times per year. The leadership steer<strong>in</strong>g committee recognized both theneed <strong>and</strong> dem<strong>and</strong> of its employees by hav<strong>in</strong>g regular stimuli for its managers.Therefore, the Book Club was established across the network. The foundationpr<strong>in</strong>ciple of Book Club is to provide the managers a book that offers opportunitiesto learn different practices <strong>and</strong> methodologies for be<strong>in</strong>g leaders <strong>and</strong>employees. The concept implemented <strong>in</strong> the network was to deploy the bookto all leaders, <strong>and</strong> have regular Book Club meet<strong>in</strong>gs designed to create smallth<strong>in</strong>k tanks. Key books that have been implemented <strong>in</strong>clude Good to Great 1<strong>and</strong> The Power of Full Engagement. 2
ST. LUKE’S HOSPITAL AND HEALTH NETWORK 375The net result of these book read<strong>in</strong>gs has been managers hav<strong>in</strong>g the opportunityto learn <strong>and</strong> reflect <strong>in</strong> a nonwork sett<strong>in</strong>g. General group feedback has<strong>in</strong>dicated that managers enjoy these books <strong>and</strong> <strong>in</strong> some way take someth<strong>in</strong>gfrom each one <strong>in</strong> everyday action.As a means to assist managers <strong>in</strong> underst<strong>and</strong><strong>in</strong>g their respective charactertraits, the Myers Briggs Type Inventory was rolled out at St. Luke’s Hospital <strong>and</strong>Health Network <strong>in</strong> fall 2001. The management team was <strong>in</strong>vited to participate<strong>in</strong> tak<strong>in</strong>g the MBTI <strong>in</strong> September 2001. The <strong>in</strong>itial education session, whichgave the leadership group the ground<strong>in</strong>g it needed <strong>in</strong> underst<strong>and</strong><strong>in</strong>g MBTI type,occurred <strong>in</strong> October 2001. This was the beg<strong>in</strong>n<strong>in</strong>g po<strong>in</strong>t of the St. Luke’s journeyof becom<strong>in</strong>g an MBTI organization. The development of a resource thatlisted the MBTI type of a manager was another educational step that wasnecessary to St. Luke’s Hospital <strong>and</strong> Health Network culture.Whereas some cultures show <strong>in</strong>dividual employee MBTI by display<strong>in</strong>g it ona p<strong>in</strong> or on their door, St. Luke’s did not feel comfortable with that method. Forthe St. Luke’s work culture, the most practical answer was to develop the TypeDirectory. This directory is a guide that lists managers’ MBTI type <strong>and</strong> phonenumber. Unlike other concepts such as signs on office doors or nametag depictions,the Type Directory was <strong>in</strong>tended to meet the needs of all employees acrossthe network. Unlike a <strong>in</strong> one-hospital atmosphere, managers <strong>in</strong> the networkoften <strong>in</strong>teract with other managers <strong>and</strong> adm<strong>in</strong>istrators from other hospitalswith<strong>in</strong> the network. The Type Directory allows all <strong>in</strong>dividuals to <strong>in</strong>teract moreeasily. The presence <strong>and</strong> importance of MBTI is seen <strong>in</strong> the second generationof this directory, which was released <strong>in</strong> spr<strong>in</strong>g 2003. At that time, even moremanagers had discovered their MBTI type <strong>and</strong> agreed on the importance of shar<strong>in</strong>git with others across the network. Its importance is considered so great thatit has been placed on the Intranet, provid<strong>in</strong>g onl<strong>in</strong>e <strong>in</strong>formation to all networkmanagers.KEY TO (CONTINUED) SUCCESSAs the leadership forums have cont<strong>in</strong>ued to be successful <strong>in</strong> both design <strong>and</strong>implementation, a core component of its successful rollout has been the ongo<strong>in</strong>gsupport from senior management. The leadership steer<strong>in</strong>g committee madeconscious decisions to <strong>in</strong>volve senior leadership from the kick-off meet<strong>in</strong>g topresentations <strong>in</strong>volv<strong>in</strong>g senior leaders’ particular expertise regard<strong>in</strong>g po<strong>in</strong>ts ofthe star. At each leadership forum, Richard Anderson welcomes leaders <strong>and</strong> provides<strong>in</strong>sightful comments to the leaders present regard<strong>in</strong>g their importance tothe network <strong>and</strong> the time they spend learn<strong>in</strong>g at each of the forums. The commitmentof senior leadership’s presence at each of the leadership forumscont<strong>in</strong>ues to be vital to the success of the forums.
376 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEFORUM EVALUATIONThe effort to educate the leadership steer<strong>in</strong>g committee was not grounded <strong>in</strong> anassumption of what people needed. The committee wanted to learn from peoplewhat they needed; this feedback has cont<strong>in</strong>ued. Survey<strong>in</strong>g the group <strong>and</strong> meet<strong>in</strong>gtheir needs is not only a “concierge” mentality—a total commitment to customerservice <strong>in</strong> all facets of service delivery—but it also is consistent with ourearly message to the leadership team, “We want to hear from you!” At the variousleadership forums, signs have been created that announce, “We heard you”<strong>and</strong> identify the changes made to the forum s<strong>in</strong>ce the last meet<strong>in</strong>g. All suchchanges were driven by attention to the group’s feedback.The leadership steer<strong>in</strong>g committee cont<strong>in</strong>ues to utilize the feedback ga<strong>in</strong>edfrom forum evaluations (see example <strong>in</strong> Exhibit 16.5) <strong>and</strong> analyzes it via aprocess improvement approach. The effectiveness of the program is measuredbased on identified objectives def<strong>in</strong>ed <strong>in</strong> the evaluation tool. Comments <strong>and</strong>suggestions from the evaluation process have been used to determ<strong>in</strong>e futureprogram content. This <strong>in</strong>formation has also helped identify leadership <strong>in</strong>itiatives.Interest <strong>in</strong> participation on leadership task forces is assessed via the evaluationprocess. Managers from all network entities have volunteered toparticipate <strong>in</strong> these endeavors. Projects <strong>in</strong>clude• Revision of the management performance evaluation to reflect the FivePo<strong>in</strong>ts of the Star model (people, quality, service, cost, <strong>and</strong> growth)• Ongo<strong>in</strong>g l<strong>in</strong>kage accountability grids<strong>Leadership</strong> development is based on educat<strong>in</strong>g to change behavior. Servicehas been an area of significant development <strong>in</strong> the St. Luke’s Hospital <strong>and</strong> HealthNetwork. Many examples of behavioral change <strong>in</strong> this area have been noted:• As stated previously, the management evaluation was revised to reflectleadership development accountability st<strong>and</strong>ards.• The St. Luke’s Hospital <strong>and</strong> Health Network Performance St<strong>and</strong>ardswere dissem<strong>in</strong>ated <strong>in</strong> a booklet as part of the <strong>Leadership</strong> <strong>Development</strong>series. The goal of the booklet was to provide m<strong>in</strong>imum expected behavior<strong>and</strong> performance st<strong>and</strong>ards across the network. These st<strong>and</strong>ards arenow part of the staff performance evaluation process.• Numerous letters have been received by senior adm<strong>in</strong>istration denot<strong>in</strong>gthe positive customer service environment.As a result of reported behavioral change, the senior adm<strong>in</strong>istrative teamfrom Presbyterian Medical Center of the <strong>University</strong> of Pennsylvania Health Systemconducted a site visit to experience <strong>and</strong> learn about our various customerservice endeavors.
ORGANIZATIONAL RESULTSST. LUKE’S HOSPITAL AND HEALTH NETWORK 377Over the past few years, the leadership of the St. Luke’s adm<strong>in</strong>istration hasresulted <strong>in</strong> the <strong>in</strong>stitution’s realization of greater success on all Five Po<strong>in</strong>ts ofthe Star model (see Exhibit 16.6). Although the organization as a whole hasrealized achievement, <strong>in</strong>dividual departmental leadership of adm<strong>in</strong>istrators <strong>and</strong>managers have been the backbone of this success. Individual <strong>in</strong>itiatives led byone leader or a team of leaders have benefited not just their own respectivedepartments, but also other departments across their <strong>in</strong>dividual facility. Eachsuccessful project has resulted from the orig<strong>in</strong>al project champions’ review<strong>in</strong>gtheir department <strong>and</strong> compar<strong>in</strong>g it with the ideal pr<strong>in</strong>ciples of the Five Po<strong>in</strong>tsof the Star model. By identify<strong>in</strong>g opportunities, tangible benefits have beenrealized through the successful completion of multiple <strong>in</strong>itiatives.Listed below are four examples that illustrate how leaders have used the FivePo<strong>in</strong>ts of the Star to recognize <strong>in</strong>itiatives with<strong>in</strong> their departments whereimprovement could be made to realize better outcomes.CASE #1: Po<strong>in</strong>t of Star—QualityTitle: “A Multidiscipl<strong>in</strong>ary Approach to Decreas<strong>in</strong>g Central/Umbilical L<strong>in</strong>e AssociatedBacteremia <strong>in</strong> the NICU”Project team leaders: Ellen Novatnack, Steven Schweon, <strong>and</strong> Charlotte BeckerThe project goal was to decrease the central/umbilical l<strong>in</strong>e associated bacteremiarate <strong>in</strong> the 1000 gram neonate to below the twenty-fifth percentile when benchmarkedaga<strong>in</strong>st the Centers for Disease Control <strong>and</strong> Prevention (CDC) NationalNosocomial Infection Surveillance (NNIS) System. Interventions would have animpact on all NICU birth weight categories.Infants <strong>in</strong> the NICU are at greater risk for health care associated (nosocomial)<strong>in</strong>fections due to their compromised immune status, low birth weight, <strong>and</strong> the complex<strong>in</strong>vasive diagnostic <strong>and</strong> therapeutic treatment regimens that they are exposedto. Central/umbilical l<strong>in</strong>e associated bacteremia rates <strong>in</strong> the 1000 gram birthweight category <strong>in</strong> the NICU were above the n<strong>in</strong>etieth percentile for twenty-fourmonths when benchmarked aga<strong>in</strong>st NNIS. Device (central <strong>and</strong> umbilical l<strong>in</strong>e)utilization ratios were below the twenty-fifth percentile when compared to NNIS.Therefore, it was concluded that the high <strong>in</strong>fection rates might be related more to<strong>in</strong>fection control issues than to device use.The strategy for improvement was based on implement<strong>in</strong>g <strong>and</strong> re<strong>in</strong>forc<strong>in</strong>g<strong>in</strong>fection control <strong>in</strong>terventions to reduce the frequency of <strong>in</strong>fection by utiliz<strong>in</strong>g acomprehensive, multidiscipl<strong>in</strong>ary approach. Representatives from Infection Control<strong>and</strong> Prevention, NICU, <strong>and</strong> Support Services collaborated to identify problems, makerecommendations, provide staff education, re<strong>in</strong>force preventive measures,implement changes, <strong>and</strong> revise policies <strong>and</strong> procedures.Specific examples of the multiple <strong>in</strong>terventions <strong>in</strong>clude revis<strong>in</strong>g policies on tub<strong>in</strong>gchanges, enforc<strong>in</strong>g proper h<strong>and</strong> hygiene technique, chang<strong>in</strong>g the antimicrobial
378 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEh<strong>and</strong>wash<strong>in</strong>g agent to one that was k<strong>in</strong>der <strong>and</strong> gentler to the sk<strong>in</strong>, enforc<strong>in</strong>g gloveuse when appropriate <strong>in</strong> conduct<strong>in</strong>g environmental rounds, observ<strong>in</strong>g staff provid<strong>in</strong>gcare, <strong>in</strong>troduc<strong>in</strong>g a waterless alcohol h<strong>and</strong> rub as an alternative to soap <strong>and</strong> water <strong>and</strong>plac<strong>in</strong>g it at every cubicle, enforc<strong>in</strong>g current policy <strong>and</strong> procedures, dat<strong>in</strong>g peripheralIV <strong>in</strong>sertion sites, stopp<strong>in</strong>g the practice of precutt<strong>in</strong>g tegaderm <strong>and</strong> b<strong>and</strong> aids,elim<strong>in</strong>at<strong>in</strong>g drawer stock of gauze so sterile gauze is used, wip<strong>in</strong>g down all sharedequipment after each patient use, enforc<strong>in</strong>g the nail policy <strong>and</strong> limit<strong>in</strong>g jewelry.Support Services also made changes. Respiratory Therapy <strong>in</strong>terventions <strong>in</strong>cludedempty<strong>in</strong>g the vent water traps <strong>in</strong>to the trash can, cover<strong>in</strong>g tub<strong>in</strong>g when alternat<strong>in</strong>gbetween CPAP <strong>and</strong> nasal cannulas, <strong>and</strong> stor<strong>in</strong>g ambu bags <strong>in</strong> a clean plastic bag atthe bedside. Environmental Services consolidated clean<strong>in</strong>g products. Radiologybegan clean<strong>in</strong>g <strong>and</strong> dis<strong>in</strong>fect<strong>in</strong>g ultrasound probes between patients <strong>and</strong> cover<strong>in</strong>gall radiology plates with clean plastic bags for each patient.After two years of elevated <strong>in</strong>fection rates <strong>and</strong> implement<strong>in</strong>g strategies, the data<strong>in</strong>dicated that four months of a decreas<strong>in</strong>g rate <strong>and</strong> then six consecutive months ofno <strong>in</strong>fections had occurred, a rate that falls below the NNIS tenth percentile. Basedon the performance improvement project, the actions taken <strong>in</strong> the NICU resulted <strong>in</strong>a decrease <strong>in</strong> central/umbilical l<strong>in</strong>e associated bacteremia rates <strong>in</strong> the 1000 gramneonate.The NICU staff ga<strong>in</strong>ed a heightened awareness that <strong>in</strong>fection control preventiveactivities reduce <strong>in</strong>fection rates. Hospital adm<strong>in</strong>istration learned what could beaccomplished through a successful <strong>in</strong>fection control program. The Jo<strong>in</strong>t Commissionof Accredited Healthcare Organizations (JCAHO) surveyor (May 2001) was impressedwith the multidiscipl<strong>in</strong>ary approach <strong>and</strong> favorable results. The deputy director of theHealthcare Outcomes Branch at the CDC sent a letter recommend<strong>in</strong>g our efforts <strong>and</strong>congratulat<strong>in</strong>g us on our success.A spot check was performed <strong>in</strong> the NICU from March 1 to May 31, 2003, byconduct<strong>in</strong>g targeted surveillance us<strong>in</strong>g the previously established guidel<strong>in</strong>es. Therate of central/umbilical l<strong>in</strong>e associated bacteremia <strong>in</strong> the gram neonate was0 <strong>in</strong>fections per 1,000 l<strong>in</strong>e days, which falls below the NNIS tenth percentile,demonstrat<strong>in</strong>g susta<strong>in</strong>ed positive results over time.CASE #2: Po<strong>in</strong>t of Star—ServiceTitle: “Incorporat<strong>in</strong>g Family Centered Care <strong>in</strong> Pediatric Nurs<strong>in</strong>g Practice”Project team leader: Charlotte BeckerIn 2001, nurs<strong>in</strong>g staff reviewed the Press Ganey results for the last three surveys(2000–2001) <strong>and</strong> learned that the department was not scor<strong>in</strong>g as high as managersexpected. Follow<strong>in</strong>g the review, the plan was to develop new approaches <strong>and</strong>physical changes with<strong>in</strong> the Pediatric Unit to improve family-centered care.The pediatric team chose to focus on provid<strong>in</strong>g family-centered care. Newapproaches when car<strong>in</strong>g for multicultural, nontraditional family units needed tobe addressed. An open-m<strong>in</strong>ded, flexible, <strong>and</strong> patient-centered approach was<strong>in</strong>troduced <strong>and</strong> emphasized with the pediatric staff members. There were physicalchanges with<strong>in</strong> the pediatric unit that needed to be addressed.
ST. LUKE’S HOSPITAL AND HEALTH NETWORK 379The network first began by provid<strong>in</strong>g concierge customer service education.These sessions consisted of two hours of education to• Discuss why customer satisfaction is so important• Provide basic skills for effective communication• Provide tools to enable the employee to embody the role of a conciergeUnit-based education was focused on education from the Family-CenteredCare Conference.The Needs Assessment was completed us<strong>in</strong>g basel<strong>in</strong>e Press Ganey reports fromJuly 1, 2002, to June 30, 2003. The items the pediatric team chose to work on were• Pleasantness of room decorations• Accommodations <strong>and</strong> comfort for visitors• Staff sensitivity to <strong>in</strong>convenience• Staff attitude toward visitors• Room temperatureThe staff held bra<strong>in</strong>storm<strong>in</strong>g sessions to generate ideas from the survey results.They also focused on the additional, written, negative comments on the surveyforms.To address various areas of concern, the follow<strong>in</strong>g actions were implemented foreach respective factor.Pleasantness of the room’s decorations:• Pictures were taken of all pediatric patients (with parent’s consent) <strong>and</strong> hung fordisplay. “Thank You” cards were also displayed. (9/02)• All children had a private room. (9/02)• A d<strong>in</strong>osaur food truck was purchased for the pediatric trays. (10/02)• A refrigerator <strong>and</strong> microwave were added to the parents’ lounge for families touse. (9/02)• Water founta<strong>in</strong>s were replaced with an ice mach<strong>in</strong>e <strong>and</strong> water dispens<strong>in</strong>g unit.(10/02)• Portable video games systems were donated <strong>and</strong> placed <strong>in</strong> moveable carts forpatients’ use. (11/02)• Meals were provided free of charge for breastfeed<strong>in</strong>g mothers.Accommodations <strong>and</strong> comfort of visitors:• Coffee, tea, hot chocolate, crackers, <strong>and</strong> cookies were placed at the nurs<strong>in</strong>g stationeach morn<strong>in</strong>g. (10/02)• Eight hundred VCR tapes, video systems, <strong>and</strong> games were donated. (Collected asan Eagle Scout project, for patient use.) (10/02)• AOL access was added to the portable laptop donated by our Ladies Auxiliary forvisit<strong>in</strong>g family members. (1/02)• Newborns need<strong>in</strong>g additional hospital stay were transferred to pediatrics. Motherswho were discharged could stay with their newborns while their baby was be<strong>in</strong>gtreated.
380 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGERoom temperature:• All <strong>in</strong>dividual heat<strong>in</strong>g systems <strong>in</strong> each room were cleaned <strong>and</strong> upgraded.• Individual room thermostats were added with signage expla<strong>in</strong><strong>in</strong>g how to adjust thetemperature.• Individual fans were provided as requested.• W<strong>in</strong>dow darken<strong>in</strong>g coat<strong>in</strong>g was placed on the <strong>in</strong>terior of the w<strong>in</strong>dows.• The return (fresh) air flow was <strong>in</strong>creased to the pediatric unit. In addition, the ventilationunit was replaced. (10/03)Staff sensitivity to <strong>in</strong>convenience <strong>and</strong> staff attitude toward visitors:• Families were provided 20 percent cafeteria discount cards. (9/01)• Parents choos<strong>in</strong>g to stay with their child were given hygiene supplies. (9/00)• A VCR was placed <strong>in</strong> every child’s room with appropriate controls. (11/02)• “Please Do Not Disturb” signs were placed <strong>in</strong> the unit. (1/02)• All units had distributed welcome pamphlets (<strong>and</strong> signs were updated). (5/03)• Snack, soda, <strong>and</strong> juice vend<strong>in</strong>g mach<strong>in</strong>es were made available <strong>in</strong> an area convenientlyadjacent to the pediatric floor.The changes that were <strong>in</strong>stituted were measured by the results of the Press GaneyReport results from July 1, 2003, to September 30, 2003 (see Exhibit 16.7). An<strong>in</strong>crease <strong>in</strong> scores was shown <strong>in</strong> all five areas of the needs assessment.CASE #3: Po<strong>in</strong>t of Star—Cost <strong>and</strong> QualityTitle: “Guidel<strong>in</strong>es for the Use of Interventional Cardiology Medications <strong>in</strong> the CardiacCatheterization Lab—A Multidiscipl<strong>in</strong>ary Approach”Project team leader: Howard C. CookUtiliz<strong>in</strong>g the pr<strong>in</strong>ciples of value analysis <strong>and</strong> evidence-based medic<strong>in</strong>e, a programwas developed highlight<strong>in</strong>g guidel<strong>in</strong>es for the use of glycoprote<strong>in</strong> IIb/IIIa <strong>in</strong>hibitors(abciximab [ReoPro], eptifibatide [Integril<strong>in</strong>]), <strong>and</strong> the direct thromb<strong>in</strong> <strong>in</strong>hibitorbivalirud<strong>in</strong> (Angiomax) <strong>in</strong> <strong>in</strong>terventional cardiology procedures. The goal of thisproject was to assure optimum patient outcomes <strong>and</strong> maximum f<strong>in</strong>ancial efficiency.It was recognized that abciximab was utilized <strong>in</strong> approximately 60 percent of allcases <strong>in</strong>volv<strong>in</strong>g these agents. This agent was also the most expensive of the threeagents usually employed. A thorough review of the medical literature wasundertaken to see whether there were specific <strong>in</strong>dications or patient types whobenefited most form the use of abciximab. For all others, the preferred agent wouldbe eptifibatide (or bivalirud<strong>in</strong>, if the cl<strong>in</strong>ical situation was appropriate). At the sametime, a national survey of top cardiac hospitals (based on Solucient data) wasconducted to see whether they had established criteria for the use of these products.Once all data were reviewed, a proposal was presented to the cardiology steer<strong>in</strong>gcommittee for approval. At that time, criteria were f<strong>in</strong>e-tuned <strong>and</strong> the project wasapproved. Educational signage was displayed <strong>in</strong> all procedure rooms, <strong>in</strong>dicat<strong>in</strong>gsituations <strong>in</strong> which abciximab would be preferred <strong>and</strong> request<strong>in</strong>g the use ofeptifibatide (or bivalirud<strong>in</strong>) <strong>in</strong> all other patients. Target drug usage data, as well as
ST. LUKE’S HOSPITAL AND HEALTH NETWORK 381concomitant <strong>in</strong>terventional medications used, were documented to determ<strong>in</strong>ecompliance to approved criteria. Physicians who consistently used abciximab outsideof approved criteria were contacted <strong>and</strong> the program was reviewed. There was aconsistent reduction <strong>in</strong> the number of cases that fell outside of established criteria asthe program cont<strong>in</strong>ued. Success of the project was measured by evaluat<strong>in</strong>g the costper case of <strong>in</strong>terventional procedures <strong>in</strong> which the target drugs were used. S<strong>in</strong>ce itsbeg<strong>in</strong>n<strong>in</strong>g <strong>in</strong> April 2003, the estimated annual sav<strong>in</strong>gs to the <strong>in</strong>stitution is <strong>in</strong> excessof $250,000. There have been no reports of adverse drug events as a result of thetherapeutic preferences of this program to date.CASE #4: Po<strong>in</strong>t of Star—PeopleTitle: “Creat<strong>in</strong>g a <strong>Best</strong> Place to Work”Project team leader: Joe P<strong>in</strong>to, director, service improvementSt. Luke’s wished to be recognized nationally <strong>in</strong> cl<strong>in</strong>ical outcomes, cost-effective care,<strong>and</strong> patient satisfaction. To achieve this recognition, the director of serviceimprovement looked to Press Ganey to provide a large medium <strong>in</strong> which St. Luke’scould compete aga<strong>in</strong>st over 1,600 hospitals across the country. Us<strong>in</strong>g the Press Ganeysurvey as well as its research resources, St. Luke’s was able to identify the questions thatwere highly correlated with employee friendl<strong>in</strong>ess <strong>and</strong> courtesy. As part of the analysis,St. Luke’s exam<strong>in</strong>ed the questions that were highly correlated with the likelihood ofpatients to recommend the hospital to others. Follow<strong>in</strong>g the assessment, a plan wasdevised based on the pr<strong>in</strong>ciple that happy employees correlate to satisfied customers,which <strong>in</strong> turn leads to patients that will recommend St. Luke’s to other people.Follow<strong>in</strong>g the research <strong>and</strong> assessment of the future goal, the first step <strong>in</strong> theimplementation process began by creat<strong>in</strong>g a customer service program. This programwas m<strong>and</strong>ated <strong>and</strong> was designed to illustrate the necessary steps to implementappropriate customer service behaviors <strong>and</strong> st<strong>and</strong>ards of performance. Key areasranged from conflict resolution to service recovery <strong>and</strong> etiquette. The second stepwas creat<strong>in</strong>g the employee recognition <strong>and</strong> reward committee. This committee ofstaff members is charged with award<strong>in</strong>g the PCRAFT (pride, car<strong>in</strong>g, respect,accountability, flexibility, teamwork) award to twelve hospital employees per year(see Exhibit 16.2). These employees are required to consistently exhibit the values ofthe organization, <strong>and</strong> documented examples have to be <strong>in</strong>cluded <strong>in</strong> their respectivenom<strong>in</strong>ation form. The third key step <strong>in</strong> the strategy process was the implementationof awards for departments’ patient satisfaction scores. The objective of thedepartmental quarterly recognition program was to reward <strong>and</strong> recognizeemployees, managers, <strong>and</strong> departments for outst<strong>and</strong><strong>in</strong>g achievement related topatient satisfaction. To achieve recognition, a department must receive one of thefollow<strong>in</strong>g:• Highest percentile rank<strong>in</strong>g on the survey• Overall mean score that is highest above the hospital mean score• Highest percentile rank<strong>in</strong>g consistently (three quarters or more)• Largest improvement <strong>in</strong> overall mean score
382 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEFollow<strong>in</strong>g a w<strong>in</strong> of this award, the department managers receive up to $100 tobe used on the department, accompanied by recognition from the COO <strong>and</strong> atmonthly management meet<strong>in</strong>gs. The f<strong>in</strong>al component of the overall strategy focuseson <strong>in</strong>dividual achievement via the “High-5” recognition. A staff member who has hisor her name appear <strong>in</strong> patient letters, Press Ganey comments, over the phone, <strong>in</strong>patient letters, or through Project Bravo recognitions—a St. Luke’s program thatrecognizes employees for positive customer service—more than five times receivesa High-5 Award. The recognized employee receives a gift certificate to either arestaurant or other outside facility, a letter from the COO, a p<strong>in</strong> with the slogan“above <strong>and</strong> beyond,” <strong>and</strong> their name displayed on the Employee Wall of Fame.The results of this comprehensive strategy are based on Press Ganey scores <strong>and</strong>other major achievements. In 2003 marked achievements <strong>in</strong> Press Ganey scor<strong>in</strong>g<strong>in</strong>cluded the follow<strong>in</strong>g:• The Environmental Services Department scored with<strong>in</strong> the n<strong>in</strong>etieth percentile forfour consecutive survey periods <strong>in</strong> the measure of room cleanl<strong>in</strong>ess <strong>and</strong> staffcourtesy.• The nurs<strong>in</strong>g staff ranked above the eightieth percentile <strong>in</strong> nurses’ attitude.• Organizational achievements <strong>in</strong>cluded a rank<strong>in</strong>g over the eightieth percentile <strong>in</strong>overall cheerfulness, eighty-fourth percentile <strong>in</strong> staff sensitivity to the <strong>in</strong>convenienceof be<strong>in</strong>g <strong>in</strong> a hospital sett<strong>in</strong>g, <strong>and</strong> eighty-third percentile <strong>in</strong> attitude towardvisitors.Although the Press Ganey scores alone provided tangible proof of success, just asvaluable was be<strong>in</strong>g named <strong>in</strong> the “<strong>Best</strong> Places to Work Foundation for Pennsylvania.”In the Top 100 <strong>Best</strong> Places, St. Luke’s ranked twenty-eighth <strong>in</strong> the large-size category(employee number greater than 250). The award is based on a written summary ofpractices, as well as an anonymous employee survey of r<strong>and</strong>omly selectedemployees. The employee survey represents 75 percent of the total grade.LEADERSHIP COMMITTEE OUTCOMESAs leadership forum programm<strong>in</strong>g cont<strong>in</strong>ued to evolve, the steer<strong>in</strong>g committeeestablished a l<strong>in</strong>kage committee. The l<strong>in</strong>kage committee membership was representativeof the entities with<strong>in</strong> the network. The primary goal of the l<strong>in</strong>kagecommittee was to l<strong>in</strong>k education to chang<strong>in</strong>g behavior. To exercise thisgoal, accountability grids were created follow<strong>in</strong>g each leadership forum. Theaccountability grids (Exhibit 16.8) conta<strong>in</strong>ed expectations for senior <strong>and</strong> middlemanagement leaders with def<strong>in</strong>ed timel<strong>in</strong>es as appropriate. The expectationsconta<strong>in</strong>ed with<strong>in</strong> each accountability grid related to the education provided atthe leadership forum.Several works, born out of the leadership forum, have contributed significantlyto the organization’s def<strong>in</strong>ition of leadership skills. One of theseworks is the leadership core competencies, which was the result of work
ST. LUKE’S HOSPITAL AND HEALTH NETWORK 383accomplishments by the entire leadership team. Seven key competencies wereidentified:• Motivator• Team builder• Goal orientation• Communicator• Commitment to service• Organized, prioritiz<strong>in</strong>g• ResourcefulEach of these competencies has specific behavioral identifiers that furtherdef<strong>in</strong>e each competency. The management performance evaluation wasredesigned by an ad hoc group of managers who participated <strong>in</strong> the leadershipforum. This group designed a new management evaluation tool that <strong>in</strong>corporatedthe core leadership competencies (Exhibit 16.9).An additional work that orig<strong>in</strong>ated out of the leadership steer<strong>in</strong>g committeewas the development of a booklet on service excellence st<strong>and</strong>ards of performance.This booklet clearly def<strong>in</strong>es, <strong>in</strong> a behavioral way, the st<strong>and</strong>ards set for“concierge service delivery” on the part of all members of the hospital team. Allnew employees are required to attend concierge tra<strong>in</strong><strong>in</strong>g as part of the orientationto the hospital.ENDNOTES1. Coll<strong>in</strong>s, J. (2001). Good to great. New York: HarperColl<strong>in</strong>s.2. Loehr, J., & Schwartz, T. (2003). The power of full engagement. New York: Simon &Schuster.
384 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 16.1. Strategic Plan Goals <strong>and</strong> ObjectivesMission Statement. The mission of St. Luke’s Hospital <strong>and</strong> Health Network isto provide compassionate, excellent quality <strong>and</strong> cost-effective health care toresidents of the communities we serve regardless of their ability to pay.The entities constitut<strong>in</strong>g the St. Luke’s Hospital <strong>and</strong> Health Network willaccomplish this mission by• Mak<strong>in</strong>g the patient our highest priority• Promot<strong>in</strong>g health <strong>and</strong> cont<strong>in</strong>uously improv<strong>in</strong>g care provided to heal the sick<strong>and</strong> <strong>in</strong>jured• Coord<strong>in</strong>at<strong>in</strong>g <strong>and</strong> <strong>in</strong>tegrat<strong>in</strong>g services <strong>in</strong>to a seamless system of care• Improv<strong>in</strong>g the level of customer service provided throughout the network• Ensur<strong>in</strong>g all health care services are relevant to the needs of the community• Striv<strong>in</strong>g to maximize the satisfaction of our employees, patients, medical staff,<strong>and</strong> volunteers• Tra<strong>in</strong><strong>in</strong>g allied health professionals, nurs<strong>in</strong>g <strong>and</strong> medical students, <strong>and</strong>residents <strong>in</strong> a variety of specialties <strong>and</strong> to attract them to practice with<strong>in</strong>the network’s service areaVision Statement. The entities of St. Luke’s Hospital <strong>and</strong> Health Network will benationally recognized for excellence <strong>in</strong> cl<strong>in</strong>ical outcomes, cost-effective care, <strong>and</strong>patient satisfaction.This vision will be achieved by• Cont<strong>in</strong>uously improv<strong>in</strong>g patient, employee, volunteer, <strong>and</strong> physiciansatisfaction• Benchmark<strong>in</strong>g cl<strong>in</strong>ical outcomes <strong>and</strong> improv<strong>in</strong>g the processes that leadto optimal care• Manag<strong>in</strong>g the resources of the network to m<strong>in</strong>imize costs• Partner<strong>in</strong>g with physicians <strong>and</strong> other providers, recogniz<strong>in</strong>g our success isdependent on cooperation <strong>and</strong> common goals• Cont<strong>in</strong>uously updat<strong>in</strong>g our view of “reality” consistent with a rapid change<strong>in</strong> the environment, technology, <strong>and</strong> the practice of medic<strong>in</strong>e
ST. LUKE’S HOSPITAL AND HEALTH NETWORK 385Exhibit 16.1. (Cont<strong>in</strong>ued)Pr<strong>in</strong>ciples. The follow<strong>in</strong>g pr<strong>in</strong>ciples will be the foundation of the goals, management,<strong>and</strong> future development of the network.• Each network entity has a responsibility to operate f<strong>in</strong>ancially at break-even orbetter on a st<strong>and</strong>-alone basis over the long term. Our entities should focus ontheir core services <strong>and</strong> divest of nonprofitable services that are not essentialto our mission.• Day-to-day management of operations must be performed locally. It should bebased on a cont<strong>in</strong>uously simplified management structure that promotes effectiveness,efficiency, <strong>and</strong> accountability for its <strong>in</strong>tegrity. However, decentralizedmanagement still requires various degrees of network oversight to coord<strong>in</strong>atethe allocation of resources <strong>and</strong> <strong>in</strong>formed decision mak<strong>in</strong>g.• The development of any network is an evolutionary process that depends onmembers’ shar<strong>in</strong>g a sense of purpose, belong<strong>in</strong>g, <strong>and</strong> a commitment to collectivesuccess. There needs to be an ongo<strong>in</strong>g commitment to <strong>in</strong>tegration, lead<strong>in</strong>gto a seamless system of care.• To establish <strong>and</strong> susta<strong>in</strong> the St. Luke’s “br<strong>and</strong>” of quality <strong>and</strong> customerservice, it is necessary to establish network-wide st<strong>and</strong>ards that are measuredaga<strong>in</strong>st national benchmarks. However, each entity must decide how best toimplement them <strong>in</strong> a cost-effective <strong>and</strong> responsible fashion.• Regular <strong>and</strong> effective communication is a prerequisite for <strong>in</strong>tegration,satisfaction, <strong>and</strong> ownership among the network’s stakeholders.• Employees are one of our most important assets.• Medical care should be delivered at the local level as a first choice <strong>and</strong> with<strong>in</strong>the resources of the network whenever appropriate.• All persons <strong>in</strong>cluded <strong>in</strong> the network are accountable to the community toadhere to the network’s mission <strong>and</strong> vision <strong>and</strong> ultimately to improve thehealth status of the community.
386 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 16.2. Management Philosophy, Vision for Patient Satisfaction, PCRAFT Core Values,Service Excellence St<strong>and</strong>ards of Performance, <strong>and</strong> Performance Improvement PlanThe management philosophy, vision for patient satisfaction, <strong>and</strong> PCRAFT corevalues are, as follows:Management Philosophy for St. Luke’s HospitalIntroduction• We believe that quality patient care will best be provided <strong>in</strong> an environmentsupported by a positive management philosophy.Objectives• To demonstrate by behavior <strong>and</strong> attitude that employees, physicians, <strong>and</strong>volunteers are St. Luke’s most valuable resource• To create a positive work environment through timely <strong>and</strong> effective communication<strong>and</strong> <strong>in</strong>volvement of employees, physicians, <strong>and</strong> volunteersManagement Pr<strong>in</strong>ciples1. Promote open, timely, <strong>and</strong> effective communication throughout theorganization2. Promote an environment that recognizes <strong>in</strong>dividual differences <strong>and</strong>encourages <strong>in</strong>dividuals to treat one another with respect <strong>and</strong> dignity3. Foster an environment <strong>in</strong> which creativity <strong>and</strong> professional <strong>and</strong> personalgrowth are encouraged4. Encourage decision mak<strong>in</strong>g at the department level5. Create clear goals, performance expectations, st<strong>and</strong>ards of accountability,<strong>and</strong> provide timely feedback to the people with whom we work; eachemployee is expected to• Cultivate a car<strong>in</strong>g atmosphere <strong>in</strong> our hospital• Place the needs of the patients first• Interact positively with physicians, visitors, fellow employees<strong>and</strong> volunteers• Solve problems• Follow through on commitments• Cont<strong>in</strong>ually improve hospital systems, emphasiz<strong>in</strong>g quality• Be fair <strong>and</strong> consistent <strong>in</strong> all deal<strong>in</strong>gs• Conduct all bus<strong>in</strong>ess deal<strong>in</strong>gs <strong>in</strong> an ethical manner• Be fiscally responsible
ST. LUKE’S HOSPITAL AND HEALTH NETWORK 387• Treat everyone as responsible adults• Recognize there are consequences for all behaviors, both positive<strong>and</strong> negative6. Provide a safe work<strong>in</strong>g environment7. Provide a compensation <strong>and</strong> benefit program that enables St. Luke’s torecruit, develop, <strong>and</strong> reta<strong>in</strong> qualified, loyal, <strong>and</strong> experienced employeesVision for Patient Satisfaction• St. Luke’s Hospital <strong>and</strong> Health Network wants to set the <strong>in</strong>dustry st<strong>and</strong>ardfor achiev<strong>in</strong>g <strong>and</strong> susta<strong>in</strong><strong>in</strong>g the highest level of patient satisfaction for ourpatients <strong>and</strong> their family members <strong>in</strong> every encounter.Core ValuesExhibit 16.2. (Cont<strong>in</strong>ued)• At St. Luke’s Hospital <strong>and</strong> Health Network, our people are the source of ourstrength; their commitment <strong>and</strong> <strong>in</strong>volvement determ<strong>in</strong>e our future success. Toachieve our vision, we are guided by our values. Great focus is placed on ourvalues. The mnemonic PCRAFT was developed to help staff remember <strong>and</strong>more readily “live” the values. St. Luke’s Values are as follows:Pride—We take pride <strong>in</strong> our accomplishments <strong>and</strong> our organization.Car<strong>in</strong>g—We show consideration for others <strong>and</strong> their feel<strong>in</strong>gs. We treat others,as we want to be treated.Respect—We recognize the value, diversity, <strong>and</strong> importance of each other,those we serve, <strong>and</strong> the organization.Accountability—We are responsible to make decisions <strong>and</strong> solve problems<strong>in</strong> a timely <strong>and</strong> effective manner.Flexibility—We adapt to the chang<strong>in</strong>g needs <strong>and</strong> expectations of thosewe serve.Teamwork—We work together to improve quality.
388 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEThe mission, vision, goals, <strong>and</strong> member roles for the leadership steer<strong>in</strong>gcommittee <strong>in</strong>cludeMission• To fully develop the excellence with<strong>in</strong> each leaderVision• To become the best leaders <strong>in</strong> health care . . . to be teachable aga<strong>in</strong> <strong>and</strong> alwaysGoalsExhibit 16.3. <strong>Leadership</strong> Steer<strong>in</strong>g Committee Mission, Vision, Goals, <strong>and</strong> Member Roles• Educate to change behavior• Move from managers to leaders• Harness the creative energy of our network <strong>and</strong> focus it <strong>in</strong> the same direction• Create a service, action-oriented culture based on consistency, relationships,<strong>and</strong> accountability• Build trust• Reduce rework, redundancy, <strong>and</strong> duplication• Set up a built-to-last culture• Establish a focus on Five Po<strong>in</strong>ts of the Star—service, people, quality, growth<strong>and</strong> cost—enabl<strong>in</strong>g us to align <strong>and</strong> connect back to our mission, vision,values, <strong>and</strong> goalsMember Roles• In order to organize the work of the committee, ad hoc groups were established<strong>and</strong> still exist to support the different actions needed to ensure success of ourendeavors; these Ad Hoc groups <strong>in</strong>cludeCurriculum, contentCommunicationAmbience, atmosphereLogisticsL<strong>in</strong>kageEvaluation, measurement
Exhibit 16.4. The Five Po<strong>in</strong>ts of the Star ModelSERVICEST. LUKE’S HOSPITAL AND HEALTH NETWORK 389QUALITYGROWTHCOSTPEOPLE
Exhibit 16.5. Sample Forum EvaluationExample: This is an example of the Forum Evaluation results from the <strong>Leadership</strong> Forum held on March 8, 2003 at Lehigh <strong>University</strong> <strong>in</strong> Bethlehem,Pennsylvania.LEADERSHIP FORUMMarch 20, 2003Lehigh <strong>University</strong>There were 182 completed evaluation forms returned from the meet<strong>in</strong>g.Strongly StronglyTotalDisagree Disagree Neutral Agree AgreeNo.(No. of (%) Ans.) (No. of (%) Ans.) (No. of (%) Ans.) (No. of (%) Ans.) (No. of (%) Ans.) Ans.1. The program today has helped me to better 0 0% 0 0% 5 3% 66 36% 98 54% 169underst<strong>and</strong> our growth as a network.2. Evan Jones was effective <strong>in</strong> expla<strong>in</strong><strong>in</strong>g the 2 1% 2 1% 3 2% 54 30% 121 66% 182f<strong>in</strong>ancial aspects of our strategic growth.3. Bob Mart<strong>in</strong>’s presentation heightened my 0 0% 5 3% 13 7% 68 37% 96 53% 182awareness of our strategic <strong>in</strong>itiatives acrossthe network.4. Brooke Huston’s presentation helped me to 0 0% 2 1% 13 7% 104 57% 60 33% 179underst<strong>and</strong> how to build a Great Place toWork at St. Luke’s.Note: This is an example of the forum evaluation results from the leadership forum held on March 8, 2003 at Lehigh <strong>University</strong> <strong>in</strong> Bethlehem, Pennsylvania.
ST. LUKE’S HOSPITAL AND HEALTH NETWORK 391Exhibit 16.6. 2000–January 2004: St. Luke’s Hospital <strong>and</strong> Health Network MajorAccomplishments by Five Po<strong>in</strong>ts of the Star ModelPeople• 100 <strong>Best</strong> Places to Work <strong>in</strong> Pennsylvania• Employee turnover rate of 12.8 percent at St. Luke’s Bethlehem (await<strong>in</strong>gtrended <strong>in</strong>formation—no national benchmark)• RN turnover for Medical/Surgical <strong>and</strong> Critical Care areas was 14.15 percent<strong>in</strong> FY 2003. This is down from 16.98 percent <strong>in</strong> FY 2002.Note: This data is only for St. Luke’s Hospital, <strong>and</strong> not the entire network.Quality• U.S. News & World Report, America’s <strong>Best</strong> Hospitals, Cardiology <strong>and</strong> OpenHeart Surgery 1999, 2000, 2001, 2002, 2003• 100 Top Hospitals: Benchmark for Success 1997, 2001• 100 Top Cardiovascular Hospitals: Benchmarks for Success 1999, 2001,2002, 2003• 100 Top ICU Hospitals: Benchmarks for Success 2000Service• St. Luke’s Hospital <strong>and</strong> Health Network participates <strong>in</strong> Press Ganey. Allhospitals <strong>in</strong> the network are ranked among national leaders <strong>in</strong> various<strong>in</strong>dividual areas of performance <strong>and</strong> service.• Unit <strong>and</strong> departmental plans for customer service improvementCost• Average length of stay (ALOS) has decreased from 5.07 days <strong>in</strong> FY 2000 to4.34 days <strong>in</strong> FY 2003.Note: Exclud<strong>in</strong>g newborns <strong>and</strong> TCU• Operat<strong>in</strong>g marg<strong>in</strong> has <strong>in</strong>creased from 0.6 <strong>in</strong> FY 2000 to 1.5 <strong>in</strong> FY 2003Note: For the St. Luke’s Hospital only the operat<strong>in</strong>g marg<strong>in</strong> has <strong>in</strong>creased from2.2 <strong>in</strong> FY 2000 to 3.0 <strong>in</strong> FY 2003.Growth• Admissions for the network were 33,742 <strong>in</strong> FY 2003. This is up from 29,564<strong>in</strong> FY 2000.Note: Exclud<strong>in</strong>g newborns <strong>and</strong> TCU• Outpatient visits have <strong>in</strong>creased from 392,770 <strong>in</strong> FY 2000 to 530,033 <strong>in</strong> FY 2003• Emergency room (ER) visits have <strong>in</strong>creased from 73,731 <strong>in</strong> FY 2000 to 93,075 <strong>in</strong>FY 2003.• Total cl<strong>in</strong>ic visits have <strong>in</strong>creased from 67,124 <strong>in</strong> FY 2000 to 88,026 <strong>in</strong> FY 2003• Achieved Level I Trauma Center Accreditation based on volume growth <strong>and</strong>quality care• Most birth <strong>in</strong> the region <strong>in</strong> FY 2003
392 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 16.7. Press Ganey ReportMeanMeanScore N Score N Mean7/1/02– 7/1/02– 7/1/03– 7/1/03– ScoreQuestion-PEDS 9/30/02 9/30/02 9/30/03 9/30/03 ChangePleasantness of room décor 85.5 19 82.6 23 (2.9)Room temperature 72.4 19 81.5 23 9.1Accommodations <strong>and</strong> comfort 82.4 17 85.7 21 3.3for visitorsStaff attitude towards visitors 85.7 14 92.9 21 7.2Staff sensitivity to <strong>in</strong>convenience 87.5 16 93.8 20 6.3
ST. LUKE’S HOSPITAL AND HEALTH NETWORK 393Exhibit 16.8. Accountability Grid for <strong>Best</strong> “People Po<strong>in</strong>t of the Star,” Fall 2003:L<strong>in</strong>k<strong>in</strong>g Education to Chang<strong>in</strong>g BehaviorCompleted CompletedWho What by Yes or NoSenior leadership As a manager, review the daily Ongo<strong>in</strong>g<strong>and</strong> management structure of your work day.Take a personal assessment <strong>in</strong>terms of work-life balanceissues to make the most of yourhours at work each day. Set agoal to feel that you accomplishsometh<strong>in</strong>g each day <strong>in</strong> both work<strong>and</strong> personal life.Senior leadership Choose <strong>and</strong> implement <strong>in</strong> your Ongo<strong>in</strong>g<strong>and</strong> management personal journey of work-lifebalance one of the itemspresented by Ellen Gal<strong>in</strong>skyat the end of her presentation.(Goal is to list the top ten thatshe presented . . . left an e-mailmessage with Bob W. to see ifwe could get this from her.)Senior leadership Provide an environment that Ongo<strong>in</strong>gpromotes an <strong>in</strong>dividualizedwork-life balance journey fordirect reports. This <strong>in</strong>cludes<strong>in</strong>itiat<strong>in</strong>g a conversation witheach direct report with the goalof develop<strong>in</strong>g an <strong>in</strong>dividualizedwork-life balance plan.
394 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 16.9. Management Performance EvaluationSt. Luke’s Hospital <strong>and</strong> Health NetworkName ______________________Department <strong>and</strong> Job Title ________________________Entity ____________________Evaluator ____________Evaluation Period____________Date ______________MANAGEMENT JOB PERFORMANCE EVALUATIONInstructions to Determ<strong>in</strong>e Level of Performance Rat<strong>in</strong>g1. Use a po<strong>in</strong>t system to differentiate between the performance levels.Performance Rat<strong>in</strong>g LevelsPo<strong>in</strong>t FactorDef<strong>in</strong>ition4 Performance is exceptional as evidenced byconsistent achievement of the maximum resultsatta<strong>in</strong>able.3 Performance is consistently above expectedst<strong>and</strong>ards as evidenced by specific achievements.2 Performance meets expected st<strong>and</strong>ards.1 Performance fails to meet expected st<strong>and</strong>ards.Improvement is required.Rat<strong>in</strong>gs of .5 (i.e., 1.5, 2.5, 3.5) are permissible <strong>in</strong> situations where improvementhas been noted s<strong>in</strong>ce the last evaluation but is not consistent enough tomove to the next rat<strong>in</strong>g factor.2. Assign a performance rat<strong>in</strong>g (1–4 po<strong>in</strong>ts) to each of the core competencies. Ifall competencies were rated “extraord<strong>in</strong>ary” (4 po<strong>in</strong>ts), the appraisal wouldhave a perfect score of 28 po<strong>in</strong>ts.
ST. LUKE’S HOSPITAL AND HEALTH NETWORK 395Exhibit 16.9. (Cont<strong>in</strong>ued)3. Upon completion of the evaluation, summarize the rat<strong>in</strong>g <strong>and</strong> score for eachcore competency on the scor<strong>in</strong>g summary. The <strong>in</strong>dividual score is the total ofthe competencies.4. The total po<strong>in</strong>t score translates to the follow<strong>in</strong>g levels of performance:Total Po<strong>in</strong>tsPerformance Level8 but less than 13 po<strong>in</strong>ts Needs improvement13 but less than 21 po<strong>in</strong>ts Good21 but less than 29 po<strong>in</strong>ts Very good29–32 po<strong>in</strong>ts Extraord<strong>in</strong>aryComments are not required for rat<strong>in</strong>gs of “good” or “very good.” Comments arerequired for core competencies rated as “needs improvement” or “extraord<strong>in</strong>ary.”MANAGEMENT CORE COMPETENCIESCommitment to ServiceRat<strong>in</strong>g: ________• Committed to excellence <strong>in</strong> customer service• Effectively models the network mission, vision, values <strong>and</strong> customer servicebehaviors• Assures staff compliance to the organizations’ mission, vision, values, <strong>and</strong>customer service behaviors• Ensures timely responses to <strong>in</strong>quiries, compla<strong>in</strong>ts, <strong>and</strong> concerns from allcustomers• Anticipates problems <strong>and</strong> is will<strong>in</strong>g to take risks to meet <strong>and</strong> exceed the needsof the customer• Consistently responds to <strong>and</strong> supports change that improves overall service tothe customerComments/Opportunities for Improvement: _________Communication SkillsRat<strong>in</strong>g: _______• Is committed to excellence <strong>in</strong> service by ensur<strong>in</strong>g timely <strong>and</strong> effectiveresponses to <strong>in</strong>quiries, compla<strong>in</strong>ts, <strong>and</strong> requests from all customers• Ability to communicate visions effectively• Demonstrates active listen<strong>in</strong>g skills• Effectively communicates ideas both orally <strong>and</strong> <strong>in</strong> writ<strong>in</strong>g• Effectively presents ideas or <strong>in</strong>formation at meet<strong>in</strong>gs(Cont<strong>in</strong>ued)
396 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 16.9. Management Performance Evaluation (Cont<strong>in</strong>ued)• Ma<strong>in</strong>ta<strong>in</strong>s confidentiality of <strong>in</strong>formation, as appropriate• Demonstrates open <strong>and</strong> approachable communication style• Provides constructive feedback to all customers• Positively promotes St. Luke’s Health Network at all times• Communicates openly, c<strong>and</strong>idly, <strong>and</strong> s<strong>in</strong>cerelyComments/Opportunities for Improvement: ________Motivational SkillsRat<strong>in</strong>g: ________• Motivates, <strong>in</strong>spires, <strong>and</strong> challenges staff to excel <strong>in</strong> their performance• Builds team spirit, energy, excitement, <strong>and</strong> enthusiasm• Proactively responds to <strong>and</strong> supports change• Promotes fun <strong>in</strong> the workplace• Recognizes <strong>and</strong> rewards effective performance• Encourages participation <strong>and</strong> empowers staff• Serves as a role model for others to “th<strong>in</strong>k out of the box”• Acts as a mentor, teacher, <strong>and</strong> coach to othersComments/Opportunities for Improvement: __________Organizational SkillsRat<strong>in</strong>g: ________• Effectively delegates activities, responsibilities• Uses effective time management skills• Sets clear expectations• Mentors others to develop effective organizational skills• Clearly identifies priorities of network <strong>and</strong> communicates these prioritiesto staff• Uses appropriate methods for collect<strong>in</strong>g <strong>and</strong> report<strong>in</strong>g data• Verifies licensure <strong>and</strong> certification of staff• Completes projects <strong>in</strong> a timely mannerComments/Opportunities for Improvement: ________Team Build<strong>in</strong>g SkillsRat<strong>in</strong>g: ________• Develops <strong>and</strong> implements employee retention <strong>and</strong> recruitment strategies thatenhance the team• Promotes open communication, assists to resolve conflict, <strong>and</strong> makes decisionsconsider<strong>in</strong>g the impact on others• Builds team spirit <strong>and</strong> acts as a coach through mentor<strong>in</strong>g, listen<strong>in</strong>g, <strong>and</strong>lead<strong>in</strong>g by example
ST. LUKE’S HOSPITAL AND HEALTH NETWORK 397Exhibit 16.9. (Cont<strong>in</strong>ued)• Encourages team decision mak<strong>in</strong>g• Effectively manages people, resources, <strong>and</strong> time to achieve team goals• Recognizes special contributions <strong>and</strong> achievements <strong>and</strong> encouragesprofessional growthComments/Opportunities for Improvement: ________ResourcefulnessRat<strong>in</strong>g: ________• Seeks out new <strong>in</strong>formation <strong>and</strong> technologies to improve performance.• Identifies <strong>and</strong> implements ways to reduce costs <strong>and</strong> streaml<strong>in</strong>e efforts• Adjusts to chang<strong>in</strong>g work needs <strong>and</strong> dem<strong>and</strong>s. Helps others respond quickly.Helps remove barriers to effectiveness• Effectively ma<strong>in</strong>ta<strong>in</strong>s compliance with budget (justifies variance, as needed)• Utilizes network resources for help or guidance• Recognizes diversity <strong>in</strong> group as an avenue to exp<strong>and</strong> visionComments/Opportunities for Improvement: _______Performance Improvement Management SkillsRat<strong>in</strong>g: _______• Develops appropriate department PI plan• Demonstrates data-evidenced examples of successful PI activities• Provides ongo<strong>in</strong>g education <strong>and</strong> <strong>in</strong>volvement of staff <strong>in</strong> PI as evidenced<strong>in</strong> department staff meet<strong>in</strong>g m<strong>in</strong>utes• Attends required PI management tra<strong>in</strong><strong>in</strong>g• Provides focused PI reports to the PI council <strong>and</strong> management team.Comments/Opportunities for Improvement: _______Goal OrientationRat<strong>in</strong>g: _______• Works effectively to achieve <strong>in</strong>dividual, team <strong>and</strong> organizational goals• Effectively plans <strong>and</strong> ma<strong>in</strong>ta<strong>in</strong>s compliance with budgets• Makes decisions consider<strong>in</strong>g the impact on others• Effectively manages people, resources <strong>in</strong> time to achieve results• Fosters cont<strong>in</strong>uous learn<strong>in</strong>g, takes risks, helps others to overcome obstacles<strong>and</strong> underst<strong>and</strong> that “mistakes <strong>and</strong> problems” provide opportunities forlearn<strong>in</strong>g• Balances long-term <strong>and</strong> short-term objectives <strong>and</strong> goals• Effectively works with<strong>in</strong> a group (contributes to the success for achievement ofidentified goals)(Cont<strong>in</strong>ued)
398 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 16.9. Management Performance Evaluation (Cont<strong>in</strong>ued)• Compliance with <strong>in</strong>ternal <strong>and</strong> external regulatory requirements (i.e., HospitalPolicies, JCAHO, HCFA, Department of Health)• Articulates an organizational vision <strong>and</strong> its <strong>in</strong>fluence on departmental goals• Promotes a supportive atmosphere <strong>and</strong> makes decisions consider<strong>in</strong>g the impacton othersComments/Opportunities for Improvement: _______Future Goals, <strong>Development</strong>al Plan,Achievement DatesObjectives, Projects _______________________________________________________Should be related to management evaluation factors. Must be specific, qualifiable,<strong>and</strong> <strong>in</strong>clude an established time frame _____________________________________
Exhibit 16.9. (Cont<strong>in</strong>ued)SCORING SUMMARYST. LUKE’S HOSPITAL AND HEALTH NETWORK 399Core Competencies:Rat<strong>in</strong>gCommitment to service . . . . . . . . . . . . . . . . . . . . . . . . . .Communication skills . . . . . . . . . . . . . . . . . . . . . . . . . . .Motivational skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Organizational skills . . . . . . . . . . . . . . . . . . . . . . . . . . . .Team build<strong>in</strong>g skills ............................Resourcefulness . ..............................Performance improvement management skills . ........Goal orientation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Total ______________Competency Assessment Met Unmet• Completed timely performance evaluation for staff• Completed annual competence assessment for staff• Attended m<strong>and</strong>atory management tra<strong>in</strong><strong>in</strong>g <strong>and</strong>development programs• Demonstrates underst<strong>and</strong><strong>in</strong>g <strong>and</strong> application of safework<strong>in</strong>g conditions <strong>in</strong> the areas of employee, patient,<strong>and</strong> environmental safety <strong>and</strong> follows appropriate report<strong>in</strong>grequirements <strong>in</strong> these areas of safety.EVALUATOR’S COMMENTS:EMPLOYEE’S COMMENTS:Employee’s Signature: _____________________________Evaluator’s Signature: _____________________________Department Head Signature: _______________________Adm<strong>in</strong>istrative Signature: __________________________Date: _____________Date: _____________Date: _____________Date: _____________
400 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEABOUT THE CONTRIBUTORSAndrew Starr is the director of cl<strong>in</strong>ical operations for St. Luke’s Hospital. Hisprimary responsibilities are manag<strong>in</strong>g the cl<strong>in</strong>ical <strong>and</strong> bus<strong>in</strong>ess aspects for multipledepartments <strong>in</strong> the perioperative service l<strong>in</strong>e. Prior to his present position,Andrew was a performance management eng<strong>in</strong>eer for Premier, Inc. His responsibilities<strong>in</strong>cluded department based projects that have resulted <strong>in</strong> cost sav<strong>in</strong>gs,revenue enhancement, <strong>and</strong> productivity enhancement <strong>in</strong> both cl<strong>in</strong>ical <strong>and</strong> noncl<strong>in</strong>icalareas. Andrew also worked <strong>in</strong> the health/managed care/life sciencespractice of Cap Gem<strong>in</strong>i Ernst & Young. Dur<strong>in</strong>g his two years at CGEY, Andrewwas <strong>in</strong>volved with projects associated with bus<strong>in</strong>ess transformation <strong>and</strong> healthcare package implementation. Andrew also has prior cl<strong>in</strong>ical experience as adialysis technician. His educational repertoire <strong>in</strong>cludes both a master’s degree<strong>in</strong> bus<strong>in</strong>ess adm<strong>in</strong>istration <strong>and</strong> master’s degree <strong>in</strong> health services adm<strong>in</strong>istrationfrom Xavier <strong>University</strong>. He also has a bachelor’s degree <strong>in</strong> biology from theState <strong>University</strong> of New York (SUNY) at Oswego.Robert Zimmel is the senior vice president for human resources for St. Luke’sHospital <strong>and</strong> Health Network. He is responsible for all the human resource functionsfor the network. Bob has been with St. Luke’s for n<strong>in</strong>eteen years <strong>and</strong> hasserved <strong>in</strong> various HR roles throughout his career. He is currently a member of thePresident’s Council <strong>and</strong> serves as the chairperson of the leadership steer<strong>in</strong>g committeefor the leadership <strong>in</strong>itiative for the network. Bob received his B.S. <strong>in</strong> bus<strong>in</strong>essfrom the Indiana <strong>University</strong> of Pennsylvania <strong>and</strong> an M.A. <strong>in</strong> personnelservices <strong>and</strong> higher education from the Indiana <strong>University</strong> of Pennsylvania aswell.Janice Bauer is the assistant vice president of patient care services. Over thepast two years, Jan has served as a leader to multiple units, <strong>in</strong>clud<strong>in</strong>g the EmergencyDepartment, CCU, ICU, <strong>and</strong> Trauma Department. Jan has been part ofthe organization s<strong>in</strong>ce 1979 <strong>and</strong> has served <strong>in</strong> a variety of positions. Jan’s successfulgrowth has <strong>in</strong>cluded achievement <strong>in</strong> past positions such as nurs<strong>in</strong>gsupervisor, nurse manager, adm<strong>in</strong>istrative director of emergency services, <strong>and</strong>adm<strong>in</strong>istrative director of trauma.Margaret Hayn is the assistant vice president of acute care <strong>and</strong> maternal childhealth. Prior to tak<strong>in</strong>g on this role, Margaret was the director of woman’s <strong>and</strong>children’s service l<strong>in</strong>e <strong>and</strong> cont<strong>in</strong>ence management program. Prior to theseroles, Margaret also served <strong>in</strong> a variety of leadership roles dur<strong>in</strong>g a fifteen-yeartenure at St. Luke’s Hospital. Margaret has been <strong>in</strong>volved <strong>in</strong> nurs<strong>in</strong>g for nearlythirty years. Her dist<strong>in</strong>guished academic record <strong>in</strong>cludes a master’s degree <strong>in</strong>nurs<strong>in</strong>g <strong>and</strong> <strong>in</strong> family practice. She also holds a bachelor’s of nurs<strong>in</strong>g from
ST. LUKE’S HOSPITAL AND HEALTH NETWORK 401Columbia <strong>University</strong>. Margaret is published <strong>in</strong> numerous journals <strong>and</strong> hasserved as a guest speaker <strong>and</strong> lecturer <strong>in</strong> many academic <strong>and</strong> hospital forums.Carol Kuplen is the vice president, senior nurse executive for St. Luke’s Hospital<strong>and</strong> Health Network. Carol’s primary responsibility <strong>in</strong>cludes provid<strong>in</strong>gadm<strong>in</strong>istrative oversight of nurs<strong>in</strong>g services for a five-hospital, nonprofit, <strong>in</strong>tegratedhealth care network. Other responsibilities <strong>in</strong>clude develop<strong>in</strong>g <strong>and</strong> implement<strong>in</strong>gnurs<strong>in</strong>g leadership philosophy, identify<strong>in</strong>g outcome expectations,lead<strong>in</strong>g recruitment <strong>and</strong> retention <strong>in</strong>itiatives, <strong>and</strong> facilitat<strong>in</strong>g the redesign ofnurs<strong>in</strong>g care delivery systems. Prior to her present position, Carol successfullyserved <strong>in</strong> other capacities with<strong>in</strong> St. Luke’s, <strong>in</strong>clud<strong>in</strong>g director of the CancerNetwork. Mrs. Kuplen has also worked <strong>in</strong> various positions at other prestigioushospitals, <strong>in</strong>clud<strong>in</strong>g Georgetown <strong>University</strong> Medical Center <strong>and</strong> Geis<strong>in</strong>gerWyom<strong>in</strong>g Valley Medical Center. Her educational repertoire <strong>in</strong>cludes M.S. <strong>in</strong>nurs<strong>in</strong>g from the <strong>University</strong> of Pennsylvania <strong>and</strong> a B.S <strong>in</strong> nurs<strong>in</strong>g fromGeorgetown <strong>University</strong>.Bob Weig<strong>and</strong> is the director of management tra<strong>in</strong><strong>in</strong>g <strong>and</strong> development forSt. Luke’s Hospital <strong>and</strong> Health Network. He is responsible for design<strong>in</strong>g, develop<strong>in</strong>g,implement<strong>in</strong>g, <strong>and</strong> evaluat<strong>in</strong>g leadership development programs throughoutthe network. Weig<strong>and</strong> <strong>in</strong>corporates experiential learn<strong>in</strong>g <strong>in</strong>to his tra<strong>in</strong><strong>in</strong>gcurriculum. He has published articles <strong>and</strong> contributed to three books on thetopic of tra<strong>in</strong><strong>in</strong>g evaluation. Weig<strong>and</strong> is certified <strong>in</strong> the Myers Briggs Type Inventory.He currently is on the faculty of several local colleges, where he teachespart time. Weig<strong>and</strong> was previously employed at the Read<strong>in</strong>g Hospital, where hiswork <strong>in</strong>cluded work<strong>in</strong>g with family practice residents on communication skills.He received his B.A. <strong>in</strong> psychology from Ricker College <strong>in</strong> Houlton, Ma<strong>in</strong>e, <strong>and</strong>a master’s <strong>in</strong> psychology from Assumption College <strong>in</strong> Worcester, Massachusetts.Debra Klepeiss currently functions <strong>in</strong> the role of senior hospital director, operations<strong>and</strong> service management at St. Luke’s Allentown Campus. She has beenemployed by St. Luke’s Hospital <strong>and</strong> Health Network for twenty-eight years.Over that time span Debra has been <strong>in</strong> many different roles, encompass<strong>in</strong>g staffnurs<strong>in</strong>g, nurs<strong>in</strong>g management, human resources management, performanceimprovement, accreditation <strong>and</strong> compliance, organizational development, education,leadership development, service improvement, <strong>and</strong> patient satisfaction.Klepeiss is a RN <strong>and</strong> has a human resources certificate, <strong>and</strong> a B.A. <strong>in</strong> bus<strong>in</strong>essmanagement.Lisa Dutterer has been the vice president for ambulatory <strong>and</strong> ancillary servicesfor St. Luke’s Hospital Allentown Campus s<strong>in</strong>ce January 2001. Lisa is responsiblefor all the outpatient services at the campus <strong>in</strong> addition to the allied healthservices that support the care of the <strong>in</strong>patient. Prior to her current position, she
402 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEwas adm<strong>in</strong>istrative director for the <strong>in</strong>patient <strong>and</strong> outpatient rehabilitationservices at the hospital of the <strong>University</strong> of Pennsylvania Medical Center<strong>and</strong> Presbyterian Medical Center. Lisa’s career <strong>in</strong> health care started as alicensed physical therapist at Germantown Hospital <strong>in</strong> Philadelphia. Shereceived her B.A. <strong>in</strong> biology from Bridgewater College <strong>in</strong> 1988 <strong>and</strong> an M.S. <strong>in</strong>physical therapy from Arcadia <strong>University</strong> <strong>in</strong> 1991.Sherry Rex is the director of human resources at St. Luke’s Quakertown Hospital.Prior to jo<strong>in</strong><strong>in</strong>g St. Luke’s, she served as the manager of benefits <strong>and</strong> compensationat The Morn<strong>in</strong>g Call, a subsidiary of Tribune Publish<strong>in</strong>g. She was alsothe payroll manager for the CoOpportunity Center, a shared services center forTimes Mirror, the prior parent company of The Morn<strong>in</strong>g Call. Sherry also servedas the human resources <strong>and</strong> operations manager for the Bon-Ton DepartmentStores. Follow<strong>in</strong>g her graduation from college, she completed the executive tra<strong>in</strong><strong>in</strong>gprogram for Boscov’s Department Stores. Sherry is a graduate of Widener<strong>University</strong>, where she earned a bachelor’s degree <strong>in</strong> arts <strong>and</strong> sciences.John Hrubenek is director of property management, St. Luke’s Hospital <strong>and</strong>Health Network. Prior to that position he was the director of support services.He holds a bachelor’s degree <strong>in</strong> economics <strong>and</strong> bus<strong>in</strong>ess from Lafayette College<strong>and</strong> a master’s <strong>in</strong> bus<strong>in</strong>ess adm<strong>in</strong>istration from Lehigh <strong>University</strong>.Donna Sabol is the assistant vice president of network performance improvementfor St. Luke’s Hospital <strong>and</strong> Health Network. Prior to her present position,Donna served <strong>in</strong> various positions with<strong>in</strong> the health network, <strong>in</strong>clud<strong>in</strong>g directorof organizational development. Donna has been associated with St. Luke’sfor twenty years. She is an RN <strong>and</strong> holds an M.S. <strong>in</strong> nurs<strong>in</strong>g from DeSales<strong>University</strong> <strong>and</strong> a B.S. <strong>in</strong> nurs<strong>in</strong>g from Wilkes <strong>University</strong>.Additional thanks to Franc<strong>in</strong>e Botek, Gary Guidetti, Ellen Novatnack, StevenSchweon, Charlotte Becker, Howard Cook, <strong>and</strong> Joe P<strong>in</strong>to.
SCHAPTER SEVENTEENStorageTekSAim<strong>in</strong>g for a high-performance culture led StorageTek to develop atransformation plan that balanced traditional operational managementwith the <strong>in</strong>novation required to be competitive <strong>in</strong> the <strong>in</strong>formationtechnology <strong>in</strong>dustry. A key element of the plan is successfully coord<strong>in</strong>at<strong>in</strong>g<strong>in</strong>itiatives already embedded <strong>in</strong> the organization <strong>and</strong> supplement<strong>in</strong>gthose <strong>in</strong>itiatives with new th<strong>in</strong>k<strong>in</strong>g.OVERVIEW 404INTRODUCTION 404A New Chairman Confronts the Issues 406DEFINE THE CHALLENGE 406Figure 17.1: Phases of Transformation 407Def<strong>in</strong>e the Goal 408Figure 17.2: Def<strong>in</strong>ition of High-Performance Culture 408Figure 17.3: Alignment to Build a High-Performance Culture 409Create a Sense of Urgency 410Lessons Learned 411WORK THROUGH CHANGE 411Focus on Results <strong>and</strong> Def<strong>in</strong><strong>in</strong>g Expectations 412Table 17.1: Performance Measurement (Spr<strong>in</strong>g 2002) 413Improve Management Competency 414Grow Organizational Capabilities 415Figure 17.4: Transform<strong>in</strong>g on Three Levels 416Lessons Learned 417ATTAIN AND SUSTAIN IMPROVEMENT 418Figure 17.5: StorageTek Timel<strong>in</strong>e of Organization Transformation 419STORAGETEK: THE HIGH-PERFORMANCE ORGANIZATION 420Exhibit 17.1: Summary of Lessons Learned 421403
404 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEREFERENCES 422ABOUT THE CONTRIBUTOR 422OVERVIEWThis change management case study describes the approach used by StorageTekto develop <strong>and</strong> implement a transformational plan to establish the company asa high-performance leader <strong>in</strong> the <strong>in</strong>formation technology (IT) <strong>in</strong>dustry. After aseries of ups <strong>and</strong> downs <strong>in</strong> its thirty-four year history, StorageTek® (StorageTechnology Corp., NYSE:STK), dur<strong>in</strong>g the later years of the 1990s <strong>and</strong> <strong>in</strong>to theearly years of 2000, was once aga<strong>in</strong> <strong>in</strong> a state of unbalance between operationalmanagement <strong>and</strong> the <strong>in</strong>novation required to be competitive. Steps were takento turn the company around, but there was little improvement. StorageTek leadershiprecognized the need for a systematic plan to transform the company <strong>in</strong>toa high-performance organization.The transformation plan outl<strong>in</strong>ed the steps to be taken <strong>in</strong> three stages. Us<strong>in</strong>gbest-practices research, StorageTek def<strong>in</strong>ed the high-performance organization<strong>and</strong> the leadership model required to implement the plan. Both focused onresults <strong>in</strong> a competent <strong>and</strong> open, trust<strong>in</strong>g environment. The second stagerequired work<strong>in</strong>g through the change by creat<strong>in</strong>g a focus on results, def<strong>in</strong><strong>in</strong>g<strong>in</strong>dividual expectations, improv<strong>in</strong>g management competencies, <strong>and</strong> grow<strong>in</strong>gorganizational capabilities. Specific to this stage were improvements to performancemanagement systems, communications, customer relationships, <strong>and</strong>many other areas. The third stage of atta<strong>in</strong><strong>in</strong>g <strong>and</strong> susta<strong>in</strong><strong>in</strong>g improvement isunder way.In light of the economic downturn worldwide, the challenge was to cont<strong>in</strong>ueto follow the transformation plan. Lessons learned are applicable to other organizationsbeg<strong>in</strong>n<strong>in</strong>g a major transformation or analyz<strong>in</strong>g <strong>and</strong> implement<strong>in</strong>gcorrections to the current path.INTRODUCTIONFour IBM eng<strong>in</strong>eers with a dream of build<strong>in</strong>g better <strong>and</strong> less expensive tape drivesfor data storage founded StorageTek <strong>in</strong> Boulder, Colorado, <strong>in</strong> 1969. Today,StorageTek is a $2 billion worldwide company with headquarters <strong>in</strong> Louisville,Colorado, <strong>and</strong> an <strong>in</strong>novator <strong>and</strong> global leader <strong>in</strong> virtual storage solutions for tapeautomation, disk storage systems, <strong>and</strong> storage network<strong>in</strong>g. The StorageTek headquartersis about halfway between Denver <strong>and</strong> Boulder, Colorado, on a 450-acrecampus <strong>in</strong> the shadow of the Rocky Mounta<strong>in</strong>s. Of the approximately
STORAGETEK 4057,200 employees worldwide, about 2,200 are based <strong>in</strong> Colorado. Among otherbenefits available to headquarters employees, there is on-site daycare, a medicalcenter <strong>and</strong> pharmacy, <strong>and</strong> a wellness center, <strong>in</strong>clud<strong>in</strong>g a three-mile outdoorjogg<strong>in</strong>g trail.“Jesse Aweida, founder of StorageTechnology [now StorageTek] [1969] <strong>and</strong>CEO until 1984, was conv<strong>in</strong>ced that a high level of operational management<strong>and</strong> ‘just enough’ <strong>in</strong>novation would keep the company ahead of IBM” (RichardFoster <strong>and</strong> Sarah Kaplan, Creative Destruction, Doubleday, 2001, p. 90). From1969 to 1981, the company experienced great success <strong>and</strong> rapid growth with thefirst product shipped <strong>in</strong> 1970, just fourteen months after start-up. That was followedby the <strong>in</strong>troduction of magnetic disk <strong>in</strong> 1973. By 1981, the company hadgrown to 13,000 employees <strong>and</strong> $603 million <strong>in</strong> revenue.The balance between operational management <strong>and</strong> <strong>in</strong>novation was difficultto ma<strong>in</strong>ta<strong>in</strong>, <strong>and</strong> StorageTek filed for Chapter 11 bankruptcy protection <strong>in</strong> 1984.Emerg<strong>in</strong>g from bankruptcy <strong>in</strong> 1987, StorageTek once aga<strong>in</strong> had a keen sense ofits customer value proposition <strong>and</strong> bus<strong>in</strong>ess focus. By 1990, the companyreached $1 billion <strong>in</strong> revenue, <strong>and</strong> <strong>in</strong> 1992 the stock reached a record high of$78 per share. In the mid-1990s, the cultural focus was on creat<strong>in</strong>g a foundationfor a company that was built to last. StorageTek formalized its core purpose<strong>and</strong> core values (see sidebar). Unfortunately, by 2001, StorageTek was onceaga<strong>in</strong> struggl<strong>in</strong>g. There was no revenue growth <strong>in</strong> 2000 <strong>and</strong> 2001 <strong>and</strong> marketshare was erod<strong>in</strong>g—StorageTek was left beh<strong>in</strong>d dur<strong>in</strong>g the technology boom ofthe late 1990s <strong>and</strong> early 2000. Once aga<strong>in</strong>, the balance between operationalmanagement <strong>and</strong> “just enough” <strong>in</strong>novation had been lost.Core PurposeTo exp<strong>and</strong> the world’s access to <strong>in</strong>formation <strong>and</strong> knowledge.Core ValuesShare ownership for the relentless pursuit of resultsProvide superior customer partnershipsInnovate <strong>and</strong> renewOperate with honesty <strong>and</strong> <strong>in</strong>tegrityAbove all else, value self <strong>and</strong> othersOver thirty-five years, StorageTek developed a unique corporate culture. Likeall corporate cultures, there were aspects that were very healthy <strong>and</strong> others thatclearly got <strong>in</strong> the way of the goals of <strong>in</strong>novation, competitiveness, <strong>and</strong> balance.In the community, <strong>in</strong> the <strong>in</strong>dustry, <strong>and</strong> with<strong>in</strong> the employee population, thecompany had a legacy of uneven performance <strong>and</strong> of hir<strong>in</strong>g employees <strong>in</strong> goodtimes <strong>and</strong> fir<strong>in</strong>g them <strong>in</strong> bad. The company was known for start<strong>in</strong>g lots <strong>and</strong>
406 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEf<strong>in</strong>ish<strong>in</strong>g little, <strong>and</strong> for reward<strong>in</strong>g “fire fight<strong>in</strong>g” rather than permanent fixes. Aconsensus <strong>and</strong> relationship-driven culture meant that decision mak<strong>in</strong>g was slow<strong>and</strong>, even when decisions were made, they could be appealed <strong>and</strong> reversed. Oneexecutive labeled it “the right of <strong>in</strong>f<strong>in</strong>ite appeal!” There was much to be proudof, however. In employee satisfaction surveys, employees reported that they feltvalued <strong>and</strong> respected, <strong>and</strong> respected their colleagues. Employees believed theirwork added value to the company. F<strong>in</strong>ally, employees said they had theflexibility to manage work-life balance.A New Chairman Confronts the IssuesPatrick J. Mart<strong>in</strong> jo<strong>in</strong>ed StorageTek <strong>in</strong> July 2000 as chairman, president, <strong>and</strong>CEO. Pat was patient as he listened to customers, stockholders, <strong>and</strong> employees<strong>and</strong> learned about StorageTek <strong>and</strong> the storage <strong>in</strong>dustry <strong>in</strong> which the companycompeted. He studied the strategy of the company. He met talented employees<strong>and</strong> loyal customers. Still, employee turnover approached 25 percent <strong>in</strong> 2000 asemployees took their skills to more successful competitors. The research <strong>and</strong>development budget was among the highest <strong>in</strong> the <strong>in</strong>dustry but generated fewnew products or technological <strong>in</strong>novations. The company had an <strong>in</strong>frastructurethat was too large, products that were consistently late to market, <strong>and</strong> arduousprocesses that made the company slow <strong>and</strong> difficult with which to do bus<strong>in</strong>ess.As true as dur<strong>in</strong>g its earlier times, StorageTek needed to return to a balancebetween operational management <strong>and</strong> <strong>in</strong>novation. Several <strong>in</strong>terventions weretried. The executive team turned over twelve of its fourteen key members <strong>in</strong>2001. The CEO “taught” basic ROI (return on <strong>in</strong>vestment) via all-employeeworldwide brief<strong>in</strong>gs us<strong>in</strong>g satellite downl<strong>in</strong>ks. Managers had too many goals,tasks, <strong>and</strong> <strong>in</strong>itiatives upon which to focus, mak<strong>in</strong>g achievement impossible. Aperiod of “blam<strong>in</strong>g” occurred. A “surprise” mid-year performance review wash<strong>and</strong>led poorly <strong>in</strong> an environment <strong>in</strong> which performance management turnedout to be “optional.” There was little improvement.DEFINE THE CHALLENGETransform<strong>in</strong>g StorageTek <strong>in</strong>to an <strong>in</strong>dustry leader where employees could growtheir careers, confident customers could solve their IT challenges, <strong>and</strong> shareholderscould receive a premium for their <strong>in</strong>vestment required a long-term plan.For a company with a reputation for start<strong>in</strong>g a lot <strong>and</strong> f<strong>in</strong>ish<strong>in</strong>g little, it wasimportant to set a transformation plan that could be susta<strong>in</strong>ed over time withas little bureaucracy as possible.A scan of the company identified myriad different <strong>in</strong>itiatives—all thoughtful,but disconnected from each other. The desire for a high-performance culturewas evident, yet the components <strong>and</strong> discipl<strong>in</strong>es of such a culture had not beendef<strong>in</strong>ed for StorageTek. The first two components of transformation—strategic
STORAGETEK 407clarity <strong>and</strong> leadership alignment—were lack<strong>in</strong>g. Several foundation pieces were<strong>in</strong> place—core values def<strong>in</strong>ed by employees <strong>in</strong> 1996, a change model that balancedthe quality of the technical strategy with the quality of the cultural strategy,<strong>and</strong> a fledgl<strong>in</strong>g quality system built as a first step toward Six Sigma. It wasimportant to build on those exist<strong>in</strong>g foundation pieces to avoid the perception ofanother “flavor of the month,” so prevalent with<strong>in</strong> the StorageTek culture.The arrival of a new CEO had offered the opportunity for change. Threemonths of plann<strong>in</strong>g by the organization development team (OD team) led to thedevelopment of a long-term transformation plan.StageGoalsActionsTools <strong>and</strong> TechniquesDef<strong>in</strong>e thechallengeCreate a sense ofurgency<strong>Leadership</strong>conferenceLearn<strong>in</strong>g Map 1BMS model <strong>and</strong> tra<strong>in</strong><strong>in</strong>gDef<strong>in</strong>e the goalExecutive teambuild<strong>in</strong>gOne Vision, One VoicepublicationDef<strong>in</strong>ed highperformanceorganizationWorldwideemployee kick-offsWorkthroughchangeCreate a foundationof results—focusDef<strong>in</strong>e <strong>in</strong>dividualexpectationsImprove managementcompetencyGrow organizationcapabilitiesExecutive teambuild<strong>in</strong>gPerformance <strong>and</strong>development goalsfor all employeesReview HR practicesfor consistencySuccession plann<strong>in</strong>gFounded aff<strong>in</strong>itygroupsPerformancemanagementGoal alignment tools<strong>Leadership</strong> requiredcourses <strong>and</strong>curriculumLearn<strong>in</strong>g Map 2–strategy updateCloser to the customerAtta<strong>in</strong> <strong>and</strong>susta<strong>in</strong>improvementSusta<strong>in</strong> results—focusBuild susta<strong>in</strong>ablefutureAdd workforceplann<strong>in</strong>g processInclude “peoplestrategy” <strong>in</strong> strategicplann<strong>in</strong>gEmployee surveyEng<strong>in</strong>eer<strong>in</strong>g excellencecurriculumTechnical talent pooldevelopmentFigure 17.1 Phases of Transformation.
408 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEThe first phase of the transformation plan was to def<strong>in</strong>e the challenge. Therewere two goals:• Def<strong>in</strong>e the goal• Create a sense of urgencyDef<strong>in</strong>e the GoalThe first step was to def<strong>in</strong>e the high-performance culture that StorageTek<strong>in</strong>tended to build. The OD team conducted a review of literature <strong>and</strong> the transformationsof other companies, both successful <strong>and</strong> not. “War for Talent,” TheMcK<strong>in</strong>sey Quarterly, 1998, Number 3, <strong>and</strong> “The War for Talent 2000,” revisedJuly 2001 along with a number of other sources, were particularly useful. Concurrently,the OD team def<strong>in</strong>ed a leadership model based on a review of currentpractice <strong>and</strong> literature. Results-Based <strong>Leadership</strong> by David Ulrich, Jack Zenger<strong>and</strong> Norm Smallwood was selected because of the focus on achiev<strong>in</strong>g results aswell as possess<strong>in</strong>g the competencies of leadership.The desired StorageTek high-performance culture was def<strong>in</strong>ed <strong>in</strong> three parts:1. “Performance ethic is the relentless desire to satisfy customers <strong>and</strong>earn their loyalty, allow<strong>in</strong>g us to out-perform our competitors. A compell<strong>in</strong>gcore purpose, vision, <strong>and</strong> values; ambitious stretch goalsfocused on results; <strong>and</strong> performance feedback based on clear expectationssupport a performance ethic.” This is measured by achievementof annual goals.Highperformanceculture3- <strong>and</strong> 5-yr. total returns to shareholders—top 20% of all companiesPerformance ethicAchievement of annual goalsOpen <strong>and</strong> trust<strong>in</strong>g environmentEmployee surveyEffective grow<strong>in</strong>g organizationCustomerloyalty <strong>and</strong> keybus<strong>in</strong>ess metricsFigure 17.2 Def<strong>in</strong>ition of High-Performance Culture.
STORAGETEK 4092. “An open, trust<strong>in</strong>g environment enjoys open <strong>and</strong> c<strong>and</strong>id communicationwith<strong>in</strong> the company; it requires everyone at every level of theorganization to do what we say we will do; <strong>and</strong> provides growth for<strong>in</strong>dividuals <strong>and</strong> the organization through learn<strong>in</strong>g, knowledge shar<strong>in</strong>g,<strong>and</strong> experience.” Open <strong>and</strong> trust<strong>in</strong>g environment is measured by theannual worldwide employee satisfaction survey.3. “An effective <strong>and</strong> grow<strong>in</strong>g organization practices six capabilities ofshared m<strong>in</strong>dset, speed, accountability, collaboration, learn<strong>in</strong>g <strong>and</strong> talent”(from Results-Based <strong>Leadership</strong> by Ulrich, Zenger, <strong>and</strong> Smallwood,1999, p. 40). An effective <strong>and</strong> grow<strong>in</strong>g organization is measured bymetrics, such as customer loyalty, revenue growth, market shareimprovement, <strong>and</strong> employee turnover rates.Measures already <strong>in</strong> place were selected to <strong>in</strong>dicate progress <strong>in</strong> each ofthe three parts of the StorageTek high-performance culture. Total shareholderreturn was selected to measure overall achievement; for StorageTek, shareholderreturn was characteristically below the <strong>in</strong>dustry average.Market-driven productdevelopment <strong>and</strong> distributionStrategic plann<strong>in</strong>gEmployeecommunicationCollaborative learn<strong>in</strong>gorganizationDiversity <strong>and</strong><strong>in</strong>clusionPerformancemanagementExternal stakeholdermanagementExcellence <strong>in</strong> customerservice <strong>and</strong> relationshipsBus<strong>in</strong>essmanagementsystemFigure 17.3 Alignment to Build a High-Performance Culture.
410 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEAny complex organization has multiple <strong>in</strong>itiatives <strong>and</strong> StorageTek was noexception. Incorporated <strong>in</strong>to the model of high-performance culture were thecomponents that must be <strong>in</strong> alignment with the def<strong>in</strong>ition to avoid conflict<strong>in</strong>gmessages to employees, customers, <strong>and</strong> shareholders. For StorageTek, thesecomponents <strong>in</strong>cluded strategic plann<strong>in</strong>g, customer <strong>and</strong> shareholder relationshipmanagement, market-driven product <strong>and</strong> services development, leadershipdevelopment, quality, employee communications, <strong>and</strong> human resourcepractices.The equation, “Effective <strong>Leadership</strong> Results Competencies” was adoptedfrom Results-Based <strong>Leadership</strong> (Ulrich, Zenger, <strong>and</strong> Smallwood, 1999). Workbegan with the executive team <strong>in</strong> June 2001 to def<strong>in</strong>e the leadership bluepr<strong>in</strong>tfor StorageTek. Work focused on strategic clarity <strong>and</strong> leadership alignment,<strong>in</strong>clud<strong>in</strong>g def<strong>in</strong><strong>in</strong>g the customer value proposition, bus<strong>in</strong>ess focus, <strong>and</strong> growthstrategy.Create a Sense of UrgencyDef<strong>in</strong><strong>in</strong>g a successful future for StorageTek was just one part of def<strong>in</strong><strong>in</strong>g thechallenge. There was also a need to create a sense of urgency among allemployees. In August 2001, 170 leaders represent<strong>in</strong>g the worldwide scope ofthe company were <strong>in</strong>vited to participate <strong>in</strong> a three-day leadership conference.With the theme of “Navigat<strong>in</strong>g to New Horizons,” Mart<strong>in</strong>, the StorageTek CEO,discussed the state of the bus<strong>in</strong>ess <strong>and</strong> the competitive environment. Whilecreat<strong>in</strong>g a sense of urgency, he also expressed confidence <strong>in</strong> the future ifthe company, its leaders, <strong>and</strong> employees changed.To further create a sense of urgency, a researcher reported on <strong>in</strong>formationfrom customers who bought from StorageTek as well as those who chose to dobus<strong>in</strong>ess elsewhere, mak<strong>in</strong>g the voice of the customer real to all attendees.Partner<strong>in</strong>g with RootLearn<strong>in</strong>g, a company specializ<strong>in</strong>g <strong>in</strong> transform<strong>in</strong>g strategicdirection to employee dialogue, a learn<strong>in</strong>g map called “Current Reality: TheFlood of Information” engaged all leadership conference attendees <strong>in</strong> an <strong>in</strong>teractive,cross-functional dialogue about StorageTek’s competitive environment.Information on the history of the storage <strong>in</strong>dustry, customer bus<strong>in</strong>ess problems,<strong>and</strong> competitor characteristics <strong>and</strong> market share were <strong>in</strong>cluded <strong>in</strong>the map.A motivational speaker at the leadership conference delivered the messagethat “for you to change, I must change,” <strong>and</strong> a group of StorageTek manufactur<strong>in</strong>gemployees described how they were tired of wait<strong>in</strong>g for management tomake the necessary changes <strong>and</strong> took action for themselves. Upon arriv<strong>in</strong>g atthe conference, each attendee received a musical <strong>in</strong>strument made by <strong>in</strong>digenouspeoples from around the world. Each portion of the conference had amusical piece represent<strong>in</strong>g that particular content. For example, executives
STORAGETEK 411beat a Navajo ceremonial tom-tom to represent strategy; at the end of the conference,all the pieces were comb<strong>in</strong>ed to create a symphony of change.The ceremonial tom-tom also represented the “cadence of change” requiredto deliver a high-performance culture. The resolve to change <strong>and</strong> implementchanges must be stronger than the resistance to change <strong>in</strong> order for the changesto be real <strong>and</strong> permanent.Late <strong>in</strong> the fall 2001, Current Reality: The Flood of Information learn<strong>in</strong>g mapwas rolled out worldwide to all employees. Groups of eight to twelve employeesgathered at a time to learn about the competitive environment <strong>in</strong> whichStorageTek operates. In January 2002, follow-up by executive team members forall employees <strong>in</strong> the form of geographical kick-offs cont<strong>in</strong>ued teach<strong>in</strong>g <strong>and</strong> re<strong>in</strong>forc<strong>in</strong>gthe key messages begun at the leadership conference. An employeecommunications newsletter aga<strong>in</strong> described the high-performance culture thatwas our goal <strong>and</strong> how the many <strong>in</strong>itiatives throughout the company wereconnected to that goal.Lessons LearnedThere were three lessons learned from the <strong>in</strong>itial phase of transformationalchange:1. Def<strong>in</strong>e where the company is go<strong>in</strong>g—provide the result of the programwith measurement that translates <strong>in</strong>to bus<strong>in</strong>ess objectives.2. Use as much as possible of what already exists <strong>in</strong> the organization.This provides a sense of stability for many employees, avoids thetemptation to label work done previously as a waste or poor quality,<strong>and</strong> lessens the “flavor of the month” cynicism.3. Develop a cadence of change—similar to the base beat of the drum—toma<strong>in</strong>ta<strong>in</strong> employee awareness of the needed changes <strong>and</strong> provide l<strong>in</strong>kagesto various programs <strong>and</strong> <strong>in</strong>itiatives.WORK THROUGH CHANGEIn reality, the first stage of change never ends. However, little progress is achievedif the organization focuses only on def<strong>in</strong><strong>in</strong>g the challenges. For StorageTek,the second stage, work<strong>in</strong>g through change, <strong>in</strong>cluded the follow<strong>in</strong>g goals:• Create a focus on results.• Def<strong>in</strong>e <strong>in</strong>dividual expectations.• Improve management competency.• Grow organization capabilities.
412 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEFocus on Results <strong>and</strong> Def<strong>in</strong><strong>in</strong>g ExpectationsNot everyth<strong>in</strong>g worked perfectly the first time. At the August 2001 leadershipconference, a second RootLearn<strong>in</strong>g map, “Strategy: Navigat<strong>in</strong>g to NewHorizons,” was <strong>in</strong>troduced to def<strong>in</strong>e the StorageTek strategy. It was clear fromthe feedback that this map did not yet convey a clear message about StorageTek’sstrategy ready for consumption by all employees. To provide the strategic clarityrequired for every employee to “buy <strong>in</strong>to” the transformation plan, the mapneeded to clearly state the StorageTek strategy <strong>and</strong> provide the bridge foremployees to l<strong>in</strong>k their <strong>in</strong>dividual work to the strategy.In rework<strong>in</strong>g the learn<strong>in</strong>g map, the executive management team memberstook special care to review the content of the map <strong>and</strong> clarify key po<strong>in</strong>ts. Themap was piloted with groups of employees <strong>in</strong> Colorado <strong>and</strong> France to be certa<strong>in</strong>the strategy was clear before it was translated <strong>in</strong>to eight languages. Aga<strong>in</strong>,facilitators worldwide led groups of eight to twelve employees <strong>in</strong> dialoguesabout the strategy <strong>and</strong> the l<strong>in</strong>k to employees’ own work. As with the first map,the more cross-functional the make-up of these employee groups, the morepowerful the learn<strong>in</strong>g.Despite changes to the performance management tools <strong>in</strong> the three previousyears, focus groups of employees <strong>and</strong> managers told us they believed the performancemanagement system at StorageTek was an optional one. Numerousemployees reported hav<strong>in</strong>g no goals or performance reviews. Managers reportedconfusion about expectations <strong>and</strong> offered that they suffered no consequencesfor tak<strong>in</strong>g short-cuts <strong>in</strong> performance management. Unfortunately, many managersapplied the “peanut butter” approach <strong>and</strong> gave all employees a similarrat<strong>in</strong>g <strong>and</strong> merit <strong>in</strong>crease rather than differentiate high performers from low. Itwas no wonder that there was a lack of clarity around expectations <strong>and</strong> resultsto be achieved! Three efforts began <strong>in</strong> the fall of 2001 for implementationJanuary 1, 2002, to solve these problems.The first effort was to align goals worldwide <strong>and</strong> assure that every employeeknew what was expected <strong>and</strong> how he or she would be measured. TheStorageTek Quality department developed a Web-based tool that provided everyemployee visibility to all goals through department level. The Quality departmentaudited goals, provid<strong>in</strong>g feedback on improvement. Goals were then tiedto <strong>in</strong>dividual performance goals <strong>in</strong> the StorageTek performance managementsystem. Each month, there is a thorough report<strong>in</strong>g of goal achievement to theexecutive team. Resources <strong>and</strong> priorities are discussed as necessary to meetgoals.The second effort was the redesign of the performance management systemto support the StorageTek def<strong>in</strong>ition of a high-performance culture. The tool isWeb-based <strong>and</strong> provides for employee assessment <strong>in</strong> three parts. The underly<strong>in</strong>gphilosophy implies each employee must perform to or exceed expectations <strong>in</strong>
STORAGETEK 413all three areas to enable StorageTek to achieve a high-performance culture. Firstis the focus on results through assessment of achievement of performance goals.The second is an assessment of how well the employee is keep<strong>in</strong>g skills <strong>and</strong>knowledge levels current <strong>and</strong> achiev<strong>in</strong>g set development goals. The third is a360-degree assessment of twenty-six behaviors that <strong>in</strong>dicate an <strong>in</strong>dividual isact<strong>in</strong>g <strong>in</strong> accordance with the core values <strong>and</strong> organizational capabilities. Themanager <strong>and</strong> employee jo<strong>in</strong>tly select those asked to provide the feedback; feedbackcan come from peers, subord<strong>in</strong>ates, customers, partners, <strong>and</strong> vendors.(Subsequent analyses of data led to limit<strong>in</strong>g the number of behaviors to sixteenthat statistically correlated to performance.)The performance review discussion takes place between the employee <strong>and</strong>manager, <strong>and</strong> is an open <strong>and</strong> honest discussion of performance <strong>in</strong> all three areasbased on self <strong>and</strong> manager assessment, along with feedback from others. Theperformance review is completed early <strong>in</strong> the first quarter of each year forthe previous calendar year, with a midyear performance checkpo<strong>in</strong>t conducted<strong>in</strong> summer to assure that an employee is on track to achieve annual goals. Managersare required to meet a distribution curve of rat<strong>in</strong>gs at the functional orbus<strong>in</strong>ess unit head level at each review.Employees who do not receive a “meets expectations” or higher rat<strong>in</strong>g arecounseled on how to improve their performance through a plan of action. Anemployee who cont<strong>in</strong>ues to fall below a “meets expectations” rat<strong>in</strong>g leaves theTable 17.1. Performance Measurement (Spr<strong>in</strong>g 2002)% Number of EmployeesRat<strong>in</strong>g 1 2 3 4 5Expected distribution 5% 10% 60% 15% 10%Actual 0.8% 10.1% 49.8% 30.8% 6.8%
414 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEcompany. Likewise, employees who exceed expectations receive larger merit<strong>in</strong>creases <strong>and</strong> receive special development attention.The expected distribution curve was not met the first time (spr<strong>in</strong>g 2002) <strong>and</strong>managers were sent back to revise their rat<strong>in</strong>gs. Although not a popular move,requir<strong>in</strong>g managers to meet the distribution curve sent the message thatStorageTek was serious about performance. The expected distribution curve wasmet with many fewer adjustments for the midyear performance check (summer2002). Subsequently, few adjustments were needed to meet the curve.The third effort was a review <strong>and</strong> electronic sign-off of StorageTek’s code ofbus<strong>in</strong>ess conduct. Months before the media began report<strong>in</strong>g on various corporatemisstatements of earn<strong>in</strong>gs, StorageTek translated its code of bus<strong>in</strong>ess conduct<strong>in</strong>to eight languages <strong>and</strong> asked each employee to read <strong>and</strong> sign that he orshe understood what was expected <strong>in</strong> terms of lawful <strong>and</strong> ethical bus<strong>in</strong>ess conduct.Work<strong>in</strong>g together, the Office of Corporate Counsel <strong>and</strong> human resourcesfollowed up with employees on questions <strong>and</strong> concerns. Every employee isexpected to act <strong>in</strong> accordance with this code of conduct.Improve Management CompetencyAt the August 2001 leadership conference, work began on creat<strong>in</strong>g a leadershipbr<strong>and</strong>. The <strong>in</strong>tent of a leadership br<strong>and</strong> is to succ<strong>in</strong>ctly communicate to leaderswhat is expected of them <strong>and</strong> how these expectations relate to achiev<strong>in</strong>g thestrategic objectives of the company. Follow<strong>in</strong>g the conference, agreement wasreached on the follow<strong>in</strong>g leadership br<strong>and</strong>:StorageTek leaders act with speed, simplicity <strong>and</strong> accountability so that we br<strong>in</strong>gvalue to every customer <strong>in</strong>teraction. We will become the number one totalstorage solution provider by effectively deliver<strong>in</strong>g high-quality products <strong>and</strong>services, result<strong>in</strong>g <strong>in</strong> susta<strong>in</strong>able shareholder value.StorageTek’s leadership br<strong>and</strong> stated a common set of expectations for allmanagers, which was <strong>in</strong>troduced <strong>and</strong> re<strong>in</strong>forced through a leadership <strong>and</strong> managementcurriculum with required courses. The curriculum is built to addressthe needs of various levels of management—new manager, program or projectmanager, first level manager, <strong>and</strong> executive.“What gets measured, gets results” applies to leadership development, too.Historically, there appeared to be little opportunity for employees to grow theircareer through the management levels. For every external hire at director <strong>and</strong>above levels dur<strong>in</strong>g 2002, there was just one <strong>in</strong>ternal promotion <strong>in</strong>to those samelevels. StorageTek set a goal of achiev<strong>in</strong>g a 3:1 ratio of <strong>in</strong>ternal promotions toexternal hires at the director level <strong>and</strong> above by 2006. <strong>Development</strong> is a longterm<strong>in</strong>vestment <strong>in</strong> talent. Succession plann<strong>in</strong>g has placed attention on <strong>in</strong>ternalc<strong>and</strong>idates for these positions, which <strong>in</strong>clude vice presidents, directors, <strong>and</strong>
STORAGETEK 415country managers. <strong>Development</strong> focuses on the experiences needed to performwell at these executive levels through the use of an experience <strong>in</strong>terview tool.The result<strong>in</strong>g development plan <strong>in</strong>cludes both learn<strong>in</strong>g <strong>and</strong> assignments neededto acquire the necessary skills.To assure a pipel<strong>in</strong>e of talent, c<strong>and</strong>idates with high potential have been identifiedaround the world <strong>and</strong> are provided with development plans <strong>and</strong> specificdevelopment opportunities. Further, an aggressive college-recruit<strong>in</strong>g programhas brought over sixty recent college graduates (undergraduate <strong>and</strong> advanceddegrees) <strong>in</strong>to the company. An eighteen-month evolv<strong>in</strong>g-leaders developmentprogram assures that these new employees receive specialized development.<strong>Development</strong> <strong>in</strong>cludes community service projects to assure the balance def<strong>in</strong><strong>in</strong>gthe StorageTek culture.Grow Organizational CapabilitiesOrganizational CapabilitiesShared m<strong>in</strong>dset—We speak with one voice (about strategy, vision, core values, <strong>and</strong>performance ethic).Talent—We attract, reta<strong>in</strong>, <strong>and</strong> develop employees with the skills to make thecompany successful.Collaboration—We share <strong>in</strong>formation broadly across the organization, whichemphasizes cross-functional teamwork <strong>and</strong> learn<strong>in</strong>g rather than competition amonggroups.Speed—We demonstrate the capacity for change, agility, flexibility, <strong>and</strong> reducedcycle time with an emphasis on simple, repeatable, efficient processes. Decisionmak<strong>in</strong>g is fast. Unproductive work is elim<strong>in</strong>ated.Accountability—We complete our work with rigor <strong>and</strong> consistency, meet<strong>in</strong>g scheduledcommitments <strong>and</strong> follow<strong>in</strong>g through on plans <strong>and</strong> programs to deliver what’spromised. Every employee is held accountable for behavior <strong>and</strong> results.Learn<strong>in</strong>g—We generate new ideas <strong>and</strong> share those ideas across the company.The organizational capabilities are shared m<strong>in</strong>dset, talent, collaboration,speed, accountability, <strong>and</strong> learn<strong>in</strong>g. Grow<strong>in</strong>g <strong>and</strong> practic<strong>in</strong>g these capabilities<strong>in</strong> a way unique to StorageTek is a key component of the high-performanceorganization because it allows StorageTek to differentiate itself from its competitors.With the belief that grow<strong>in</strong>g organizational capabilities is first a managementresponsibility, the capabilities were <strong>in</strong>troduced at the 2001 leadershipconference. Soon thereafter, the capabilities were <strong>in</strong>tertw<strong>in</strong>ed through the languageof the second RootLearn<strong>in</strong>g map, “Strategy: Navigat<strong>in</strong>g to New Horizons,”embedded <strong>in</strong> the Lead<strong>in</strong>g for Results workshop <strong>and</strong> performance managementsystem, <strong>and</strong> used to l<strong>in</strong>k various <strong>in</strong>itiatives with<strong>in</strong> the organization.
416 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEKnow<strong>in</strong>g the audience <strong>and</strong> vary<strong>in</strong>g the messages to meet the audience’sneeds is important to assure underst<strong>and</strong><strong>in</strong>g at all levels of the organization. Forexample, strategic clarity work at the executive level <strong>in</strong>cluded <strong>in</strong>teractionthrough workshops with Norm Smallwood <strong>and</strong> work on clarify<strong>in</strong>g roles <strong>and</strong>responsibilities. For managers <strong>and</strong> directors, there was <strong>in</strong>volvement <strong>in</strong> creat<strong>in</strong>g<strong>and</strong> participat<strong>in</strong>g <strong>in</strong> the learn<strong>in</strong>g maps. For employees, kick-offs <strong>and</strong> learn<strong>in</strong>gmap participation provide opportunities for strategic clarity.The Bus<strong>in</strong>ess Management System (BMS) was <strong>in</strong>troduced as the overarch<strong>in</strong>gquality model. Start<strong>in</strong>g with def<strong>in</strong><strong>in</strong>g the customer <strong>and</strong> cont<strong>in</strong>u<strong>in</strong>g with def<strong>in</strong><strong>in</strong>gHighperformanceculture3- <strong>and</strong> 5-yr. total returns to shareholders—top 20% of all companiesPerformance ethicAchievement of annual goalsOpen <strong>and</strong> trust<strong>in</strong>g environmentEmployee surveyEffective grow<strong>in</strong>g organizationCustomerloyalty <strong>and</strong> keybus<strong>in</strong>ess metricsEMTRBL WorkRoles <strong>and</strong>Responsibilities<strong>Leadership</strong>ConferenceSuccessionGoalsMonthlyReport<strong>in</strong>gE2EHir<strong>in</strong>g GoalsAff<strong>in</strong>ity GroupSponsorshipExecutiveVisabilityMBO'sStockIncentivesDirectors <strong>and</strong> managersCreat<strong>in</strong>g <strong>and</strong>Participat<strong>in</strong>g<strong>in</strong> Learn<strong>in</strong>gMapsCurriculumExecutiveF<strong>in</strong>anceSuccessionGoalsImplementedProcessImprovementMonthlyReport<strong>in</strong>gE2ECSmart GoalsC2it GameHir<strong>in</strong>g GoalsAff<strong>in</strong>ityGroupsRound TablesStaff Meet<strong>in</strong>gsMBO'sStockIncentivesEng<strong>in</strong>eer<strong>in</strong>gExcellenceEmployeesKick-OffsLearn<strong>in</strong>g Maps1 <strong>and</strong> 2GoalsBehaviors<strong>Development</strong>KnowledgeProcessImprovementC2it GameCSMARTGoalsAff<strong>in</strong>ityGroupsFocus [On]VoiceStaff Meet<strong>in</strong>gs R&R ProgramEng<strong>in</strong>eer<strong>in</strong>gExcellenceTran<strong>in</strong>g/<strong>Development</strong>Dual SalaryLadderStrategic clarity<strong>Leadership</strong>/Management skillsPerformance management <strong>in</strong>clud<strong>in</strong>g goalsBMS (quality)Close to the customerDiversity <strong>and</strong> InclusionCommunicationsRewards <strong>and</strong> recognitionMarket-driven technology leadershipFigure 17.4 Transform<strong>in</strong>g on Three Levels.
STORAGETEK 417vision, goals, resources, measures, <strong>and</strong> improvements, every employee completedtra<strong>in</strong><strong>in</strong>g led by his or her manager <strong>and</strong> focused on his or her department.Comb<strong>in</strong>ed with the goal-sett<strong>in</strong>g <strong>and</strong> follow-up process described earlier <strong>and</strong> ISOaudits every six months, there is a direct l<strong>in</strong>k to shared m<strong>in</strong>dset <strong>and</strong> accountabilitycapabilities. The <strong>in</strong>troduction of meet<strong>in</strong>g guidel<strong>in</strong>es provided a focus onspeed, accountability, <strong>and</strong> collaboration. The latest step to Six Sigma with the<strong>in</strong>troduction of Black Belt tra<strong>in</strong><strong>in</strong>g <strong>and</strong> projects positions StorageTek well tofocus on the operational excellence needed to balance a successful company.Closer to the customer is the descriptor for all the customer <strong>in</strong>itiatives with<strong>in</strong>StorageTek. With the belief that external results come from <strong>in</strong>ternal actions,there is a strong focus on the employee, as well as traditional customer <strong>in</strong>itiatives.For example, a board game developed by StorageTek <strong>and</strong> provided <strong>in</strong> eightlanguages <strong>in</strong>vites employees to play a game <strong>in</strong> which decisions must be madeto meet customer expectations; w<strong>in</strong>n<strong>in</strong>g or los<strong>in</strong>g “hearts” <strong>and</strong> money is basedon the decisions made. A CD provides directions <strong>and</strong> <strong>in</strong>cludes executives tell<strong>in</strong>gfamous customer relationship stories, as well as some of their own. Sharedm<strong>in</strong>dset, learn<strong>in</strong>g, <strong>and</strong> collaboration are the capabilities affected.Employee communications have been redesigned to provide clear <strong>and</strong> concise<strong>in</strong>formation to employees. Changes were made to the “look <strong>and</strong> feel,”frequency, <strong>and</strong> content to deliver <strong>in</strong>formation employees deemed of greatestvalue. Executive visibility programs, <strong>in</strong>clud<strong>in</strong>g round tables, give employeesmore opportunities to meet with executives <strong>in</strong>formally. E-mail is the primarymethod of communication. A weekly employee electronic newsletter, withgeographically sectioned <strong>in</strong>formation, provides overall messag<strong>in</strong>g <strong>and</strong> <strong>in</strong>formation.Dur<strong>in</strong>g the week, messages of importance are targeted to various groupsof employees worldwide on a need-to-know basis. An electronically distributed,pr<strong>in</strong>t-ready, bi-monthly newsmagaz<strong>in</strong>e is used to provide greater underst<strong>and</strong><strong>in</strong>gof StorageTek <strong>in</strong>formation. Recently <strong>in</strong>troduced is a hierarchy of messag<strong>in</strong>g tohelp employees prioritize e-mail messages, <strong>and</strong> a letter from the StorageTek CEOon timely topics. Shared m<strong>in</strong>dset, speed, <strong>and</strong> collaboration are the organizationcapabilities of focus.Lessons LearnedFive lessons were learned from the “work through change” stage:1. Although the <strong>in</strong>itiatives are corporatewide, for the maximum benefitthe actions should be focused on <strong>in</strong>dividual requirements at threelevels of employees: executives, managers, <strong>and</strong> employees. The<strong>in</strong>itiatives are the same but the practices <strong>and</strong> implementation areflexed to the needs of each group.2. All employees must be held accountable for achiev<strong>in</strong>g results. Look<strong>in</strong>gfor others to blame is one sign of an immature organization.
418 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE3. Assess what the organization can absorb <strong>and</strong> be will<strong>in</strong>g to be flexible.There is never just one way to accomplish a goal, so look for alternativeswhen the first choice isn’t work<strong>in</strong>g.4. Be will<strong>in</strong>g to take the 80 percent solution; noth<strong>in</strong>g is ever perfect.5. Keep up the cadence of change—just like the steady bass drum beat ofthe ceremonial tom-tom.ATTAIN AND SUSTAIN IMPROVEMENTAs 2004 began, StorageTek <strong>in</strong>itiated the third stage of change. The goals of thisstage are• Cont<strong>in</strong>ue results focus• Build susta<strong>in</strong>able future foundationCont<strong>in</strong>u<strong>in</strong>g the focus on results <strong>and</strong> alignment to a high-performance culturewill <strong>in</strong>volve add<strong>in</strong>g other <strong>in</strong>itiatives while cont<strong>in</strong>u<strong>in</strong>g to focus on <strong>and</strong> deliverresults <strong>in</strong> the areas already <strong>in</strong>troduced. In some cases, there are small changesto keep programs <strong>and</strong> practices contemporary, such as reduc<strong>in</strong>g the performancemanagement behavioral measurements to sixteen from twenty-six, as describedearlier.The results of the October 2002 all-employee satisfaction survey showed adecrease <strong>in</strong> employee satisfaction from 2001. All categories were significantlylower, with the most dramatic decrease <strong>in</strong> the Top <strong>Leadership</strong> category. Theseresults were not unexpected but they were dishearten<strong>in</strong>g. Employees were nothappy about significant changes made <strong>in</strong> the organization, <strong>in</strong>clud<strong>in</strong>g bus<strong>in</strong>essdecisions to move assembly from headquarters to Puerto Rico <strong>and</strong> outsourcethe operation of the <strong>in</strong>ternal <strong>in</strong>formation technology department. Resourceswere scarce as StorageTek controlled costs dur<strong>in</strong>g difficult economic times.Go<strong>in</strong>g forward, there will need to be cont<strong>in</strong>ued focus on strategic clarity withthorough explanations of bus<strong>in</strong>ess decisions <strong>and</strong> their impact on the bus<strong>in</strong>essoverall. To put a greater focus on employee satisfaction at a departmental level,each manager was required to have a 2003 performance goal on employee satisfaction,specifically address<strong>in</strong>g issues <strong>in</strong> the department. There was good newswhen the October 2003 survey <strong>in</strong>dicated that overall employee satisfaction had<strong>in</strong>creased slightly. The addition of the Dennison survey <strong>in</strong> 2003 provided managersgreater underst<strong>and</strong><strong>in</strong>g of the levers of change <strong>and</strong> susta<strong>in</strong>ability for theirdepartments.Future <strong>in</strong>itiatives at StorageTek will focus on align<strong>in</strong>g human resource practicessuch as rewards <strong>and</strong> recognition with a high-performance organization. The
STORAGETEK 419addition of workforce plann<strong>in</strong>g <strong>and</strong> a “people strategy” to the strategic plann<strong>in</strong>gprocess cont<strong>in</strong>ue the focus on results. Other plans <strong>in</strong>clude tak<strong>in</strong>g advantage ofan already-<strong>in</strong>-place dual salary ladder to build a technical talent pool, <strong>and</strong> a morerobust eng<strong>in</strong>eer<strong>in</strong>g excellence recognition program to honor creativity <strong>and</strong><strong>in</strong>novation beyond the current patents, papers, <strong>and</strong> presentations program.Ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g the right balance of operational management <strong>and</strong> <strong>in</strong>novation willbe key to build<strong>in</strong>g a susta<strong>in</strong>able future. StorageTek must meet the challenge ofovercom<strong>in</strong>g its legacy of ups <strong>and</strong> downs by establish<strong>in</strong>g a track record of resultsExecutive Management TeamNew CEO jo<strong>in</strong>sEE surveyKick-offsPerformance reviewsGoals setExecutive team workshop<strong>Leadership</strong> conferencePerformance checkEE surveySuccession plann<strong>in</strong>gKick-offsGoals setPerformance reviewsF<strong>in</strong>ance coursePerformance checkEE surveySuccession plann<strong>in</strong>gKick-offsPerformance reviewsGoals setEE surveySuccession plann<strong>in</strong>gKick-offsPerformance reviewsGoals set7/00 12/00 6/01 12/01 6/02 12/02 6/03 12/03 6/04ManagersEE surveyPerformance reviewsGoals setPerformance check<strong>Leadership</strong> conferenceEE surveyLearn<strong>in</strong>g map 1Kick-offsGoalsPerformance reviewsRequired curriculumBMS tra<strong>in</strong><strong>in</strong>gLearn<strong>in</strong>g map 2Performance checkCustomer gameEE surveyKick-offsPerformance reviewsGoals setPerformance checkEmployee surveyKick-offsPerformance reviewsGoals set7/00 12/00 6/01 12/01 6/02 12/02 6/03 12/03 6/04EmployeesEE surveyPerformance reviewsGoals setPerformance checkEE surveyLearn<strong>in</strong>g map 1Kick-offsGoalsPerformance reviewsAff<strong>in</strong>ity groupsBMS tra<strong>in</strong><strong>in</strong>gLearn<strong>in</strong>g map 2Performance checkCustomer gameEE surveyPerformance reviewsGoals setPerformance checkEmployee surveyPerformance reviewsGoals set7/00 12/00 6/01 12/01 6/02 12/02 6/03 12/03 6/04Figure 17.5 StorageTek Timel<strong>in</strong>e of Organization Transformation.
420 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEthat customers, shareholders, <strong>and</strong> employees can count on. To do that, allemployees must1. Be accountable for achiev<strong>in</strong>g results2. Act with speed <strong>in</strong> meet<strong>in</strong>g customer requirements3. Behave consistently with a shared m<strong>in</strong>dset result<strong>in</strong>g <strong>in</strong> believabilityto the customer4. Collaborate <strong>and</strong> learn together to drive out redundancy5. Develop <strong>and</strong> share talents so that StorageTek is a great place for highlyskilled employees to spend their careersThe right balance also means rema<strong>in</strong><strong>in</strong>g a company focused on its employees<strong>and</strong> ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g a culture where employees feel valued <strong>and</strong> respected,believe their work provides mean<strong>in</strong>g, <strong>and</strong> can achieve work-life balance.STORAGETEK: THE HIGH-PERFORMANCE ORGANIZATIONDur<strong>in</strong>g 2001 <strong>and</strong> 2002, the United States <strong>and</strong> much of the world was <strong>in</strong> an economicslump. Information technology spend<strong>in</strong>g was down significantly <strong>and</strong> theprice of data storage technology was erod<strong>in</strong>g. Through the first half of 2002,revenue was flat <strong>and</strong> market share was static at best.Then third quarter 2002 results <strong>in</strong>dicated a glimmer of hope that StorageTekmight have made the turn after all. Reported results <strong>in</strong>cluded a slight growth <strong>in</strong>revenue, an <strong>in</strong>crease <strong>in</strong> market share, <strong>and</strong> double-digit growth <strong>in</strong> services. Witha pipel<strong>in</strong>e of orders for fourth quarter, new products <strong>in</strong>troduced, <strong>and</strong> a slight h<strong>in</strong>tof optimism, perhaps StorageTek had begun to achieve the real <strong>and</strong> last<strong>in</strong>g resultsdesired. The fourth quarter <strong>and</strong> 2002 full year f<strong>in</strong>ancial results were very positive.“This was our best quarter for revenue <strong>in</strong> the past two years <strong>and</strong> has resulted<strong>in</strong> StorageTek ga<strong>in</strong><strong>in</strong>g market share <strong>in</strong> tape, disk, network<strong>in</strong>g <strong>and</strong> storageservices,” said Pat Mart<strong>in</strong>, chairman, president, <strong>and</strong> chief executive officer.Results for 2003 cont<strong>in</strong>ued to show success with revenue growth <strong>and</strong> strong earn<strong>in</strong>gs.The “cadence of change” delivered the desired results of a high-performanceorganization. The challenge ahead is to stay the course <strong>in</strong> ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g thebalance between traditional operational management <strong>and</strong> <strong>in</strong>novation.As a high-performance organization, StorageTek wants to be respected <strong>in</strong> thecommunities <strong>in</strong> which its employees work <strong>and</strong> live, recognized by people whowant to do bus<strong>in</strong>ess with it, selected as an employer of choice, <strong>and</strong> known foroperat<strong>in</strong>g guidel<strong>in</strong>es <strong>in</strong>clud<strong>in</strong>g <strong>in</strong>tegrity <strong>and</strong> core values. Achiev<strong>in</strong>g these goalswill mean that StorageTek will enjoy a perceived value evidenced by stock price<strong>and</strong> an <strong>in</strong>crease <strong>in</strong> highly talented employees. Total shareholder return should<strong>in</strong>crease as a result.
STORAGETEK 421Exhibit 17.1. Summary of Lessons LearnedTransformation PhaseDef<strong>in</strong>e the challengeWork through changeAtta<strong>in</strong> <strong>and</strong> susta<strong>in</strong>improvementLessons LearnedDef<strong>in</strong>e where the company is go<strong>in</strong>g—providethe result of the program with measurement thattranslates <strong>in</strong>to bus<strong>in</strong>ess objectivesUse as much as possible of what already exists<strong>in</strong> the organizationDevelop a cadence of change to ma<strong>in</strong>ta<strong>in</strong>employee awarenessFocus actions on <strong>in</strong>dividualized requirementson three levelsHold all employees accountable forachiev<strong>in</strong>g resultsAssess organizational read<strong>in</strong>ess for change<strong>and</strong> stay flexibleTake the 80 percent solutionMa<strong>in</strong>ta<strong>in</strong> the cadence of changeStay the courseAdjust <strong>and</strong> improve as needed
422 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEREFERENCESFoster, R., <strong>and</strong> Kaplan, S. Creative Destruction. New York: Doubleday, 2001, p. 90.Ulrich, D., Zenger, J., <strong>and</strong> Smallwood, N. Results-Based <strong>Leadership</strong>. Cambridge, Mass.:Harvard Bus<strong>in</strong>ess School Press, 1999.“War for Talent.” The McK<strong>in</strong>sey Quarterly, 1998, Number 3.“The War for Talent 2000.” The McK<strong>in</strong>sey Quarterly, July 2001.ABOUT THE CONTRIBUTORSusan Curtis is StorageTek’s leadership coach. Curtis jo<strong>in</strong>ed StorageTek <strong>in</strong> 1998.In her former role as director of leadership <strong>and</strong> change management, she wasresponsible for leadership development, <strong>in</strong>clud<strong>in</strong>g succession plann<strong>in</strong>g, employeecommunications, professional development, tra<strong>in</strong><strong>in</strong>g, <strong>and</strong> change management.Before jo<strong>in</strong><strong>in</strong>g StorageTek, Curtis held several organizational development,leadership development, <strong>and</strong> tra<strong>in</strong><strong>in</strong>g management positions with JohnsManville, Rockwell International, <strong>and</strong> EG&G. She taught at the communitycollege level for a number of years <strong>in</strong> Florida <strong>and</strong> designed the curriculum for theCommunity College of Aurora (Colorado) at its found<strong>in</strong>g. Curtis is a founder ofWomen’sL<strong>in</strong>k, an <strong>in</strong>tercorporate leadership development <strong>and</strong> network<strong>in</strong>gprogram that l<strong>in</strong>ks midlevel corporate women with senior-level women. Curtisalso contributed expertise to the design of Web-based culture assessment <strong>and</strong>career development tools. These tools <strong>and</strong> Women’s L<strong>in</strong>k are currently availableto members of the Women’s Vision Foundation. F<strong>in</strong>ally, she was a member ofthe Goodwill Industries of Denver board of directors for six years, <strong>in</strong>clud<strong>in</strong>g oneyear as chair. Curtis earned bachelor’s <strong>and</strong> master’s degrees from Iowa State<strong>University</strong> <strong>and</strong> a Ph.D. <strong>in</strong> curriculum <strong>and</strong> <strong>in</strong>struction, post-secondary educationfrom the <strong>University</strong> of Florida.
SCHAPTER EIGHTEENW<strong>in</strong>dber Medical CenterSA patient-centered care model for creat<strong>in</strong>g a heal<strong>in</strong>g environment that leadsto shorter lengths of stay, lower <strong>in</strong>fection rates, <strong>and</strong> reduced mortality ratesthrough a heal<strong>in</strong>g culture that embraces m<strong>in</strong>d, body <strong>and</strong> spirit.OVERVIEW 424INTRODUCTION: PATIENT EMPOWERMENT 425DIAGNOSIS: THE DECISION TO CHANGE 425ORGANIZATIONAL CHALLENGE 426Reasons for Change 427Change Objectives 427APPROACH 428ASSESSMENT: THE MAN SHOW 428Physicians 429Employees 430FEEDBACK USE 430DESIGN: PLANETREE PHILOSOPHY 431INTERVENTION: FUNDAMENTAL CHANGES 431THE PLANETREE TEAMS 432LOOKING BACK 432The Change Circle 433It Gets Worse Before It Gets Better 433I’m from the Government <strong>and</strong> I’m Here to Help 434Gett<strong>in</strong>g Back on Track 434Quantify<strong>in</strong>g the Results: Exhibits 435Exhibit 18.1: Average Length of Stay 435Exhibit 18.2: Nosocomial Infection Rate 436423
424 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 18.3: Mortality Comparison by Hospital 436Mov<strong>in</strong>g Ahead Aga<strong>in</strong> 437LESSONS LEARNED 437ABOUT THE CONTRIBUTOR 438OVERVIEWThis change management case study explores <strong>and</strong> details the transition of asmall, urban hospital from a traditional, acute care facility to a Planetree hospital.Plantree hospitals are accredited by the Planetree organization, whose missionis “to serve as a catalyst <strong>in</strong> the development <strong>and</strong> implementation of newmodels of health care, which cultivate the heal<strong>in</strong>g of m<strong>in</strong>d, body, <strong>and</strong> spirit; arepatient-centered, value-based, <strong>and</strong> holistic; <strong>and</strong> <strong>in</strong>tegrate the best of Westernscientific medic<strong>in</strong>e with time-honored heal<strong>in</strong>g practices” (from Planetreewebsite: www.planetree.org).The philosophy of W<strong>in</strong>dber Medical Center was developed <strong>and</strong> nurtured <strong>in</strong>the Industrial Revolution. The change from this paternalistic, parent-to-childenvironment to one <strong>in</strong> which patients have choice <strong>and</strong> participate <strong>in</strong> their care<strong>in</strong> surround<strong>in</strong>gs that embrace holistic, patient-centered care is not new, but itis revolutionary.This little hospital, located just a few miles from the site where UnitedFlight 93 went down on September 11 <strong>and</strong> less than ten miles from the Quecreekm<strong>in</strong>e where the n<strong>in</strong>e coal m<strong>in</strong>ers were rescued is nearly one hundred years old.W<strong>in</strong>dber Hospital was started by a coal m<strong>in</strong><strong>in</strong>g company, the Berw<strong>in</strong>d WhiteCoal Company, to take care of its workers. When Western Pennsylvania coalwent out of style due to high pollution levels, the hospital <strong>and</strong> the town also fellout of favor.Under the leadership of a new president, the organization took on the challengeof recreat<strong>in</strong>g itself by enlist<strong>in</strong>g physicians <strong>and</strong> employees to return aspatient advocates <strong>and</strong> also return<strong>in</strong>g to the car<strong>in</strong>g, nurtur<strong>in</strong>g roots of health care.Us<strong>in</strong>g already exist<strong>in</strong>g care models <strong>and</strong> the power of love, the organizationbegan a change journey that would forever alter its culture <strong>in</strong>to a unifiedapproach that makes patient-centered care its top priority. The hospital, whichhas gone on to ga<strong>in</strong> national attention, has created a research <strong>in</strong>stitute <strong>and</strong> garneredover $30 million <strong>in</strong> grants dur<strong>in</strong>g the past four years. Because of Planetree,it has established itself as a prime example of a model hospital for thefuture.The lessons learned by the W<strong>in</strong>dber Medical Center are important forany organization undergo<strong>in</strong>g a major change <strong>in</strong>itiative <strong>in</strong> which success of theentire organization depends on the outcome of the effort.
INTRODUCTION: PATIENT EMPOWERMENTWhen a patient walks <strong>in</strong>to the typical hospital, the overwhelm<strong>in</strong>g, confus<strong>in</strong>gsignage, the smell of antiseptics, the curt <strong>and</strong> often unforgiv<strong>in</strong>g attitude of theemployees, <strong>and</strong> the awesome power of the physicians are usually clear<strong>in</strong>dicators that they should leave their dignity at the door.Follow<strong>in</strong>g the <strong>in</strong>troduction of the Baby Boom generation to the United States,much has changed both good <strong>and</strong> bad. We have changed the way the worlddeals with fashion, protest, drugs, credit card debt, <strong>and</strong> <strong>in</strong>vest<strong>in</strong>g. Not all ofthose lessons have been positive, but they have forever changed the way ourcountry approaches war, marriage, <strong>and</strong> health. As we Baby Boomers transition<strong>in</strong>to our Baby Geezer years, our expectations of how the ag<strong>in</strong>g process willwork, how we will deal with illness, <strong>and</strong> how we will cope with end-of-lifeissues have already begun to change.With nearly a thous<strong>and</strong> competitive tertiary care hospital beds available onlyseven short miles away from W<strong>in</strong>dber Medical Center, the change managementmission was clear: Do not create what people would like. Create, <strong>in</strong>stead, whatpeople will love <strong>in</strong> a hospital environment that embraces holistic care.This challenge did not <strong>in</strong>volve simple cosmetic changes. It <strong>in</strong>volved mov<strong>in</strong>gan entire workforce on through the Industrial Revolution <strong>in</strong>to the Age of Intelligence.It meant chang<strong>in</strong>g sixty years of care giv<strong>in</strong>g <strong>and</strong> iron clad control <strong>in</strong> away that embraced patients <strong>and</strong> their families through empowerment.These change management efforts required a total commitment from everyemployee, manager, <strong>and</strong> caregiver. Many of the <strong>in</strong>dividuals <strong>in</strong>volved <strong>in</strong> the organizationdid not want to believe <strong>in</strong> this philosophy because it took the ultimatepower away from them. So the question became, Could leadership create apatient-centered care philosophy <strong>and</strong> survive?DIAGNOSIS: THE DECISION TO CHANGEWINDBER MEDICAL CENTER 425In 1996, the three-hundred-employee W<strong>in</strong>dber Hospital was merged <strong>in</strong>to theConemaugh Health System, but like many “follow the leader” mergers <strong>in</strong> thatera, this affiliation brought few mean<strong>in</strong>gful changes to the system. The reallysignificant opportunity that did develop was to change the leadership. The newpresident of the organization was recruited from very nontraditional ranks. Witha background <strong>in</strong> education, the arts, <strong>and</strong> tourism before enter<strong>in</strong>g health caremanagement, his philosophy was not traditional. It <strong>in</strong>cluded br<strong>in</strong>g<strong>in</strong>g the best<strong>in</strong> health care <strong>and</strong> patient empowerment to the organization. His most oftenasked question was, “Why do you do it like that?”Dur<strong>in</strong>g the previous decade a philosophy of care had emerged that addresseda type of environment that put the patient <strong>in</strong> the center of the care mission,
426 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEPlanetree. Rather than the typical, system-first emphasis, this philosophy putthe patient first. Planetree embraces the concept that the m<strong>in</strong>d <strong>and</strong> body are<strong>in</strong>tricately <strong>in</strong>terrelated <strong>and</strong> that heal<strong>in</strong>g must address the needs of the m<strong>in</strong>d <strong>and</strong>spirit as well as the body. All facets of the Planetree model—open communication,patient choices, family-friend <strong>in</strong>volvement, music, art, massage, architecture,use of complementary therapies, <strong>and</strong> others—work to uphold this concept.Because the hospital had a palliative care unit for its hospice, it was relativelyeasy to conv<strong>in</strong>ce the board that the need existed to be k<strong>in</strong>d, car<strong>in</strong>g, compassionate,lov<strong>in</strong>g, <strong>and</strong> nurtur<strong>in</strong>g to patients. That six-bed unit had eighty volunteers,123 clergy volunteers, <strong>and</strong> embraced the family <strong>in</strong> every way. So tripswere made to other Planetree hospitals.Of the 150 physicians on staff at the time, only a few openly endorsed thisprogram. Generally, the attitude embraced by the physicians was one of wait<strong>and</strong> see. The employees who embraced the program were already seen as k<strong>in</strong>d,car<strong>in</strong>g <strong>in</strong>dividuals, but <strong>in</strong> spite of the lack of overt endorsement for thisapproach to care, the board <strong>and</strong> president went forward with their decision tobr<strong>in</strong>g change to the little hospital on the hill.A new build<strong>in</strong>g was designed to br<strong>in</strong>g a wellness center to the organization,<strong>and</strong> <strong>in</strong> January 2000, that build<strong>in</strong>g was completed. It had been designed tohouse rehabilitation, a heart disease reversal program, <strong>and</strong> <strong>in</strong>tegrative health.The Integrative Health Center was for traditional therapies as well as complementary<strong>and</strong> alternative therapies. Included <strong>in</strong> the programs were yoga, stressmanagement, Tai-Chi, Ai-Chi, Reiki, Spiritual Counsel<strong>in</strong>g, Aroma Therapy,Massage, Infant Massage, Music Therapy, <strong>and</strong> Acupuncture.ORGANIZATIONAL CHALLENGEDur<strong>in</strong>g the first two weeks of his employment, the president of the newlyrenamed W<strong>in</strong>dber Medical Center quickly realized that the organization neededdeep <strong>and</strong> almost unlimited change <strong>in</strong> a culture that was deeply engra<strong>in</strong>ed <strong>in</strong> aworld that had clearly ceased to exist.So he had his assistant schedule approximately 270 appo<strong>in</strong>tments for him,one every ten m<strong>in</strong>utes from 7:30 <strong>in</strong> the morn<strong>in</strong>g until well after normal shiftchange hours each day for two weeks. He met with every employee <strong>in</strong> the facility,<strong>in</strong>troduced himself, <strong>and</strong> then listened as they expressed their concerns, theirbeliefs, <strong>and</strong> their dreams to him. In less than ten work<strong>in</strong>g days, he knew theculture.He then attempted to recreate the same process with his medical staff. Thatmission was much less successful. In fact, it was nearly impossible. The power ofthe organization was clearly nestled <strong>in</strong> that group of <strong>in</strong>dividuals. Of the 150-plusphysicians on staff, approximately sixteen held the organization <strong>in</strong> their control.
WINDBER MEDICAL CENTER 427Of that sixteen, five were from the Far East, <strong>and</strong> four were born <strong>and</strong> raised <strong>in</strong> theW<strong>in</strong>dber area. This group formed the nucleus of what would create five years ofstruggle. These physicians controlled patient flow <strong>and</strong> the care philosophy, butthey were <strong>in</strong>dependent physicians who could take their patients anywhere theyselected <strong>and</strong> could also close the facility overnight if they changed theirallegiance.Reasons for ChangeThe president was not mak<strong>in</strong>g these decisions completely out of personal fondnessfor change. One month after tak<strong>in</strong>g over <strong>in</strong> his position, the account<strong>in</strong>gfirm of Ernst <strong>and</strong> Young (E&Y) presented him with the first chapter of a strategicplan that predicted the demise of W<strong>in</strong>dber Medical Center <strong>in</strong> less than fiveyears. This was due to competition, changes <strong>in</strong> <strong>in</strong>surance reimbursements, <strong>and</strong><strong>in</strong>creased penetration of managed care products <strong>in</strong> the market.Congress also enacted the Balanced Budget Amendment Act, which wouldforever change the way hospitals, especially nonteach<strong>in</strong>g <strong>and</strong> nonrural hospitals,would be paid by Medicare <strong>and</strong> Medicaid. The full impact of that act wasnot known <strong>in</strong> 1997, but it proved to be much more detrimental than any of theother E&Y predictions. The change <strong>in</strong> reimbursements to small, urban hospitalswould plunge many of them <strong>in</strong>to bankruptcy over the next few years, <strong>and</strong>W<strong>in</strong>dber was no exception.Stakeholder Expectations. The public <strong>and</strong> local communities <strong>and</strong> politiciansdesperately needed the facility to rema<strong>in</strong> open. In 1997, <strong>in</strong> an area noted for thesecond highest outmigration of population of anywhere except East St. Louis,Missouri, W<strong>in</strong>dber desperately needed the $8 million payroll provided by itslargest employer. Clearly, patient first was the key to the future of this hospital<strong>in</strong> rural Pennsylvania.Change ObjectivesIn a number of town meet<strong>in</strong>gs, the president expla<strong>in</strong>ed his vision of the Planetreephilosophy to the entire medical center. The senior management teamverbally committed to the follow<strong>in</strong>g transformation process:• Make patient-centered care the number-one priority of theorganization• Commit to provid<strong>in</strong>g a lov<strong>in</strong>g, nurtur<strong>in</strong>g environment to the patients<strong>and</strong> their families• Address all patient <strong>and</strong> patient family issues quickly <strong>and</strong> efficiently• Become recognized locally, regionally, <strong>and</strong> nationally for this newtype of commitment to care <strong>in</strong> which the patients’ dignity is notcompromised
428 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGETo be sure that everyone was aware of these expectations, the president conductednearly a dozen hour-long meet<strong>in</strong>gs over a five-day period. Once aga<strong>in</strong> hemet with every employee possible. These meet<strong>in</strong>gs were repeated every few monthsfor nearly three years. Patient-centered care was the po<strong>in</strong>t of these meet<strong>in</strong>gs.APPROACHWork<strong>in</strong>g with <strong>in</strong>dividuals who had been employed at W<strong>in</strong>dber Medical Centerfor fifteen or more years proved to provide an environment that was not onlyresistant to change but completely opposed to change. It became evident whenthe president attempted to demonstrate his commitment to this new philosophyby <strong>in</strong>itiat<strong>in</strong>g steps to create the Planetree look. As the walls were transformedfrom Pepto Bismol p<strong>in</strong>k to new shades of gold <strong>and</strong> yellow, the employees beganto react as if their world was collaps<strong>in</strong>g. This was a clear <strong>in</strong>dicator that outsidehelp was needed <strong>in</strong> this transformation.Several approaches were embraced by management:• Four employees were chosen from the four areas of employment, allstaff-level employees, to go to the Disney Institute for tra<strong>in</strong><strong>in</strong>g. Theirexpenses were paid, <strong>and</strong> upon their return they began to tell what theyhad learned to all of the employees of the hospital.• A management consultant tra<strong>in</strong>ed <strong>in</strong> conflict management wasemployed to tra<strong>in</strong> all of the employees <strong>in</strong> Emotional Quotient tra<strong>in</strong><strong>in</strong>g.Each employee was tested <strong>in</strong> order to determ<strong>in</strong>e his or her personalityprofile. They then tested their family members <strong>and</strong> shared with theirpeers. This tra<strong>in</strong><strong>in</strong>g progressed to enable employees to learn how to dealwith each personality type.• Heads of other departments were given gift certificates <strong>and</strong> encouragedto go to resorts, hotels, <strong>and</strong> restaurants to observe new models of care.These new models were not without critics. At least a third of the managersresented the idea of giv<strong>in</strong>g up their power over the patients <strong>and</strong> their families.Many nurses who were directly connected to the older physicians also resistedthese changes. It took nearly three years to change the employee evaluation systemto allow these thirty-two <strong>in</strong>dividuals, approximately 10 percent of the workforce,to be removed.ASSESSMENT: THE MAN SHOWAlthough health care would seem to be a sacred guardian of human life thattreats each <strong>in</strong>dividual with compassion, love, <strong>and</strong> care, it is, <strong>in</strong> fact, based uponthe military model. Many physicians approach their patients as unenlightened.
WINDBER MEDICAL CENTER 429Many adm<strong>in</strong>istrators do the same with their subord<strong>in</strong>ates, as do many caregivers.It is a world often driven by power <strong>and</strong> money.When hospitals were reimbursed for the total number of days a patient washospitalized, those days were numerous. WMC’s first patient was hospitalizedfor seven years <strong>and</strong> eight months. When reimbursement methodology changed,hospitals started “drive-by deliveries” for pregnant moms.A prelim<strong>in</strong>ary diagnosis of the organization clearly demonstrated where thepower was. It was with the physicians <strong>and</strong> their m<strong>in</strong>ions. Those senior managerswho believed <strong>in</strong> the power of the medical staff clearly sided with them onevery decision.In order to overwhelm the resistance, the president, a former market<strong>in</strong>g executive,began to seek <strong>and</strong> obta<strong>in</strong> overwhelm<strong>in</strong>g endorsements from the media <strong>in</strong>the area. Numerous television, radio, <strong>and</strong> pr<strong>in</strong>t endorsements were forthcom<strong>in</strong>gfor even tak<strong>in</strong>g on this enormous task of attempt<strong>in</strong>g to change this veryconservative system back to it roots.This effort resulted <strong>in</strong> a partial power shift. The board <strong>and</strong> adm<strong>in</strong>istrationwere clearly pursu<strong>in</strong>g a popular path with the patients <strong>and</strong> media, <strong>and</strong> resistantmembers of the medical staff were forced to go underground <strong>in</strong> the form of passiveaggressive resistance. Another unexpected negative from this attentionemanated from senior leadership at the health system. So the question became,Could leadership create a patient-centered care philosophy <strong>and</strong> survive?All of the vice presidents were removed <strong>and</strong> replaced twice over a three-yearperiod until the right comb<strong>in</strong>ation of warm, car<strong>in</strong>g, empower<strong>in</strong>g <strong>in</strong>dividualswere put <strong>in</strong> place; <strong>in</strong>terest<strong>in</strong>g enough, they were all women.Hence, the Man Show began to take on an all-new look, <strong>and</strong> a nurtur<strong>in</strong>g,lov<strong>in</strong>g environment began to take hold.PhysiciansThe obvious key to the success of this program was to f<strong>in</strong>d physicians who had adeep moral belief <strong>in</strong> patient empowerment. There were three very religious <strong>in</strong>dividualswho emerged as leaders <strong>in</strong> our efforts. Each represented a different specialty,<strong>and</strong> each had commonsense <strong>in</strong>fluence over the other physicians on staff.These docs helped keep th<strong>in</strong>gs on an even keel <strong>in</strong> meet<strong>in</strong>gs where confrontationwas the core <strong>in</strong>tent of many of those threatened by this new philosophy.Issues over non<strong>in</strong>vasive complementary techniques like massage <strong>and</strong> spiritualtouch came to the forefront of these medical staff meet<strong>in</strong>gs. Open medicalrecords, unlimited visit<strong>in</strong>g hours, unlimited access to psychologists, clergy, familymembers, <strong>and</strong> even pets were often topics that engendered heated discussionsfrom the bulls, or the bullies.The other phenomena that developed were resistance to all forms of generalchange. Where a public work-out center might have been embraced <strong>in</strong> the traditionalworld of old W<strong>in</strong>dber medic<strong>in</strong>e, <strong>in</strong> the new order it was resisted.Musicians <strong>in</strong> the halls were seen to be <strong>in</strong>vasive, as was massage for the patients,
430 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEemployees, <strong>and</strong> physicians. The physicians were the most difficult <strong>and</strong> mostimportant change agents. At times they acted as desperate victims as the coreof their power was dim<strong>in</strong>ished.EmployeesAnother key to the process was the employee. Change at the staff level was critical.Employees were rewarded for be<strong>in</strong>g caught car<strong>in</strong>g. They were empoweredto make th<strong>in</strong>gs right when patients or their family members were upset. Theywere encouraged to go the extra mile when necessary. For the first two yearsthis worked beautifully.As the bottom fell out of health care due to the shortage of registered nurses<strong>and</strong> the impact of the Balanced Budget Amendment, however, those employeeswho were motivated not to change began us<strong>in</strong>g the Planetree philosophy as alever to get even with adm<strong>in</strong>istration.Any time the employees, specifically nurses <strong>and</strong> laboratory technologists,were upset about pay raises or work<strong>in</strong>g conditions, they were less attentive tothe patients, <strong>and</strong> told the patients <strong>and</strong> their families that they were overworked<strong>and</strong> underpaid. Both of these statements were true.The manner <strong>in</strong> which management corrected this problem <strong>in</strong>volved surround<strong>in</strong>gthe patients with volunteers <strong>and</strong> complementary care givers. A typicalpatient would be seen by a massage therapist, aroma therapist, behavioralpsychologist, clergy, volunteers with art carts, <strong>and</strong>, when desired, pets for pettherapy.FEEDBACK USEPlanetree teams were put together to teach, tra<strong>in</strong>, <strong>and</strong> gather feedback from theemployees. After the first two years of change, mean<strong>in</strong>gful growth, <strong>and</strong> strongprofits, dur<strong>in</strong>g which time the employees enjoyed significant <strong>in</strong>creases <strong>in</strong> salary,morale was at an all time high.Dur<strong>in</strong>g the follow<strong>in</strong>g two years the f<strong>in</strong>ances were the driv<strong>in</strong>g force beh<strong>in</strong>dthe primary unrest. These Planetree teams served an <strong>in</strong>tegral part of the curativeprocess for advanc<strong>in</strong>g the philosophy.Each meet<strong>in</strong>g started with a vent<strong>in</strong>g session <strong>in</strong>tended to allow the employees<strong>in</strong> attendance the opportunity to express themselves. After each session theteam would prepare anonymous debrief<strong>in</strong>g reports to be read by senior leadership.This feedback began to br<strong>in</strong>g light to the subject of the employee’sconcerns.The Planetree team made sure that all participants had access to the summarypages as well. The president discussed the f<strong>in</strong>d<strong>in</strong>gs with employees dur<strong>in</strong>ghis regular employee meet<strong>in</strong>gs. Due to these f<strong>in</strong>d<strong>in</strong>gs, employee satisfaction
WINDBER MEDICAL CENTER 431surveys, Lunch with the President, <strong>in</strong>dividual meet<strong>in</strong>gs, <strong>and</strong> newsletters wereall forthcom<strong>in</strong>g.In spite of all of these ongo<strong>in</strong>g efforts, noth<strong>in</strong>g changed until a w<strong>in</strong>dfall cameto the hospital through a settlement with an <strong>in</strong>surance provider that enabledthe hospital to give 30 percent raises to key caregivers. The reality here is thathappy, well-paid employees were critical to the success of Planetree.DESIGN: PLANETREE PHILOSOPHYThe core of the Planetree philosophy is as old as human heal<strong>in</strong>g <strong>and</strong> car<strong>in</strong>g. It<strong>in</strong>volves the holistic care that nurtures the m<strong>in</strong>d, body, <strong>and</strong> spirit. It embracesthe creation of an environment that recognizes a heal<strong>in</strong>g process that does notemanate purely from drugs or surgeries. It is a truth that has been known forthous<strong>and</strong>s of years but has been overpowered dur<strong>in</strong>g the past fifty years bymodern medic<strong>in</strong>es.Planetree embraces a philosophy that <strong>in</strong>cludes the creation of a heal<strong>in</strong>g environmentthrough architecture, natural light, plants, music, aroma therapy, thepresence <strong>and</strong> encouragement of loved ones, <strong>and</strong> the nurtur<strong>in</strong>g provided byclergy <strong>and</strong> psychologists.Each day bread is baked <strong>in</strong> the hallways, popcorn is popped <strong>in</strong> the lobby,music is played, <strong>and</strong> massage is offered to patients as they wait, to the employeesat their workstations, <strong>and</strong> to the physicians <strong>in</strong> the hallways <strong>and</strong> <strong>in</strong> their offices.More important, the patients are empowered to ask, participate, <strong>and</strong> know.It is all about the belief that heal<strong>in</strong>g can occur <strong>in</strong> many ways.INTERVENTION: FUNDAMENTAL CHANGESThe work of the Planetree teams, the senior leadership, the board <strong>and</strong> staff wasall-<strong>in</strong>clusive <strong>and</strong> cont<strong>in</strong>ues to this day. Each aspect of this change culturewas carefully planned, executed, <strong>and</strong> managed.• Formal on-the-job tra<strong>in</strong><strong>in</strong>g <strong>and</strong> classroom tra<strong>in</strong><strong>in</strong>g from <strong>in</strong>ternal Planetreeleaders, consultants from Planetree staff, <strong>and</strong> outside consultants• Annual refresher course for all employees• Employee tra<strong>in</strong><strong>in</strong>g course for all new hires• Establishment of an anonymous telephone hotl<strong>in</strong>e for employees toidentify any feel<strong>in</strong>gs of wrong do<strong>in</strong>g toward them• Celebration of major accomplishments with parties, ice cream sundaes,d<strong>in</strong>ner certificates, awards, trips to baseball games, <strong>and</strong> cash; recognition<strong>in</strong> written communication <strong>and</strong> gifts from senior managers
432 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGE• Empowerment of employees with the authority to care for patients’needs up to $300 <strong>in</strong> costs per <strong>in</strong>cident• A portion of the employee compensation is tied to performanceSuccess Factors1. The extensive tra<strong>in</strong><strong>in</strong>g by professionals <strong>and</strong> peers2. Mention of Planetree <strong>in</strong> every communication to employees made itthe s<strong>in</strong>gle focus of the mission of the organization3. Employee recognition by senior leadership4. The president’s walk the talk approach5. The humanistic approach to the removal of employees who wouldnever be able to provide Planetree care6. Recognition by local, regional, <strong>and</strong> national press for the uniquepatient-centered care, trademarked W<strong>in</strong>dbercare, provided by theemployees <strong>and</strong> volunteers at W<strong>in</strong>dber Medical CenterTogether, these factors helped overcome the <strong>in</strong>ternal resistance <strong>and</strong> programobstacles.THE PLANETREE TEAMSThe value of the Planetree teams cannot be discounted. It was because of theirongo<strong>in</strong>g work <strong>and</strong> dedication that progress occurred. These employees workeddozens of hours on their own time at special meet<strong>in</strong>gs on <strong>and</strong> off campus toensure that the Planetree sessions were mean<strong>in</strong>gful.Because the sessions were peer to peer, they were much more effective.All employees were required to attend sessions where sensitivity tra<strong>in</strong><strong>in</strong>goccurred. Role-play<strong>in</strong>g of employees as patients was an important part of theprograms.A SWAT team made up of social workers, psychologists, <strong>and</strong> clergy provideson-the-job help. This crisis <strong>in</strong>tervention team was an important aspect ofprovid<strong>in</strong>g support for employees when crisis situations arise.LOOKING BACKThe transition of a small, 102-bed, urban hospital located <strong>in</strong> a community ofless than four thous<strong>and</strong> people to national prom<strong>in</strong>ence was neither easy norsafe. The president of the organization was challenged numerous times by
WINDBER MEDICAL CENTER 433physicians, system executives, <strong>and</strong> employees. It was a passion for change thatallowed the dream to become a reality. None of the goals could have beenaccomplished without hard work <strong>and</strong> commitment from the entire staff.The Change CircleThe textbooks talk about unfreez<strong>in</strong>g, chang<strong>in</strong>g, <strong>and</strong> refreez<strong>in</strong>g a culture. In thiscase the refreez<strong>in</strong>g of the culture is a never-end<strong>in</strong>g task. The change circle formov<strong>in</strong>g a traditional hospital to the Planetree model takes years. As the reputationof the organization cont<strong>in</strong>ued to grow, new physicians <strong>and</strong> employeesattracted to the holistic, car<strong>in</strong>g culture came seek<strong>in</strong>g employment at the facility.The addition of these special caregivers enabled the culture to change moredramatically <strong>and</strong> completely. It also began to balance the power of the medicalstaff.The organization was a typical Industrial Revolution model. Employeesclocked <strong>in</strong> each day m<strong>in</strong>utes before they were to be at their position with<strong>in</strong> thehospital. They went to their workstations, <strong>and</strong> the day revolved aroundthe physicians’ <strong>and</strong> employees’ schedules.In many cases, the staff did not recognize the patient as a customer. Thepatient was an <strong>in</strong>convenience. Their presence was an <strong>in</strong>terruption.In order to see the need for change, studies depict<strong>in</strong>g the future demise ofthe organization were made available at employee meet<strong>in</strong>gs. These studies werenot used as gospel but only as a warn<strong>in</strong>g signal that the organization had fiveyears to make a significant change.The importance of mak<strong>in</strong>g the patient the center of care was a difficult job.It was totally foreign to the culture of much of health care. Although theemployees of W<strong>in</strong>dber Medical Center <strong>and</strong> especially those of the palliative careunit were exceptionally car<strong>in</strong>g <strong>in</strong>dividuals, the general rule of thumb was thatthe rules were the rules. Patients were scheduled at the convenience of thephysician <strong>and</strong> the technician. This required the changes previously outl<strong>in</strong>ed.It Gets Worse Before It Gets BetterThe overall atmosphere of the organization was one of wait<strong>in</strong>g for the wave topass over. In fact, each aspect of the Planetree philosophy was underm<strong>in</strong>ed,ignored, <strong>and</strong> blatantly pushed aside while the employees waited for their fifthpresident to be fired or their sixth manager to be promoted or dismissed. It wasthe revolv<strong>in</strong>g door theory. If you ignore it, they will go away. When it becameobvious that the change agents <strong>and</strong> the philosophy were, for the most part,go<strong>in</strong>g to stay, then positive re<strong>in</strong>forcement could beg<strong>in</strong> to take hold.It was also a we-they relationship with the physicians <strong>and</strong> employees. Onephysician had all of the nurses on his group e-mail <strong>and</strong> used that e-mail tounderm<strong>in</strong>e the senior leaders on a regular basis. So those employees would cl<strong>in</strong>gto their protective physician for power as they ignored management.
434 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEI’m from the Government <strong>and</strong> I’m Here to HelpAs the program moved forward <strong>and</strong> received the positive attention of localpoliticians, federal, state, <strong>and</strong> local grants began to pour <strong>in</strong>to the organizationfor special programs, research projects, <strong>and</strong> capital additions.Instead of pleas<strong>in</strong>g the employees, mak<strong>in</strong>g them happy <strong>and</strong> secure, thesegrants caused jealously between the departments that received them <strong>and</strong>those that did not. As new build<strong>in</strong>gs came on l<strong>in</strong>e, the employees located <strong>in</strong>the older build<strong>in</strong>gs were resentful <strong>and</strong> openly hostile. As new employees cameon board, the long-time employees were disruptive <strong>and</strong>, many times, unk<strong>in</strong>dtoward them.It was a very <strong>in</strong>terest<strong>in</strong>g evolution that did not <strong>and</strong> could not work out untilsalaries, remodel<strong>in</strong>g, <strong>and</strong> attention occurred housewide, five years <strong>in</strong>to thetransition.Gett<strong>in</strong>g Back on TrackAfter several years of tra<strong>in</strong><strong>in</strong>g, growth through <strong>in</strong>creased census <strong>and</strong> patientnumbers, grants, <strong>and</strong> national recognition, Planetree began to take hold as away of life at W<strong>in</strong>dber Medical Center. There are still physicians who do notwant to allow patient empowerment, there are still not always care teams <strong>in</strong>place, there are days when patients don’t smell the bread, see the volunteers,or see the special complementary medic<strong>in</strong>e specialists, but 95 percent of thetime, th<strong>in</strong>gs are as they should be.Because we wanted everyone to feel as though they were <strong>in</strong> the best five starhotel, a spa, <strong>and</strong> a heal<strong>in</strong>g garden, we hired a hotel manager to run our housekeep<strong>in</strong>g,dietary, <strong>and</strong> ma<strong>in</strong>tenance departments <strong>and</strong> provide room service, freshflowers, bread, live music, artwork, <strong>and</strong> founta<strong>in</strong>s <strong>and</strong> <strong>in</strong>vite loved ones to staywith their sick relatives. We have unlimited visit<strong>in</strong>g hours. We also providepajama bottoms <strong>and</strong> bathrobes. More like their home or better. A heal<strong>in</strong>genvironment.In our birth<strong>in</strong>g suites, we have midwives <strong>in</strong> room deliveries <strong>and</strong> use suchcomplementary therapies as birth<strong>in</strong>g balls, aromatherapy, music <strong>and</strong> massagetherapy, <strong>in</strong>fant massage, Jacuzzi tubs, <strong>and</strong> h<strong>and</strong>-held massagers. We also havedouble beds for the families to use after the baby is born. Mother, father, <strong>and</strong>baby occupy the same room. These birth<strong>in</strong>g suites also conta<strong>in</strong> computerhookups to the Internet, live music, <strong>and</strong> TV-VCR, <strong>and</strong> we bake fresh bread daily<strong>and</strong> offer tea <strong>and</strong> coffee.As part of our commitment to the community, we have added a “Center forLife.” This is the senior center for senior citizens. Seniors come each day <strong>and</strong>have access to our gym, our doctors, <strong>and</strong> tra<strong>in</strong>ed staff. In this center, oldercitizens have access to social services <strong>and</strong> preventative health options.
WINDBER MEDICAL CENTER 435The medical center has a palliative care unit for our hospice for pa<strong>in</strong> control,respite for the family, <strong>and</strong> end-of-life care. We can accommodate a family of four<strong>in</strong> each patient room.The Joyce Murtha Breast Care Center is a model of breast care for women. Itconta<strong>in</strong>s all state-of-the-art equipment for digital mammography, breast biopsy,osteoporosis, <strong>and</strong> 3D ultrasound, <strong>and</strong> even has a cosmetologist to assist womenwho are go<strong>in</strong>g through chemotherapy treatments.Quantify<strong>in</strong>g the Results: ExhibitsAfter several years of patient-centered care, some curious anomalies beganto appear. Our patients had the lowest mortality rate for adjusted acuity, theyhad an extremely low length of stay, <strong>and</strong> our <strong>in</strong>fection rate was well below thenational average. (See Exhibits 18.1–18.3.)Exhibit 18.1. Average Length of Stay4.54WMCPeer group3.532.521.510.501998 1999 2000 2001 2002 2003 2004Source: The Hospital Council of Western Pennsylvania. Repr<strong>in</strong>ted with permission.
436 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEExhibit 18.2. Nosocomial Infection Rate543210Jan.April July Oct.Jan.2003–2004Average rate for 2003–2004 = 0.96Source: The Hospital Council of Western Pennsylvania. Repr<strong>in</strong>ted with permission.Exhibit 18.3. Mortality Comparison by HospitalOct. '99–Sep. '001.61.41.21.00.80.60.40.20.0WMCHospital AHospital BHospital CHospital DHospital EHospital FHospital GRisk-adjusted <strong>in</strong>dex isstatistically significantat a confidence levelof 95%.Source: The Hospital Council of Western Pennsylvania. Repr<strong>in</strong>ted with permission.
Mov<strong>in</strong>g Ahead Aga<strong>in</strong>The Planetree philosophy is the future of health care. It embraces all aspects ofholistic care.• We value Planetree as the medical center’s number-one priority• Patient-centered care is the center of the philosophyWINDBER MEDICAL CENTER 437W<strong>in</strong>dber, PA—David Klementik, Chairman of W<strong>in</strong>dber Medical Center’s Boardof Trustees, was named today by the prestigious publication Modern Healthcareas Trustee of the Year for hospitals <strong>and</strong> health systems with fewer than 250 bedsor annual revenue of less than $75 Million.Dur<strong>in</strong>g a recent visit to W<strong>in</strong>dber Medical Center, former Health <strong>and</strong> HumanServices Secretary Donna Shalala summed up the W<strong>in</strong>dberCare vision brilliantly,say<strong>in</strong>g: “Close your eyes if you want to see health care <strong>in</strong> the future. Then openthem, <strong>and</strong> see the extraord<strong>in</strong>ary facility here at W<strong>in</strong>dber. This is the future ofhealth care, it focuses on prevention <strong>and</strong> research. Keep<strong>in</strong>g people healthy <strong>and</strong>focus<strong>in</strong>g on the end of life” (Modern Healthcare Magaz<strong>in</strong>e, January 22, 2001).Modern Maturity selected W<strong>in</strong>dber Medical Center as one of the top 15Hospitals with Heart <strong>in</strong> the United States.Its president was chosen as Outst<strong>and</strong><strong>in</strong>g Rural Health Leader of the year forPennsylvania <strong>in</strong> 2001.LESSONS LEARNEDLesson #1—Work with the physicians first, last, <strong>and</strong> always.Lesson #2—Make sure that the right senior leadership is <strong>in</strong> place early<strong>and</strong> often.Lesson #3—Establish an effective employee screen<strong>in</strong>g <strong>and</strong> evaluationsystem. Some people never can or will be Planetree.Lesson #4—Be sure that the employees are taken care of first, last, <strong>and</strong>always. Happy employees make happy patients.Lesson #5—Recognition of team players by senior leadership on a regularbasis is important <strong>and</strong> powerful.Lesson #6—Don’t give up.
438 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEABOUT THE CONTRIBUTORF. Nicholas Jacobs currently is president of W<strong>in</strong>dber Medical Center <strong>and</strong> theW<strong>in</strong>dber Research Institute. He has been with the Conemaugh Health Systems<strong>in</strong>ce August 1993 <strong>and</strong> before that was vice-president for adm<strong>in</strong>istrative servicesat Mercy Medical Center for five years. Mr. Jacobs holds a master’s degree fromIndiana <strong>University</strong> of Pennsylvania <strong>and</strong> Carnegie Mellon <strong>University</strong>, plus a healthcare certification from Harvard <strong>University</strong> <strong>and</strong> the Grantsmanship Center. He is aFellow <strong>in</strong> the American College of Health Care Executives <strong>and</strong> was awarded theCommunity Rural Health Leader of the Year <strong>in</strong> 2001 by the Pennsylvania RuralHealth Association. In addition, Mr. Jacobs served as an adjunct <strong>in</strong>structor forSt. Francis <strong>University</strong> <strong>and</strong> has been a guest lecturer at Ohio State <strong>University</strong>, theGraduate School of Indiana <strong>University</strong> of Pennsylvania, Carnegie Mellon<strong>University</strong>, <strong>and</strong> other regional, state, <strong>and</strong> national conferences <strong>and</strong> workshops.
SCHAPTER NINETEENConclusionPractitioner Trends <strong>and</strong> F<strong>in</strong>d<strong>in</strong>gsSTo provide additional context for the practices presented <strong>in</strong> this book, we askedcontributors to complete a survey to ga<strong>in</strong> a more comprehensive view of theirorganizational change <strong>and</strong> leadership development program. The surveycomprised of five themed sections: (1) bus<strong>in</strong>ess diagnosis (<strong>in</strong>clud<strong>in</strong>g the typeof <strong>in</strong>itiative, bus<strong>in</strong>ess revenues, <strong>and</strong> costs <strong>and</strong> revenues associated with the<strong>in</strong>itiative), (2) resistance to change, (3) design <strong>and</strong> implementation,(4) evaluat<strong>in</strong>g the <strong>in</strong>itiative, <strong>and</strong> (5) summary.Though each organization differs with respect to area of expertise, amount ofyearly revenues, <strong>and</strong> types of <strong>in</strong>itiatives undertaken, each shares a similar goalof creat<strong>in</strong>g more successful <strong>and</strong> results-oriented organizations by way oforganizational change <strong>and</strong> leadership development.COMPANY AND INITIATIVE BACKGROUND 440BUSINESS DIAGNOSIS AND ASSESSMENT 440Table 19.1: Top Five Reasons Organizations Madethe Bus<strong>in</strong>ess Case for the Initiative, <strong>in</strong> Order of Frequency 441Table 19.2: Assessment Methods by Frequency of Use 442RESISTANCE TO CHANGE 442Table 19.3: Types of Resistance Encountered, <strong>in</strong> Orderof Percentage Frequency Encountered 443REDUCING RESISTANCE 443Table 19.4: Top Champions of Change <strong>in</strong> the CompaniesInitiative, <strong>in</strong> Order of Percentage Frequency 444Table 19.5: Top Critical Success Behaviors of Senior <strong>Leadership</strong>for the Initiative, <strong>in</strong> Order of Percentage Frequency 444Table 19.6: Challenges <strong>in</strong> Ga<strong>in</strong><strong>in</strong>g Consensus Dur<strong>in</strong>g <strong>and</strong> for<strong>Best</strong> Practice Organizations’ Initiatives, <strong>in</strong> Order of Frequency 445439
440 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGEDESIGN AND IMPLEMENTATION 445Table 19.7: Content That Was Most Emphasized<strong>in</strong> Tra<strong>in</strong><strong>in</strong>g Initiatives, <strong>in</strong> Order of Frequency of Use 446Table 19.8: Specific Content Most Emphasized with<strong>in</strong>Tra<strong>in</strong><strong>in</strong>g Interventions, <strong>in</strong> Order of Percentage Frequency 447Table 19.9: Key Factors for <strong>Leadership</strong> <strong>Development</strong><strong>and</strong> Change, <strong>in</strong> Order of Frequency of Use 447Table 19.10: Other Key Factors Indicated by <strong>Best</strong>Practice Organizations 448EVALUATING THE OD/HRD INITIATIVE 448Table 19.11: Evaluation Method Usage 450Table 19.12: Positive Results of Initiatives, <strong>in</strong> Orderof Percentage Frequency 450SUMMARY 450NOTES 451COMPANY AND INITIATIVE BACKGROUNDThe organizations appear<strong>in</strong>g <strong>in</strong> this book vary <strong>in</strong> the number of employees, revenues,<strong>and</strong> <strong>in</strong>dustries. Industries represented throughout this book are aerospace,consult<strong>in</strong>g services, consumer products, electronics, f<strong>in</strong>ancial services,higher education, hospitality <strong>and</strong> restaurants, <strong>in</strong>formation technology, manufactur<strong>in</strong>g,<strong>and</strong> telecommunications. Respondents come from different divisions,<strong>in</strong>clud<strong>in</strong>g commercial services, corporate, facilities, human resources, manufactur<strong>in</strong>g,<strong>and</strong> science <strong>and</strong> technology, among others.BUSINESS DIAGNOSIS AND ASSESSMENTThe greatest compliment that was ever paid me was when one asked mewhat I thought, <strong>and</strong> attended to my answer.—Henry David Thoreau 1Prior to embark<strong>in</strong>g on any <strong>in</strong>itiative to change some aspect of organizationalculture, each organization engaged <strong>in</strong> diagnosis, us<strong>in</strong>g a customized needsassessment to further determ<strong>in</strong>e the most prudent course of action. The <strong>in</strong>itialstep of assess<strong>in</strong>g guarantees that <strong>in</strong>itiatives <strong>and</strong> <strong>in</strong>terventions are well thoughtout <strong>and</strong> planned. Needs assessment provided organizations, its leaders,
CONCLUSION 441Table 19.1. Top Five Reasons Organizations Made the Bus<strong>in</strong>essCase for the Initiative, <strong>in</strong> Order of FrequencyBus<strong>in</strong>ess CaseFrequencyProductivity needs 1Competitive pressures 2Consumer needs 3Growth 4Corporate vision 5employees, <strong>and</strong> customers the opportunity to uncover specific issues <strong>and</strong>perspectives on change.Diagnosis for our best practice organizations considered the <strong>in</strong>creas<strong>in</strong>g numbersof competitors from a grow<strong>in</strong>g global marketplace, fluctuat<strong>in</strong>g economicconditions, <strong>and</strong> the rise <strong>and</strong> fall of <strong>in</strong>dustries. Another challenge organizationsare fac<strong>in</strong>g is the realization <strong>and</strong> acknowledgement of the importance of customers<strong>in</strong> their decision-mak<strong>in</strong>g processes <strong>and</strong> potentially a more importantstakeholder—the employee.<strong>Best</strong> practice organizations used a variety of methods to measure the need fortheir <strong>in</strong>itiatives. These methods ranged from observation of work practices <strong>and</strong>employee behavior to more concrete <strong>and</strong> less subjective measures such as surveys,focus groups, <strong>and</strong> performance appraisals. The later methods helped reducethe number of alternate hypotheses that were made by the program designers<strong>and</strong> also served to re<strong>in</strong>force the perceptions of senior management <strong>and</strong> programdesigners’ use of observation techniques. Survey<strong>in</strong>g <strong>and</strong> appraisals took theform of several <strong>in</strong>struments <strong>in</strong> the assessment phase, <strong>in</strong>clud<strong>in</strong>g 360-degreeassessment, multirater assessment <strong>in</strong>struments, <strong>and</strong> various <strong>in</strong>dividual assessment<strong>in</strong>struments.The diagnosis <strong>and</strong> assessment phase of the best practice leadership development<strong>and</strong> change programs proved to be an excellent method of ga<strong>in</strong><strong>in</strong>g support<strong>and</strong> market<strong>in</strong>g the <strong>in</strong>itiative. By better underst<strong>and</strong><strong>in</strong>g the learn<strong>in</strong>g <strong>and</strong> changeneeds of participants, organizations became more knowledgeable <strong>and</strong> more ableto adapt to the chang<strong>in</strong>g needs <strong>and</strong> dem<strong>and</strong>s of its participants <strong>and</strong> employees.The results of the assessment <strong>in</strong>struments often formed the basis of the tra<strong>in</strong><strong>in</strong>gprograms <strong>and</strong> other specific company change <strong>in</strong>itiatives.Assessment methods <strong>in</strong> the “Other” category ranged <strong>in</strong> depth of diagnostictechniques from f<strong>in</strong>ancial performance to quality <strong>in</strong>dicators to employeeturnover to <strong>and</strong> customer feedback to comments from board members.
442 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGETable 19.2. Assessment Methods by Frequency of UseAssessment MethodsFrequency of UseObservation 1Surveys 2Interviews 3Focus groups 4Meet<strong>in</strong>gs 5Performance appraisals 6Other 7Survey box/op<strong>in</strong>ions 8RESISTANCE TO CHANGEYou have to have confidence <strong>in</strong> your ability, <strong>and</strong> then be toughenough to follow through.—Rosalynn Carter 2In th<strong>in</strong>k<strong>in</strong>g about the forces of change—technology, economics, competition,social <strong>and</strong> cultural, <strong>and</strong> the chang<strong>in</strong>g workforce, <strong>in</strong>clud<strong>in</strong>g diversity <strong>and</strong> skillslevels—it seems that every organization is <strong>in</strong> a constant state of change. Oneof the most challeng<strong>in</strong>g obstacles to overcome <strong>in</strong> any organizational transformationeffort is the resistance encountered dur<strong>in</strong>g change. Resistance can bedue to any comb<strong>in</strong>ation of factors, <strong>in</strong>clud<strong>in</strong>g psychological, technological, orcultural fears, security or economic concerns, or fear of the unknown, to namea few. Of those who responded, the most prevalent obstacles to implement<strong>in</strong>gthe <strong>in</strong>itiative were difficulty <strong>in</strong> ga<strong>in</strong><strong>in</strong>g consensus from disparate parties(40 percent of respondents) <strong>and</strong> ma<strong>in</strong>ta<strong>in</strong><strong>in</strong>g that managers are accountablefor follow<strong>in</strong>g through with action items (33 percent of respondents). Surveydata also showed that 27 percent responded to hav<strong>in</strong>g difficulty with each ofthe follow<strong>in</strong>g items: implement<strong>in</strong>g change <strong>in</strong> different regions of the world,achiev<strong>in</strong>g project sponsorship, assist<strong>in</strong>g employees <strong>in</strong> apply<strong>in</strong>g new technologies<strong>and</strong> applications, <strong>and</strong> others, <strong>in</strong>clud<strong>in</strong>g cont<strong>in</strong>ued learn<strong>in</strong>g <strong>and</strong> susta<strong>in</strong><strong>in</strong>gthe focus on the <strong>in</strong>itiative. All organizations reported some type ofresistance.
CONCLUSION 443Table 19.3. Types of Resistance Encountered, <strong>in</strong> Order of PercentageFrequency EncounteredTypes of ResistanceFrequencyFear of change, the unknown, <strong>and</strong> loss of control 1Time constra<strong>in</strong>ts 2Negative reaction to “soft skills” tra<strong>in</strong><strong>in</strong>g 3Negative reaction to failed prior <strong>in</strong>itiatives 4Sense of mistrust 5REDUCING RESISTANCEYou cannot shake h<strong>and</strong>s with a clenched fist.—Indira G<strong>and</strong>hi, 1982 3Although resistance is often viewed as negative, it was often viewed positivelyby our best practice organizations to help to guide the design <strong>and</strong> developmentof the leadership development <strong>and</strong> change <strong>in</strong>itiatives. Employees present<strong>in</strong>goppos<strong>in</strong>g viewpo<strong>in</strong>ts, or what some call “pushback,” were <strong>in</strong>stead perceived asa sound-board <strong>and</strong> sometimes as a “balanc<strong>in</strong>g system” for the organization. Ofcourse, a critical mass of supporters are necessary for any change <strong>in</strong>itiative. Thechallengers to the system, however, have proven to be important <strong>in</strong> balanc<strong>in</strong>gsystems that are too synchronous or closed <strong>in</strong> their decision-mak<strong>in</strong>g processes.Challengers serve to clarify <strong>and</strong> br<strong>in</strong>g more awareness of the <strong>in</strong>itiative to theorganization. It was proven through our best practice contributors that challengersare healthy to the system <strong>in</strong> this way. Employees need to be reassuredthat positive change is not someth<strong>in</strong>g to fear but <strong>in</strong>stead someth<strong>in</strong>g to beembraced for the organization. As described by Richard Beckhard <strong>in</strong> his modelfor resistanceFirst steps (F) (multiplied by) Vision (V) Dissatisfaction (D) (is greater than or overcomes) Resistance (R)It is therefore important to have stable <strong>and</strong> visible senior leadership that is supportiveof the changes tak<strong>in</strong>g place, a clear picture of what is go<strong>in</strong>g to be accomplishedas a whole system, step-by-step approaches to achieve change, <strong>and</strong> aclear underst<strong>and</strong><strong>in</strong>g throughout the organization of the dissatisfaction, so thatthe entire organization is aware of what needs to be changed for the greatergood.
444 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGETable 19.4. Top Champions of Change <strong>in</strong> the Companies Initiative, <strong>in</strong> Orderof Percentage FrequencyChange Agents Frequency (%)President <strong>and</strong> chief officers 73Senior executives 60OD, HRD, tra<strong>in</strong><strong>in</strong>g, strategy, implementation team 33Entire organization 13Driven jo<strong>in</strong>tly by managers 7Table 19.5. Top Critical Success Behaviors of Senior <strong>Leadership</strong> for theInitiative, <strong>in</strong> Order of Percentage FrequencyBehavior Frequency (%)Allocates funds for the <strong>in</strong>itiative 93Models behavior consistent with strategy 73Integrates <strong>in</strong>itiative <strong>in</strong>to strategic plan 60Facilitates education or tra<strong>in</strong><strong>in</strong>g 47Participates <strong>in</strong> education <strong>and</strong> tra<strong>in</strong><strong>in</strong>g 73Articulates case for change 67Ties compensation to <strong>in</strong>itiative 27Because of the need for consistency <strong>in</strong> senior leadership support, we askedour contribut<strong>in</strong>g organizations which ways organizational leaders showed supportfor the <strong>in</strong>itiative. Results <strong>in</strong>dicated that leadership makes significantattempts <strong>and</strong> gestures to model behavior, quell fears, <strong>and</strong> work with fund<strong>in</strong>gsources.The organizations with<strong>in</strong> this book clearly make the choice to treat peoplewith dignity, underst<strong>and</strong><strong>in</strong>g, <strong>and</strong> respect while balanc<strong>in</strong>g organizational needs<strong>and</strong> objectives. And they are aware that the truth of one <strong>in</strong>dividual is not necessarily“the Truth but simply one person’s wisdom. Organizations <strong>in</strong> this bookclearly underst<strong>and</strong> that employees are adult learners with various <strong>and</strong> diversepositions, needs, <strong>in</strong>terests, learn<strong>in</strong>g styles, personality styles, levels of <strong>in</strong>tellectualdevelopment, <strong>and</strong> th<strong>in</strong>k<strong>in</strong>g styles (see Table 19.6).
CONCLUSION 445Table 19.6. Challenges <strong>in</strong> Ga<strong>in</strong><strong>in</strong>g Consensus Dur<strong>in</strong>g <strong>and</strong> for <strong>Best</strong> PracticeOrganizations’ Initiatives, <strong>in</strong> Order of FrequencyOrganizational Underst<strong>and</strong><strong>in</strong>gRank<strong>in</strong>g of Frequencyof Underst<strong>and</strong><strong>in</strong>gDiverse <strong>in</strong>terests, positions, <strong>and</strong> needs 1Diverse th<strong>in</strong>k<strong>in</strong>g styles 2Different levels of <strong>in</strong>tellectual development 3Different personality styles 4Different communication skill-levels <strong>and</strong> styles 5Diverse learn<strong>in</strong>g styles 6DESIGN AND IMPLEMENTATIONImag<strong>in</strong>ation cont<strong>in</strong>ually frustrates tradition, that is its function.—John PfeifferOrganizations are beg<strong>in</strong>n<strong>in</strong>g to recognize the need to <strong>in</strong>tegrate their <strong>in</strong>itiatives<strong>in</strong>to the exist<strong>in</strong>g culture <strong>and</strong> environment of the company. There is also a greaterawareness seen <strong>in</strong> this best practices book than others of the human factors<strong>in</strong>volved <strong>in</strong> champion<strong>in</strong>g or enabl<strong>in</strong>g change. From consider<strong>in</strong>g the employeeas customer to be<strong>in</strong>g more aware of client <strong>in</strong>put <strong>in</strong>to <strong>in</strong>ternal systems, thereappears to be a new emphasis on people-centered <strong>in</strong>itiatives. The mention ofwork-life balance as an important <strong>in</strong>itiative for implement<strong>in</strong>g change reflects thedevelopment of appreciation for employees. In addition, the overwhelm<strong>in</strong>g supportfor leadership development programs may reveal the importance of demonstrat<strong>in</strong>ga will<strong>in</strong>gness to develop effective managers rather than allow poormanagement to negatively affect productivity, employee morale, <strong>and</strong> retention.Some <strong>in</strong>terest<strong>in</strong>g remarks <strong>in</strong> the “Other” category also related to effectivecommunication <strong>in</strong>cluded rais<strong>in</strong>g <strong>and</strong> resolv<strong>in</strong>g issues; faster decision mak<strong>in</strong>g;<strong>in</strong>creased alignment; commitment to shared purpose; courage; motivation;knowledge of organizational structure, operations, products, <strong>and</strong> services; <strong>and</strong>Sensei (ability to teach <strong>and</strong> transfer knowledge to others).Follow<strong>in</strong>g the proven wisdom that there must be buy-<strong>in</strong> <strong>and</strong> commitmentfrom senior leaders, the majority of organizations <strong>in</strong>dicated presidents, chiefofficers, <strong>and</strong> other senior executives as top champions of change. What is relativelynew is the entire organization or “whole system” as a champion ofchange. These data acknowledge that it is not just top-level management, butall employees who play an important role <strong>in</strong> enabl<strong>in</strong>g change.
446 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGETable 19.7. Content That Was Most Emphasized <strong>in</strong> Tra<strong>in</strong><strong>in</strong>g Initiatives, <strong>in</strong> Order of Frequency of UseTeam<strong>in</strong>g, teamwork 1Customer service 2Ethics <strong>and</strong> <strong>in</strong>tegrity 3Giv<strong>in</strong>g <strong>and</strong> receiv<strong>in</strong>g feedback 4Results-based decision mak<strong>in</strong>g 5Coach<strong>in</strong>g 6Bus<strong>in</strong>ess acumen 7Emotional <strong>in</strong>telligence 8Innovation 9Systems th<strong>in</strong>k<strong>in</strong>g 10Build<strong>in</strong>g networks <strong>and</strong> alliances 11Diversity (race, ethnicity, th<strong>in</strong>k<strong>in</strong>g styles, or all forms) 12F<strong>in</strong>ancial acumen 13Productivity 14Sales 15Other 16Stress management 17Consensus build<strong>in</strong>g 18Diversity (specifically race or ethnicity) 19Ethics <strong>and</strong> <strong>in</strong>tegrity were <strong>in</strong>dicated by nearly half of the organizations asbe<strong>in</strong>g an area of emphasis <strong>in</strong> tra<strong>in</strong><strong>in</strong>g programs. Data around the need for ethics<strong>and</strong> <strong>in</strong>tegrity tra<strong>in</strong><strong>in</strong>g has rema<strong>in</strong>ed consistent throughout all of our best practiceresearch. Results-based decision mak<strong>in</strong>g as tra<strong>in</strong><strong>in</strong>g content <strong>in</strong>dicates a newlevel of accountability <strong>in</strong> mak<strong>in</strong>g decisions. Coach<strong>in</strong>g, emotional <strong>in</strong>telligence,<strong>and</strong> giv<strong>in</strong>g <strong>and</strong> receiv<strong>in</strong>g feedback all seem to demonstrate the desire torelate <strong>and</strong> communicate more effectively with others for more enabled <strong>and</strong> functionalworkplaces <strong>and</strong> teamwork, as well as faster decision mak<strong>in</strong>g <strong>and</strong> anemphasis on profitability, sales, <strong>and</strong> improvement of relationships <strong>in</strong> the workplacefor <strong>in</strong>creased retention.The top methods for the implementation of leadership development <strong>and</strong>change varied from results-driven practices for learn<strong>in</strong>g <strong>and</strong> transferr<strong>in</strong>g learn<strong>in</strong>gon-the-job to the k<strong>in</strong>d of <strong>in</strong>teractions <strong>and</strong> experiences of leaders throughoutall levels of the organization. Our best practice companies <strong>in</strong>dicated a diverse
CONCLUSION 447Table 19.8. Specific Content Most Emphasized with<strong>in</strong> Tra<strong>in</strong><strong>in</strong>gInterventions, <strong>in</strong> Order of Percentage FrequencyContent Frequency (%)Team<strong>in</strong>g, teamwork 73Giv<strong>in</strong>g <strong>and</strong> receiv<strong>in</strong>g feedback 53Results-based decision mak<strong>in</strong>g 47Ethics <strong>and</strong> <strong>in</strong>tegrity 47Customer service 47Coach<strong>in</strong>g 47Innovation 33Bus<strong>in</strong>ess acumen 33Emotional <strong>in</strong>telligence 27Table 19.9. Key Factors for <strong>Leadership</strong> <strong>Development</strong> <strong>and</strong> Change, <strong>in</strong> Order of Frequency of UseKey FactorFrequency of UseAction(able) learn<strong>in</strong>g 1Exposure to senior executives 2Increas<strong>in</strong>g awareness 3Experiential learn<strong>in</strong>g 4360-degree feedback 5Work<strong>in</strong>g from core <strong>in</strong>dividual values <strong>and</strong> vision 6Commitment to corporate vision <strong>and</strong> strategy 7Simulation-based learn<strong>in</strong>g 8Group <strong>in</strong>terventions 9Vision<strong>in</strong>g sessions 10Internal case studies 11Model<strong>in</strong>g 12Whole-scale <strong>in</strong>terventions 13Scenario plann<strong>in</strong>g 14Cross-functional rotations 15Assessment centers 16Organizational or corporate <strong>in</strong>dicator models 17Other 18
448 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGETable 19.10. Other Key Factors Indicated by <strong>Best</strong> Practice Organizations• Eight-week follow-up on action plans• <strong>Leadership</strong> development tra<strong>in</strong><strong>in</strong>g, employee behavior st<strong>and</strong>ards, measur<strong>in</strong>g theimportant th<strong>in</strong>gs, accountability at all levels, communications at all levels• Shared ownership of ideas, trust <strong>in</strong>dividual <strong>and</strong> group expression <strong>and</strong>improvisation• Dedicated <strong>in</strong>ternal coaches to participants• Cross-functional strategic leadership teams• Use of <strong>in</strong>formal op<strong>in</strong>ion leaders identified through survey <strong>and</strong> targetedbehaviors for change• Personal growth <strong>and</strong> behavior/learn<strong>in</strong>g plan <strong>and</strong> written contract; postprogramreassessment n<strong>in</strong>e to twelve months follow<strong>in</strong>g participation• <strong>Development</strong> of a leadership strategy that is aligned with <strong>and</strong> helps drive thebus<strong>in</strong>ess strategy• Build<strong>in</strong>g of effective networks <strong>and</strong> th<strong>in</strong>k<strong>in</strong>g without boundariesset of implementation tactics that <strong>in</strong>cluded whole-scale <strong>in</strong>terventions,simulation-based learn<strong>in</strong>g, <strong>and</strong> experiential learn<strong>in</strong>g that form the foundationfor effective learn<strong>in</strong>g. By far, action learn<strong>in</strong>g led the way <strong>in</strong> the most popularform of learn<strong>in</strong>g, because of its emphasis <strong>and</strong> ease of measurement.Key factors <strong>in</strong> the “Other” category <strong>in</strong>cluded such practices as storytell<strong>in</strong>g <strong>and</strong>susta<strong>in</strong><strong>in</strong>g a leadership change culture through consistent communication<strong>and</strong> common language for positive cultural change throughout the organization.When asked what other remarkable key features that organizations leveragedfor the success of their leadership development <strong>and</strong> change program, our bestpractice organizations <strong>in</strong>dicated several practices worthy of not<strong>in</strong>g:EVALUATING THE OD/HRD INITIATIVEIt is never too late to become what you might have been.—George Eliot 4Although the evaluation stage is arguably one of the most important componentsof the leadership development <strong>and</strong> change process, it is often not giventhe attention it deserves. Beckhard <strong>and</strong> Harris (1977) def<strong>in</strong>ed evaluation as“a set of planned, <strong>in</strong>formation-gather<strong>in</strong>g, <strong>and</strong> analytical activities undertakento provide those responsible for the management of change with a satisfactoryassessment of the effects <strong>and</strong>/or progress of the change effort.” 5 Nearly all companiesuse various systems to evaluate the effectiveness of the OD <strong>in</strong>itiative.
CONCLUSION 449However, the subject of measurement can vary from one company to another,as well as the methods <strong>in</strong> which evaluation can be taken.Organizations that participated <strong>in</strong> this best practice book used five methodsof implement<strong>in</strong>g evaluations. The first evaluation method used <strong>in</strong> our studywas behavioral change evaluation. This method measures the gap betweenspecific behaviors before <strong>and</strong> after the <strong>in</strong>tervention. Although <strong>in</strong>tervention canimprove desired dimension, it can also help <strong>in</strong> elim<strong>in</strong>at<strong>in</strong>g undesired behavior.Therefore, the gap can be positive or negative. The method is well implemented<strong>in</strong> the frame of rout<strong>in</strong>e performance appraisal processes, whereas previousevaluation can be used as a base l<strong>in</strong>e for comparison. The ma<strong>in</strong> contribution ofthis method is by its ability to measure visible behaviors, which have a directrelationship to performance. The second type of evaluation was organizationassessments, surveys, <strong>and</strong> track<strong>in</strong>g. This method can be conducted dur<strong>in</strong>g the<strong>in</strong>tervention (a formative base) or immediately after the completion of the <strong>in</strong>tervention(summative base). The format of this method is based on paper orcomputer tools that collect <strong>in</strong>formation aga<strong>in</strong>st specific questions. Althoughnot found <strong>in</strong> our study, evaluation can also be conducted <strong>in</strong> a longitud<strong>in</strong>al base.Longitud<strong>in</strong>al evaluations are conducted after a specific time has passed afterthe completion of the <strong>in</strong>tervention. This method can add to the measure ofa time perspective. 6The third evaluation method used was return on <strong>in</strong>vestment (ROI) calculations.Although not always manageable to calculate, several of the companieswere able to measure the results aga<strong>in</strong>st the cost of <strong>in</strong>vestment <strong>in</strong> their <strong>in</strong>itiatives.When conducted, this method serves as a mean<strong>in</strong>gful tool that has thebenefit of connect<strong>in</strong>g the <strong>in</strong>itiative to the bus<strong>in</strong>ess lexicon. The fourth evaluationmethod was results evaluations. This method measures the effect of tra<strong>in</strong><strong>in</strong>gon achiev<strong>in</strong>g organizational goals. It is most effective when the <strong>in</strong>itiativeaims to achieve specific <strong>and</strong> measurable goals. The fifth method is based onfeedback sessions. This method can be structured around specific questions oras an open discussion. It has the advantage of receiv<strong>in</strong>g direct <strong>and</strong> immediatefeedback. In our study, feedback sessions were conducted on both a formative<strong>and</strong> summative basis.The table below presents the rank<strong>in</strong>g of usage of each of the five evaluationmethods by best practice organizations <strong>in</strong> the study.The survey results also <strong>in</strong>dicated that although the frequency of evaluationis varied accord<strong>in</strong>g to the unique characteristics of every <strong>in</strong>itiative, most <strong>in</strong>itiativeswere measured at least twice a year.This best practice book was built on the premise that organizations achievemeasurable results from their <strong>in</strong>itiatives. We asked our best practice organizationsto <strong>in</strong>dicate what k<strong>in</strong>ds of positive results their <strong>in</strong>itiatives had. Results <strong>in</strong>this category were clearly <strong>in</strong> the areas of organization effectiveness <strong>and</strong> achievementof bus<strong>in</strong>ess strategy <strong>and</strong> objectives. These objectives varied from cost
450 BEST PRACTICES IN LEADERSHIP DEVELOPMENT AND ORGANIZATION CHANGETable 19.11. Evaluation Method UsageEvaluation Method UsageRank<strong>in</strong>gBehavioral change evaluation 1Organization assessments, surveys, track<strong>in</strong>g 2ROI calculations 3Results evaluation 4Feedback sessions 5Table 19.12. Positive Results of Initiatives, <strong>in</strong> Order of Percentage FrequencyPositive Results Frequency (%)Organizational effectiveness (e.g., communication, 87consensus build<strong>in</strong>g, project plann<strong>in</strong>g)Strategic imperatives fulfilled 73Team performance 67Cost sav<strong>in</strong>gs 53Customer satisfaction 33F<strong>in</strong>ancial results 27Shareholder value 7sav<strong>in</strong>gs to ga<strong>in</strong><strong>in</strong>g consensus on a project that led to tangible bus<strong>in</strong>ess resultsto customer satisfaction to f<strong>in</strong>ancial results <strong>and</strong> even to shareholder value.SUMMARYOnly those who dare to fail greatly, can ever achieve greatly.—Robert F. Kennedy 7The summary results underscored the critical importance of senior managementsupport. These data did not disregard the crucial role of participants <strong>in</strong> design<strong>in</strong>gthe program itself, thus support<strong>in</strong>g the need for employees at all levels ofthe organization to be active <strong>and</strong> equal partners <strong>and</strong> players <strong>in</strong> leadership development<strong>and</strong> change. All of our data suggest that the more <strong>in</strong>volvement, underst<strong>and</strong><strong>in</strong>g,<strong>and</strong> respect given to the diverse needs <strong>and</strong> styles of employees at alllevels, the lower the resistance to change. In addition, there seems to be
CONCLUSION 451<strong>in</strong>creased value derived from build<strong>in</strong>g on exist<strong>in</strong>g systems <strong>and</strong> <strong>in</strong>volv<strong>in</strong>g alllevels of employees <strong>in</strong> the development of new processes, both of which helptruly <strong>in</strong>tegrate change <strong>in</strong>itiatives <strong>in</strong>to the organization’s culture.The top-rank<strong>in</strong>g critical success factors <strong>in</strong>cluded1. Support <strong>and</strong> participation of senior management2. Connect<strong>in</strong>g development <strong>and</strong> the <strong>in</strong>itiative with the strategic plan3. Involvement of participants <strong>in</strong> design4. Integration with other divisional processes, practices, or systems5. Pilot program before launch6. Cont<strong>in</strong>uous evaluation7. Leverag<strong>in</strong>g of <strong>in</strong>ternal capacityHav<strong>in</strong>g employees become more <strong>in</strong>volved <strong>in</strong> the development of the <strong>in</strong>itiativesdirectly addresses some of the most significant challenges, such as fear ofthe unknown, aversion to loss of control, <strong>and</strong> of course aversion to change.Build<strong>in</strong>g on exist<strong>in</strong>g successful systems helps reduce the sense of mistrust thatcomes from “<strong>in</strong>itiatives of the month.”There is no doubt that these best practice organizations both endured struggles<strong>and</strong> enjoyed rewards, but what is even more certa<strong>in</strong> is that they will cont<strong>in</strong>ueto strive toward <strong>in</strong>creas<strong>in</strong>g organizational effectiveness through <strong>in</strong>novative,results-oriented, <strong>and</strong> <strong>in</strong>tegrated multilayered leadership development <strong>and</strong> change<strong>in</strong>itiatives. Louis Carter, his co-editors David Ulrich <strong>and</strong> Marshall Goldsmith,<strong>and</strong> the <strong>Best</strong> <strong>Practices</strong> Institute look forward to cont<strong>in</strong>u<strong>in</strong>g their work with theworld’s best organizations, which are passionate about positive change <strong>and</strong>leadership development.NOTES1. H. D. Thoreau. Civil Disobedience, Solitude: And Life Without Pr<strong>in</strong>ciple.M<strong>in</strong>neapolis, M<strong>in</strong>n.: Prometheus Books, 1998.2. R. Carter (b. 1928). United States First Lady, wife of Jimmy Carter.3. I. G<strong>and</strong>hi, quoted by Christian Science Monitor, May 17, 1982.4. George Eliot was the pseudonym of novelist, translator, <strong>and</strong> religious writer MaryAnn Evans (1819–1880).5. R. Beckhard <strong>and</strong> R. Harris. Organizational Transitions. Read<strong>in</strong>g, Mass.: Addison-Wesley, 1977, p. 86.6. W. J. Rothwell, R. Sullivan, <strong>and</strong> G. N. McLean. Practic<strong>in</strong>g Organization <strong>Development</strong>:A Guide for Consultants. San Francisco: Jossey-Bass, 1995, p. 313.7. R. F. Kennedy, “Day of Affirmation Address,” <strong>University</strong> of Capetown, SouthAfrica, June 6, 1966.
SSABOUT THE BEST PRACTICES INSTITUTEThe <strong>Best</strong> <strong>Practices</strong> Institute (BPI) <strong>and</strong> <strong>Best</strong> Practice Publications werefounded by Louis Carter <strong>in</strong> New York City just after September 11, 2001,while Carter was a graduate student at Columbia <strong>University</strong>. BPI wasformed to br<strong>in</strong>g the best-thought leadership <strong>and</strong> research <strong>in</strong> the field of organization<strong>and</strong> social change to leaders of governments, social systems, nonprofitorganizations, <strong>and</strong> for-profit organizations <strong>in</strong> an <strong>in</strong>creas<strong>in</strong>gly complex <strong>and</strong>chaotic world. In order to achieve this goal, Carter—with the help of a team offive <strong>in</strong>terns from Columbia <strong>University</strong>’s MBA <strong>and</strong> Social/Organizational Psychologyprogram—recruited a panel of twenty-three experts <strong>in</strong> the field of leadership<strong>and</strong> organization development <strong>and</strong> eighteen best practice organizations toform the basis of the Change Champion’s Model for mean<strong>in</strong>gful change <strong>and</strong>to complete the research beh<strong>in</strong>d this book.Carter’s Change Champion’s Model is based on the assumption that onlythrough a deep <strong>and</strong> profound exploration <strong>and</strong> underst<strong>and</strong><strong>in</strong>g of one’s own <strong>and</strong>others’ life experiences <strong>and</strong> perspectives is true positive social, personal,<strong>and</strong> organizational change accomplished. Carter’s book with <strong>Best</strong> Practice Publications<strong>and</strong> the <strong>Best</strong> <strong>Practices</strong> Institute, entitled The Change Champion’s Fieldguide,received praise from sources <strong>in</strong> the People’s Republic of Ch<strong>in</strong>a, India,<strong>and</strong> America. Vijay Gov<strong>in</strong>darajan, professor of <strong>in</strong>ternational bus<strong>in</strong>ess <strong>and</strong> directorof the Center for Global <strong>Leadership</strong> at the Tuck School of Bus<strong>in</strong>ess atDartmouth College, endorsed the book by say<strong>in</strong>g, “The Change Champion’sFieldguide will become one of the most quoted, referenced, <strong>and</strong> used bus<strong>in</strong>essbooks <strong>in</strong> the first decade of the 2000s.” Professor Li Jianfeng, Ph.D., of the453
454 ABOUT THE BEST PRACTICES INSTITUTERenm<strong>in</strong> <strong>University</strong> School of Bus<strong>in</strong>ess <strong>and</strong> Cisun Academy of Management <strong>in</strong>Beij<strong>in</strong>g translated the book <strong>in</strong>to M<strong>and</strong>ar<strong>in</strong> <strong>and</strong> Cantonese <strong>and</strong> published thebook through Huaxia Publish<strong>in</strong>g House (Beij<strong>in</strong>g) for distribution throughoutall prov<strong>in</strong>ces of Ch<strong>in</strong>a. Dr. Debi Sa<strong>in</strong>i, professor of leadership at the Management<strong>Development</strong> Institute <strong>in</strong> Gurgaon, India, is currently br<strong>in</strong>g<strong>in</strong>g the book<strong>and</strong> its teach<strong>in</strong>gs to the Indian market.Louis Carter’s <strong>Best</strong> <strong>Practices</strong> Institute <strong>and</strong> Change Champion thought leaders<strong>in</strong>clude David Cooperrider, Jerry Stern<strong>in</strong>, David Ulrich, Mary Eggers, MarshallGoldsmith, Dr. John Sullivan, Ryan Matthews, Stu Noble, William Rothwell,<strong>and</strong> Larry Sussk<strong>in</strong>d. The Change Champion’s Model <strong>and</strong> several BPI workshopshave been presented by Louis Carter <strong>in</strong> S<strong>in</strong>gapore, Bangkok, Beij<strong>in</strong>g, <strong>and</strong>at American universities <strong>and</strong> corporations.For more <strong>in</strong>formation on the <strong>Best</strong> <strong>Practices</strong> Institute <strong>and</strong> <strong>Best</strong> PracticePublications, visit http://www.bp<strong>in</strong>stitute.net or contact Louis Carter directlyat lcarter@bp<strong>in</strong>stitute.net.LOUIS CARTER’SLouis Carter, CEO<strong>Best</strong> <strong>Practices</strong> Institute, LLC25 Crescent StreetSuite 531Waltham, Massachusetts 02453http://www.bp<strong>in</strong>stitute.nethttp://www.bestpracticepublications.comcustomer support: lcarter@bp<strong>in</strong>stitute.net888-895-8949For <strong>in</strong>ternational calls, please see our Website for details.
SABOUT THE EDITORSSLouis Carter is founder <strong>and</strong> president of the <strong>Best</strong> <strong>Practices</strong> Institute, anorganization that provides best practices to organizations <strong>and</strong> <strong>in</strong>dividualsthroughout the world. Carter also serves as vice president of research atL<strong>in</strong>kage, Inc.Carter has written, edited, or directed more than six books, numerous lead<strong>in</strong>gresearch projects, <strong>and</strong> learn<strong>in</strong>g or development programs on leadership <strong>and</strong>change, <strong>in</strong>clud<strong>in</strong>g The Change Champion’s Fieldguide. His three new books, <strong>Best</strong><strong>Practices</strong> <strong>in</strong> <strong>Leadership</strong> <strong>Development</strong> <strong>and</strong> Organization Change: How the <strong>Best</strong> CompaniesEnsure Mean<strong>in</strong>gful Change <strong>and</strong> Susta<strong>in</strong>able <strong>Leadership</strong>, America’s <strong>Best</strong>Led Hospitals, <strong>and</strong> <strong>Best</strong> <strong>Practices</strong> <strong>in</strong> Lead<strong>in</strong>g the Global Workforce will be released<strong>in</strong> 2005.Carter has lectured domestically <strong>and</strong> abroad for organizations rang<strong>in</strong>g fromTs<strong>in</strong>ghua <strong>University</strong> School of Economics <strong>and</strong> Management <strong>in</strong> Beij<strong>in</strong>g to TexasA&M <strong>University</strong> to the American Society for Tra<strong>in</strong><strong>in</strong>g <strong>and</strong> <strong>Development</strong> to UniversalNetwork Intelligence <strong>in</strong> S<strong>in</strong>gapore <strong>and</strong> Bangkok. A passionate advocatefor values-based leadership, Carter’s articles, books, <strong>and</strong> work have been featured<strong>in</strong> Investors Bus<strong>in</strong>ess Daily, Bus<strong>in</strong>ess Watch magaz<strong>in</strong>e, SGQE, ASTD, <strong>and</strong>several other trade <strong>and</strong> professional journals. He has been described as “a realfuturist <strong>in</strong> the human resources arena cont<strong>in</strong>u<strong>in</strong>g to challenge <strong>and</strong> educate practitionerson new methodologies—on the cutt<strong>in</strong>g-edged leadership” by LouManzi, vice president of global recruitment at GlaxoSmithKl<strong>in</strong>e.Carter is a graduate of Columbia <strong>University</strong>’s Graduate Program <strong>in</strong> Social<strong>and</strong> Organizational Psychology. His work has been featured <strong>in</strong> bus<strong>in</strong>ess <strong>and</strong>455
456 ABOUT THE EDITORSprofessional texts <strong>and</strong> publications as well as at leadership conferences <strong>and</strong>courses around the world.David Ulrich is currently president of the Canada Montreal Mission for theChurch of Jesus Christ of Latter-day Sa<strong>in</strong>ts while on a three-year sabbatical (untilJuly 2005) as a professor of bus<strong>in</strong>ess from the <strong>University</strong> of Michigan. He studieshow organizations build capabilities <strong>and</strong> <strong>in</strong>tangibles of speed, learn<strong>in</strong>g, accountability,talent, <strong>and</strong> leadership through leverag<strong>in</strong>g human resources. He has publishedover one hundred articles <strong>and</strong> book chapters <strong>and</strong> twelve books. He wasthe editor of Human Resource Management Journal from 1990 to 1999. He ison the board of directors for Herman Miller, a Fellow <strong>in</strong> the National Academyof Human Resources, <strong>and</strong> cofounder of the Michigan Human Resource Partnership.He has received numerous honors for his professional contributions. Hehas consulted <strong>and</strong> done research with over half of the Fortune 200.Marshall Goldsmith (Marshall@A4SL.com) is a world authority <strong>in</strong> help<strong>in</strong>g successfulleaders achieve positive, measurable change <strong>in</strong> behavior. The AmericanManagement Association has named Marshall as one of fifty great th<strong>in</strong>kers <strong>and</strong>leaders who have <strong>in</strong>fluenced the field of management over the past eighty years.His work has been featured <strong>in</strong> a Harvard Bus<strong>in</strong>ess Review <strong>in</strong>terview, Bus<strong>in</strong>essStrategy Review cover story (from the London Bus<strong>in</strong>ess School), <strong>and</strong> New Yorkerprofile. His work has received national recognition from almost every professionalorganization <strong>in</strong> his field. Marshall has been asked to work with over seventymajor CEOs <strong>and</strong> their management teams. He conducts workshops forexecutives, high-potential leaders, <strong>and</strong> HR professionals. His Ph.D. is fromUCLA. He is on the faculty of executive education programs at Dartmouth,Michigan, <strong>and</strong> Cambridge (U.K.) Universities. Marshall is a found<strong>in</strong>g directorof A4SL—The Alliance for Strategic <strong>Leadership</strong>, a founder of the RussellReynolds executive advisors network, <strong>and</strong> a partner with Hewitt Associates <strong>in</strong>provid<strong>in</strong>g global executive coach<strong>in</strong>g, <strong>and</strong> he has served as a member of theboard of the Peter Drucker Foundation. Aside from his corporate work, Marshalldonates substantial time to nonprofit organizations, such as the International<strong>and</strong> American Red Cross, where he was a “National Volunteer of the Year.”Marshall’s eighteen books <strong>in</strong>clude The Leader of the Future (a Bus<strong>in</strong>ess Weekbest-seller), Coach<strong>in</strong>g for <strong>Leadership</strong>. (Choice award w<strong>in</strong>ner, Outst<strong>and</strong><strong>in</strong>gAcademic Bus<strong>in</strong>ess Book), Global <strong>Leadership</strong>: The Next Generation, <strong>and</strong> HumanResources <strong>in</strong> the 21st Century.
SINDEXSAAccelerated Performance for Executives(APEX) program, 1–19. See also AgilentTechnologies, Inc.Accountability: of Agilent’s coach<strong>in</strong>g program,4, 6–7; at Delnor Hospital, 52–53, 61, 64; atEmmis Communications, 87, 94–97; atHewlett-Packard, 184, 185; <strong>in</strong> Intel’s <strong>Leadership</strong><strong>Development</strong> Forum, 219; at LockheedMart<strong>in</strong>, 241, 245; at St. Luke’s Hospital, 376,382, 393; at StorageTek, 415, 417Accountability grids, 69, 376, 382, 383Ackerman, R., 29, 40Acquisition growth: culture <strong>and</strong> changemanagement for, 80–83, 86–87; exercisefor manag<strong>in</strong>g, 157; negative effects of, 86–87ACT (apologize, correct, <strong>and</strong> take action), 52Action learn<strong>in</strong>g, xxiii; <strong>in</strong> First Consult<strong>in</strong>gGroup’s leadership development program,130; <strong>in</strong> GE Capital’s leadership developmentprogram, 167; <strong>in</strong> Hewlett-Packard’s leadershipdevelopment program, 184; <strong>in</strong> Mattel’sProject Platypus process, 262–281; atMcDonald’s, 285, 289–290, 292–295;tools for, 290Action plann<strong>in</strong>g, 217, 220, 221, 232Active matrix liquid crystal display (AMLCD),31–32Adoption curve, 254–255Adult learners, employees as, 444–445Aerospace <strong>in</strong>dustry case studies. SeeHoneywell Aerospace; Lockheed Mart<strong>in</strong>After-action review, 40, 319Agilent Technologies, Inc.: Accelerated Performancefor Executives (APEX) program, xxvi,1–19; assessment at, xxii, 3–4, 8, 15; backgroundon, 2; Bus<strong>in</strong>ess Leader Inventory of, 3,15; case study, 1–19; coach<strong>in</strong>g at, xxiii, xxvi,1–19; early coach<strong>in</strong>g efforts at, 2–3; evaluationat, xxvii–xxviii, 10–13, 16–17; Global LeaderProfile of, 3–4, 5, 8, 15; implementation at,8–10; <strong>Leadership</strong> <strong>Development</strong> Showcase of, 7;lessons learned at, 13–14; on-the-job supportat, xxvi; overview of, xvii, 2; program designof, 4–7; Semiconductor Products Group (SPG)of, 3; top leadership support at, xx,14Agility, 30Agruso, V., 88, 89, 95Air Research, 196Akron Beacon Journal, 279Alignment scene, 271–276All-sports radio, 81Alliance for Strategic <strong>Leadership</strong> Coach<strong>in</strong>g &Consult<strong>in</strong>g (A4SL C&C), 3, 6–7, 8–9, 10, 18AlliedSignal, 196, 198; Honeywell mergerwith, 198, 199457
458 INDEXAlternative health therapies, 426, 429“America’s <strong>Best</strong> Hospitals,” 391Andersen Consult<strong>in</strong>g, 165, 179Anderson, B., 248, 249, 250Anderson, D., 3, 18Anderson, R. A., 367, 368, 375Anecdotal evaluation, 251–252Annual bus<strong>in</strong>ess conferences, 355Annual Emmis Managers Meet<strong>in</strong>g, 84, 85, 93Annual excellence awards, 56Archetypes, 269Archetypes <strong>and</strong> Strange Attractors(Van Eenwyk), 274Argyris, C., 162, 167, 179Assessment: <strong>in</strong> Agilent’s APEX coach<strong>in</strong>gprogram, 3–4, 8, 15; <strong>in</strong> Corn<strong>in</strong>g’s <strong>in</strong>novationchange <strong>in</strong>itiative, 24; <strong>in</strong> Emmis Communications’culture change process, 85–86; <strong>in</strong> FirstConsult<strong>in</strong>g Group’s leadership developmentprogram, 126–128, 133, 135; <strong>in</strong> GE Capital’sleadership development program, 168–170;at Hewlett-Packard, 182–183; at Honeywell,203–204; implementation <strong>and</strong>, xxvi; <strong>in</strong> Intel’s<strong>Leadership</strong> <strong>Development</strong> Forum, 220, 225,226; <strong>in</strong> McDonald’s leadership developmentprogram, 285–288, 294; methods <strong>and</strong><strong>in</strong>struments of, 127–128, 133, 169–170, 351,441–442; at MIT, 310–312; <strong>in</strong> Motorola’s leadershipsupply system, 340–341; organizationeffectiveness models <strong>and</strong>, xix–xx; phase of,xxii, xxvi, 440–442; at Praxair, 350–353; <strong>in</strong>St. Luke’s Hospital leadership developmentprogram, 373, 374–375; at StorageTek,412–413; trends <strong>and</strong> themes <strong>in</strong>, 440–442; atW<strong>in</strong>dber Medical Center, 428–431. See alsoEvaluation; MeasurementAssessment Plus, 4, 18–19Atk<strong>in</strong>s Kacher LIFO, 127, 133Atk<strong>in</strong>son, J., xxixAttitud<strong>in</strong>al change, <strong>in</strong> MIT’s organizationallearn<strong>in</strong>g <strong>in</strong>itiative, 318Autobiography, leadership, 216, 220, 221,233–236Awards: at Delnor Hospital, for excellence, 56,61; at Emmis Communications, 84, 93–94; ofIntel’s <strong>Leadership</strong> <strong>Development</strong> Forum, 220,225, 227; at St. Luke’s Hospital, 381Aweida, J., 405BBaby Boom generation, 336, 425Baby Bust generation, 336–337Bagian, J., 373Balanced Budget Amendment Act, 427, 430Balanced Scorecard, xxvi, 314; at EmmisCommunications, 94–95, 97, 108; at MIT, 314Balanc<strong>in</strong>g Act, The (Patterson et al.), 260–261Baldrige (Malcolm) model, <strong>in</strong>tegration of SixSigma with, 198–199Baptist Hospital, Pensacola, 46Barker, J., 216Barker, K., 54Barnholt, N., 2Barrier analysis: for Delnor Hospital’scustomer service improvement, 49–50;for First Consult<strong>in</strong>g Group’s leadershipdevelopment program, 125–126Baseball team, 82Bass, B. M., 162, 179Bauer, J., 400Becker, C., 377, 378Beckhard, R., 443, 448, 451Behavior st<strong>and</strong>ards, for patient service, 49,59–60, 376Behavioral change, xix, xxii; accountability for,245; alignment of, with bus<strong>in</strong>ess model, 197,201–202; alignment of, with values, 166–167,173, 354–355; coach<strong>in</strong>g for, 5, 10–13; correlationof, to bus<strong>in</strong>ess performance improvement,252–253, 259; critical behaviors for,244, 254, 256; demonstration of, 187, 188;evaluation of, 449; key factors for, 447;leadership forums for, 371, 393; at LockheedMart<strong>in</strong>, 239–261; mak<strong>in</strong>g the case for,240–241, 242; <strong>in</strong> MIT’s organizational learn<strong>in</strong>g<strong>in</strong>itiative, 318; op<strong>in</strong>ion leaders for, 246,247–252, 254, 257; senior leaders’ model<strong>in</strong>gof, 358; at St. Luke’s Hospital, 376, 393;top-down approach to, 245–246Behavioral event focused <strong>in</strong>terview, 287Behavioral measurements, xxvii, 449Behavioral needs profile, 127Benchmark<strong>in</strong>g. See External benchmark<strong>in</strong>gBenchmarks for Success, 391BenchStrength <strong>Development</strong>, LLC, 364Bennis, W., 121, 123, 126, 128, 129, 138, 216,218, 237Berw<strong>in</strong>d White Coal Company, 424<strong>Best</strong> of the <strong>Best</strong> (BoB) award, 56, 71“<strong>Best</strong> Places to Work Foundation forPennsylvania,” 382, 391<strong>Best</strong> Practice forums, 172<strong>Best</strong> <strong>Practices</strong> Institute (BPI), research study,xv; case study organizations <strong>in</strong>, xv, xvi–xvii,440; major f<strong>in</strong>d<strong>in</strong>gs of, xvi–xxi, 439–451<strong>Best</strong> <strong>Practices</strong> Institute (BPI), Step-by-StepSystem to Organization <strong>and</strong> HumanResources <strong>Development</strong>, xvi, xxi–xxviii
INDEX 459Biometric feedback, 54–55, 70Birth<strong>in</strong>g suites, 434Black Belts, Six Sigma, 199, 201, 204, 206–207,208, 210–211, 417Blam<strong>in</strong>g, 406, 417Blyme, C., 279Bob Costas Show, 82Bongarten, R., 83, 84Bonsignore, M., 199, 202Book Club, 374Booth Company, 215, 237Bossidy, L., xxi, 196, 197, 199, 202Bra<strong>in</strong>storm<strong>in</strong>g: <strong>in</strong> Mattel’s Project Platypus,272–273; <strong>in</strong> MIT’s organizational learn<strong>in</strong>g<strong>in</strong>itiative, 314Br<strong>and</strong> stories, 269–279Break-out work sessions, 133, 137Breakthrough <strong>in</strong>vention, 30Bridge-build<strong>in</strong>g, cross-organizational, 38–39Brookhouse, K., 344Burke, W. W., xx, 315, 320Burnett, S., 194Bus<strong>in</strong>ess Improvement RecommendationProcess, 306–307Bus<strong>in</strong>ess Leader Inventory, 3, 15Bus<strong>in</strong>ess Management System (BMS), 416–417Bus<strong>in</strong>ess Model Exercise, 152–156Bus<strong>in</strong>ess services <strong>in</strong>dustry case study. See FirstConsult<strong>in</strong>g GroupBus<strong>in</strong>ess Y model, 107–108CCadence of change, 411, 418Calibration scores, of leadershipperformance, 341Call-backs, 51–52Campbell, D. P., 162, 179Camp<strong>in</strong>g trip, 222–223Capabilities, organizational, 409, 415–417Capra, F., 264–265, 276, 280Career history assessment, 286Career plann<strong>in</strong>g <strong>and</strong> development, 338Career Systems International, 223, 237Carter, L., xvCarter, R., 442, 451Case study approach: <strong>in</strong> First Consult<strong>in</strong>gGroup’s leadership development program,132, 133, 135–136, 137, 139–140, 152–159;<strong>in</strong> GE Capital’s leadership developmentprogram, 170–171; <strong>in</strong> Intel’s <strong>Leadership</strong><strong>Development</strong> Forum, 223; OrganizationAnalysis (OA) model of, 170–171Cashman, K., 217–218, 237, 316, 320Celebrations, xxvi, 372, 431Centers for Disease Control, NationalNosocomial Infection Surveillance (NNIS)System, 377–378Centers of Excellence, 37, 39Centralization: of Corn<strong>in</strong>g’s research <strong>and</strong>development function, 23; of EmmisCommunications, 86Challenge, talent <strong>and</strong>, 210Challeng<strong>in</strong>g the process, 222Chamberla<strong>in</strong>, Colonel, 168Champion tra<strong>in</strong><strong>in</strong>g, 199Champions, 40, 261; customer focus, 356; <strong>in</strong>Six Sigma, 199, 200, 208; types of, by organizationalposition, 444; whole systems as, 445Change agents, 40; leaders-as-teachers as, 241,246–247, 251–252, 254; op<strong>in</strong>ion leaders as,246, 247–252, 254, 257; physicians as, 430Change Champions, 261Change circle, 433Change diffusion, 248, 254–255Change <strong>in</strong>itiatives: evaluation issues <strong>in</strong>, 251,252, 448–450; modification of, to fit bus<strong>in</strong>essmodel, 201–202; multiple, 406–407, 410; fororganizational learn<strong>in</strong>g, 309–321;overzealous implementation of, 200–202,204; resistance to, 243, 245–251, 433,442–443, 451; results of, 449, 450; seatback,196–197; top-down approach to, 245–246;value creation purpose of, 204–205Change-management or catalyst programs,xxv. See also Corn<strong>in</strong>g; Emmis Communications;Honeywell; Lockheed Mart<strong>in</strong>; MassachusettsInstitute of Technology; StorageTek;W<strong>in</strong>dber Medical CenterChaos theory, 274–276Check-<strong>in</strong>s, coach<strong>in</strong>g, xxvi, 5, 6Checkpo<strong>in</strong>t dialogues, 340Chemcor, 31Chemicals <strong>in</strong>dustry case study. See PraxairChung, S. Y., 361Clark, K. E., 162, 179Clark, M. B., 162, 179Clarke, B., 216Clawson, J., 166, 168, 179Coaches: <strong>in</strong> Agilent’s APEX program, 6–7, 8, 9,14; for cultural change, 46–47; <strong>in</strong>ternalversus external, 169; learn<strong>in</strong>g, <strong>in</strong> Corn<strong>in</strong>g’s<strong>in</strong>novation process, 39–40, 42Coach<strong>in</strong>g, xvi; Agilent’s APEX program of, 1–19;assessment <strong>and</strong>, xxii, 3–4, 15; content, 8;evaluation of, 10–13, 16–17; fees for, 6; <strong>in</strong> FirstConsult<strong>in</strong>g Group’s leadership developmentprogram, 130, 140; follow-up to, 10, 12–13, 14,16–17; <strong>in</strong> GE Capital’s leadership
460 INDEXCoach<strong>in</strong>g (Cont<strong>in</strong>ued)development program, 169, 170, 172; globalcoach pool for, 6–7, 9; high-performanceversus remedial, 14; <strong>in</strong>ternal market<strong>in</strong>g of, 7;lessons learned about, 13–14; <strong>in</strong> McDonald’sleadership development program, 287–288;on-the-job support <strong>in</strong>, xxvi; options for, 5–6;participant qualification <strong>and</strong> selection for,xxiii, 6, 8–9, 14; program designs for,xxii–xxiii, 4–7; results guarantee for, 6–7;team, 9, 137–138, 170, 172Coalition build<strong>in</strong>g, for change <strong>in</strong>itiatives, 202Code of bus<strong>in</strong>ess conduct, 414Cohen, E., 163, 179, 260Coherence <strong>and</strong> chaos, 274–276Collaboration: for knowledge shar<strong>in</strong>g <strong>and</strong><strong>in</strong>novation, 38–40, 41; Mattel’s ProjectPlatypus process of, 262–281; as StorageTekorganizational capability, 415Collective <strong>in</strong>genuity, 28Collective self-exam<strong>in</strong>ation, 28Collegial culture, 128–129Coll<strong>in</strong>s, J., 383Commitment, top leadership. See Topleadership supportCommitment to excellence, 48–49, 60Communication: at Delnor Hospital, 59; atEmmis Communications, 92–94, 99,105–107; exercise <strong>in</strong>, 158; at LockheedMart<strong>in</strong>, 244; <strong>in</strong> Mattel’s Project Platypus,277–279; at Praxair, 355–356; at St. Luke’sHospital, 367; at StorageTek, 409, 417; atW<strong>in</strong>dber Medical Center, 426–428, 432.See also Internal market<strong>in</strong>gCommunications <strong>in</strong>dustry case studies.See Corn<strong>in</strong>g; MotorolaCommunities of practice, 37, 39Community service projects, 415Compaq, 182, 183, 190Competency models, xix–xx; culture l<strong>in</strong>kageto, 110–115; at Emmis Communications, 94,95, 109–116; for First Consult<strong>in</strong>g Group’sleadership development, 127, 128, 130–132;at GE Capital, 164–165; Kouzes <strong>and</strong> Posnermodel of, 218; for McDonald’s regionalmanagers, 284, 287, 297; for MIT’sorganizational learn<strong>in</strong>g <strong>in</strong>itiative, 315, 325,326; for Motorola’s leadership supplyprocess, 339–340; at St. Luke’s Hospital,382–383, 395–398. See also <strong>Leadership</strong>behavioral profilesComplementary therapies, 426, 429Computer hardware <strong>in</strong>dustry case studies.See Hewlett Packard; StorageTekConcierge service delivery, 375, 383Conemaugh Health System, 425. See alsoW<strong>in</strong>dber Medical CenterConference calls, 106, 107, 137Conflict, <strong>in</strong> liv<strong>in</strong>g systems, 275Conflict management, at W<strong>in</strong>dber MedicalCenter, 428Conflicts of <strong>in</strong>terest, with consolidation, 87Conger, J. A., 167, 172, 179Connolly, M., 193Consolidation, 87. See also AcquisitiongrowthConsultants, xxviii–xxix; for Delnor Hospitalculture change program, 46–47; for EmmisCommunications culture change program, 88;external comb<strong>in</strong>ed with <strong>in</strong>ternal, 184, 185;for Hewlett-Packard’s leadership developmentprogram, 184; for Intel’s <strong>Leadership</strong><strong>Development</strong> Forum, 221; leadership competencyframeworks <strong>and</strong>, 165; for McDonald’sleadership development assessment, 286,287–288; for MIT’s organizational learn<strong>in</strong>g<strong>in</strong>tervention, 313–314, 315; for Motorola’sleadership supply process, 337, 343–344; forW<strong>in</strong>dber Medical Center’s transformation<strong>in</strong>itiative, 428Consult<strong>in</strong>g <strong>in</strong>dustry case study. See FirstConsult<strong>in</strong>g GroupConsult<strong>in</strong>g <strong>in</strong>dustry realities, 122–123Consumer products <strong>in</strong>dustry case study.See MattelCont<strong>in</strong>uous improvement: of Corn<strong>in</strong>g’s<strong>in</strong>novation process, 41–42; Malcolm Baldrigemodel of, 198–199; Six Sigma <strong>and</strong>, 198–199.See also Six SigmaConversant Solutions, LLC, 182Cook, H. C., 380Cooperrider, D. L., 167, 179Corn<strong>in</strong>g Competes, xxv, 30Corn<strong>in</strong>g Incorporated: assessment at, 24;background on, 22; best practices for <strong>in</strong>novationat, 34–36; case study, 20–42; changeobjectives of, xviii–xvix, 23–24; cont<strong>in</strong>uousimprovement at, 42–43; critical successfactors for, 27–28; diagnosis phase at, 22–24;EAGLE 2000TM program of, 22, 31–33; evaluationof, 36; five-stage StageGate model of<strong>in</strong>novation used by, 25–26, 28, 36, 41; ashigh-tech company, 29–33; implementationat, 29–36; <strong>in</strong>novation/change-catalystprogram of, xxv, 20–42; learn<strong>in</strong>g mach<strong>in</strong>e of,36–40; lessons learned at, 40–41; on-the-jobsupport at, 33–36; overview of, xvii, 21;program design at, 25–29
INDEX 461Cost improvement, at St. Luke’s Hospital, 370,380, 391Cote, D., 196Cowan, P., 160Craig, C., 27, 29, 30, 39, 40Cray, C., 21“Creat<strong>in</strong>g a <strong>Best</strong> Place to Work,” 381–382Creation workshops, 272Creative culture speakers, 269Creative Destruction (Foster <strong>and</strong> Kaplan), 405Critical behaviors, for behavior change atLockheed Mart<strong>in</strong>, 244, 254, 256Critical success factors: for change <strong>in</strong>itiatives,444; <strong>in</strong> Corn<strong>in</strong>g’s <strong>in</strong>novation change management<strong>in</strong>itiative, 27–28; <strong>in</strong> First Consult<strong>in</strong>gGroup’s leadership development program,130–132; <strong>in</strong> Intel’s <strong>Leadership</strong> <strong>Development</strong>Forum, 230; <strong>in</strong> McDonald’s leadershipdevelopment program, 293; <strong>in</strong> Praxair’sleadership strategy <strong>in</strong>itiative, 356–357;top-rank<strong>in</strong>g, 451; <strong>in</strong> W<strong>in</strong>dber Medical Center’stransformation, 432Cross-functional/cross-discipl<strong>in</strong>ary <strong>in</strong>tegration:for culture change at StorageTek, 412; for <strong>in</strong>novation,25–26, 27–28, 29, 30, 33, 38, 40–41;for knowledge shar<strong>in</strong>g, 38–39, 41; for leadershipdevelopment program, 128–129; fororganizational learn<strong>in</strong>g at MIT, 311, 312–313,314, 319Crossl<strong>and</strong>, R., 216Crucial conversations, 244, 247, 253, 256Crucial Conversations (Patterson et al.),260–261Culture, organizational: alignment of leadershipdevelopment with, 166–167; of change,30; collegial, 128–129; commitment to,xvii–xix, 48–49, 60; competency l<strong>in</strong>kage to,110–115; country cultures versus, 173;employer-of-choice, 79–119; of entitlement,86, 87; fun <strong>in</strong>, 371–372; high-performance,def<strong>in</strong>ition of, 408–410; leadership role <strong>in</strong>,162; of learn<strong>in</strong>g, 38–39, 315, 318; ofownership, 52–53, 61; of participation, 185;of resistance, 243–251, 433; of serviceexcellence, 49–52Culture change programs, xix; with acquisitiongrowth, 80–83, 86–87; alignment <strong>in</strong>, 89–92;approaches <strong>in</strong>, 88; coaches for, 46–47;communication <strong>and</strong> promotion of, 92–94,105–107, 205–207; at Delnor Hospital, 43–78;at Emmis Communications, 79–119; employeetra<strong>in</strong><strong>in</strong>g <strong>in</strong>, 95–96; for firm br<strong>and</strong> <strong>and</strong>employee satisfaction, 79–119; for highperformance,403–422; impact of, on bus<strong>in</strong>essperformance, 252–253, 259; leaders-asteachersfor, 241, 246–247, 251–252, 254;lessons learned <strong>in</strong>, 60–61, 99–100; atLockheed Mart<strong>in</strong>, 239–261; op<strong>in</strong>ion leadersfor, 246, 247–252, 254, 257; for serviceexcellence, 43–78; at St. Luke’s Hospital,371–372; at StorageTek, 403–422; stressmanagement for, 54–55, 61; at W<strong>in</strong>dberMedical Center, 423–438Cumm<strong>in</strong>gs, R., 83“Current Reality: The Flood of Information”learn<strong>in</strong>g map, xxv, 410–411Curtis, S., 422Customer contact behaviors assessment, 351,352, 353Customer focus conferences, 351, 352, 353,356, 359, 361–363Customer scorecards, 354, 358Customer service improvement: at StorageTek,416–417. See also Employee satisfactionimprovement; Patient satisfactionimprovement; Service enhancementCustomer service teams, 49–50, 51, 62Customers: change <strong>in</strong>itiatives <strong>and</strong>, 204–205;employees as, 89, 312; underst<strong>and</strong><strong>in</strong>g,34, 41DDamage control, 99Dannemiller, K., 315, 321Dashboard of <strong>in</strong>dicators, 58, 73Data Collection Methods: Pros <strong>and</strong> Cons, 290,301–302Deal, T. E., 166, 179Debt-leverage issues, 87Decentralization, 23, 86Decision-mak<strong>in</strong>g improvement, 446; withHewlett-Packard’s leadership developmentprogram, 190; with Honeywell’s Six Sigma<strong>in</strong>itiative, 208–209Deer<strong>in</strong>g, L., 45–46, 47, 49–52, 56, 59–60, 78Defense <strong>in</strong>dustry case study. SeeLockheed Mart<strong>in</strong>Defense <strong>in</strong>dustry realities, 240, 241–242Delnor Hospital: accountability build<strong>in</strong>g at,52–53, 61, 64; alignment of behaviors withgoals <strong>and</strong> values at, 59–60, 75–77;background on, 45–46; case study, 43–78;commitment to excellence at, 48–49, 60;communication at, 59; employee satisfactionat, 56–57, 58–59, 61, 72; five pillars of, 47,58; leadership development at, 53–55, 61,65–69; lessons learned at, 60–61; measurementat, 50, 53, 57–59, 61, 64, 73–74; n<strong>in</strong>e
462 INDEXDelnor Hospital: (Cont<strong>in</strong>ued)pr<strong>in</strong>ciples of, 44–45, 47, 48–60; on-the-jobsupport at, xxvii; overview of, xvii, 44–45;reward <strong>and</strong> recognition at, 50, 55–56, 58, 61;St. Luke’s Hospital <strong>and</strong>, 369; top-downcommitment at, 46–48, 60Demographic change, 336–337Deneka, C. “S.”, 33, 40Dennison survey, 418Diagnosis, bus<strong>in</strong>ess: for Corn<strong>in</strong>g, 22–24; forEmmis Communications, 86–88; for FirstConsult<strong>in</strong>g Group’s leadership developmentprogram, 122–126; futur<strong>in</strong>g versus, 167; forGE Capital, 162; for Hewlett-Packard,182–183; for MIT, 310–312; for Motorola,335–337; phase of, xxi–xxii, 440–442; forPraxair, 349–350; for St. Luke’s Hospital,368–369; trends <strong>and</strong> themes <strong>in</strong>, 440–442; forW<strong>in</strong>dber Medical Center, 425–426, 427Dialogues: to discuss emotional issues, 199;for leadership development, 340, 341; toovercome resistance, 244, 247, 248–249,253, 256Differential <strong>in</strong>vestment <strong>in</strong> talent, 341–342Differentiation strategy, alignment ofleadership strategy with, 346–364, 412Diffusion of <strong>in</strong>novations, 248, 254–255Diffusion of Innovations (Rogers), 260Discont<strong>in</strong>uous improvement, 30Disney Institute, 428Diversity Channel, 93Division leadership conferences, 355–356“Do differentlies”: <strong>in</strong> MIT’s organizationallearn<strong>in</strong>g <strong>in</strong>itiative, 316, 332; <strong>in</strong> Motorola’sleadership supply system, 343–344Domalick, K., 50Dowl<strong>in</strong>g, J., 89Druyan, D., 242Dual-path results model, 89, 102Dutterer, L., 401–402Dynamic <strong>Leadership</strong>, 181–194. See alsoHewlett-PackardDyrek, Deborah, 51EE-consultancies, 122–123E-mail, company, 106, 107E-vendors, 122–123EAGLE 2000TM , 22, 30–33Early adopters, 254, 255Eckert, R., 263, 277Economic downturn, xxviii, 14, 84, 336,404, 420Edge competency, 339Education case study. See MassachusettsInstitute of Technology (MIT)Effective Communication Exercise, 158Eich<strong>in</strong>ger, R. W., 341, 344Electronics <strong>in</strong>dustry case studies. See AgilentTechnologies, Inc.; Intel; StorageTekEleven Comm<strong>and</strong>ments, 82, 83, 86, 94, 96, 101Eliot, G., 448, 451“Ello,” xxv, 279Emmi Awards, 84, 93–94Emmis Attribute Model, 109Emmis Communications: accountability at, 87,94–97; acquisition growth of, 80–83, 86–87;Annual Report, 94, 107; assessment phase at,85–86; background on, 81–83; BalancedScorecard of, 95–96, 97, 108; case study,79–119; change drivers for, 87; change<strong>in</strong>itiative promotion at, 92–94, 105–107;change objectives of, xvii–xviii, 88; companywidecommunication at, 92–94, 99, 105–107;competency models of, 94, 95, 109–116;cultural foundations of, 82, 86, 87; culture <strong>and</strong>change management at, 79–119; diagnosisphase at, 86–88; Eleven Comm<strong>and</strong>ments of,82, 83, 86, 94, 96, 101; employer-of-choicequalities of, 83–85, 97–98; employment br<strong>and</strong>of, 83–85; evaluation phase at, xxvii, 97–98;executive alignment at, 89–91, 99; firmbr<strong>and</strong> of, 80, 88, 90, 92, 94; implementationphase at, 89–97; <strong>in</strong>novation at, 90, 96–97;leadership br<strong>and</strong> of, 92, 117; leadershipdevelopment at, 84, 89–92; lessons learned at,99–100; on-the-job support at, xxvi; overviewof, xvii, 80–81; performance management at,87, 94–97, 109–118; program design for,88–89; recognition at, 84, 93–94, 118Emmis Weekly Update, 105Emmissary, 93, 105Emotional balance, 54–55, 61Emotional issues: with change <strong>in</strong>itiatives, 199;creativity <strong>and</strong>, 271; <strong>in</strong> Mattel’s ProjectPlatypus, 271, 274; vent<strong>in</strong>g, at W<strong>in</strong>dberMedical Center, 430Emotional Quotient tra<strong>in</strong><strong>in</strong>g, 428Employee assistance program, 84Employee benefit <strong>and</strong> welfare programs, 84Employee commitment <strong>in</strong>dex score, 98Employee morale, 87Employee policies, 84Employee satisfaction improvement: customersatisfaction <strong>and</strong>, 56–57, 61, 368; at DelnorHospital, 45–46, 56–57, 58–59, 61, 72;at Emmis Communications, 79–119; atSt. Luke’s Hospital, 368, 372, 381–382, 391;
INDEX 463at StorageTek, 418; at W<strong>in</strong>dber MedicalCenter, 430–431Employee stock ownership, 84Employee Survey Reaction Plan, 85Employee tra<strong>in</strong><strong>in</strong>g, at Emmis Communications,95–96Employee Wall of Fame, 381Employer-of-choice <strong>in</strong>itiatives: at DelnorHospital, 57; at Emmis Communications,79–119; at St. Luke’s Hospital, 381–382, 391Enabl<strong>in</strong>g others to act, 223–224Encourag<strong>in</strong>g the heart, 223Encourag<strong>in</strong>g the Heart: A Leader’s Guide toReward<strong>in</strong>g <strong>and</strong> Recogniz<strong>in</strong>g Others(Kouzes <strong>and</strong> Posner), 223, 237Energize competency, 339Enron, 166Entitlement culture, 86, 87Entrepreneurial behavior, <strong>in</strong>ternal, 28Envision competency, 339Ergonomics, 38Ernst & Young (E&Y), 427ESAP (Emmis Sales Assault Plan), 83Ethics, 340, 446Evaluation: of Agilent’s APEX coach<strong>in</strong>gprogram, 10–13, 16–17; anecdotal, 251–252;of Corn<strong>in</strong>g’s <strong>in</strong>novation change process, 36;of Emmis Communications’ change <strong>in</strong>itiative,97–98; of First Consult<strong>in</strong>g Group’sleadership development program, 138–140;of GE Capital’s leadership developmentprogram, 172–173; of Hewlett-Packard’sleadership development program, 187–190,192; of Intel’s <strong>Leadership</strong> <strong>Development</strong>Forum, 225–229; of large-scale changeefforts, 251, 252; of Lockheed Mart<strong>in</strong>’sWorkforce Vitality <strong>in</strong>itiative, 251–253,256–257, 258, 259; of McDonald’s leadershipdevelopment program, 291–295; methods of,xxvii–xxviii, 291–292, 449–450; of MIT’sorganizational learn<strong>in</strong>g <strong>in</strong>itiative, 317–319;phase of, xxvii–xxviii, 448–450; of Praxair’sleadership strategy <strong>in</strong>itiative, 359–360; ofSt. Luke’s Hospital’s leadership forums,375–376, 390–391; trends <strong>and</strong> themes <strong>in</strong>,448–450; of W<strong>in</strong>dber Medical Center’stransformation effort, 432–437. See alsoAssessment; MeasurementEvolution scene, 276–278Excellence, service: commitment to, 48–49, 60;concepts that foster, 367–368Execute competency, 340Executive team commitment: at EmmisCommunications, 86, 89–91, 99; at FirstConsult<strong>in</strong>g Group, 128–129, 134. See alsoTop leadership supportExecutive visibility programs, 417Expectations: alignment of, <strong>in</strong> Six Sigma casestudy, 200–202; for Intel’s <strong>Leadership</strong><strong>Development</strong> Forum, 217; sett<strong>in</strong>g, for EmmisCommunications’ change <strong>in</strong>itiative, 99–100Experts, outside, xxiv. See also ConsultantsExpression, <strong>in</strong> Mattel’s Project Platypus,269–271External benchmark<strong>in</strong>g: <strong>in</strong> First Consult<strong>in</strong>gGroup’s leadership development program,127, 128, 130, 133, 138; on hospital quality,370; <strong>in</strong> Intel’s <strong>Leadership</strong> <strong>Development</strong>Forum, 225; for Motorola’s leadership supplyprocess, 337, 343FF-16 Fighter Jets, 240, 241–242, 246, 248Face-to-Face sessions, 271, 274, 276, 277–278Facilitators: of First Consult<strong>in</strong>g Group’sleadership development program, 134,136–137; of Hewlett-Packard’s leadershipdevelopment program, 185Facilities design, 38Factory-specific leadership developmentprogram, 213–238. See also IntelFAST workshops, 89–91, 103–104FCC regulations, 87Field beta tests, 99F<strong>in</strong>ance <strong>in</strong>dustry case study. See GE CapitalF<strong>in</strong>ancial analysis, post-program: ofHewlett-Packard’s leadership developmentprogram, 189–190; of Motorola’s leadershipsupply system, 342F<strong>in</strong>kelste<strong>in</strong>, S., 162, 179Fior<strong>in</strong>a, C., 182, 184Fireside chats, 169Firm br<strong>and</strong>, of Emmis Communications, 80,88, 90, 92, 94FIRO-B, 127, 133First Consult<strong>in</strong>g Group (FCG): assessment at,xx, xxii, 126–128, 133, 135; background on,121–123; barriers analysis of, 125–126; casestudy, 120–160; change objectives of, xviii,123–124, 141; critical success factors for,130–132; diagnosis phase at, 122–126; evaluationphase at, 138–140; implementationphase at, xxiv, 134–135; <strong>Leadership</strong> Firstprogram of, xxiv, 120–160; lessons learnedat, 135–137; on-the-job support at,xxvi–xxvii, 121; out-of-classroom follow-upat, 137–138; overview of, xvii, 121–123;participant selection at, 125–126, 129, 135,
464 INDEXFirst Consult<strong>in</strong>g Group (FCG): (Cont<strong>in</strong>ued)142–144; professional compensation <strong>and</strong>development system (PCADs) of, 126–127,138, 140; program design phase at, 128–134,141; risk-reward analysis of, 124–125;situational approach of, 132–134, 135–136,139–140, 152–159; situational assessmentfor, 123; 360-degree assessment at, 127, 129,133, 145–149; top leadership support at, xx,128–129, 134–135Fisher-Price, 263Five Discipl<strong>in</strong>es Model of Peter Senge, 314, 315Five Pillars of Success, 369Five-Po<strong>in</strong>t Star Model, 367; accomplishmentsby, 391; cost po<strong>in</strong>t of, 370, 380, 391; examplesof employment of, 377–382; growth po<strong>in</strong>t of,370–371, 374, 391; illustration of, 389;leadership forums on, 371–376; orig<strong>in</strong>s of,369; people po<strong>in</strong>t of, 370, 373, 381–382, 391;quality po<strong>in</strong>t of, 370, 377–378, 380, 391;service po<strong>in</strong>t of, 370, 373–374, 378–380, 391Five-<strong>Practices</strong> <strong>Leadership</strong> Model of Kouzes <strong>and</strong>Posner, 218, 220, 2225 L Model of <strong>Development</strong>al Coach<strong>in</strong>g, 223Flat panel glass, 31–33Flexibility: <strong>in</strong> coach<strong>in</strong>g program, 4, 6; <strong>in</strong>cultural change management, 61; <strong>in</strong><strong>in</strong>novation process, 40Flexible critical mass, 25Flight of the Buffalo, 225, 238Follow-up: <strong>in</strong> Agilent’s APEX coach<strong>in</strong>gprogram, 10, 12–13, 14, 16–17; <strong>in</strong> FirstConsult<strong>in</strong>g Group’s leadership developmentprogram, 137–138; <strong>in</strong> GE Capital’s leadershipdevelopment program, 170, 172–173; <strong>in</strong>Hewlett-Packard’s leadership developmentprogram, 184, 186, 191; <strong>in</strong> McDonald’s leadershipdevelopment program, 291–292; <strong>in</strong>MIT’s organizational learn<strong>in</strong>g <strong>in</strong>itiative, 316;<strong>in</strong> St. Luke’s Hospital’s leadership developmentprogram, 382–383, 393; <strong>in</strong> StorageTek’sculture change program, 418–420. See alsoOn-the-job supportFor Your Improvement (Lombardo &Eich<strong>in</strong>ger), 341Force-Field Analysis, 290, 303Ford, R., 251Fort Hill Company, 189, 194“Fortune 100 <strong>Best</strong> Companies to WorkFor,” 97Foster, R., 405, 422“4e’s + Always 1” leadership st<strong>and</strong>ards,339–340, 341Freez<strong>in</strong>g, 433Friday5s, xxv, 186, 188, 193, 194Fulcrum, for behavioral change at LockheedMart<strong>in</strong>, 240–241, 244Fun, 371–372Fusion process, 31–33Futur<strong>in</strong>g, 167GG<strong>and</strong>hi, I., 443, 451Gap assessment, 126, 127, 337, 449Garrett Turb<strong>in</strong>e Eng<strong>in</strong>es, 196GE: Honeywell <strong>and</strong>, 200, 202; Six Sigma at, 198GE Capital: action learn<strong>in</strong>g at, xxiii, 167;assessment at, xxii, 168–170; background on,162; case study, 161–180; competency modelof, xix, 164–165; diagnosis at, xxi, 162; evaluationat, xxvii, 172–173; follow-up at, 170,172–173; implementation at, 167–172; leadershipdevelopment conceptual frameworkof, 166–167; leadership developmentmethods of, xxiii, 167–172; overview of, xvii,162; program design for, 163–167; resultsat, 172–173; top leadership support at, xx,163–164Gift giv<strong>in</strong>g, 273–274Gifun, J., 311, 313–314, 333Gladwell, M., 260Global <strong>Leadership</strong> Profile, 3–4, 5, 8, 15Global m<strong>in</strong>dset, 296Global scope: of Agilent’s APEX coach<strong>in</strong>gprogram, 4, 14; of Hewlett-Packard’sleadership development program, 185–186Goal alignment: <strong>in</strong> Delnor Hospital’s serviceexcellence <strong>in</strong>itiative, 60, 75–76; <strong>in</strong>StorageTek’s culture change <strong>in</strong>itiative, 412Goldsmith, M., 170, 172, 179, 186, 193, 451Good to Great, 374Graboski, J., 364Graham, G., 55Graham, P. K., 313–314, 333Great Ideas Contest, 96Green Belts, Six Sigma, 208, 211Greenleaf, R. K., 271, 280Grenny, J., 260–261Gross, T., 216, 237Group management approaches,136–137, 373Growth commitment teleconferences, 355Growth improvement <strong>in</strong>itiative, of healthnetwork, 370–371, 374, 391“Guidel<strong>in</strong>es for the Use of InterventionalCardiology Medications <strong>in</strong> the CardiacCatherization Lab,” 380GuideMe, 186
INDEX 465HHalm, D., 238Hambrick, D. C., 162, 179Hamill, S., 273, 280Hancock, D., 240–249, 250–251Harris, R., 448Harrison, R., 361Harvard Bus<strong>in</strong>ess Review, 133, 216Hayn, M., 400–401HBO, 82Health care <strong>in</strong>dustry case studies. See DelnorHospital; St. Luke’s Hospital <strong>and</strong> HealthNetwork; W<strong>in</strong>dber Medical CenterHealth care <strong>in</strong>dustry realities, 368, 425, 427,428–429, 430, 433HeartMath Freeze Frame technique, 54–55, 70HeartMath LLC, 54–55Hewlett, B., 182Hewlett-Packard (HP): Agilent Technologies,Inc., <strong>and</strong>, 2, 3; assessment at, 182–183; casestudy, 181–194; change objectives of, xix;coach<strong>in</strong>g at, 3; Compaq merger of, 182,183, 190; development methods of, xxiii;diagnosis at, xxii, 182–183; Dynamic<strong>Leadership</strong> program of, xix, 181–194;evaluation at, 187–190, 192; implementationat, xxv, 185–186; on-the-job support at, 184,186, 191; overview of, xvii, 182; programdesign at, 183–185Hidden Connections, The (Capra), 276“High-5” award, 381High-performance culture improvement,403–422. See also StorageTekHigh-potential leaders, McDonald’s <strong>Leadership</strong>at McDonald’s Program for, 295–296Hofestede, G., 173, 179Holistic health care, 431, 433, 437. See alsoPatient-centered care modelHoly Cross Hospital, Chicago, 46Homework assignments, 133, 134, 159Honeywell Aerospace: AlliedSignal mergerwith, 198, 199; assessment at, 203–204;background on, 196; case study, 195–212;change journey of, 198–202; changeobjectives of, xix, 200–202, 207–208;Eng<strong>in</strong>es, Systems, <strong>and</strong> Services division of,202–210; GE <strong>and</strong>, 200, 202; implementationat, 210–212; Malcolm Baldrige model at,198–199; overview of, xvii, 196; results at,211–212; Six Sigma at, xix, xxi, 195–212;success criteria for, 205–207; top leadershipsupport at, xxi, 200–202, 205–208; top talentapproach of, 209–210; United Technologies<strong>and</strong>, 200; vision of, 205–209Honeywell International, Inc., 195–212Hospice care center, 426, 435Hospital case studies. See Delnor Hospital;St. Luke’s Hospital; W<strong>in</strong>dber Medical CenterHoughton, A. (Alanson), 22Houghton, A. (Arthur), 22Houghton, A., Jr., 22Houghton, A., Sr., 22Houghton, C., 22Houghton, J. R., 21, 23, 24, 29, 30, 31, 40, 41Howard, D., 28Hrubenek, J., 402Human resource development methods, xv–xviHuman resource (HR) systems: highperformanceculture alignment with,418–419; leadership development <strong>in</strong>tegrationwith, 291, 343. See also Rewards <strong>and</strong> rewardsystemsHuman Synergistics, 168IIBM, 404, 405Ideas <strong>in</strong>to Dollars, 34, 35, 38Immersion programs, xxiii, 136Immersion scene, 267–269Implementation: of Agilent’s APEX coach<strong>in</strong>gprogram, 8–10; assessment <strong>and</strong>, xxvi; ofCorn<strong>in</strong>g’s <strong>in</strong>novation change process, 29–36;elements of, xxiv–xxvi; of Emmis Communications’change effort, 89–97, 99–100; ofFirst Consult<strong>in</strong>g Group’s leadership developmentprogram, 134–135; of GE Capital’sleadership development program, 167–172;of Hewlett-Packard’s leadership developmentprogram, 185–186; of Honeywell’s SixSigma <strong>in</strong>itiative, 210–212; of Intel’s <strong>Leadership</strong><strong>Development</strong> Forum, 219–225; of LockheedMart<strong>in</strong>’s Workforce Vitality <strong>in</strong>itiative,244–251; of McDonald’s leadership developmentprogram, 289–290; of MIT’s organizationallearn<strong>in</strong>g <strong>in</strong>itiative, 315–316, 327–328;phase of, xxiv–xxvi, 445–448; of Praxair’sleadership strategy <strong>in</strong>itiative, 357–358; ofSt. Luke’s Hospital leadership developmentprogram, 372–375; of StorageTek’sculture change program, 407, 411–418;trends <strong>and</strong> themes <strong>in</strong>, 445–448; ofW<strong>in</strong>dber Medical Center’s transformation,431–432Improvisation for the Theater (Spol<strong>in</strong>),272, 273Improvisational theater, 269–279In-house leadership <strong>in</strong>stitution, 53–55Inclusion phase, 269
466 INDEX“Incorporat<strong>in</strong>g Family Centered Care <strong>in</strong>Pediatric Nurs<strong>in</strong>g Practice,” 378–380Incremental improvement, 30Indianapolis Monthly, 81Individual <strong>Development</strong> Plans, for McDonald’sleadership development program, 295Industrial gas company case study. See PraxairIndustrial gas <strong>in</strong>dustry realities, 347–348Industrial Research Institute, 29, 30Industrial Revolution model of health care,424, 425, 433Industry Week, Plant of the Year award, 253Information technology <strong>in</strong>dustry case studies.See Agilent Technologies, Inc.; Intel;Motorola; StorageTekInformation technology <strong>in</strong>dustry realities,420, 422Innovation, xvi; balanc<strong>in</strong>g operationalmanagement with, at StorageTek, 405,419–420; chaos <strong>and</strong>, 275–276; cont<strong>in</strong>uousimprovement <strong>and</strong>, 41–42; Corn<strong>in</strong>g’s changemanagement <strong>in</strong>itiative for, 20–42; crossfunctional<strong>in</strong>tegration for, 26, 27–28, 29, 30,33, 40–41; diffusion of, 248, 254–255; atEmmis Communications, 90, 96–97;five-stage StageGate model of, 25–26, 28, 36,41; knowledge management <strong>and</strong>, 36–40;learn<strong>in</strong>g <strong>and</strong>, 36–40; Mattel’s ProjectPlatypus process for, 262–281; methodsfor encourag<strong>in</strong>g, xxiv–xxv, 34–36; people<strong>and</strong>, 263–264; Total Quality Management<strong>in</strong>tegration with, 22–24, 27, 29, 36–37Innovation effectiveness, 33–34, 41–42Innovation People!, 27–28Innovation pipel<strong>in</strong>e, 33, 34Innovation project management, 33, 34, 36Innovative Learn<strong>in</strong>g Methods, 218Intagliata, J., 91, 95, 308Intel: assessment at, xxii, 220, 225, 226; backgroundon, 215–217; case study, 213–238;coach<strong>in</strong>g at, xxii, xxiii, xxvi; evaluation <strong>and</strong>results at, xxvii, 225–229; Fab 12s Organization<strong>Development</strong> Team (ODT) of, xxvii,213–238; implementation at, 219–225;<strong>Leadership</strong> <strong>Development</strong> Forum (LDF) of,xxvii, 213–238; leadership developmentpurpose <strong>and</strong> objectives at, 215–217; lessonslearned at, 229–230; on-the-job support at,xxvi; overview of, xvii, 214–215; programdesign at, 217–219, 221, 229; session-bysessionprogram example for, 221–225;WOW! Projects at, xxvii, 220, 221, 222,227–228, 231Intel Manufactur<strong>in</strong>g Excellence Conference(IMEC), 214–215Interaction: for knowledge shar<strong>in</strong>g, 38, 41; forovercom<strong>in</strong>g resistance, 246–247Interconnectedness, team, 278–279Internal market<strong>in</strong>g: of Agilent’s APEX coach<strong>in</strong>gprogram, 7; of Emmis Communications’change <strong>in</strong>itiative, 92–94, 105–107; of FirstConsult<strong>in</strong>g Group’s leadership developmentprogram, 134–135, 139; of Honeywell’s SixSigma implementation, 205–207; of W<strong>in</strong>dberMedical Center’s change <strong>in</strong>itiative, 426–428.See also CommunicationInvolvement. See ParticipationIrritants, customer, 49–50ISO audits, 417Iterative design process, 354–357JJacobs, N. F., xx, 438Jeopardy, 374Job protection, 87Jo<strong>in</strong>t Commission of Accredited HealthcareOrganizations (JCAHO), 378Jo<strong>in</strong>t Strike Fighter (JSF) contract competition,240, 242, 246, 252, 253–254Jo<strong>in</strong>t ventures, <strong>in</strong> consult<strong>in</strong>g <strong>in</strong>dustry, 122–123Joyce Murtha Breast Care Center, 435KKaplan, S., 405, 422Keilty, Goldsmith & Company, 3, 18. See alsoAlliance for Strategic <strong>Leadership</strong> Coach<strong>in</strong>g &Consult<strong>in</strong>g (A4SL C&C)Kennedy, A. A., 166, 179Kennedy, R. F., 450, 451Killer Angels (Shaara), 168Kirk, B., 34Kirkpatrick, D. L., 187, 193Kittoe, M., 50, 58Klementik, D., 437Klepeiss, D., 401Knowledge re-use quotient, 38, 41Knowledge shar<strong>in</strong>g <strong>and</strong> management: <strong>in</strong>Corn<strong>in</strong>g’s <strong>in</strong>novation process, 36–40, 41;<strong>in</strong> Delnor Hospital’s leadership developmentprogram, 54; at Emmis Communications,96–97; at MIT, 319Knowledge speakers, 267Knowledge (technology) warehouse, 38Kocourek, P. F., 361Kotter, J., 215, 216Kouzes, J., 216, 217, 218, 220, 222, 237
INDEX 467Kozlowski, T., 28Kraft Foods, 263Kuehler, D., 265, 266, 281Kuplen, C., 401LLaggards, 254Lagg<strong>in</strong>g <strong>in</strong>dicators, 359Lane, J. M., 344–345Language, common: for culture changemanagement, 99; for <strong>in</strong>novation, 25, 33; <strong>in</strong>Mattel’s Project Platypus, 269–271Lao Tzu, 320, 321Leaders: <strong>in</strong>formal, as <strong>in</strong>fluencers, 247–249;as teachers, 241, 246–247, 251–252, 254<strong>Leadership</strong>: management versus, 215–216;role of, <strong>in</strong> culture model<strong>in</strong>g <strong>and</strong>re<strong>in</strong>forcement, 162<strong>Leadership</strong>, an Art of Possibility, 224, 238<strong>Leadership</strong> Action Plan (LAP), 220, 232<strong>Leadership</strong> Autobiography, 216, 220, 221,233–236<strong>Leadership</strong> behavioral profiles, xxii; of Agilent,3–4, 5, 15; of First Consult<strong>in</strong>g Group, 127,128, 130–132. See also Competency models<strong>Leadership</strong> br<strong>and</strong>: of Emmis Communications,92, 117; of StorageTek, 414–415<strong>Leadership</strong> Breakthrough Award (LBA),220, 225<strong>Leadership</strong> Commitment Day, 355, 358<strong>Leadership</strong> cultural assessment tool, 351<strong>Leadership</strong> development, xvi; Agilent’s APEXcoach<strong>in</strong>g case study of, 1–19; consult<strong>in</strong>gfirms <strong>and</strong>, xxviii–xxix; content of, 446, 447;at Delnor Hospital, 50, 53–55, 56, 61, 65–69;design elements for, 132–134; at EmmisCommunications, 84, 89–92; at factory level,213–238; First Consult<strong>in</strong>g Group case studyof, 120–160; GE Capital case study of,161–180; global, 4, 14, 173, 185–186;Hewlett-Packard case study of, 181–194;<strong>in</strong>tegration of, with HR systems, 291, 343;Intel case study of, 213–238; leaders’participation <strong>in</strong> design of, 128–129, 134, 162,163–165; at McDonald’s, 282–308; methodsof, 446–447; at Motorola, 334–345; pre-workfor, 167–168, 174, 286; return on <strong>in</strong>vestmenton, xxviii, 190, 191, 341–342; sampleexercises for, 152–158; self-developmentapproach to, 215–216, 217–218, 229; SixSigma <strong>and</strong>, 202–210; at St. Luke’s Hospital,365–402; at StorageTek, 414–415; strategicobjectives <strong>and</strong>, xviii; tools for, 290<strong>Leadership</strong> <strong>Development</strong> Forum (LDF),213–238. See also Intel<strong>Leadership</strong> Eng<strong>in</strong>e, The (Cohen <strong>and</strong> Tichy), 260<strong>Leadership</strong> First, 120–160. See also FirstConsult<strong>in</strong>g Group (FCG)<strong>Leadership</strong> forums, St. Luke’s Hospital, 367,371–377, 382–383. See also St. Luke’sHospital<strong>Leadership</strong> Impact (LI) Survey, xxii, 168, 169<strong>Leadership</strong> Philosophy Map, 351, 352, 353,361, 362<strong>Leadership</strong> <strong>Practices</strong> Inventory (LPI), 221,222, 237<strong>Leadership</strong> st<strong>and</strong>ards: Motorola’s, 337,339–340, 341; St. Luke’s Hospital’s, 376<strong>Leadership</strong> strategy alignment <strong>in</strong>itiative,346–364. See also Praxair DistributionInc. (PDI)<strong>Leadership</strong> strategy design tool, 361<strong>Leadership</strong> supply process: leadership dem<strong>and</strong><strong>and</strong>, 335–336; Motorola’s development of,334–345Lead<strong>in</strong>g for Results workshops, 91–92, 99,416–417Lead<strong>in</strong>g <strong>in</strong>dicators, 359Lean Experts, Six Sigma, 199, 210, 211Lean Masters, Six Sigma, 210Learn<strong>in</strong>g: <strong>in</strong> Corn<strong>in</strong>g’s <strong>in</strong>novation process,36–40; leadership <strong>and</strong>, 216; l<strong>in</strong>k<strong>in</strong>g, toperformance, 319–320; organizational,309–321, 415; team, 325Learn<strong>in</strong>g challenges, exposure to, 285, 286Learn<strong>in</strong>g coaches, 39–40, 42Learn<strong>in</strong>g Company, 263Learn<strong>in</strong>g contracts, 134, 138, 139, 150–151Learn<strong>in</strong>g culture, enhanc<strong>in</strong>g, <strong>in</strong> Corn<strong>in</strong>g casestudy, 38–39Learn<strong>in</strong>g groups, 219Learn<strong>in</strong>g journals, 184, 289, 290, 316Learn<strong>in</strong>g mach<strong>in</strong>e, 36–40Learn<strong>in</strong>g maps, xxv, 410–411, 412, 415Learn<strong>in</strong>g organization, self-perpetuat<strong>in</strong>g:development of, at MIT, 309–321; tra<strong>in</strong><strong>in</strong>gmethodologies <strong>and</strong> tools for, 316Learn<strong>in</strong>g partners, 289, 293–294Lehigh Valley, Pennsylvania, 367Leibig, E., 25Leisure <strong>in</strong>dustry case study. See McDonald’sCorporationLessons learned: <strong>in</strong> Agilent’s APEX coach<strong>in</strong>gprogram, 13–14; <strong>in</strong> Corn<strong>in</strong>g’s <strong>in</strong>novationchange <strong>in</strong>itiative, 40–41; <strong>in</strong> Delnor Hospital’sservice excellence program, 60–61; <strong>in</strong> Emmis
468 INDEXLessons learned: (Cont<strong>in</strong>ued)Communications’ change <strong>in</strong>itiative, 99–100;<strong>in</strong> First Consult<strong>in</strong>g Group’s leadershipdevelopment program, 135–137; <strong>in</strong> Intel’s<strong>Leadership</strong> <strong>Development</strong> Forum, 229–230;<strong>in</strong> Lockheed Mart<strong>in</strong> Workforce Vitality<strong>in</strong>itiative, 253–254; <strong>in</strong> Mattel’s Project Platypus,269, 271, 273, 274, 278; <strong>in</strong> McDonald’sleadership development program, 293–294;<strong>in</strong> MIT’s organizational learn<strong>in</strong>g <strong>in</strong>itiative,319–320; <strong>in</strong> Motorola’s leadership supplyprocess, 342–343; <strong>in</strong> Praxair’s leadershipstrategy change <strong>in</strong>itiative, 360–361; <strong>in</strong>StorageTek’s culture change <strong>in</strong>itiative, 411,417–418, 421; <strong>in</strong> W<strong>in</strong>dber Medical Center’stransformation <strong>in</strong>itiative, 437Leverage, for behavior change at LockheedMart<strong>in</strong>, 241, 254L<strong>in</strong>kage OD Summit, 315Livermore, C. A., 45, 46, 47–48, 49, 52, 53, 54,56, 57, 59, 60, 78Liv<strong>in</strong>g stage, 266–267Liv<strong>in</strong>g systems, 264–265, 267; chaos <strong>and</strong>cohesion <strong>in</strong>, 274–276; conflict <strong>in</strong>, 275;<strong>in</strong>clusion phase of, 269Lockheed Mart<strong>in</strong> Tactical Aircraft Systems(LMTAS): background on, 241–242; bestpractices of, 253–254; case study, 239–261;change objectives of, xviii, 240–242;evaluation at, xxvii, 251–253, 256–257,258, 259; implementation at, xxiv, 244–251;leaders-as-teachers at, 241, 246–247,251–252, 254; leadership support at,240–241, 245–247; op<strong>in</strong>ion leaders at, 246,247–252, 254, 257; overview of, xvii,240–241; resistance at, 243–251; Six Sigmaat, 243, 244, 249; Workforce Vitality <strong>in</strong>itiativeof, 245–259Loehr, J., 383Lombardo, M. M., 341, 344Loranger, S., 203Los Angeles Magaz<strong>in</strong>e, 81Lucas, L., 310–311Lucent Technology, 182Lynch, R., 94MMacAvoy, T., 21, 22, 23, 24, 25, 26, 27, 40Magaz<strong>in</strong>e division, of EmmisCommunications, 81Malicious compliance, 91Management, leadership versus, 215–216Management performance evaluation, atSt. Luke’s Hospital, 383, 394–399Management practices redesign, 354–355,358–359Managerial style profile, 127Manag<strong>in</strong>g Acquisitions <strong>and</strong> Mergers Exercise,157Manag<strong>in</strong>g Through People, 215Manag<strong>in</strong>g-up, 59Manufactur<strong>in</strong>g function <strong>in</strong>tegration, <strong>in</strong><strong>in</strong>novation process, 26, 27–28, 29, 31–33, 38,39, 40, 41Manufactur<strong>in</strong>g <strong>in</strong>dustry case studies. SeeHoneywell Aerospace; IntelMarket<strong>in</strong>g function <strong>in</strong>tegration, <strong>in</strong> <strong>in</strong>novationprocess, 26, 27–28, 33, 40, 41Mart<strong>in</strong>, P. J., 406, 410, 420Masa, C., 56Massachusetts Institute of Technology (MIT),Department of Facilities: assessment at,310–312; behavioral, cultural, <strong>and</strong> perceptualchange at, xix; case study, 309–321; changecatalystprogram of, xxv, 309–321; changeobjectives of, xviii, 310–312, 314; competencymodels of, 315, 325, 326; evaluation<strong>and</strong> results at, 317–318; lessons learned at,319–320; on-the-job support at, xxvi–xxvii,316; organizational learn<strong>in</strong>g models of, xx,314; overview of, xvii, 310–312; personalmastery module of, 314, 316, 318, 327–328,330–332; program design at, 314–315; strategicplan of, 311–312, 322–323; top managementsupport at, 312–313; tra<strong>in</strong><strong>in</strong>gmethodologies <strong>and</strong> tools of, 316Masters, Six Sigma, 204, 208, 210, 211MatrixWorks Inc., 279Mattel, Project Platypus, xix, xxiv–xxv, xxvi,262–281; alignment scenes <strong>in</strong>, 271–276;background <strong>and</strong> overview of, xvii, 263, 268;case study, 262–281; communication <strong>in</strong>,277–279; elements of, 266–267, 268; evolutionscene <strong>in</strong>, 276–278; expression scene <strong>in</strong>,269–271; Face-to-Face sessions <strong>in</strong>, 271, 274,276, 277–278; immersion scene <strong>in</strong>, 267–269;on-the-job support at, xxvi; philosophicalunderp<strong>in</strong>n<strong>in</strong>gs of, 264–265; process of,267–279; results <strong>and</strong> impact of, 279–280;theater model of, 266–279; the wall <strong>in</strong>, 267,270, 272, 273, 275, 276, 278McClell<strong>and</strong>, M., 57McDonald’s Corporation: action learn<strong>in</strong>g at,xxii, 285, 289–290, 292–295; assessment at,xxii, 285–288, 294; Bus<strong>in</strong>ess ImprovementRecommendation Process of, 306–307; casestudy, 282–308; change objectives of, xviii;coach<strong>in</strong>g at, xxiii, 287–288; competency
INDEX 469model of, 284, 287, 297; critical successfactors at, 293; developmental objectives of,285, 287, 288, 295; developmental toolsof, 290; evaluation at, xxvii, 291–295; followupat, xxvi, 291; implementation at, 289–299;<strong>Leadership</strong> at McDonald’s Program (LAMP)of, 295–296; <strong>Leadership</strong> <strong>Development</strong>Experience of, 283–295, 296–307; leadershipdevelopment program impact at, 292–293,294–295; lessons learned at, 293–294;overview of, xvii, 283–285; program designat, 288; regional manager (RM) developmentat, 282–307McKenna, M. G., 361McK<strong>in</strong>sey & Company, 336, 337, 339, 344,408, 422McLean, G. N., 451McMillan, R., 260Measurement: at Delnor Hospital, 50, 53,57–59, 61, 64, 73–74; at Emmis Communications,94–95, 108–118; of leadership effectiveness,340–341; of leadership strategychange <strong>in</strong>itiative, 359–360; at McDonald’s,291–292; of patient satisfaction, 50, 53, 58,64, 74; at StorageTek, 409; at W<strong>in</strong>dberMedical Center, 435–436. See alsoAssessment; EvaluationMedia endorsements, for change, 429, 432Media <strong>in</strong>dustry case study. See EmmisCommunicationsMedia <strong>in</strong>dustry realities, 87Medicaid, 427Medicare, 427Melohn, T., 223, 237Mental models, 325Mentor<strong>in</strong>g, <strong>in</strong> First Consult<strong>in</strong>g Group’s leadershipdevelopment program, 130, 134, 137Meredith, M., 279, 280Merit compensation program, 94Michaels, E., 336Micro-management, 278Military model, 428–430Miller, J., 21, 33, 40Mission statement: for Delnor Hospital, 48; forSt. Luke’s Hospital, 384Model<strong>in</strong>g the way, 225Modern Healthcare, 437Modern Maturity, 437Momentum, 357Monthly excellence awards, 56Morn<strong>in</strong>g meet<strong>in</strong>gs, 37Motorola: assessment at, xxii, 340–341; casestudy, 334–345; change objectives of, xviii,335–337; diagnosis at, 335–337; f<strong>in</strong>ancialresults at, 342; “4e’s + Always 1” leadershipst<strong>and</strong>ards of, 337, 339–340, 341; leadershipsupply process of, 334–345; lessons learnedat, 342–343; on-the-job support at,xxvi–xxvii; overview of, xvii, 335; performancemanagement at, xix–xx, xxvi–xxvii,338, 339–342; Six Sigma at, 198; talentdem<strong>and</strong> <strong>and</strong> supply issues of, 335–337Mounta<strong>in</strong>eer<strong>in</strong>g theme, for coach<strong>in</strong>g program,5–6“Multidiscipl<strong>in</strong>ary Approach to Decreas<strong>in</strong>gCentral/Umbilical L<strong>in</strong>e AssociatedBacteremia <strong>in</strong> the NICU,” 377–378Murphy, 58Myers Briggs Type Indicator (MBTI), xxii, 168,169–170, 373, 374–375NNational Medal of Technology, 22Needs assessment, 440–441. See alsoAssessment; Diagnosis, bus<strong>in</strong>essNeil, R., 364Nelson, J. S., 119N<strong>in</strong>th House Network Innovation, 222, 237Nolet, D., 31Nordstrom Way (Spector), 93North American Tool <strong>and</strong> Die, 223NorthStar Group, 91, 308Nosocomial <strong>in</strong>fection prevention, 377–378, 436Novatnack, E., 377NPR Radio, 273OObjectives, strategic: align<strong>in</strong>g behavior st<strong>and</strong>ardsto, 59–60, 201–202; align<strong>in</strong>g leadershipstrategy with, 346–364; commitment to,xvii–xix; consult<strong>in</strong>g firms’ objectives versus,xxix; of Corn<strong>in</strong>g change <strong>in</strong>itiative, 23–24; ofEmmis Communications’ change <strong>in</strong>itiative,88; of First Consult<strong>in</strong>g Group’s leadershipdevelopment program, 123–124, 141; ofHoneywell’s Six Sigma program, 200–202,207–208; of Lockheed Mart<strong>in</strong>, 240–242; ofMIT, 310–312, 314; of Motorola, 335–337; ofPraxair, 349, 350; of St. Luke’s Hospital,384–385; of StorageTek’s culture change,406–411; of W<strong>in</strong>dber Medical Center’stransformation, 427–428OD Source Consult<strong>in</strong>g, Inc., 119O’Leary, R. A., 42On-the-job learn<strong>in</strong>g, at McDonald’s, 295On-the-job support: <strong>in</strong> Corn<strong>in</strong>g’s <strong>in</strong>novationchange management process, 33–36; <strong>in</strong>First Consult<strong>in</strong>g Group’s leadership
470 INDEXOn-the-job support: (Cont<strong>in</strong>ued)development program, 137–138; <strong>in</strong> Hewlett-Packard’s leadership development program,186, 191; phase of, xxvi–xxvii; <strong>in</strong> Praxair’sleadership strategy <strong>in</strong>itiative, 358–359.See also Follow-upOp<strong>in</strong>ion leaders, 246, 247–252, 254, 257Oral histories, 38Organization Analysis (OA) model, 170–171Organization change models, xix–xx; foralign<strong>in</strong>g leadership strategy with bus<strong>in</strong>essstrategy, at Praxair, 346–364; customizationof, 61; for Delnor Hospital, 47–48, 61; forMIT’s organizational learn<strong>in</strong>g <strong>in</strong>itiative,315, 325–326Organization development (OD) <strong>and</strong> change:common elements of, xvii–xix; consult<strong>in</strong>gfirms <strong>and</strong>, xxviii–xxix; <strong>in</strong>vestment <strong>in</strong>, xxviii;methods of, xv–xvi; trends <strong>and</strong> themes <strong>in</strong>,439–451Organization development–human resourcesdevelopment (OD–HRD) <strong>in</strong>itiative, xxviOrganizational capabilities development, 409,415–417Organizational learn<strong>in</strong>g: capabilities for, 325;competency model for, 326; at Corn<strong>in</strong>g,36–40; MIT’s <strong>in</strong>itiative for, 309–321; atStorageTek, 415Orientation, to Intel’s <strong>Leadership</strong> <strong>Development</strong>Forum, 221–222Osborne, J., 203, 204, 205, 206, 210, 212Outst<strong>and</strong><strong>in</strong>g Rural Health Leader award, 437Ownership: environment of, 52–53, 61; ofleadership development program, 134PPackaged gas <strong>in</strong>dustry, 347–349. See alsoPraxairPackard, D., 182Parker, G., 58Participant reactions: to HP’s leadershipdevelopment program, 187, 189, 193; toIntel’s leadership development program,226–227, 228–229; to MIT’s organizationallearn<strong>in</strong>g <strong>in</strong>itiative, 317–318; programimprovement based on, 365–376, 390; toSt. Luke’s Hospital’s leadership forums,375–376, 390Participant selection: for Agilent’s APEXcoach<strong>in</strong>g program, xxiii, 6, 8–9, 14; for FirstConsult<strong>in</strong>g Group’s leadership developmentprogram, 125–126, 129, 135, 142–144; forIntel’s <strong>Leadership</strong> <strong>Development</strong> Forum, 218;for Mattel’s Project Platypus, 266Participation: <strong>in</strong> First Consult<strong>in</strong>g Group’s leadershipdevelopment design, 128–129, 134; <strong>in</strong>GE Capital’s leadership development design,162, 163–165; <strong>in</strong> Hewlett-Packard’s leadershipdevelopment design, 185; importance of,450–451; <strong>in</strong> MIT’s renewal plann<strong>in</strong>g, 311; <strong>in</strong>Motorola’s leadership supply process, 337,342; <strong>in</strong> organizational change, 350, 445; <strong>in</strong>Praxair’s assessment <strong>and</strong> design phases, 350,356; requirements for, <strong>in</strong> Intel’s <strong>Leadership</strong><strong>Development</strong> Forum, 217; <strong>in</strong> St. Luke’s Hospitalleadership forum design, 375–376, 390Partners, <strong>in</strong> Mattel’s Project Platypus, 276–277Partnerships, <strong>in</strong> consult<strong>in</strong>g <strong>in</strong>dustry, 122–123Past history, leverag<strong>in</strong>g, xxiii, 411, 451; <strong>in</strong>Corn<strong>in</strong>g’s <strong>in</strong>novation change <strong>in</strong>itiative, 24,25, 28, 38, 40, 41Patient call-backs, 51–52Patient-centered care model, 423–438;elements of, 427, 431; patient empowerment<strong>and</strong>, 425, 431; physician <strong>and</strong> staff resistanceto, 426–427, 428–430, 432–433. See alsoW<strong>in</strong>dber Medical CenterPatient satisfaction improvement: culturebased on, 49–52; customer service teams for,49–50, 51, 62; at Delnor Hospital, 43–78;employee behavior st<strong>and</strong>ards for, 59–60;employee satisfaction <strong>and</strong>, 56–57, 61, 368;measurement of, 50, 53, 58, 64, 74; atSt. Luke’s Hospital, 370, 373–374, 376,378–380, 383, 387, 391Patterson, K., 260Peak performance analysis, 167, 168,169–170, 175Pearce, T., 216Peer networks, 296Perceptual change, xix; <strong>in</strong> MIT’s organizationallearn<strong>in</strong>g <strong>in</strong>itiative, 318“Perfect Enough” pr<strong>in</strong>ciple, 184Performance ethic, 408Performance management, xvi; at EmmisCommunications, 87, 94–97, 109–118; learn<strong>in</strong>gl<strong>in</strong>kage to, 319–320; at Motorola, 338,339–342; on-the-job support <strong>and</strong>, xxvi–xxvii;at Praxair, 355, 358; at St. Luke’s Hospital,383, 394–399; at StorageTek, 412–414Performance scorecard, for Delnor Hospital, 64Personal engagement, 244Personal mastery, 314, 316, 318, 325, 327–328;exercises for, 318, 327, 328, 330–332Perspectives Conference, 358Peters, L., 261Peters, T., 216, 222Pfeiffer, J., 445
INDEX 471Physician culture change, 426–427, 428–430,432–433Physician satisfaction, 50, 58–59Picnics, 372P<strong>in</strong>to, J., 381Planetree hospital model, 424–437. See alsoPatient-centered care model; W<strong>in</strong>dberMedical CenterPlann<strong>in</strong>g dialogue, 340Playbook, 354–355Politics, <strong>in</strong>ternal, 100Portfolio management, 28, 33, 34Posner, B., 216, 217, 218, 220, 222, 237Post-course management system, xxvPostmodernism, xxiv–xxv, 264, 266Power of Full Engagement, The, 374<strong>Practices</strong>, current, leverag<strong>in</strong>g, xxiii, 411, 451Praxair Distribution Inc. (PDI): acquisitionstage of, 347–348; alignment of leadershipstrategy with bus<strong>in</strong>ess strategy at, 346–364;assessment at, xxii, xxvi, 350–353; casestudy, 346–364; critical success factors for,356–357; diagnosis of, 349–350; differentiationstrategy of, 349, 350, 352; evaluation at,359–360; implementation at, xxvi, 357–358;iterative design process of, 354–357; lessonslearned at, 360–361; on-the-job support at,xxvi–xxvii, 358–359; organizational change<strong>in</strong>itiative of, 346–364; overview of, xvii,347–349; rollup strategy of, 348–350; strategicobjectives of, 349, 350; top leadershipsupport at, xx–xxi, 355–356Pre-work, leadership development, 168–169,174, 286Presbyterian Medical Center, 375Presentation tools, 290Press Ganey, 58, 369, 370, 373, 378, 379, 380,381, 382, 392Price, M. Q., 261Process eng<strong>in</strong>eer<strong>in</strong>g, 38, 39Product cost<strong>in</strong>g, 277Product life cycles, 182Product test<strong>in</strong>g, 277Program design: of Agilent’s APEX coach<strong>in</strong>gprogram, 4–7; of Corn<strong>in</strong>g’s <strong>in</strong>novationchange process, 25–29; elements of,xxii–xxiv, 141; of Emmis Communications’change effort, 88–89; of First Consult<strong>in</strong>gGroup’s leadership development program,128–134, 141; of GE Capital’s leadershipdevelopment program, 163–167; of Hewlett-Packard’s leadership development program,183–185; of Intel’s <strong>Leadership</strong> <strong>Development</strong>Forum, 217–219, 221, 229; iterative, 354–357;just-<strong>in</strong>-time, 218; of McDonald’s leadershipdevelopment program, 288; of MIT’s organizationallearn<strong>in</strong>g <strong>in</strong>itiative, 314–315; phaseof, xxii–xxiv, 445–448; of Praxair’s change<strong>in</strong>itiative, 354–357; redesign of, 221, 229,230, 375–376, 390; of St. Luke’s Hospitalleadership development program, 369–372;team for, 128; trends <strong>and</strong> themes <strong>in</strong>,445–448; of W<strong>in</strong>dber Medical Center’spatient-centered care <strong>in</strong>itiative, 431Project Bravo awards, 381Project Platypus. See Mattel, Project PlatypusProject Review Checklist, 290, 304–305Project tools, action learn<strong>in</strong>g, 290, 301–305Property swapp<strong>in</strong>g, 87Prototype build<strong>in</strong>g, 277Purpose, organizational: connection to,xxiii–xxiv; <strong>in</strong>novation program connectionto, 40Pushback, 443QQuality improvement: at St. Luke’s Hospital,370, 377–378, 380, 391; at StorageTek,416–417. See also Employee satisfactionimprovement; Patient satisfaction improvement;Total Quality ManagementRRadio corporation. See EmmisCommunicationsRadio Ink, 82Rapid prototyp<strong>in</strong>g, 184, 222Rard<strong>in</strong>, R., 364Rate-change enablers, 36–37Read<strong>in</strong>gs, for leadership developmentprogram, 133“Real work,” xv–xviRecognition: at Delnor Hospital, 50, 55–56, 58,61; at Emmis Communications, 84, 93–94,118; for service excellence, 50, 58; atW<strong>in</strong>dber Medical Center, 431, 432.See also AwardsRecruitment: at Motorola, 337; atStorageTek, 415Reeng<strong>in</strong>eer<strong>in</strong>g, bus<strong>in</strong>ess process, 30, 38, 39Refreez<strong>in</strong>g, 433Regional manager (RM) development, 282–307Regional Manager Success Profile, 284,285–288, 290, 294, 297“Re<strong>in</strong>vent HP” campaign, xxii, 182–183, 185Relationship build<strong>in</strong>g: <strong>in</strong> First Consult<strong>in</strong>gGroup’s leadership development program,134; <strong>in</strong> Mattel’s Project Platypus, 271,
472 INDEXRelationship build<strong>in</strong>g: (Cont<strong>in</strong>ued)277–278; <strong>in</strong> McDonald’s leadershipdevelopment program, 285, 296Remedial coach<strong>in</strong>g, 14Research <strong>and</strong> development (R&D) change<strong>in</strong>itiative, 20–42. See also Corn<strong>in</strong>gResearch reviews, 37Resistance: behaviors of, 244; at EmmisCommunications, 91; emotional basis of, 199;<strong>in</strong>volvement <strong>and</strong>, 350, 450–451; at LockheedMart<strong>in</strong>, 243–251; model of, 443; to patientcenteredcare, at W<strong>in</strong>dber Medical Center,426–427, 428–430, 432–433; reduc<strong>in</strong>g,443–445; to Six Sigma, 197, 199, 243, 244;trends <strong>and</strong> themes <strong>in</strong>, 442–443; types of, 443Resource Associates, 133Restaurant case study. See McDonald’sCorporationRestructur<strong>in</strong>g, 30Results-Based <strong>Leadership</strong> (RBL), 81, 89–91, 93,94–95; at Emmis Communications, 81,89–91, 93, 94–95, 103–104; FAST workshopsof, 89–91, 103–104; Lead<strong>in</strong>g for Resultsworkshops of, 91–92, 99; at StorageTek, 408,409, 410, 412–414, 418–420, 422Results-Based <strong>Leadership</strong> (Ulrich, Zenger, <strong>and</strong>Smallwood), 90, 314, 408, 409, 410, 422Results guarantee, of coach<strong>in</strong>g firm, 6–7Return on <strong>in</strong>vestment (ROI): of Hewlett-Packard’s leadership development program,190, 191; for leadership development <strong>and</strong>organization change <strong>in</strong>itiatives, xxviii, 449Revolv<strong>in</strong>g door theory, 433Rewards <strong>and</strong> reward systems: at Delnor Hospital,50, 55–56, 58, 61; at Emmis Communications,94, 117–118; at First Consult<strong>in</strong>g Group,125; for high performance, 418–419; l<strong>in</strong>kageof, to behavior change, 245; l<strong>in</strong>kage of, toleadership performance, 341–342; at LockheedMart<strong>in</strong>, 245, 249; at Motorola, 338,341–342; for patient care at W<strong>in</strong>dber MedicalCenter, 430, 432; for service excellence, 50,58; at StorageTek, 418–419; at W<strong>in</strong>dberMedical Center, 432Rex, S., 402Rhoads, R., 31Rhythmic Top, 40, 81Rianoshek, R., 193Riesbeck, J., 26Risk management, 33Risk-reward analysis, 124–125Roadmapp<strong>in</strong>g, 28, 33, 34Rock climb<strong>in</strong>g, 222–223Rogers, E., 248, 254–255, 260Rollup strategy, 348–350RootLearn<strong>in</strong>g, 410, 412, 415Ross, I., 263, 265, 266, 280–281Rothwell, W. J., 451Round<strong>in</strong>g, hospital, 51Rudolph, S., 238SSabol, D., 402St. Luke’s Hospital <strong>and</strong> Health Network:assessment at, 373, 374–375; backgroundon, 366–368; case study, 365–402; competencymodel of, 382–383, 395–398; core conceptsof, xxiii–xxiv, 367–368; core pr<strong>in</strong>ciplesof, 385; core values of (PCRAFT), 367, 381,387; diagnosis of, 368–369; evaluation at,375–376, 390, 391; Five-Po<strong>in</strong>t Star model of,367, 369–376, 377–382, 389, 391; implementationat, 372–375; leadership developmentprogram of, 365–402; leadership forums of,367, 371–376, 382–383; leadership l<strong>in</strong>kagecommittee of, 382–383, 393; leadershipsteer<strong>in</strong>g committee of, 369, 372, 373, 375,376, 382, 388; management performanceevaluation at, 383, 394–399; managementphilosophy for, 386–387; organizationalresults at, 376–377, 391; overview of, xvii,366; program design at, 369–372; strategicplan of, 367, 384–385; top leadershipsupport at, 375Sartre, J.-P., 266, 280Sartre on Theater, 266Schwartz, T., 383Schweon, S., 377Script<strong>in</strong>g, nurse, 50–51, 63Seatback <strong>in</strong>itiatives, 196–197Seattle Mar<strong>in</strong>ers, 82Selection, at Motorola, 337Self-assessment: <strong>in</strong> First Consult<strong>in</strong>g Group’sleadership development program, 127, 133;<strong>in</strong> Intel’s <strong>Leadership</strong> <strong>Development</strong> Forum,220, 225, 226; <strong>in</strong> McDonald’s leadershipdevelopment program, 286; <strong>in</strong> Praxair’sleadership strategy <strong>in</strong>itiative, 355Self-development approach, to leadershipdevelopment, 215–216, 217–218, 229Self-discovery speakers, 267–268Self-nom<strong>in</strong>ation, for leadership developmentprogram, 129, 135, 143–144Self-reflection: <strong>in</strong> GE Capital’s leadershipdevelopment program, 166–167, 168; <strong>in</strong>Intel’s <strong>Leadership</strong> <strong>Development</strong> Forum, 216,220, 224, 229, 233–236SEMATECH, 225, 227, 238
INDEX 473Senge, P., xx, 167, 179, 314, 315, 321, 325Senior center, 434Sense of urgency. See Urgency, sense ofSeptember 11, 2001, 83, 84Servant <strong>Leadership</strong> (Greenleaf), 271Service enhancement, xvi; commitment toexcellence for, 48–49, 60, 367–368; coreconcepts for, xxiii–xxiv, 367–368; culturalchange for, 49–52; at Delnor Hospital, 43–78;at Emmis Communications, 89, 90; atSt. Luke’s Hospital, 370, 373–374, 376,378–380, 383, 391; at StorageTek, 416–417.See also Patient satisfaction improvementService recovery, 52Sever, E., 29Severance package, 84Shaara, M., 168Shalala, D., 437Shared memory, 25, 28, 38Shared m<strong>in</strong>dset, 415, 417Shared vision, 325Sharkey, L., 179–180Sh<strong>in</strong>go Prize, 253Short-cycle learn<strong>in</strong>g mach<strong>in</strong>e, 37Shortcuts, <strong>in</strong> change model, 99–100Silva, R. A., 18Simulation exercise, 224Sirianni, V., 310–311, 312–313, 314Situational approach, xxiv; <strong>in</strong> First Consult<strong>in</strong>gGroup’s leadership development program toleadership development, 132–134, 135–136,139–140, 152–159; <strong>in</strong> GE Capital’s leadershipdevelopment program, 169, 170–171; <strong>in</strong>Intel’s <strong>Leadership</strong> <strong>Development</strong> Forum, 219Situational assessment, of First Consult<strong>in</strong>gGroup, 123Six Sigma: at Honeywell, xix, xxi, 195–212; atLockheed Mart<strong>in</strong>, 243, 244, 249; modificationof, to fit bus<strong>in</strong>ess objectives, 201–202;Organization Analysis (OA) model <strong>and</strong>, 170;results of, 211–212; revitalization of, for leadershipimprovement, 202–210; at StorageTek,417; success criteria for, 205–207; top firmswith, 198; top talent <strong>and</strong>, 209–210; wholescaleimplementation of, 210–212Slow roll<strong>in</strong>g, 243Small, D., 308Smallwood, N., 89–90, 93, 321, 408, 409,410, 422SMART goal development, 95Smith, H., 46Smith, J., 238Smulyan, J., 80, 81, 82–83, 84, 87, 89, 91, 93,97, 98, 106Spector, R., 93Speed, as StorageTek organizational capability,415Sperduto & Associates, 57, 72Sperry Flight Systems, 196Spol<strong>in</strong>, V., 272, 273, 280StageGate model of <strong>in</strong>novation, 25–26, 28,36, 41Stakeholders, of change <strong>in</strong>itiatives, 202Star Model. See Five-Po<strong>in</strong>t Star ModelStar Trek, 373Starr, A., 400Step-by-Step System to Organization <strong>and</strong>Human Resources <strong>Development</strong>, xvi,xxi–xxviiiStep change, 30Stewards <strong>and</strong> stewardship, 276, 278Stock compensation program, 85, 94Stokes, H., 361StorageTek: assessment at, xxii, 412–413;atta<strong>in</strong>-<strong>and</strong>-susta<strong>in</strong>-improvement phase at,407, 418–420; background on, 404–406; casestudy, 403–422; challenge def<strong>in</strong>ition phase at,406–411; change objectives of, xix, 406–411;core purpose <strong>and</strong> values of, 405; culturechange program of, xxv, 403–422; culture of,405–406; current practices usage of, xxiii,411; f<strong>in</strong>ancial results at, 420; goal def<strong>in</strong>itionat, 408–410, 411; IBM <strong>and</strong>, 404, 405; lessonslearned at, 411, 417–418; overview of, xvii,404; Six Sigma at, 417; transformation phasesof, 406–407; transformation timel<strong>in</strong>e of, 419;work-through-change phase at, 407, 411–418Stories <strong>and</strong> storytell<strong>in</strong>g, xxiii, xxiv, 28, 38, 167;elements of, 269–270; <strong>in</strong> Mattel’s ProjectPlatypus, 269–279Storyboards, 221Strange attractors, 274–276Strategic plan: for Delnor Hospital, 48; forMIT, 311–312, 322–323; for St. Luke’sHospital, 367, 384–385“Strategy: Navigat<strong>in</strong>g to New Horizons”learn<strong>in</strong>g map, 412, 415Stress management, 54–55, 61Studer, Q., 46–47, 48, 49, 53, 55, 369Studer Group, 46, 53Succession plann<strong>in</strong>g, at StorageTek, 414–415.See also <strong>Leadership</strong> development; <strong>Leadership</strong>supply processSullivan, R., 451Summary dialogue, 341Supervisory skill-tra<strong>in</strong><strong>in</strong>g program, 357Supplier feedback, 359–360Surveys, coach<strong>in</strong>g, 8, 10, 16–17
474 INDEXSurveys, evaluation, xxvii–xxviii; of Agilent’sAPEX coach<strong>in</strong>g program, 10, 16–17; ofLockheed Mart<strong>in</strong>’s Workforce Vitality<strong>in</strong>itiative, 252–253, 253, 255–256, 258, 259Surveys, satisfaction: of employee satisfaction,85, 97–98, 418; of patient <strong>and</strong> physiciansatisfaction, 58, 73, 74Switzler, A., 260System theory <strong>and</strong> approach, xxiv–xxv; <strong>in</strong>Mattel’s Project Platypus, 264–265; <strong>in</strong> MIT’sorganizational learn<strong>in</strong>g <strong>in</strong>itiative, 315, 324;<strong>in</strong> Praxair’s leadership strategy <strong>in</strong>itiative,358–359Systems th<strong>in</strong>k<strong>in</strong>g, 167, 325TTalent: dem<strong>and</strong> side of, 335–336; differential<strong>in</strong>vestment <strong>in</strong>, 341–342; management of,338, 343; Motorola’s leadership supplyprocess for, 334–345; as StorageTekorganizational capability, 415; supply sideof, 336–337; war for, 336, 337, 408Talent Web, 337Tao Te Ch<strong>in</strong>g, 320Teachable po<strong>in</strong>ts of view, 163, 169Teachers, leaders as, 241, 246–247,251–252, 254Team Charter, 290, 298Team Metrics, 290, 299Team Process Check, 290, 300Technical tutorials, 37Technology function, cross-functional<strong>in</strong>tegration with, 25–26, 27–28, 29, 30,33, 40–41Technology sector realities, 182–183, 335Technology solutions provider. See FirstConsult<strong>in</strong>g GroupTelecommunications <strong>in</strong>dustry case study. SeeMotorolaTelecommunications <strong>in</strong>dustry realities, 31, 335,336Television corporation. See EmmisCommunicationsTestimonials, for Intel’s <strong>Leadership</strong><strong>Development</strong> Forum, 226–227, 228–229Texas Monthly, 81Theater model, 266–279Th<strong>in</strong>k tank, 96Thoe, G., 83Thompson, J., 266–267Thoreau, H. D., 440, 4513D Learn<strong>in</strong>g, LLC, 238360-degree feedback: for assessment, xxii; <strong>in</strong>coach<strong>in</strong>g, 8, 9, 10, 16–17; for evaluation,xxvii; <strong>in</strong> First Consult<strong>in</strong>g Group’s leadershipdevelopment program, 127, 129, 133, 138,145–149; follow-up, 8, 10, 16–17, 138, 172;<strong>in</strong> GE Capital’s leadership developmentprogram, 168–169, 172; at Intel, 215; samplereport form for, 145–149; <strong>in</strong> StorageTek’sculture change program, 413Thunderbird International Consortia, 296Tichy, N., 163, 169, 179, 260Time management, of leadership developmentprogram, 136Time to market, 28, 29Tipp<strong>in</strong>g Po<strong>in</strong>t, The (Gladwell), 260Tom Peters Company, 222, 237Top leadership support, xx–xxi, 445; forAgilent’s APEX coach<strong>in</strong>g program, 14;alignment of, with management expectations,200–202; at Corn<strong>in</strong>g, 40, 41; at DelnorHospital, 46–48, 60; at Emmis Communications,86, 89–92, 99; at First Consult<strong>in</strong>gGroup, 128–129, 134–135; at GE Capital,163–164; at Hewlett-Packard, 185; atHoneywell, 200–202, 205–208; at Intel, 230;at Lockheed Mart<strong>in</strong>, 240–241, 245–247, 254;at MIT, 312–313; at Motorola, 342, 343; atPraxair, 355–356; for reduc<strong>in</strong>g resistance,443–444; at St. Luke’s Hospital, 375; waysof show<strong>in</strong>g, 444; at W<strong>in</strong>dber MedicalCenter, 426. See also Executive teamcommitmentTOPICS, 356Total Quality Management (TQM): <strong>in</strong>tegrationof <strong>in</strong>novation change <strong>in</strong>itiative with, 23–24,27, 29, 36–37; Six Sigma <strong>and</strong>, 197Town meet<strong>in</strong>gs, 199, 355Toy company case study. See MattelToy Report <strong>and</strong> Toy Wishes, 279Tra<strong>in</strong><strong>in</strong>g programs: <strong>in</strong> Corn<strong>in</strong>g’s <strong>in</strong>novationchange <strong>in</strong>itiative, 27–28; <strong>in</strong> Emmis Communicationsculture change <strong>in</strong>itiative, 95–96; <strong>in</strong>W<strong>in</strong>dber Medical Center’s change <strong>in</strong>itiative,428. See also <strong>Leadership</strong> developmentTransition assistance process, 338–339Travel restrictions, 9, 123, 185Trust <strong>and</strong> trust build<strong>in</strong>g: <strong>in</strong> Intel’s <strong>Leadership</strong><strong>Development</strong> Forum, 222–223; with LockheedMart<strong>in</strong>’s op<strong>in</strong>ion leaders, 250–251;<strong>in</strong> Mattel’s Project Platypus, 271, 274,277–278; <strong>in</strong> StorageTek culture changeprogram, 409Trustee of the Year award, 437Turnover, employee satisfaction improvement<strong>and</strong>, 57, 97Type Directory, 375
INDEX 475UUlrich, D., 314, 321, 408, 409, 410, 422, 451Underhill, B., 3, 18Unfreez<strong>in</strong>g, 433Unified Team Video, The, 224, 237U.K. Royal Air Force <strong>and</strong> Navy, 242U.S. Air Force, 242U.S. Congress, 427U.S. Department of Defense, 240U.S. Mar<strong>in</strong>es, 242U.S. Navy, 242U.S. News <strong>and</strong> World Report, 391U.S. Veterans Adm<strong>in</strong>istration, 373United Technologies, 199–200<strong>University</strong> of Pennsylvania Health System, 375Urgency, sense of, xxi, xxv; at LockheedMart<strong>in</strong>, 244; for Six Sigma implementation atHoneywell, 198; at StorageTek, 410–411User-friendl<strong>in</strong>ess, of coach<strong>in</strong>g program, 4VValue creation, change <strong>in</strong>itiatives <strong>and</strong>, 204–205Values: align<strong>in</strong>g assessment <strong>and</strong> design phaseswith, 351; align<strong>in</strong>g behavior st<strong>and</strong>ards with,59–60; align<strong>in</strong>g leadership behavior changewith, 166–167, 173, 354–355; of DelnorHospital, 48, 59–60; of Emmis Communications,82, 101; at GE Capital, 166; of Praxair,350, 351; of St. Luke’s Hospital, 367, 381,387; of StorageTek, 405Van Eenwyk, J. R., 274, 280Venture Up, 222–223, 237Video case study, 223Vision: for Honeywell’s Six Sigma program,205–209; <strong>in</strong> Mattel’s Project Platypus, 267Vision statement: for Delnor Hospital, 48; forHoneywell Aerospace, 205; for St. Luke’sHospital, 384Visionary exercises, xxv; <strong>in</strong> Intel’s <strong>Leadership</strong><strong>Development</strong> Forum, 221–222; <strong>in</strong> MIT’s organizationallearn<strong>in</strong>g <strong>in</strong>itiative, 315–316,330–332VitalSmarts, Inc., 260Vortex Simulation, 224, 238Vulnerability, 271WWalker, K., 18–19Wall Street Journal, 21War for Talent, The (McK<strong>in</strong>sey), 336, 337,408, 422Web-based systems: follow-through management,186, 191; leadership supply, 337,340–341, 343, 344; multirater assessment,340–341; performance management system,412–413Weig<strong>and</strong>, B., 401Welch, J., 200Wellness center, 426WENS-FM, 81, 97Westwood International, 212“What If?” stories, 270Wheatley, M., 263–264White water, 240Wick, C., 194Williams, M., 93Willyerd, K., 261W<strong>in</strong>dber Medical Center: assessment at,428–431; behavioral, cultural, <strong>and</strong> perceptualchange at, xix; case study, 423–438; changeobjectives of, 427–428; core concepts of, xxiv,431; critical success factors for, 432; diagnosisof, 425–426, 427; evaluation <strong>and</strong> resultsat, 432–437; grant politics of, 434; implementationat, 431–432; lessons learned at,437; organizational challenges of, 426–428;overview of, xvii, 424, 425; Planetree,patient-centered care model at, 423–438;Planetree teams at, 432; program design at,431; top leadership support at, xx, 426Word-<strong>in</strong>-a-Box exercise, 318, 330Work/action plan, 90 day, 77Work-life balance, 54–55, 61, 445Work problem studies, 133, 136, 139–140,152–159Workforce reductions, 84Workforce Vitality <strong>in</strong>itiative, 245–259Workout process, 164–165WOW! Projects, xxvii, 220, 221, 222, 227–228,231Wright, T. L., 54, 55, 78ZZ<strong>and</strong>er, B., 216, 225, 238Zenger, J., 321, 408, 409, 410, 422Zimmel, R. P., 369, 400Zlevor, G., 212Zulauf, C., 313–314, 333
Pfeiffer Publications GuideThis guide is designed to familiarize you with the various types of Pfeiffer publications.The formats section describes the various types of products that we publish; themethodologies section describes the many different ways that content might be providedwith<strong>in</strong> a product. We also provide a list of the topic areas <strong>in</strong> which we publish.FORMATSIn addition to its extensive book-publish<strong>in</strong>g program, Pfeiffer offers content <strong>in</strong> anarray of formats, from fieldbooks for the practitioner to complete, ready-to-use tra<strong>in</strong><strong>in</strong>gpackages that support group learn<strong>in</strong>g.FIELDBOOK Designed to provide <strong>in</strong>formation <strong>and</strong> guidance to practitioners <strong>in</strong> themidst of action. Most fieldbooks are companions to another, sometimes earlier, work,from which its ideas are derived; the fieldbook makes practical what was theoretical<strong>in</strong> the orig<strong>in</strong>al text. Fieldbooks can certa<strong>in</strong>ly be read from cover to cover. More likely,though, you’ll f<strong>in</strong>d yourself bounc<strong>in</strong>g around follow<strong>in</strong>g a particular theme, or dipp<strong>in</strong>g<strong>in</strong> as the mood, <strong>and</strong> the situation, dictates.HANDBOOK A contributed volume of work on a s<strong>in</strong>gle topic, compris<strong>in</strong>g an eclecticmix of ideas, case studies, <strong>and</strong> best practices sourced by practitioners <strong>and</strong> experts<strong>in</strong> the field.An editor or team of editors usually is appo<strong>in</strong>ted to seek out contributors <strong>and</strong> toevaluate content for relevance to the topic. Th<strong>in</strong>k of a h<strong>and</strong>book not as a ready-to-eatmeal, but as a cookbook of <strong>in</strong>gredients that enables you to create the most fitt<strong>in</strong>gexperience for the occasion.RESOURCE Materials designed to support group learn<strong>in</strong>g. They come <strong>in</strong> manyforms: a complete, ready-to-use exercise (such as a game); a comprehensive resourceon one topic (such as conflict management) conta<strong>in</strong><strong>in</strong>g a variety of methods <strong>and</strong>approaches; or a collection of like-m<strong>in</strong>ded activities (such as icebreakers) on multiplesubjects <strong>and</strong> situations.TRAINING PACKAGE An entire, ready-to-use learn<strong>in</strong>g program that focuses on aparticular topic or skill. All packages comprise a guide for the facilitator/tra<strong>in</strong>er <strong>and</strong> aworkbook for the participants. Some packages are supported with additional media—
such as video—or learn<strong>in</strong>g aids, <strong>in</strong>struments, or other devices to help participantsunderst<strong>and</strong> concepts or practice <strong>and</strong> develop skills.• Facilitator/tra<strong>in</strong>er’s guide Conta<strong>in</strong>s an <strong>in</strong>troduction to the program, advice onhow to organize <strong>and</strong> facilitate the learn<strong>in</strong>g event, <strong>and</strong> step-by-step <strong>in</strong>structornotes. The guide also conta<strong>in</strong>s copies of presentation materials—h<strong>and</strong>outs,presentations, <strong>and</strong> overhead designs, for example—used <strong>in</strong> the program.• Participant’s workbook Conta<strong>in</strong>s exercises <strong>and</strong> read<strong>in</strong>g materials that supportthe learn<strong>in</strong>g goal <strong>and</strong> serves as a valuable reference <strong>and</strong> support guide for participants<strong>in</strong> the weeks <strong>and</strong> months that follow the learn<strong>in</strong>g event. Typically, eachparticipant will require his or her own workbook.ELECTRONIC CD-ROMs <strong>and</strong> web-based products transform static Pfeiffer content<strong>in</strong>to dynamic, <strong>in</strong>teractive experiences. Designed to take advantage of the searchability,automation, <strong>and</strong> ease-of-use that technology provides, our e-products br<strong>in</strong>g convenience<strong>and</strong> immediate accessibility to your workspace.METHODOLOGIESCASE STUDY A presentation, <strong>in</strong> narrative form, of an actual event that hasoccurred <strong>in</strong>side an organization. Case studies are not prescriptive, nor are they used toprove a po<strong>in</strong>t; they are designed to develop critical analysis <strong>and</strong> decision-mak<strong>in</strong>g skills.A case study has a specific time frame, specifies a sequence of events, is narrative <strong>in</strong>structure, <strong>and</strong> conta<strong>in</strong>s a plot structure—an issue (what should be/have been done?).Use case studies when the goal is to enable participants to apply previously learnedtheories to the circumstances <strong>in</strong> the case, decide what is pert<strong>in</strong>ent, identify the realissues, decide what should have been done, <strong>and</strong> develop a plan of action.ENERGIZER A short activity that develops read<strong>in</strong>ess for the next session or learn<strong>in</strong>gevent. Energizers are most commonly used after a break or lunch to stimulate orrefocus the group. Many <strong>in</strong>volve some form of physical activity, so they are a usefulway to counter post-lunch lethargy. Other uses <strong>in</strong>clude transition<strong>in</strong>g from one topicto another, where “mental” distanc<strong>in</strong>g is important.EXPERIENTIAL LEARNING ACTIVITY (ELA) A facilitator-led <strong>in</strong>terventionthat moves participants through the learn<strong>in</strong>g cycle from experience to application (alsoknown as a Structured Experience). ELAs are carefully thought-out designs <strong>in</strong> whichthere is a def<strong>in</strong>ite learn<strong>in</strong>g purpose <strong>and</strong> <strong>in</strong>tended outcome. Each step—everyth<strong>in</strong>g that
participants do dur<strong>in</strong>g the activity—facilitates the accomplishment of the stated goal.Each ELA <strong>in</strong>cludes complete <strong>in</strong>structions for facilitat<strong>in</strong>g the <strong>in</strong>tervention <strong>and</strong> a clearstatement of goals, suggested group size <strong>and</strong> tim<strong>in</strong>g, materials required, an explanationof the process, <strong>and</strong>, where appropriate, possible variations to the activity. (For moredetail on Experiential Learn<strong>in</strong>g Activities, see the Introduction to the Reference Guideto H<strong>and</strong>books <strong>and</strong> Annuals, 1999 edition, Pfeiffer, San Francisco.)GAME A group activity that has the purpose of foster<strong>in</strong>g team sprit <strong>and</strong> togetherness<strong>in</strong> addition to the achievement of a pre-stated goal. Usually contrived—undertak<strong>in</strong>g a desert expedition, for example—this type of learn<strong>in</strong>g method offers anengag<strong>in</strong>g means for participants to demonstrate <strong>and</strong> practice bus<strong>in</strong>ess <strong>and</strong> <strong>in</strong>terpersonalskills. Games are effective for team-build<strong>in</strong>g <strong>and</strong> personal development ma<strong>in</strong>lybecause the goal is subord<strong>in</strong>ate to the process—the means through which participantsreach decisions, collaborate, communicate, <strong>and</strong> generate trust <strong>and</strong> underst<strong>and</strong><strong>in</strong>g.Games often engage teams <strong>in</strong> “friendly” competition.ICEBREAKER A (usually) short activity designed to help participants overcome <strong>in</strong>itialanxiety <strong>in</strong> a tra<strong>in</strong><strong>in</strong>g session <strong>and</strong>/or to acqua<strong>in</strong>t the participants with one another. Anicebreaker can be a fun activity or can be tied to specific topics or tra<strong>in</strong><strong>in</strong>g goals. Whilea useful tool <strong>in</strong> itself, the icebreaker comes <strong>in</strong>to its own <strong>in</strong> situations where tension orresistance exists with<strong>in</strong> a group.INSTRUMENT A device used to assess, appraise, evaluate, describe, classify, <strong>and</strong>summarize various aspects of human behavior. The term used to describe an <strong>in</strong>strumentdepends primarily on its format <strong>and</strong> purpose. These terms <strong>in</strong>clude survey, questionnaire,<strong>in</strong>ventory, diagnostic, survey, <strong>and</strong> poll. Some uses of <strong>in</strong>struments <strong>in</strong>clude provid<strong>in</strong>g<strong>in</strong>strumental feedback to group members, study<strong>in</strong>g here-<strong>and</strong>-now processes or function<strong>in</strong>gwith<strong>in</strong> a group, manipulat<strong>in</strong>g group composition, <strong>and</strong> evaluat<strong>in</strong>g outcomes oftra<strong>in</strong><strong>in</strong>g <strong>and</strong> other <strong>in</strong>terventions.Instruments are popular <strong>in</strong> the tra<strong>in</strong><strong>in</strong>g <strong>and</strong> HR field because, <strong>in</strong> general, moregrowth can occur if an <strong>in</strong>dividual is provided with a method for focus<strong>in</strong>g specificallyon his or her own behavior. Instruments also are used to obta<strong>in</strong> <strong>in</strong>formation that willserve as a basis for change <strong>and</strong> to assist <strong>in</strong> workforce plann<strong>in</strong>g efforts.Paper-<strong>and</strong>-pencil tests still dom<strong>in</strong>ate the <strong>in</strong>strument l<strong>and</strong>scape with a typicalpackage compris<strong>in</strong>g a facilitator’s guide, which offers advice on adm<strong>in</strong>ister<strong>in</strong>g the<strong>in</strong>strument <strong>and</strong> <strong>in</strong>terpret<strong>in</strong>g the collected data, <strong>and</strong> an <strong>in</strong>itial set of <strong>in</strong>struments.Additional <strong>in</strong>struments are available separately. Pfeiffer, though, is <strong>in</strong>vest<strong>in</strong>g heavily <strong>in</strong>e-<strong>in</strong>struments. Electronic <strong>in</strong>strumentation provides effortless distribution <strong>and</strong>, for
larger groups particularly, offers advantages over paper-<strong>and</strong>-pencil tests <strong>in</strong> the time ittakes to analyze data <strong>and</strong> provide feedback.LECTURETTE A short talk that provides an explanation of a pr<strong>in</strong>ciple, model, orprocess that is pert<strong>in</strong>ent to the participants’ current learn<strong>in</strong>g needs. A lecturette is<strong>in</strong>tended to establish a common language bond between the tra<strong>in</strong>er <strong>and</strong> the participantsby provid<strong>in</strong>g a mutual frame of reference. Use a lecturette as an <strong>in</strong>troduction toa group activity or event, as an <strong>in</strong>terjection dur<strong>in</strong>g an event, or as a h<strong>and</strong>out.MODEL A graphic depiction of a system or process <strong>and</strong> the relationship among itselements. Models provide a frame of reference <strong>and</strong> someth<strong>in</strong>g more tangible, <strong>and</strong>more easily remembered, than a verbal explanation. They also give participants someth<strong>in</strong>gto “go on,” enabl<strong>in</strong>g them to track their own progress as they experience thedynamics, processes, <strong>and</strong> relationships be<strong>in</strong>g depicted <strong>in</strong> the model.ROLE PLAY A technique <strong>in</strong> which people assume a role <strong>in</strong> a situation/scenario: acustomer service rep <strong>in</strong> an angry-customer exchange, for example. The way <strong>in</strong> whichthe role is approached is then discussed <strong>and</strong> feedback is offered. The role play is oftenrepeated us<strong>in</strong>g a different approach <strong>and</strong>/or <strong>in</strong>corporat<strong>in</strong>g changes made based onfeedback received. In other words, role play<strong>in</strong>g is a spontaneous <strong>in</strong>teraction <strong>in</strong>volv<strong>in</strong>grealistic behavior under artificial (<strong>and</strong> safe) conditions.SIMULATION A methodology for underst<strong>and</strong><strong>in</strong>g the <strong>in</strong>terrelationships amongcomponents of a system or process. Simulations differ from games <strong>in</strong> that they test oruse a model that depicts or mirrors some aspect of reality <strong>in</strong> form, if not necessarily<strong>in</strong> content. Learn<strong>in</strong>g occurs by study<strong>in</strong>g the effects of change on one or more factorsof the model. Simulations are commonly used to test hypotheses about what happens<strong>in</strong> a system—often referred to as “what if?” analysis—or to exam<strong>in</strong>e best-case/worst-case scenarios.THEORY A presentation of an idea from a conjectural perspective. Theories areuseful because they encourage us to exam<strong>in</strong>e behavior <strong>and</strong> phenomena through adifferent lens.TOPICSThe tw<strong>in</strong> goals of provid<strong>in</strong>g effective <strong>and</strong> practical solutions for workforce tra<strong>in</strong><strong>in</strong>g<strong>and</strong> organization development <strong>and</strong> meet<strong>in</strong>g the educational needs of tra<strong>in</strong><strong>in</strong>g <strong>and</strong>
human resource professionals shape Pfeiffer’s publish<strong>in</strong>g program. Core topics <strong>in</strong>cludethe follow<strong>in</strong>g:<strong>Leadership</strong> & ManagementCommunication & PresentationCoach<strong>in</strong>g & Mentor<strong>in</strong>gTra<strong>in</strong><strong>in</strong>g & <strong>Development</strong>E-Learn<strong>in</strong>gTeams & CollaborationOD & Strategic Plann<strong>in</strong>gHuman ResourcesConsult<strong>in</strong>g
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